Digressions&Impressions

On the Function of Money in Adam Smith according to Veblen and Graeber

It may, however, be worth while to point out another line of influence along which the dominance of the teleological preconception shows itself in Adam Smith. This is the normalization of data, in order to bring them into consonance with an orderly course of approach to the
putative natural end of economic life and development. The result of this normalization of data is, on the one hand, the use of what James Steuart calls "conjectural history" in dealing with past phases of economic life, and, on the other hand, a statement of present-day phenomena in terms of what legitimately ought to be according to the God-given end of life rather than in terms of unconstrued observation. Account is taken of the facts (supposed or observed) ostensibly in terms of causal sequence, but the imputed causal sequence is construed to run on lines of teleological legitimacy.
A familiar instance of this "conjectural history," in a highly and effectively normalized form, is the account of "that early and rude state of society which precedes both the accumulation of stock and the appropriation of and."* It is needless at this day to point out that this "early and rude state," in which "the whole produce of labor belongs to the laborer," is altogether a figment. The whole narrative, from the putative origin down, is not only supposititious, but it is merely a schematic presentation of what should have been the course of past
development, in order to lead up to that ideal economic situation which would satisfy Adam Smith's preconception. As the narrative comes nearer the re known latter-day facts, the normalization of the data becomes more difficult and receives more detailed attention; but the change in method is a change of degree rather than of kind. In the "early and rude state " the coincidence of the "natural" and the actual course of events is immediate and undisturbed, there being no refractory data at hand; but in the later stages and in the present situation, where refractory facts abound, the coordination is difficult, and the coincidence can be shown only by a free abstraction from phenomena that are irrelevant to the teleological trend and by a laborious interpretation of the rest. The facts of modern life are intricate, and lend themselves to statement in the terms of the theory only after they have been subjected to a "higher criticism."
The chapter  "Of the Origin and Use of Money" is an elegantly normalized account of the origin and nature of an economic institution, and Adam Smith's further discussion of money runs on the same lines. The origin of money is stated in terms of the purpose which money should legitimately serve in such a community as Adam Smith considered right and good, not in terms of the motives and exigencies which have resulted in the use of money and in the gradual rise of the existing method of payment and accounts. Money is "the great wheel of circulation," which effects the transfer of goods in process of production and the distribution of the finished goods to the consumers. It is an organ of the economic commonwealth rather than an expedient of accounting and a conventional repository of wealth.
It is perhaps superfluous to remark that to the "plain man," who is not concerned with the "natural course of things" in a consummate Geldwirtschaft, the money that passes his hand is not a "great wheel of circulation." To the Samoyed, for instance, the reindeer which serves as unit of value is wealth in the most concrete and tangible form. Much the same is true of coin, or even of bank-notes, in the apprehension of unsophisticated people among ourselves to-day. And yet it is in terms of the habits and conditions of life of these "plain people" that the development of money will have to be accounted for if it is to be stated in terms of cause and effect.--Veblen (1899), "The Preconceptions of Economic Science" The Quartely Journal of Economics, 404-406

Glory Liu, the world's expert on Smith's American reception, called my attention to Veblen's paper, which I had missed. Sadly, this paper lacks the rhetorical panache one expects from Veblen. It's not -- to use one of his key words -- an elegant read. Even so, Veblen puts forward a distinctive interpretation of Smith's chapter on the Origin and Use of Money. And because Veblen can hardly be thought of as a lazy defender of laissez faire, Veblen's interpretation of Smith is a useful corrective, avant le lettre, to one made popular recently by David Graeber.

There is a quite a bit to Graeber's reading of Smith on the origin of money (recall) in Debt, (a book I admire (recall here, here, and here)). But here I focus on the main thrust of Graeber's analysis of Smith. For Graeber, Smith is the originator of a mythical "and most important" (to subsequent economists') "story" in "founding the discipline of economics" and "the very idea of economics." The key feature of this story is that the function of money is, in the first instance, a "medium of exchange," and secondarily a "unit of account" as well as "a store of value." And so before Graeber gets to all of his rich and fascinating anthropological and conceptual detail in Debt, Graeber first offers a textually grounded interpretation of Smith by way of a careful reading of the chapter on the"Origin and Use of Money." I suspected Graeber's line of reading is so influential (also among those that admire Smith and/or laissez faire) that I started my book with an alternative proposal, which I call "Smithian social explanation." 

