Adam Smith
It should be ridiculous to anyone with a brain in her head that we talk so incessantly about secularization, if by the term we mean a movement away from religion. And it should be ridiculous because we are anything but secular in this sense, hardly, that is, less religious. Though they go by different names, the gods we worship still thrive, still plunder and kill and steal, still ravage nations and wage wars, and show no signs of dying anytime soon. It might be surprising to hear this, especially since the philosopher with a hammer, Friedrich Nietzsche, proclaimed the death of god now more than a century ago. Nietzsche wasn’t wrong; we only read him incorrectly. Nietzsche was correct when he said that God is dead and we have killed him. It’s just that he was talking about a particular God, namely the God of the philosophers, perhaps best epitomized by Plato’s or in Aristotle’s Ultimate Form, or even Descartes’ or Berkeley’s god. It is the god whom Derrida was right to identify as the ‘transcendental signified,’ a sort of metaphysical telos, the origin of meaning and rationality, the ground of being and truth:
[S]tructure-or rather the structurality of structure-although it has always been involved, has always been neutralized or reduced, and this by a process of giving it a center or referring it to a point of presence, a fixed origin. The function of this center was not only to orient, balance, and organize the structure … but above all to make sure that the organizing principle of the structure would limit what we might call the freeplay of the structure … Successively, and in a regulated fashion, the center receives different forms or names. The history of metaphysics, like the history of the West, is the history of these metaphors and metonymies … It would be possible to show that all the names related to fundamentals, to principles, or to the I center have always designated the constant of a presence-eidos, arche, telos, energeia, ousia (essence, existence, substance, subject) aletheia [truth], transcendentality, consciousness, or conscience, God, man, and so forth.[1]
And Nietzsche, as Derrida goes on to observe, is quite right to suggest that this God has been all but slaughtered. Christians, inasmuch as they believe in Christ as the gospels describe him rather than as the Greek fathers and church theologians (Origen, Philo, Anselm, Aquinas, Augustine, etc.) did, need little worry: Christ, who if anything is an immanent signifier (of the human condition) has little to do with this transcendental signified whom/which Nietzsche, rather like a coroner, pronounced dead. This god is dead, but there are others, quite aside from Yahweh, who not only live, but also continue to guide, regulate, and structure our lives, and whom we still very reverently worship. Among this pantheon of modern Gods, which includes, among others, Science, Power, Sex, and Lady Gaga, there is one who stands out prominently and is worshipped most pervasively, but who, at the same time, is also the subtlest, the hardest to discern, or as Flaubert said of the author, who is “present everywhere and visible nowhere.”[2]
Karl Marx, ever the prophet, is one of the few who not only named and identified this god, Capital, but also devoted entire volumes–Capital, The Communist Manifesto, The German Ideology, The Grundrisse, etc.–to describing its nature. In Capital, for instance, Marx writes that
[I]n its blind, unrestrainable passion, its werewolf hunger for surplus labour, [C]apital oversteps not only the moral, but even the merely physical maximum bounds of the working day. It usurps time for growth, development, and the healthy maintenance of the body. It steals the time required for the consumption of fresh air and sunlight.[3]
And he goes on to say that “Capital cares nothing for the length of life of labour power. All that concerns it is simply and solely the maximum of labour power that can be rendered fluent in a working day.”[4] Notice that Marx, for good reasons, doesn’t say that capitalists do any of these things, but ‘Capital,’ which, for our purposes, I have capitalized (no pun intended)–because Capital is the Logos of the modern world, Capital is its unchallenged and all-powerful god. That is why what Marx and Engels say about the bourgeoisie, they might well have said about Capital–that it, like the God of Creation, “creates a world after its own image.”[5]
And much like the Eidos, the transcendental signified, of which Derrida writes, Capital too is a god who has in the past assumed different names: Baal, Moloch, Mammon. I do not, moreover, mean this in any simply metaphorical sense. If I did, one would hardly be able to tell the difference between this metaphorical ‘religion’ and any other established religion. Capital, too, has its symbols, rituals, practices, people, institutions–all not only on par with the other established religions, but far and away beyond them. Rather as Christianity is the religion of Christ, capitalism is the religion of Capital, and it too has its scribes and pharisees, priests and acolytes; it too has its own, surprisingly complex theology.
The American theologian Harvey Cox, for instance, was able to put his theological expertise to good use when, in reading through the economics of the major business press, he was able to trace out a whole theology. When, Cox, a theologian, read through The Wall Street Journal and the business sections of Time and Newsweek, he was “surprised to discover that most of the concepts [he] ran across were quite familiar,” and that “there lies embedded in the business pages an entire theology, which is comparable in scope if not in profundity to that of Thomas Aquinas or Karl Barth. It needed only to be systematized for a whole new Summa to take shape.”[6]
Some attempts at this systematic theology have indeed been undertaken. The great summas of economic theology, among them Milton Friedman’s Capitalism and Freedom, Friedrich von Hayek’s Road to Serfdom, and Ayn Rand’s magisterial treatise, Capitalism: The Unknown Ideal. These high priests of the capitalist religion make it their duty, rather as theologians have over the centuries, to spell out the moral demands of their supreme deities. In the Old Testament, Yahweh spelled these out to Moses in the Ten Commandments. In the new New Testament, the Commandments are known as the ‘Washington Consensus’: Thou shalt liberalize trade and finance, thou shalt allow markets to set prices, thou shalt end inflation, and thou shalt privatize. And it is this wisdom our high priests so graciously bestow upon us, that we might grow in our faith to the Lord our God, Capital.
