prior probability

Update: since I missed my morning flight to DCA (thanks TSA and CLEAR; see below), I will head off to Zaza’s in Terminal B to finish reading and reviewing Paul Sagar’s Adam Smith Reconsidered. In the meantime, I just have to say: it’s 2024, so why are we still being required to remove our shoes at the airport?

I found this thread on Twitter to be helpful (see below). PS: I absolutely positively refuse to call Twitter “X”, and I dislike hate everything that Elon Musk has done to this once glorious platform. I have even muted that megalomaniac’s tweets from my feed.

Here, I will review the next two chapters of Paul Sagar’s 2022 book Adam Smith Reconsidered, beginning with Chapter 3, which is titled “Smith and Rousseau, after Hume and Mandeville” — four of my favorite 18th-century figures! The main subject of this chapter is one of Adam Smith’s earliest published works: a short essay that the young Scottish professor published in the Edinburgh Review in 1755 (available here via Google Books; see pp. 121-135). Among other things, Smith, who was 32 years old at the time he wrote his essay, reviews J. J. Rousseau’s Discourse on Inequality, an English translation of which is available here.

So, what did Smith think of Rousseau, and what influence did this reclusive Swiss author have on Smith’s intellectual development? In summary, the academic literature is sizable (see, for example, the collection of essays in this book, the cover of which is pictured below), and according to Sagar, the scholarly consensus is that Smith considered the Swiss scholar “a major intellectual interlocutor and challenger” (Sagar 2022, p. 116). Some scholars have even concluded that Smith wrote his first great work, The Theory of Moral Sentiments, in direct response to Rousseau’s Discourse.

Professor Sagar, however, claims this consensus is wrong: Smith would have considered Rousseau’s ideas either obsolete or unpersuasive! According to Sagar, Smith’s Theory of Moral Sentiments was more influenced by David Hume, Bernard Mandeville, and others than by Rousseau. For my part, I won’t rehash the particulars of Sagar’s meticulous, if not tedious, line of reasoning. Instead, it suffices to say that by the end of Chapter 3 Sagar concludes that “the influence of Rousseau upon Smith is at best minimal and secondary” (Sagar, p. 141).

So, is Professor Sagar’s contrarian assessment correct? I hate to be that guy (again!), but there is one question that Sagar himself admits he is unable to answer. (On this note, see Sagar, p. 126.) Specifically, if the influence of the Swiss author on Smith really were de minimus, if Adam Smith viewed Rousseau’s ideas as “obsolete, or without force” (Sagar, p. 117), then why did the Scottish philosopher choose to review Rousseau’s Discourse on Inequality in the first place? Alas, Prof Sagar’s own response to this query is telling: “we simply do not know why Smith reviewed Rousseau for his Scottish audience” (p. 126), it being “doubtful [that] we will ever have an entirely satisfactory answer” (ibid.).

The most plausible answer to the above question, however, is staring us in the face: the Scottish philosopher-professor reviewed Rousseau’s Discourse precisely because he (Smith) indeed took it seriously, at least in 1754 or 1755 when he first read Rousseau’s work. (The Discourse on Inequality was first published in Geneva in 1754.) After all, however feeble his arguments in the Discourse, Rousseau was a leading light of the great Enlightenment movement sweeping Western Europe, and Smith himself devotes half of his 1755 essay to one person: Rousseau! (See pp. 130-135 of this issue of the Edinburgh Review.) That said, it is entirely possible that Smith may have at some point later changed his mind about the Swiss scholar — and for the various reasons set forth in Chapters 3 and 4 of Sagar’s book.

Pause. Why does any of this matter? Because according to Professor Sagar’s revisionist reading of Smith and Rousseau in Chapters 3 and 4 of his book, these great Enlightenment thinkers have radically different views about the moral implications of markets. For Rousseau, it is the pursuit of luxury goods — and the concomitant growth of commercial society more generally — that is the main source of man’s moral corruption, while Sagar’s version of Adam Smith is less troubled by commerce, luxury goods, etc. and more worried about inequality, or in the words of Sagar himself, “it is inequality, and not mere riches …, that makes the real difference for Smith” (Sagar, p. 161). Wait … say what?!

