28 Aug, 2018
The Moral Basis of a Commercial Society
It is a great honour to be invited to give the second PM Glynn Lecture on Religion, Law and Public Life. This is my first visit to Australia, but as a former academic, I have also long been dazzled by this country — not by its natural beauty, but by the quality of its philosophers. Now to many Brits the mention of this subject will raise a smile: they will think of the Monty Python sketch of Australian philosophers all named Bruce, who want to name their English visitor Bruce “in order to avoid confusion”. But the real laugh is on Monty Python, because when I worked in the subject at University College London twenty years ago we revered Australian philosophers such as John Mackie, David Armstrong, John Finnis and Brian O’Shaughnessy, to say nothing of adopted Australians such as Jack Smart and David Lewis, and their many influential students and successors.
Those voices were very powerful in that small but wide-ranging world, but they were not merely powerful. These were tough-minded thinkers, and from metaphysics to logic to ethics they threw themselves at some of the hardest and most technically complex issues in the field. And above all, they were highly original. In the sixteenth and seventeenth centuries the Latin phrase “In terra australis” — in the land of the south — was a standard form of words used to denote mythical and unknown places, of vast immensity and possibility, places in which, as they say, the hand of man had never set foot. That idea — that things might be possible in Australia that would not be possible anywhere else in the world — persisted in philosophy. Little wonder that at one point the academic joke went that the phrase “in Australia” was logically equivalent to the word “not”. So one might say “In Australia there are mammals that lay eggs”, meaning of course that there are no such mammals in reality; or “In Australia there are black swans”, meaning that no real swans are black; or, in that complacent English way, “In Australia people who stand upright have their heads pointing downwards”, meaning perhaps that life down under inevitably stretches the limits of logic itself. I cannot comment on that; but I will say that we seem to be getting quite expert in logic-stretching ourselves back in Blighty at the moment.
Glynn and Burke
I make no apologies, therefore, for taking an Australian audience, let alone one as distinguished as this, into — you must excuse me — some thorny thickets of theoretical thought. But I am keenly aware too that it is an honour — and something of a challenge — to be asked to follow last year’s immensely distinguished inaugural lecture by Justice Heydon. As he noted, Paddy Glynn’s life showed what a career could lie open to a Catholic of real talent, despite serious headwinds of prejudice and circumstance, in nineteenth-century Ireland and then in the Australian colonies. We celebrate that talent, that life and that career this evening; as those of the last of the Australian founders to sit in the Commonwealth Parliament, a leading voice among those who drafted the Bill of 1900, and of the reported author of the words “humbly relying on the blessing of Almighty God” in the Preamble to the Australian Constitution.
But there are real similarities with the life of another Irishman a century earlier, a man who — at a time when conventional opinion held that an Irishman in England was either after your fortune or your daughter — overcame discrimination and prejudice through raw talent, to make it to the very centre of British politics. I refer of course to my great political hero, Edmund Burke. Burke was often accused by his political enemies of being a crypto-Catholic, and in cartoons he was often caricatured as a thin figure wearing the black coat and corned hat or biretta of the Jesuits, sometimes with a potato or a rosary to ram the point home. In fact Burke was not himself a Catholic. But he came from a Catholic family on his mother’s side, and this combined with his father’s Protestantism and his own early education by the Quakers to give him a deep understanding of religious doctrine and practice.
Religion apart, however, it is striking to note the many parallels between Burke and Glynn. Both were Irish, of course, both educated at Trinity College Dublin and both sent to the Middle Temple to study law. Both were renowned for their capacity for hard work; both expressed political views that were often controversial; both had a hatred of injustice; both were great constitutionalists, extraordinarily well read, and brilliant speakers. And whether in England or Australia, neither lost his Irish accent. It was said of Glynn that the more eloquent his speech, the thicker did his brogue become. It was said of Burke that he spoke with an accent “as strong as if he had never quitted the banks of the Shannon” — which itself perfectly illustrates English ignorance, since Burke was born on the banks of the Liffey, in Dublin.
Breakdown and Disintegration
My subject this evening is what I have called, adapting a phrase of the great Edward Banfield, the Moral Basis of a Commercial Society. I hope you will agree that this is a subject worthy of exploration, and perhaps especially so tonight since the Glynn lecture is specifically dedicated to Religion, Law and the Public Life, all areas which my title encompasses. You will understand, of course, that I am speaking here as someone who tries to write and think about philosophy and history and politics, not as a Member of Parliament, let alone as a Government minister.
