Adam Smith and Coronavirus

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. [1]

Basically the idea is that in a free-market democratic capitalist society everyone acts purely in pursuit of their own material interests and by some kind of magic this will lead to the best possible outcome for everyone.

It appears that people who are embarrassed by this naked attempt to legitimize morally empty egoism point to other aspects of Adam Smith’s writings where he talks about justice and so on. To be honest; I don’t know. I’ve never read Adam Smith. What I do know is that in classical economics this principle is taken as axiomatic. This principle really is the bedrock of classical economics; the kind which governs Western societies. True; there is an acknowledgement that ‘demand’ represents purchasing power and not need but once acknowledged the whole edifcase is in fact built around Adam Smith’s principle. Everyone is presumed to act in their material self-interest at all times. This is seen as normal. From another point of view it is not normal at all and what is happening here is that it is being normalised.

It occurs to me that the panic buying of basic foods (and toilet paper) which the UK government is desperate to stop is a nice example of the reality of this principle of materialist egoism. All these people clogging up the Internet shops and sweeping clean the supermarket shelves with the effect that the elderly, vulnerable and (for example) nurses can’t buy food are simply acting in their own rational self-interest. They are just thinking about their own advantage. And, indeed, for them, it works. The most pushy and least scrupulous now have the most well-stocked larders. Whatever happens they will be alright.

And, lo. People thinking of their own advantage does not produce a good outcome. It leads to panic buying, empty shelves and thus hungry pensioners.

Usually this reality – selfishness produces horrible social outcomes – is masked simply because (and here Adam Smith seems to have been right) selfishness leads to enormous wealth and this wealth masks the horrible social conditions which the selfishness creates. For example; the system of everyone pursuing her own advantage creates a substantial ‘underclass’ of people who are, basically, losers in the race. But because of the wealth produced by the others they can be paid off – with subsidies and handouts. Thus the raw realities of Dickensian London are masked over.

Obviously a larger topic than I am treating here. But I was just struck how panic-buying in a time of coronavirus is a nice example of the actual face of our capitalist free market society.  In a crisis the mask slips just a little.

Notes

  1. Adam Smith. The Wealth of Nations. See e.g. https://www.goodreads.com/quotes/68664-it-is-not-from-the-benevolence-of-the-butcher-the and other sources.

 

 

Author: justinwyllie

EFL Teacher and Photographer