To make his revisionist interpretation of Adam Smith’s “egalitarian impulses” (p. 65) make sense, Sagar devotes most of Chapter 4 (“Whose corruption, which polity?”) to a close reading — and tedious reinterpretation — of the poor son’s paragraph in Smith’s Theory of Moral Sentiments. Alas, although I am willing to concede that Sagar’s interpretation of the poor son’s paragraph is persuasive (see especially pp. 173-176), his larger point about Smith’s diagnosis of the source of moral corruption is way off the mark. Yes, Smith was a champion of equality before the law, i.e. the classical liberal idea that everyone, including the lawmakers themselves, are bound by the law, but Smith was also a champion of markets, and markets by definition generate economic inequality.

As it happens, Sagar himself grudgingly concedes this point in a footnote: “We can agree with [Smith scholar István Hont] that Smith [sided] with Locke, and against a thinker like Rousseau, in judging that economic inequality is on balance justified if the result is an absolute and massive improvement in the condition of the poor” (Sagar p. 171, n.39). But back to the topic at hand: Smith versus Rousseau. The real difference between these two intellectual giants is that one was a critic of markets and private property; the other, their greatest defender. Sagar’s revisionist reinterpretation of Smith is a textbook example of a scholar from the present forcing a figure from the past to conform to the scholar’s normative priors.

Note: I will resume my review of Adam Smith Reconsidered sometime next week. (We still have Chapter 5, plus the Conclusion, to discuss.) In the meantime, weather permitting, I will be in Washington, D.C. during the remainder of this week to attend the 25th Annual Federalist Society Faculty Conference (see here) and present my prequel to Gödel’s Loophole (here) at the annual meeting of the American Association of Law Schools (AALS).

Still a great song! Happy New Year!!

Bonus ballad below the fold:

Happy New Year! Today, I will review Chapter 2 of Paul Sagar’s 2022 book Adam Smith Reconsidered. This chapter — titled “Domination, Liberty, and the Rule of Law” — is the most lengthy part of Sagar’s work, but it is an intellectual tour de force and should be required reading among Smith scholars. Among many other things, Professor Sagar explores the relation between law and liberty from a Smithian perspective and presents a novel but compelling reading of The Wealth of Nations — and of the larger “classical liberal” tradition that the Scottish philosopher-economist founded. To the point, Sagar concludes that Adam Smith should not only be seen as a great classical liberal champion of free trade and economic freedom; he should also be considered “a theorist of liberty as [political] nondomination” (p. 60).

For starters, what does Adam Smith have to say about the relation between law and liberty? Alas, this question is not an easy one to answer, for as I mentioned in my previous post, Smith never published his promised book on law, and furthermore as Professor Sagar correctly notes, the Scottish scholar does not bother to define the concept of liberty in his magnum opus The Wealth of Nations (see, e.g., Sagar 2022, p. 56). Instead, Sagar shows how Smith prefers historical case studies over abstract or philosophical definitions of liberty and how, as a result, Smith ends up concluding that “the normal condition of politics is not likely to be equality based on the mutual recognition of the equal worth of each person … but [rather] the tyrannic domination of the many by [the] few …” (ibid., p. 67).

Or to put it even more bluntly, according to Sagar’s reading of Smith “law was originally an invention of the rich to secure themselves [and their riches] against the depredations of the poor …” (Sagar 2022, p. 59), or better yet, in the immortal words of Adam Smith himself: “Laws and government … [are] a combination of the rich to oppress the poor …” (see Smith, Lectures on Jurisprudence (A), iv.22-23, quoted in Sagar, p. 69). Let’s put aside my standing objection that the “Lectures on Jurisprudence” (quoted above and repeatedly in Sagar’s book) must be taken with a grain of salt, since as I explained in my previous post, Smith never published them. The key point that Professor Sagar is trying to make here is that, for Smith, the historical or actual relation between law and liberty has almost always been an inverse one. (I shall hereafter call this insight — i.e. the historical reality that law and liberty are inversely related — the “law as domination” paradigm for reference.)