And I hope you will agree that this subject is topical, for we seem to have become gripped in recent years by a kind of moral panic about the nature of modern society, especially in what is sometimes referred to as the Anglosphere. In Britain, this can be seen in the huge concern at current levels of drug abuse, loneliness, obesity, suicide, divorce, single motherhood and teenage pregnancy. It can be seen in concern about falling social mobility and the future (or lack of it) for young people; in anger at economic and educational division, and what are seen as entrenched and selfselecting elites; in the remarkable distrust of traditional sources of authority; and in the suspicion that those in power are distant, unaccountable and incapable of leadership. And it can be seen in culture wars over sexuality and gender, in fears of a loss of local or national identity, and in the escalating belief that hard-heartedness is now a norm, and that basic values of respect, hard work and public service are being lost in celebrity worship, consumerism and the money culture.
Much of the blame for these developments has been laid at the feet of free trade and the capitalist system. On this view, such things simply serve to worsen economic inequality and encourage corruption and greed. And all the more so, the argument goes, in an increasingly globalized world: a world in which capital is financialised, marketised and liquid; companies are multinational and effectively able to choose where they pay tax; and labour is offshored to low-cost jurisdictions with few rights or union protections, while the rich are mobile and can relocate as and where they see fit. This in turn supports an emergent global value system which exalts material success; a brand-driven bucket-shop mentality that tacitly despises national cultures and local values and institutions.
In Britain — I cannot speak for Australia, of course — the broader political response to these concerns has moved from denial to division. After the fall of the Berlin Wall in 1989 there was remarkable complacency across the political spectrum about the status of capitalism, especially in the United Kingdom and the United States. History had supposedly ended, and free markets had won. The political centre-right largely fell back into a complacent snooze of self-satisfaction, while the centre-left refused to interfere with its quest for political power, and made its peace with the new dispensation — so much so that in the title of one influential book of the period, Tony Blair and Gordon Brown were “Thatcher’s Children”. The centre-right did not deem it necessary to make the case for the market economy in any serious way, let alone to develop the kind of systematic account of its strengths and weaknesses that might enable it to address public concerns about crony capitalism; while the centreleft neglected to offer any serious critique of its own, let alone to prepare for the negative effects of globalization.
The public mood decisively changed with the financial crisis of 2007-08; with stagnating incomes, weak productivity, Occupy Wall Street, “We are the 99%” and the work of the French economist Thomas Piketty in his best-selling book Capital in the 21st Century. But the mainstream political response remained perilously weak. The right continued to repeat the language of “free markets” from its 1980s heyday, without noticing that that phrase had all but lost its content, while the left simply seemed confused. Politics itself started to fracture horizontally, between urban and rural, young and old, more and less heavily educated, as different politicians sought to use nationalist and patriotic appeals to create and mobilize new coalitions of voters over the issue of EU membership. Nudged by technology, tribes started to form that talked more and more not to others, but to themselves. The centre ground of British politics began to empty. Yet these phenomena were not exclusive to Britain: similar forces have been seen in many countries and many societies around the world. Is it any wonder, then, that the way has been open to more radical arguments and movements? Is it any wonder that extreme schemes of nationalisation, expropriation and state control have begun to gain public currency?
Many of these issues have revolved around economics. But it would, I suggest, be a serious error to think about them merely in economic terms. At root, they concern basic questions of identity and legitimacy. They force us to ask once again: What is the nature of modern society? What sustains it? Why should we give it our continued loyalty as citizens, as individuals, as human beings? Why should we help others outside our immediate families and friends? Why should we make any sacrifice for others, come to that, if we have nothing in common with them? And who is this we, anyway?
As you will be aware, within the Western tradition, there have been many attempts to address these questions over the past four hundred years. But what counts as an answer has changed. Today, in heavily secularised societies dominated by the cultural pre-eminence of the sciences, we must answer these questions realistically, reflecting how people actually think and behave; and in a sober recognition that, for many people, traditional answers based on religious belief will not suffice. One may welcome that fact, or deplore it, as Justice Heydon so eloquently did in his lecture last year. But if an answer is to be generally persuasive, it has to do what many regard as impossible: take a description of the world, and somehow derive normative conclusions from it. It must extract the rich, warm blood of human value from the cold stone of bare fact.
