Adam Smith, in Wealth of Nations, offers the following well-known myth:
In a tribe of hunters or shepherds a particular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison with his companions; and he finds at last that he can in this manner get more cattle and venison, than if he himself went to the field to catch them. From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer. Another excels in making the frames and covers of their little huts or moveable houses. He is accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison, till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter. In the same manner a third becomes a smith or a brazier; a fourth, a tanner or dresser of hides or skins, the principal part of the clothing of savages. And thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent of genius he may possess for that particular species of business (Wealth of Nations I.2.2).
For Smith, this perfectly “natural” process is both the origin of the division of labour and reveals the natural propensity for human beings to “truck, barter and exchange one thing for another” (I.2.1). This distinguishes us from the animals, for who ever saw a dog offer a bone as a fair and deliberate exchange with another dog? Smith goes on:
When the division of labour has been once thoroughly established, it is but a very small part of a man’s wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society (I.4.2).
We’re all capitalists at heart, it seems, for we are natural merchants, constantly exchanging things with one another. Smith can be a little long-winded, so let me summarise the remainder of this myth. Once our primitives have all busied themselves with their natural propensity to produce and “truck”, they soon find that others may have enough of whatever is on offer. I might have made plenty of toe ticklers, but now that the tribe or village is full of toe ticklers, I have nowhere to hawk my wares and get what I want. The solution: stockpile items that I am sure everyone will want – salt, sugar, dried cod, dressed leather, sex toys …. So when I want something, I can simply use these items in exchange. At last, one of us happens upon the idea of using precious metals, weighed, then standardized, minted and so on. Eventually, in our wisdom, we come up with credit, or virtual money.
In various forms, this myth has been repeated countless times in economics textbooks, in online forums and in classes on economics. For economists, it is “the most important story ever told” (Graeber, Debt, p. 24). Its narrative from a natural division of labour, through to barter, money and then, in our sophisticated modern era, banking and credit, has become so pervasive that it is regarded as common sense. The problem, as David Graeber shows, is that it is pure fantasy-land (pp. 21-41). Where is this mythical village? Among North American Indians? Asian pastoral nomads? African tribes, Pacific Islanders, Australian aborigines? A small Scottish town of shopkeepers? Often in the same myth it moves from one place to the other. But the simple fact is that it never existed. No such village has ever been found, nor will it be. As Graeber shows in some detail, contrary to the barter-money-credit sequence of the myth, credit may well have preceded money, and barter is a side product, happening only in places that have already come to know money. On that last point, the common “return to barter” account during economically difficult times – in the early Middle Ages or in Russia and eastern Europe in the 1990s or today in Greece and other countries severely affected by the rolling economic crisis that began in 2008 – takes place only within the framework of monetarized economies.
Graeber expresses some frustration at the sheer pervasiveness of Adam Smith’s myth, working overtime to show that it is not original to Smith and that the evidence is overwhelmingly stacked against it. One source of his frustration is that a crucial founding myth is not empirically falsifiable. No amounts of “facts” will dent the power of the myth, as Sorel showed so well many years ago (Reflections on Violence). Instead, it is more worthwhile to ask what truth the myth expresses, given that a myth is always split between fiction and a deeper and not always pleasant truth (part of its mixed heritage).
That truth is that Smith, in resuscitating and refining the myth, had a distinct agenda: he wanted to create a new being, “the economy.” The definite article is crucial, for “the” economy was to be distinct entity, with its own rules, its own dynamic that is distinct from politics, the state, and above all religion. What better way to do so than reconstruct a myth in which “the” economy arose as a natural expression of human nature? But why did he wish to create such a being? A new field of study needed an object to study, the discipline of economics. And in order to ensure that this discipline was not bereft of an object of study, “the economy” was created.
It is worth noting that Smith was really completing a process that began with the earlier work of Hobbes and Locke from the seventeenth century. They provide an explicit but incomplete path from the Bible and theology to economics, at times seeking continuities and at others offering a narrative of movement beyond the Bible. Smith’s achievement was to bring the process to a definitive break: economics as both discipline and reality was no longer tied to theology. Or rather, it was sublimated as a moral tension between compassion and self-interest.
In other words, the myth of origin is crucial to the very formation of the discipline of what we would now call classical economics. To dump the myth would mean to dismantle the discipline as now understood. I would prefer another formulation: economics would turn out to be inseparable from social relations, politics, and religion.
13 May, 2012 at 10:33 pm
Brilliant, I will us this.
14 May, 2012 at 7:48 am
Be my guest.
14 May, 2012 at 6:29 am
So too with writing: historical investigations of writing in the seventeenth and eighteenth centuries “were born in a milieu of thought where proper scientific work had constantly to overcome the very thing that moved it: speculative prejudice and ideological presumption. Critical work progresses by stages and its entire strategy can be reconstructed after the fact. It first sweeps away the “theological” prejudice”. Or rather, the sciences – of exchange, writing, law, religion, politics, etc – retain the theological prejudice, but in a new form.
14 May, 2012 at 7:50 am
It’s not clear whether you are finally giving up your futile effort to banish theology, whether you are subscribing to a narrative of origins that recognises theology’s inescapable power, or …
14 May, 2012 at 6:53 pm
I’ve never attempted to banish theology – only dogmatic theology, which is the game of apologetics, a reactionary occupation – and which perhaps confusingly I sometimes simply call “theology”.