At the same time, Adam Smith rejects this oppressive status quo, for as Sagar shows (see especially pp. 83-85 in chapter 2), The Wealth of Nations not only touts the benefits of free markets at home and abroad; it also contains a devastating critique of both economic oppression and political domination. Furthermore, Smith was in many ways ahead of his times, since he was opposed to all forms of unjust domination on both economic and moral grounds, including the institution of slavery. (On this important note, see Sagar, pp. 62-67.) But this observation begs the key question: how do we escape the “law as domination” paradigm? Put another way, how is modern liberty possible when law is just a conspiracy of the rich to exploit the poor?

Professor Sagar’s attempt to reconstruct Adam Smith’s jurisprudential answer to this question was music to my law professor ears. Spoiler alert: the answer is not democracy, for as Professor Sagar correctly notes, Smith was skeptical of civic republicanism (see, e.g., Sagar 2022, pp. 99-100). Instead, according to Sagar’s close reading of Smith’s Wealth of Nations, there can be no liberty — no end to the “law as domination” paradigm — until “those who [hold] political power [are] themselves meaningfully subject to law …” (Sagar, p. 79). For Smith, then, the secret ingredient for modern liberty is the “rule of law”: the few who make and enforce the law must themselves be bound by their own laws. Simply put, without rule of law, there can be no modern liberty.

Alas, I hate to be that guy (especially considering how much I enjoyed reading this chapter), but there is one big blind spot in Sagar’s — and Adam Smith’s — analysis of modern liberty. If State A represents the “law as domination” paradigm and State B the “rule of law” ideal, then how does the transition from A to B occur? By way of analogy, consider the phase transition from a solid state to a liquid state (pictured below). If heat converts a solid into a liquid, what must be added (or taken away) from State A to create State B? How do we get from “law as domination” in which the few use the law to oppress the many to the “rule of law” in which the people in power are themselves bound by law? That is the $64 question!

Let’s keep this key question in mind when I resume my review on Tuesday, January 2.

For once, I agree with Antonio Brown! See also here. (Or are the conspiracy theories true, i.e. are the outcomes of pro games scripted?)

Happy New Year’s Eve, loyal readers! Here, I will review Chapter 1 of Adam Smith Reconsidered, which is titled “Commercial Society, History, and the Four Stages Theory”. In brief, from what I can tell, Professor Sagar has two goals in this early chapter. One is to clarify the true meaning of the term “commercial society” in Smith’s works; the other is to put Adam Smith’s so-called “four stages” model of economic development into context. As it happens, Sagar devotes most of Chapter 1 to Smith’s theory of history, so let’s begin there.

By way of background, the “four stages” is a simple model that Smith himself first presented to his students when he was still a full-time professor at the University of Glasgow in the 1750s and early 1760s. (Specifically, see Smith’s “Lectures on Jurisprudence”, which are available here.) In summary, Smith divides economic history into four separate stages: “1st, the Age of Hunters; 2dly, the Age of Shepherds; 3dly, the Age of Agriculture; and 4thly, the Age of Commerce” (see Smith, Lectures on Jurisprudence (A), i.27; see also the infographic pictured below.) So, what should we make of this model?

For his part, Professor Sagar explains why most Smith scholars have for various reasons misinterpreted Smith’s simple model, believing it to represent a “stadial” or deterministic account of economic history, with commercial society representing the culmination of economic progress. Although Sagar’s meticulous critique of this common-sense reading of Smith’s historical theory is the most tedious part of his entire tome, it suffices to say that, according to Sagar, Smith’s four-stages model is just a thought experiment, not a “conjectural history”, let alone an historical account, “of how things ever actually happened” (Sagar, p. 20, internal quotation marks omitted). So, who’s right?

Alas, I don’t think the answer to this question matters too much, for as Sagar himself correctly notes, Adam Smith makes no mention of his four-stages model in The Wealth of Nations (ibid., p. 40). Also, for what it’s worth, I would further add that this simple model — as well as anything else in the “Lectures on Jurisprudence” for that matter — must be taken with a large grain of salt. Why? Because Smith never published those Glasgow-era law lectures. (The Lectures on Jurisprudence are a series of class notes taken by one of his students.) Although Adam Smith was writing a book on jurisprudence — something Smith reveals to his readers as early as 1759 in the last paragraph of his first great work, The Theory of Moral Sentiments — he not only never finished writing that promised law book; he specifically instructed his literary executors to destroy the unpublished manuscript upon his death, which they did!