As an aside, the main point of Veblen's article is not to offer an interpretation of Smith on the origin of money. This is merely exemplary to illustrate the not entirely simple relationship and interplay between Smith's theological commitments and Smith's attitude toward empirical facts. (As Liu noted in her letter to me, Veblen's reading of Smith anticipates Viner's (1927) argument, which is still cited among scholars.) And this is treated as an important contrast to the "preconceptions" of the later "classical economists" influenced by Bentham and the rise of utilitarianism with a very unSmithian metaphysics. And these post-Benthamite classical economists are Veblen's true target. That's for another time.

It's key to Veblen's interpretation of Smith, that Smith is not a simple empiricist. But that Smith's treatment of the data is mediated by a theologically grounded theory. This theory provides the providential structure of what naturally ought to be the case. This structure provides a base-line from which to analyze and organize empirical facts. In Veblen's interpretation of Smith, this structure provides a "distinction between reality and fact" (399), which, in turn, is presupposed, "in weakened form" according to Veblen, in Smith's famous three-fold distinction between natural, real, and market prices. In this interpretation reality seems to accord with the natural price (and, more intuitively, facts with market prices). Reality is thus thoroughly normative and, because according to Veblen it is causal, it supports counterfactuals. My own reading of Smith (which emphasizes the evidential import to Smith of the deviation of observed facts from counterfactual 'reality') can be  treated fairly as a descendant of Veblen's even though I have a tendency to downplay commitment to providence in Smith. 

With that in place, let's turn to (and close with), Veblen's interpretation of Smith's account on the origin of money. According to Veblen Smith's treatment of the origin of money is functional. And according to Veblen Smith is, in fact, at least a partial critic of the account that Graeber attributes to Smith and the economists following him. The function of money is clearly not in the main to be "an expedient of accounting and a conventional repository of wealth."So, two of the three functions of money Graeber attributed to Smith are clearly absent according to Veblen.

Veblen does claim that for Smith money is a medium of exchange ("the great wheel of circulation," ). But in a manner very much unlike Graeber's interpretation of Smith. It is a medium of exchange not, as Graeber emphasizes, in the absence of politics and government, but rather  as a mechanism or instrument of the "economic commonwealth." Unlike 'the great wheel of circulation,' the phrase "economic commonwealth" is not in Smith and is also not vaguely Smithian. Unfortunately, Veblen does not use the phrase again in the article.

Prior to 1899 the "economic commonwealth" is not a common phrase at all. The main instance I have found (but I welcome correction) is in a description of the origin of the meritocratic scholarships -- then a novelty! -- to help students from Maryland, Virginia, and North Carolina enter The Johns Hopkins University in the will of Hopkins. This description (not the will) seems to have been reprinted a few times. In this text an "economic commonwealth" seems to be used to define an economic zone that is economically integrated and has clear political boundaries even though these are part of a larger political commonwealth.

The connection with Veblen is not obvious. But Veblen went to Hopkins and, as it happens, publishes one of my favorite books, the Theory of Leisure Class, also in 1899 (the same year as the article). The Theory of Leisure Class is, amongst other things, a meditation on the genealogy of the evolving character of meritoriousness, including its belated arrival in higher education. So, it's not impossible he read up on the development of higher education and encountered the phrase there.

As it happens, Veblen does use the phrase "economic commonwealth" again in his (1918) On the Nature of Peace. There it is used to describe the independent, but subservient to political ends, of economic policy by "dynastic statesmen." In particular, an "economic commonwealth" is self-sufficient, self-balancing, and capable of feeding the needs of war. And while Smith may be associated with promoting a self-balancing economy; and while Smith allowed that self-defense may trump economic needs, nobody would think  that Smith writes in defense of self-sufficiency or that statecraft should promote war-making capacity (which Smith associates with the mercantilists he attacks). And. in fact, the whole book relies on, as the late Warren Samuels noted, on the contrast between the pacific liberal state and the dynastic state (which is held responsible for the Great War by Veblen).

