Amartya Sen vs. Dan Klein on Adam Smith
By David Henderson
Last week the New York Times blog had a post referencing an article on Adam Smith by Amartya Sen. Those of Sen’s thoughts that sounded correct were not news and those that sounded like news were ones that I wasn’t sure were correct. So I contacted Smith afficionado Dan Klein of George Mason University. What follows is an edited version of the interview.
Henderson: The New York Times blog on Thursday claimed, drawing on an article by Amartya Sen in The New Statesman, that Adam Smith is a “softee” because he “had a soft spot for government welfare and the little guy.” I know he had a soft spot for the little guy. You can’t read The Wealth of Nations without reaching that conclusion. The Wealth of Nations was all about how to create wealth for the common man. I’m surprised that the New York Times thought that was new. But did Smith have a soft spot for government welfare?
Klein: Saying that Smith “had a soft spot for government welfare” is highly misleading. Smith expounded a presumption of liberty – as you and I understand that term. Even Jacob Viner, an earlier cataloger of Smith’s exceptions to the liberty principle, says so. Though he was in an important sense an egalitarian, and an affirmer of distributive justice understood in a libertarian way, he never favored a policy that he construed as forced “poor relief,” and never argued on such grounds. He was silent, even conspicuously silent, in the otherwise quite comprehensive WN, regarding the essential feature of the poor law, tax-financed poor relief. At the opening of WN he says that he shows “what are the necessary expences of the sovereign, or commonwealth …”, and, in the spirit of enumerated powers, we might infer that he did not regard the poor law as “necessary.” Indeed, there is a lot of textual evidence indicating that he would not be supportive of the redistributive state.
Henderson: According to the NYT, “Amartya Sen, called ‘the Mother Teresa of economics’ for his work on poverty and development, says people misunderstand Adam Smith as simply ‘an advocate of pure capitalism’ extolling the selfishness of ‘the butcher, the baker and the brewer.'” My own take is that Smith was not an advocate of pure capitalism and that only people who had never read him thought that. Also, I never thought Smith extolled selfishness but, rather, recognized that people are self-interested and that free markets and private property channel that self interest into paths that are valuable for others. What’s your take?
Klein: Lord knows where people come up with that which they pretend to debunk. The Theory of Moral Sentiments (TMS) is about virtue, and Smith develops a rich ethical plexus. At one point, where he treats of his teacher, Francis Hutcheson, he itemizes four sources of moral approval. The fourth source of moral approval looks at “actions as making a part of a system of behaviour which tends to promote the happiness either of the individual or of the society”. Later, he morally authorizes the pursuit of honest profit and the policies that give it free play.
[Henderson translation of Klein answer above: Yes, Sen is right that Smith didn’t extol selfishness, but who ever said he did?]
Henderson: Sen says, “He defended such public services as free education and poverty relief, while demanding greater freedom for the indigent who receives support than the rather punitive Poor Laws of his day permitted.” Did Smith defend “free,” by which I assume Sen meant “priced at zero due to government subsidies” education? And how about poverty relief?
Klein: If “poverty relief” means forced redistribution, Sen is wrong to say that Smith defended that. As for schooling, what Sen says is simplistic and highly misleading. Smith’s discussion of schooling is lengthy and rhetorically complicated. But read WN’s final words on the topic of schooling:
“This expence, however, might perhaps with equal propriety, and even with some advantage, be defrayed altogether by those who receive the immediate benefit of such education and instruction, or by the voluntary contribution of those who think they have occasion for either the one or the other.”
It would be wrong of me to suggest that those words–which, by the way, are not Smith’s only words suggesting doubts about tax-funding of schooling–fully represent Smith’s views on the topic. Sen and many others have been seizing on particular moments in Smith that sound–or can be dressed to sound–more social-democratic.