At the risk of horrendous over-simplification, historically, there have been at least four approaches to these questions. The first is couched in terms of natural law: that human society is grounded via human nature in a grant from God or nature itself. The second derives from Thomas Hobbes, and argues that human society is based on a contract whereby individuals in a state of nature give up some of their personal autonomy to a sovereign power which guarantees their internal and external security in return. The third is the Kantian idea that human society is underwritten by a moral code of universal duties to which humans are committed just in virtue of being rational beings. And the final approach is the classical utilitarian idea that human society is legitimate only in so far as it conduces to individual wellbeing, and in particular the greatest good of the greatest number.
But I am now going to cut through these four hundred years of history and many thousands of volumes of political thought, by suggesting that while all the four approaches I have outlined have their attractions, none is adequate to the task before us. The natural law view rests on assumptions about a transcendent God or nature which many people, especially young people today, do not share. The social contract theory is a beguiling one, but it argues in a circle. For, as David Hume pointed out, how could human society derive from the promise contained in a social contract if people did not already accept a norm that promises should be honoured? And if they already accepted the validity of promises, why is it necessary to posit a social contract at all? It is a devastating attack. The Kantian approach fares no better, because it is unrealistic in its ethical demands and in its indifference to community. And nor does utilitarianism, a doctrine in which the one supreme good is the satisfaction of human wants, regardless of place or context.
But if these four sets of ideas are unavailing — if natural law, social contract, Kantian duty and utilitarianism cannot afford us the answers we need — then where can we go? What is to be done?
The Tradition of Natural Utility
My answer is this: that there is a fifth tradition, to be found in the writings of Edmund Burke and Adam Smith. We might call it the tradition of natural utility. It has escaped academic notice hitherto for reasons that need not detain us. But it gives us what we want, and vastly more: indeed, I believe it contains a vision of society fit to sustain us for the long term.
Let us start with Burke, and start where Burke starts. Not with some supposed state of nature but with the here and now, with what is given: with the fact of human society itself. Human beings grow up within human society, and their identities, behaviour and institutions are formed by social interaction. Societies differ in many and various ways — rich or poor, open or closed, centralised or dispersed, warlike or peaceable. But each has a social order, which links people together in an enormous and ever-shifting web of institutions, customs, traditions, habits and expectations built up by innumerable interactions over many years. Thus in eighteenth-century England the social order would include the great estates of the realm: the monarchy, the aristocracy and the commons; the “establishments”, such as the Church of England and the universities; the City of London, the guilds and trading companies; the institutions of local government; the navy and army; the legal system and judiciary, and so on. But by extension it would also include the institutions surrounding marriage, birth and death; church attendance and prayer; the tavern and the theatre; the arts and culture; booksellers and the press; gambling, drinking and “the mob”; and patterns of education, self-enrichment and social mobility.
These institutions are ultimately grounded in feeling and emotion, which guide and direct man’s reason. They are bound together by affection, identity and interest. They matter for three reasons. First, they constrain each other, competing and cooperating as required to survive, diffusing power across communities, and providing a social challenge to state power. Secondly, they give shape and meaning to people’s lives, at work or play, setting rhythms to the day or year, creating overlapping identities and personal loyalties. As Burke famously says in the Reflections on the Revolution in France: “to be attached to the subdivision, to love the little platoon we belong to in society, is . . . the first link in the series by which we proceed towards a love to our country, and to mankind.” Finally, institutions trap and store knowledge. Composed of a myriad of private interactions, traditions and practices as it is, the social order overall becomes a repository of shared knowledge and inherited wisdom.
The social order is not, then, the result of any overall design. It is not the outcome of any specific plan or project. It evolves slowly over time. Different social orders may evolve in different ways, and some may be more effective and successful than others. Each is sui generis, a largely accidental and historically contingent human achievement. It therefore makes an enormous difference how exactly each has evolved, and how it functions. Any practical or theoretical reflection on such a human artefact — and this applies to any institution, large or small, to peoples and nations as much as to words or ideas — must therefore begin with history and experience.
For Burke the social order is, in the language of the Philosophical Enquiry into the Origin of our Ideas of the Sublime and Beautiful, sublime: it far outstrips human understanding, triggering the instinct for self-preservation, and so feelings of awe and humility, in those who seek to grasp it. It is an inheritance, which imposes on each generation the obligation to preserve and if possible enhance it, before passing it on to the next generation. And there is no opt-out. In the words of the Reflections, “Society is indeed a contract . . . but the state ought not . . . to be dissolved by the fancy of the parties. It is to be looked on with other reverence . . . It is a partnership in all science, in all art, a partnership in every virtue and in all perfection. As the ends of such a partnership cannot be obtained in many generations, it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.”