I am inclined to think that in 1899 Veblen used the "economic commonwealth" to help explain how for Smith the function of the institution of money as a medium of exchange is itself embedded in a larger political or juridical (note Veblen's "legitimately") framework in which  it can "serve" the "community." So, rather than being a figment of the fantasy of apolitical money, it serves to remind us of the essentially political nature of money in Smith. For Veblen's Smith this functionality need not be part of the psychology of the original inventors of money nor present users. But it can be discerned, theoretically, in reality.*

On Aesthetics & Elitism

[A]esthetics as a discipline is considered to be marginal in the eyes of other philosophers... One of the reasons for this is exactly the perceived elitism of aestheticians – we go on about extremely highbrow examples like Proust, Bartok and Godard and most of our colleagues find it difficult to relate to this. And our students also find it difficult to relate to this.

But if aesthetics has an elitism problem, what can we do about this? I myself have tried all the strategies I could think of at some point or another in my life, and I’m really unhappy with each of them:

1. Ignore the problem. Just assume that your audience has as much background in atonal music and modernist cinema as you do. If they don’t, it’s their problem, maybe they’ll feel ashamed and go home to educate themselves.  

2. Throw a bone to the crowd sometimes. When I served as a TA in Richard Wollheim’s 200-strong intro to philosophy of art class, one day he came to me enthusiastically, saying he will talk about an artwork the students can surely relate to – and then he talked about the Watts Towers in LA. The idea was that the student from Southern California are bound to love it. To Wollheim’s greatest amazement, the students were not particularly thrilled.

3. Try to educate the audience. I have to confess that I have done this quite a bit. Especially when teaching, which may be excusable. But this can be pretty heavy-handed. Once when I needed to use examples of the representation of dance in film (why? I’m not sure. Maybe something about the relation between the visual and the auditory?), I eased them in with the scene from Pulp Fiction, but then went on to do some Godard, Pasolini  and even Bela Tarr. As I said, heavy-handed.

4. Go completely anti-elitist. Stop talking about high art altogether and focus on artforms and examples the audience can be expected to know and like – sitcoms, comics, punk-rock, street art, porn, horror, late-night talk-shows, whatever.

...

I have been mainly talking about choosing what examples one uses to demonstrate an aesthetic phenomenon. But there is an even more important sense in which we should address the issue of elitism within aesthetics – if we remain too elitist, we may miss out on genuinely important aesthetic phenomena that have become extremely widespread around us, but we failed to notice in our ivory tower.--Bence Nanay [@Aesthetics for Birds]

There was sadly little public comment on Nanay's disarmingly frank blog post; it's also an interesting essay not the least because it contains a very stimulating discussion of shipping. ("You are shipping a couple if you really really want two fictional characters of a serialized narrative fiction, mostly a TV show, to have a romantic relationship.")* Nanay is surely right that the way aesthetics is practiced is, in some respects a cause of its marginalization among its professional peers. I would like to develop his analysis a bit.

 

A. Let's start with the elitism issue. The problem is not so much elitism as class. For as any reader of Timothy Williamson knows, that just a few have a taste for an intellectial project is no argument against its significance and high status. Rather there is a considerable amount of anxiety over class among professional philosophers; many have upper-middle class backgrounds or aspirations in that direction, in a culture in which the rich are getting wealthier at a faster rate. (You don't believe me? Note (a) how many academics blabber on about fine wine and food on facebook; (b) it is verboten to point to the sociological commitments, say, built into Grice's analysis.) Aesthetics is the only field in philosophy that actually is about the objects & experiences that were once a central component of bourgeois life. One's response to aesthetics, thus, generates its own anxiety about how much one reveals of one's class background or desires. Given the fact that so many folk feel uncertain about their professional futures and uneasy over their professional identities, many will instinctively avoid adding a confrontation with one's class status to it.

