Sunday, December 5, 2010

Markets and Politics: Are they really two separate choices?

I think that Sam Fleischacker makes a good argument for reducing the claim made by many that Smith's biggest contribution was the notion of self-interest (read his post here: Economics and the Ordinary Person: Re-reading Adam Smith.) The role of the individual to know most about his needs, and his ability to temper those selfish needs at the interest of others, are certainly critical notions to our world today and the increased recognition of the "relationship" as being critical to the functioning of our society as a whole and of our commercial lives.

Yet, there is one thing that stuck out for me in Fleischacker's analysis (I have to state that I have not read any of his books) is the assumption that there is a seperation between markets (economics) and politics (politicians); that somehow the market exists without the political influence of the state. I am not sure that Smith saw it this way. From my readings of Smith, he saw the need for a new type of politics that liberated and encouraged a form of market exchange based on private property. This was of course in direct opposition to the ideas of monarchy and the power of the landed class over the merchant class.

If it is not Smith that saw this separation of market/economics and politics, then I get the sense it must be Fleischacker who sees this separation. Fleishacker says, "This respect for the market, as a tool for character development, is unusual among moral philosophers: most of Smith's predecessors, peers, and successors would have favored the political realm, instead, as the best place to develop character." I disagree with this, I believe Smith saw a particular type of political-economics as being a constraint on the development of individual's character and wanted a new form of political-economy to move into one that enabled a form of market exchange based on the individual preferences of the consumer rather then the needs of the monarch or noble.

It is this continued analytical separation between economics and politics that I believe continues to confound many theorists and plays strongly into many of the dialogues and debates currently underway around questions of finance and money creation. Seeing money as something separate from politics or even economics, as something natural and epiphenomenal; as if money will exist without specific socio-political structures. The same assumption seems evident in Fleischacker, one in which the market is natural and will exist in its current form irrespective of political choices.

Perhaps I am overstating Fleischacker's argument and interpretation. However, it is a linguistic question, one that I am sure Chomsky and others would highlight. These false distinctions are something that I don't believe many moral philosophers of the Enlightenment would have supported.

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