Towards a Commercial Society
So far, so good, ladies and gentlemen. But there is a problem. Burke’s is an astonishingly powerful vision, a miracle of insight and rhetoric, but it is an outline. We need to see the inner workings better, and we need to understand how any of this can be relevant to our present lives.
For this purpose we need to call on Adam Smith. But this is not just the Smith of that masterpiece of political economy, The Wealth of Nations; it is also the Smith of his little-known first book, The Theory of Moral Sentiments. Burke was a great admirer of that work, and from that admiration arose a long and close friendship between the two men. There are points of difference between the two, of course, but Smith reportedly believed that Burke was “the only man, who, without communication, thought on economic subjects exactly as he did”, and this hints at a deeper and recognized affinity. Together, they are an extraordinary pair. Burke is the first great theorist of modern political parties and representative government. Smith is the first thinker to put markets at the centre of political economy, and so of economics, and to place norms at the centre of what we now think of as sociology. As Burke is the hinge of our political modernity, so is Smith the hinge of our economic, and in many ways our social, modernity. Theirs are momentous achievements.
Smith is sometimes accounted the father of capitalism, but I believe this is a serious mistake. For Smith, the central fact of his time in Britain was not the existence of what we would call capitalism, which did not emerge until the emergence of corporations as autonomous pools of capital in the mid-nineteenth century. Rather, it was the fact that feudalism had been superseded by what Smith called “commercial society”, a process which had unleashed huge prosperity, spreading wealth and replacing personal subordination with economic relationships of interdependence. In such a society, he says, “Every man . . . lives by exchanging, or becomes, in some measure, a merchant,” as people seek to “better their condition” and autonomously create mutual obligations with each other.
But these processes of exchange are not merely economic; they are also moral. Like Burke, Smith sees man as a social animal, a being whose nature is to be in society. Indeed, there is little or no sense at all to be attached to the idea of man as an atom, wholly cut off from human society: the human self is a social self. Precisely for this reason, however, he argues that moral values and standards come not from the inside out, but from the outside in. They do not derive from divine revelation or some innate inner moral sense, but are created by human interaction itself. Humans naturally identify with each other imaginatively; they see each other’s actions, and by means of what Smith calls “sympathy” they come to see themselves as judgeable by others, and so come to judge their own conduct. Moreover, they seek “not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love” — and not only to be admired but to be worthy of admiration by others. This mutual interaction and empathy, corrected by what Smith calls the “impartial spectator”, becomes the basis for moral norms. Once a norm is established — be it a moral norm of personal integrity and truth-telling, or a social norm of good manners or fair dealing, it takes on a public life of its own and becomes authoritative to others. In effect, fact leads to value via norms.
We are now in a position to put Burke and Smith together. The moral basis of commercial society lies in the ceaseless exchange of mutual obligations and personal regard. In markets, this creates wealth and the benefits of spontaneous economic order; more widely, it creates ethical and social norms of behaviour. Both in turn generate habits, practices and institutions. Cities, trade, manufactures and commercial contracts come to the fore. Legal institutions emerge to adjudicate on and protect claims to property rights, and then rights more generally. The nature of criminal justice changes from direct individual or familial redress and compensation to a focus on the impact of crime on society as such, with a growing state monopoly of adjudication and enforcement. People become more civilized and pacific, and the collective demand for society to be orderly becomes of central importance. As the needs of society grow stronger, so too do society’s demands on the state. This is a dynamic and evolutionary analysis that can be run at every level of human society, from the family to the community to the nation, and beyond.
It is important to be clear, though, that this picture does not offer a panacea. There will be societies in which the boot-strapping process by which freedom creates freedom cannot take place, because not enough of its people have boots on their feet at all. There will be societies in which that process runs slowly; and there will be institutions such as cartels and gangs which become dominated by norms that are expedient but anti-social. Sometimes this can happen to whole countries, as the history of fascism and communism reminds us: when they are controlled and directed to some purpose such as political conformity, national destiny, racial purity, or, today, extreme religious orthodoxy. It is part of the evil of these enforced communities that they are able to exploit what is perhaps the deepest human need — the need for meaning — to usurp and displace the freedoms of commercial society, freedoms which can all too easily be taken for granted. Indeed, one hesitates to call them societies in the true sense at all, because the equal status and freedoms implicit in the idea of a society have been subsumed by the hierarchies and structures of an overwhelming collective goal.