 

Salaita and the Two Cultures

All politics is local, so it would be unwise to read too much into the  8-1 vote by the University of Illinois Board of Trustees against hiring (or unhiring) Dr. Salaita. But if you look at the sixteen UIUC departments that voted no confidence, the STEM disciplines and even some of the important social sciences (economics, psychology) are conspicuously absent. This is worthy of attention because there is little doubt that the views of the major STEM departments would not have been easily ignored. I have seen reports that suggest that people were reluctant to vote against Chancellor Wise because she is well liked and there is a desire for stability due to a recent history of administrative turmoil. I also suspect that the pro-Salaita campaigners did not help his case by trying to turn this into a wider movement and wedge-issue against Israel. (I am not denying that they were justified in doing so, not the least because right wing Zionists clearly tried to get a hostile critic fired from his job, but it might have been better to have focused exclusively on procedural and constitutional issues rather than turning it into a movement building moment.)*

Even so, the list of departments that voted no confidence points to an important cultural, even sociological divide.** Folk in the Humanities have not come to grips with the fact that many of the professionals in STEM disciplines are, in effect, extremely successful fundraisers and managers of highly skilled technicians. The culture is not corporate in a GE or Wall Street sense, but on the STEM sides of campus there is a different atmosphere from the Humanities. This is not to deny that there are many genuine intellectuals among STEM types and that they have broadly liberal-cosmopolitan views, but their ethic and self-identity is not tied up with the very possibility of permanent, even intense disagreement.

Moreover, STEM folks are, in effect, at-will employees; when the grants dry up, they can get eased out. (Of course, in practice many have skills that are in good demand inside and outside the academy.) Classroom education is ideally based on (charismatic) lecturers with elegant powerpoint slides that need to be memorized (in practice it is often taught by folk that do not have very good language and communicative  skills); education in a STEM field is not really about free-flowing and passionate discussion. (Of course, there are exceptions.) While we all know some STEM-scientists that also have activist sympathies (in ecology, climate science, marine biology, etc.), there is no natural sympathy or affinity with social causes and expansive views on education and debate. (This is, in part, due to the influence of bad images of science generated in past philosophy.)

In so far as universities present themselves as places where ideas are genuinely debated and creativity is valued, the Humanities play an important totemic, even status-enhancing role. It's okay to have Humanities Centers, and funky art galleries, and world class chamber music. But, in reality,  the Humanities are a fig-leaf for the permanent fund-raising activities of the rest of campus (no different from the role of the arts in modern city-planning.) We are good for the luxury life-style that gets projected in glossy folders and fancy clips (cf Veblen); but our concerns are not well understood, and, evidently, we are not very good at conveying the significance of these to our STEM peers, who, of course, have to balance the demands of scientific integrity, publication pressure, managing complex work environments, and grant-making salesmanship. There is really little room for error, and the focus is on getting the job done; politics is a major distraction that, if allowed to surface, may disrupt even destroy a lab's functioning.

 

On Joining the Club

It used, I think, to happen a great deal, when one didn’t get called on however often one’s hand went up in a question period until finally at the end one could say something and it was completely misunderstood and dismissed.--Anne J Jacobson "Am I Dead"

I don’t want to belong to any club that would accept me as one of its members.--G. Marx.

Variants on the phenomenon that Prof. Jacobson describes above have happened to me, too, quite a bit before April 10, 2005. I say this not to deny that there is no sexism (and racism, etc.), but rather to reflect on the fact that among men there are also huge status differences within professional philosophy. As I have recounted elsewhere (here and here), while I have always had privileged jobs (by academic and non-academic standards), I had a slow start publishing and found it hard to land my first tenure track position. In addition to the phenomenon described above, once I left the safety of my own PhD program,  I have been invisible at the so-called APA Smoker (if you don't know what that is, be grateful for small mercies) to my own placement director; I have had graveyard shift sessions (i.e., the last one on the final day) at the APA clear out of the whole audience after the talk ahead of me; I had an audience laugh after I get introduced as an Adam Smith expert at my job-talk (they invited me to laugh at me?), etc. 

This all changed when my then-colleague, Prof. Dennis Des Chene, asked me to give a talk at a fantastic workshop he hosted in St. Louis. I really didn't want to be at his workshop (I was very upset about being passed over for a position), but Dennis gently prevailed on me. As it happens, by the time of the conference, I had two post-doc offers in hand, and a tenure-track offer at a fantastic department at Syracuse (and a few more offers to come). Dennis made a point of mentioning all of this in the introduction to my talk. The effect was uncanny; it was, as if, I was reborn. (Does that count as a transformative experience, Prof. Paul?)