What about the meaning of the term “commercial society” in Smith’s works? Here, Sagar makes two important points, both of which I readily concede as correct. One is that Smith himself used the words “commercial society” only twice (p. 52). The other is that, for Smith, there are many different types of commercial society, such as those of ancient Athens and Rome, that of Imperial China, and that of post-feudal Europe. Having now dispensed with Smith’s four-stages model and having also established that “commercial society” can have multifarious meanings, we will proceed to Chapter 2 in my next post.

This is part 1 of my review of Adam Smith Reconsidered. To begin, two things about the Introduction to Paul Sagar’s beautiful book caught my attention: (1) Professor Sagar’s striking but simple solution to something called “Das Adam Smith Problem” and (2) his formulation of what he considers to be the “real” Adam Smith problem. So, let’s start off with the so-called Das Adam Smith Problem, a longstanding academic controversy originating in the 19th century. What is it? Why does this obscure scholarly conundrum matter? And how does Sagar solve it?

In brief, the original “Adam Smith Problem” refers to a possible internal contradiction between Smith the political economist and Smith the moral philosopher — a deep paradox that arises when his two great works are read as a whole — namely, the possible contradiction between the invisible hand of self-interest in Smith’s Wealth of Nations, where the Scottish philosopher develops a testable theory of political economy based on “self-regarding” or wealth-maximizing behavior on the one hand, and the impartial spectator of Smith’s Theory of Moral Sentiments, where he develops a more complex and convoluted pro-social theory of ethics based on mutual “fellow feeling” and “other-regarding” behavior on the other. Or in the eloquent words of Paul Sagar himself, “How could the same man have written both books?” (Sagar 2022, p. 1, footnote omitted).

For his part, Professor Sagar waves away this scholarly Smithian dilemma as a faux problem. Simply put, for Sagar there is no “Adam Smith Problem” because both of Smith’s great works are operating at “differing levels of analysis” (p. 2). Specifically, The Theory of Moral Sentiments is about “individual-level morality”, while The Wealth of Nations is about “societal level systemic analysis” (ibid.). As an aside, Sagar’s simple solution to this centuries-old Smithian conundrum is so potent and compelling that I wish I had thought of it first!

But as they say on late-night TV infomercials: wait, there’s more! Much, much more. In addition to solving the so-called Das Adam Smith Problem, Sagar’s Introduction makes another significant contribution to the literature. In a word, he identifies what he consider to be the “Real Das Adam Smith Problem” (p. 3). For Sagar, the true or “real” Adam Smith problem is the inherent tension between markets and morality, or in Sagar’s own words: “How could a first-rate moral philosopher like Smith think that morality was not fatally compromised by the existence of the kind of market-reliant society that he set out not only to understand and explain, but in various ways to suggest could be improved?” (ibid.).

Although this particular query might appear to be of interest only to a handful of historians and a few other esoteric academics, it turns out that it concerns each and every one of us, especially in our times, i.e. “consumer-driven postindustrial capitalism” (ibid.). After all, how can one reconcile self love and love of others, capitalism and Christianity, the urge to accumulate material goods and the desire be a good person at the same time? Like the catchy Nicki Minaj rap battle song “No Frauds” (featuring hip hop legends Drake and Lil Wayne), do we have to pick a side? Or can the pursuit of material wealth (e.g. “get yours”) be compatible with higher moral standards such as those embodied in the Sermon on the Mount or the Golden Rule (“love thy neighbor as thyself”)?

It suffices to say (for now) that the rest of Sagar’s book, to which I shall turn in my next few posts, is devoted to the painstaking task of reconstructing Adam Smith’s responses to these larger economic/ethical questions.

Thus far this week I have written up and posted several short reviews (i.e. “micro reviews”) of some of the works that I have been reading this holiday season. The last book on my list, however — Paul Sagar’s new work Adam Smith Reconsidered, pictured below — is so good and so dense (in the good sense of the word) that it deserves an in-depth, multi-part review of its own. Starting tomorrow, then, we will begin reviewing each of the chapters in Sagar’s excellent book, one-by-one, beginning with the Introduction. I can’t think of a better way of ending the old year and starting off the new one.