By contrast, the idea of commercial society rests on mutual obligation and mutual esteem. Its virtues are those of hard work, enterprise, creativity and thrift, though Smith is also realistic about its vices. But such a society’s sense of virtue is not simply that of the marketplace. On the contrary — and here we must turn back to Burke — it preserves a sense of the divine, in the need to respect something apart from and above oneself, something that gives a higher meaning and a moral perspective to human lives. It does this through the proper feeling of awe that any thinking person has and should have for the complexity and value of society itself as an inheritance; as Glynn puts it, “humbly relying on the blessing of Almighty God”. It is in part the function of free institutions, as stores of memory and of politics, as channels for the articulation and reconciliation of conflicting views and interests, to be that national treasury of shared history and self-understanding. It is in part the function of political leaders to act as its custodians, to make that understanding a living force across the life and span of a nation. And it is in part the function of government to lift human capabilities and their free expression, and cherish moderation, tolerance and mutual respect; its goal not merely private freedoms but a free and educated public realm, filled with the conversation of civil, honest and independent minds.
Why it Matters
So, then: why does all this matter? First, it reminds us that ultimately markets and morals cannot be separated from each other, for both rely on the human capacity for empathy and exchange. As Smith says, “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.” Like all human institutions, markets rely on human acquiescence or consent. And so the idea that economics is, or could ever be, a value-free science is a hopeless one. As an ideology, market fundamentalism is dead.
Secondly, it offers an important but undervalued model of political leadership. On this view, the purpose of politics is not to satisfy the felt needs of any individual or generation; it is to preserve and enhance the social order in the public interest. It is therefore rooted in a sense of history. Leadership begins in respect for the social order, and so in modesty. It pushes leaders towards a close study of their people, all the people, and their institutions. It locates the “we” of politics at the level of the nation as a whole. And it insists on the common good, and the importance of public service and public duty. In Burke’s memorable words, “We are afraid to put men to live and trade each on his own private stock of reason; because we suspect that this stock in each man is small, and that the individuals would do better to avail themselves of the general bank and capital of nations and of ages.”
But thirdly, it is that idea of capital, of social capital, that is perhaps the most important. At least in the United Kingdom and America we seem to be becoming increasingly trapped in bleak and nihilistic narratives of grievance and anger, narratives that ignore our history and devalue our society. In his own time, Burke returned again and again to the idea of capital to explain what had gone wrong. As he said of the English Jacobins at the time of the French Revolution, “You had all these advantages in your ancient states; but you chose to act as if you had never been moulded into civil society, and had everything to begin anew. You began ill, because you began by despising everything that belonged to you. You set up your trade without a capital.” Exactly the same thing could be said today.
Ladies and gentlemen, it is time for us to renew that capital. It is time to recover that shared understanding of what makes our countries today, each in its own ways, so remarkable: to ask what draws people towards our countries, and how we can continue in Smithian style to be worthy of the admiration of others in future. It is time to re-examine, and perhaps redefine, that “we” — that partnership between those who are living, those who are dead, and those who are to be born — so that it spreads as widely and inclusively as possible today. And it is time to recognise that what matters about the modern era is not so much capitalism as commercial society itself. It is commercial society that, in its democratic form, has proven to have a unique capacity to command the allegiance of citizens, and to sustain its legitimacy over centuries by increasing their prosperity and freedom. This is an evolved collective achievement of extraordinary value, which it is the duty of us all to protect and enhance. Capitalism has its own pathologies — crony capitalism in all its many forms — and if the preservation of commercial society requires the reform of capitalism, then reform it we must. For the alternatives, of war over trade, of religious autocracy, authoritarian communism and nationalism over democracy, or simply of an empty economic materialism, are not to be contemplated. And to those who argue that today’s state-first models of capitalism are not merely ideologically but practically superior to commercial society, I say this: let us see what sources of legitimacy, what institutions, what mutual obligations bind such societies together when economic growth starts to slow, as it inevitably must. That, I think, will be a moment of reckoning.
Ladies and Gentlemen, as I have said, I cannot speak about Australia. I cannot speak to the vicissitudes and glories of national development and nation-building here over two centuries, and so I must leave to you to tell me whether, and how far, what I have said may apply to this wonderful country. But let me suggest that when Paddy Glynn arrived in Australia in 1880, when he joined the Adelaide law firm of Hardy & Davis in 1882 and opened a branch office in Kapunda, when he became the editor of the Kapunda Herald in the following year and, above all, as Assemblyman, as delegate to the federal convention, and as Representative, he was acting in precisely the ways anticipated by Burke and Smith. Transacting commercial and political business, building a family, embedding himself in local institutions, campaigning and lobbying and always, always making the argument. It is a record anyone could be proud of, and one which it is an honour for me to celebrate with you tonight.
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