But among the elders, seers, and high priests of economic theology, there is one Caiaphas who looms large over the group, nay, one Paul who presides over the life of the church, writes a good portion of its founding documents, His Holiness Adam Smith, all-seeing author of the Bible of Capital known rather more familiarly as The Wealth of Nations. But to be perhaps more fair to Saint Smith, one recognizes, as one does for Paul, his brilliance. It is rather his devotees who misunderstand and misuse him.
The notion of an Invisible Hand is a good example of precisely this kind of abuse, one which, more than Smith ever attempted to do, imbues Capital with the agency and attributes of God. There is a single mention of the Invisible Hand in The Wealth of Nations:
As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.[7]
Smith here is making the rather limited claim that in the specific case of deciding whether to deploy his capital abroad or domestically, the capitalist will, “upon equal or nearly equal profits” prefer “the home-trade to the foreign trade of consumption” for a number of self-interested reasons. So in this specific case, Smith is indeed saying that the self-interest supports the public good (of the domestic market). Therefore, Paul Samuelson, one of the most influential economic theologians of the 20th century, paraphrased Smith as follows:
[E]very individual …neither intends to promote the general interest, nor knows how much he is promoting it. he intends only his own security, his own gain; and he is in this, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it.[8]
Rather curiously leaving out anything that refers to foreign trade (which is what Smith, uncontroversially, was talking about), omitting, that is, any reference to what would make Smith’s claim limited and circumstantial, so that he can go on, as if his misrepresentation were not egregious enough, to summarize Smith as follows:
Smith proclaimed the principle of the ‘invisible hand’. It says that every individual, in selfishly pursuing only his or her personal good, is led, as if by an invisible hand, to achieve the best good for all. In this best of all possible worlds, any interference with free competition is certain to be injurious.[9]
This version of Smith’s Invisible Hand theory, along with Ricardo’s theory of comparative advantage, have been used to support the reigning orthodoxy of economic theology known as ‘Neoliberalism,’ (the liberalization of foreign trade and opening of markets to foreign investment)–which hardly makes sense because the (conveniently omitted) condition upon which Smith predicates his theory is a condition of “equal or nearly equal profits,” which is clearly not the case. It is clear to anyone who cares to think that profit margins are far higher in the numerous nations where the United States has overthrown the democratic government and installed a brutal dictator who then crushes unions, suppresses wages, and slaughters dissidents. But this divorce of theory from reality, in practice, is precisely how this the Capitalist religion functions, that is by faith–faith, as Saint Paul says, being the evidence of things unseen.
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1. Jacques Derrida, ‘Structure, Sign, and Play in the Discourse of the Human Sciences, in Jacques Derrida, Writing and Difference, trans. Alan Bass. London: Routledge, pp 278-294, accessed online: http://hydra.humanities.uci.edu/derrida/sign-play.html
2. Gustave Flaubert, Letter to Louise Colet, 09 December 1852
3. Karl Marx, Capital: A Critique of Political Economy, excerpted in Marx and Engels: Basic Writings on Politics and Philosophy, ed. Lewis S. Feuer, London: Fontana, 1971, p.188
4. Karl Marx, Capital: A Critique of Political Economy, excerpted in Marx and Engels: Basic Writings on Politics and Philosophy, ed. Lewis S. Feuer, London: Fontana, 1971, p.189
5. Karl Marx and Friedrich Engels, Manifesto of the Communist Party, in Marx and Engels: Basic Writings on Politics and Philosophy, ed. Lewis S. Feuer, London: Fontana, 1971, p.53
6. Harvey Cox, ‘The Market as God,’ The Atlantic, 01 March 1999
7. Adam Smith, The Wealth of Nations, ed. Edwin Cannan, London: Methuen & Co., Ltd., 1904, 5th ed., Book IV, Ch. 2, Section 9, accessed online: http://www.econlib.org/library/Smith/smWN13.html
8. Paul Samuelson, William Nordhaus, Economics, New York: McGraw-Hill, 1989, 13th ed, p.825. To be fair to Samuelson, though he does clearly misrepresent Smith, he does not himself subscribe to the infallibility of the Invisible Hand and is, in fact, rather critical of it.
9. Paul Samuelson, William Nordhaus, Economics, New York: McGraw-Hill, 1988, 12th ed, p.41, quoted online: http://adamsmithslostlegacy.blogspot.com/2009/10/paul-samuelsons-nuanced-assessment-of.html