Jacob Levy was at King’s this past week presenting his NBER working paper “Corps Intermediaries, Civil Society, and the Art of Association“. The piece is intended to be a chapter in volume by Naomi Lamoreaux and John Wallis that looks at the relationship between civil society and the origins of economic development – a topic of great interest to me.
To simplify his main argument – pluralism in associational life fundamentally underpins the liberal constitutional order. However, the relationships of associational life will be comprised of not just competition between civic bodies, but also hierarchical organisations involving loyalty, status, and privilege. This is a tension in social order, one which it is not likely or desirable to do away with.
In the paper, Levy traces the shifts in treatments of intermediate groups among some liberal and democratic political theorists in the 18th and 19th centuries, particularly Montesquieu, Smith, and Tocqueville. At one point, he draws attention to Adam Smith’s famous passage concerning the “man of system” –
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. VI.II.42
He then goes on the state that “these lines have often been read as criticisms of centralized economic planning and treated as a kind of adjunct to The Wealth of Nations.” Instead, Levy argues, this passage is about “constitutional reform, privilege, and politics, not economics at all. Smith’s man of system bears a closer resemblance to Montesquieu’s legislator of uniformity than to the modern would-be economic planner.”
And here is where I take pause. I agree with Levy’s interpretation of the passage in Smith. The man of system is the one who thinks he can remake the constitutional order – or law – as he imagines it to be. But this is exactly what Hayek was drawing on when he makes the argument in Rules and Order. Hayek cites this same passage when he introduces the second chapter of the book dedicated to spelling out the differences between evolutionary law (the kind of constitutional order Smith has in mind) and legislation (the term which Smith uses). In the footnote, Hayek explains his choice of the passage:
It deserves to be noted that this passage contains some of the basic concepts and terms we shall have to use throughout this book: the conception of a spontaneous order of the Great Society as contrasted with a deliberate arrangement of the elements; the distinction between coincidence and opposition between the rules (principles of motion) inherent in the elements and those imposed upon them by legislation; and the interpretation of the social process as a game which will go on smoothly if the two kinds of rules are in concord but will produce disorder if they are in conflict. [emphasis in the original]
As such, I don’t think Hayekians would be off-base to draw parallels between Smith’s man of system and central planners. After all, the relationship in question is between civil society and the origins of economic development. If it is the case that associational life – both through competition and corporate activity – works to limit centralised power, it is directly relevant. Attempts to change the constitutional structure of a society are bound up with questions of economic organisation. As Buchanan was fond of saying, “it is never about particular distributions, but always about changes in rules that engender a pattern of production and exchange”.
Levy’s paper uses the analyses and reactions of Montesquieu, Smith, and Tocqueville to help us see things about the shift to “open-access orders” that might not be fully visible in retrospect. This is laudable, exciting research at the intersection of political economy. If the topic interests you, his book Rationalism, Pluralism, and Freedom gives a much deeper treatment to some of the ideas sketched here.
READER COMMENTS
ThaomasH
Jun 9 2016 at 9:10pm
I had heard the expression “man of system” but not this fuller quote. It seems like an apt description of certain Libertarians who can judge any policy measure according to whether is is a departure from a completely unregulated market.
Ross Emmett
Jun 10 2016 at 9:54am
The chief question is not whether it is appropriate for a Hayekian to see in Smith’s argument a case against centralized planning. The question is whether in Smith’s own intellectual context it was possible for Smith’s text to mean what a contemporary Hayekian makes of it.
I would share Levy’s orientation to the historical understanding of the text: look at what other arguments were being made by those Smith might have read/had contact with. I share with Emily surprise at Levy’s reference to Montesquieu’s legislator of uniformity as a model for Smith’s man of system, but upon reflection, it makes sense. Wish I’d thought of it.
However, while Smith did not think of “system” in the same way that Hayek or other modern thinkers did/do, that does not mean that we can’t use his argument for contemporary purposes. In this, the 25th year of the fall of the Soviet Union, one can certainly talk about how Smith’s notion is relevant to today. Smith did not share with us a contemporary notion of how markets coordinated choices via the price system. That doesn’t mean we can’t use him as a reference point for a defense of markets. And it could even be applied, a la James Scott, to Hayek’s ideas!
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