But to clarify, while I think we should pursue both of those aims at the same time (banishing more and more theology and also recognising it will keep cropping up), I was thinking more along the lines of its “inescapable power” there.
14 May, 2012 at 9:39 pm
But you read that power as negative – why? It sounds pretty much what the opponents to religion in universities assume, namely that it’s a pseudo-science since its object of study doesn’t exist. Unlike, say, anti-matter, the imagination, or quantum physics.
15 May, 2012 at 4:43 am
Theology belongs with astrology, humourology, hermeticism, etc. While they once assisted knowledge, now they mainly only obfuscate it. In economic terms – seeing as this is a post about Adam Smith – all areas of knowledge-production are subject to The Law of Diminishing Returns. The study of quantum physics is currently at the top of the line (its obfuscation is outweighed by its insights into reality), while the study of theology is at the bottom, obfuscating far more than it elucidates.
15 May, 2012 at 9:12 am
Gotcha: so theology is a Dawkinite meme. The problem is, as Gary Bouma points out, that the stridency of the ‘new old atheists’ as well as the anti-theologians points to the position of a threatened minority. Good liberal that he is, Gary argues that they should allowed a quiet place, along with many other religious positions, in a multi-religious world.
15 May, 2012 at 3:55 pm
That fits with the atheists in the US, who are strident and a minority, treated as social pariahs, not-really-citizens (as made explicit by Bush the Younger), immoral, etc.
It doesn’t fit so much with the atheists in the UK, Australia, or NZ, where it is simply passe. Nobody takes any notice of the alarm raised by the Atheists/Humanist Society when they raise their occasional protest that there is a prayer recited at the beginning of every Parliament (or against some such vestige of an earlier Christian dominance). It is simply irrelevant: nobody really gives a fuck, because Christianity is treated as an old great-uncle in the family who tells bad jokes, is a bore at parties, and probably shouldn’t be left alone around any children … but is largely harmless.
The minority status does fit within biblical studies, wherein religious presumptions and motivations have remained dominant (although changing somewhat with the tides and shifts in Protestant Christianity over the last 250 years or so). The subject matter has never made Sheehan’s shift to second place behind cultural evaluation, a point biblical scholars who adopt Sheehan’s thesis should really have picked up on. The religious evaluation, framing, benefits, employment, etc of biblical scholarship is still, as always, of primary concern. This tends to make the person doing areligious biblical scholarship – scholarship on the Bible which is not in service of any caretaking role – perverse in the eyes of the majority, and so best treated by being dismissed or ignored (because it’s not “really” biblical studies if it doesn’t serve Christianity). Makes you want to take the piss now and again, doesn’t it?
15 May, 2012 at 5:11 pm
Your world is very small, Deane. Try looking at a global level instead of small countries on its edge. But you make a massive assumption here: why is theology by definition confessional?
15 May, 2012 at 8:11 pm
Well pardon me for not discussing atheism and biblical studies in every country in the world.
Theology, as practised under that name, is almost always confessional. Non-confessional theology is in theory possible, but to apply the name of theology to non-confessional discourses is usually humpty-dumptyism or the jaundiced view of non-theological discourses by those employed by Theology Departments. As with all definitions, this discussion is quite arbitary. Why not limit “theology” to confessional activities?
15 May, 2012 at 9:52 pm
That’s simply putting the old cart before the nag. Confessional positions and discipline known as theology have no necessary connection. We don’t expect students of classical Greece to believe in Greek gods (although there was supposedly one eccentric classics professor who once did), or an art critic to be an artist, a literary critic to be a novelist or a poet. Besides, critical biblical scholarship has banished the gods from its scholarship for well over a century.
16 May, 2012 at 6:39 am
All definitions put the horse before the cart, yours included (and what’s with you and horses, anyway?). In favour of mine is that this is how theology is understood by almost all of its practitioners today. Conversely, students of classical Greek gods, do not claim to do “theology”. Therefore, when I use the term, I’m paying attention to the actual practice of theology; when you use the term it is humpty-dumptyism. Sure, it is in theory possible to have a non-dogmatic, non-confessional theology, a distinction I already made above. But it is certainly not “a massive assumption” to employ the word “theology” according to its common usage and from there seek to critically understand what is meant by it. But I suppose if I were paid by a theology department, I’d start to want to enlarge the scope of my domain to every other subject, too – so I don’t blame your penchant for inflationary definitions.
As for critical biblical scholarship banishing the gods for well over a century, I have never heard anything so naive. To the contrary, for the last 250 years, almost every biblical scholar has been engaged in the reactionary task of maintaining the belief that the Bible tells us something of God, in response to the new assumptions of modernity. The myth that critical biblical scholarship wanted to get rid of God is simply a parroting of the polemical response of conservative biblical scholars over this period. The truth is precisely the opposite: critical biblical scholarship has embraced the divine in its scholarship for well over a century.
16 May, 2012 at 6:41 am
… “cart before the horse”, rather.
16 May, 2012 at 10:57 am
There’s no such thing as a slip, for deep down you realise the irrepressible correctness of my argument …
16 May, 2012 at 6:03 pm
Shirley, you are putting Descartes before d’hors-texte.
16 May, 2012 at 10:32 pm
Stop calling me Shirley
15 May, 2012 at 4:43 am
Reblogged this on Stephen Keating and commented:
Great intro to the barter myth in Graeber’s Debt by Roland Boer.
16 May, 2012 at 12:00 pm
I finished Graeber’s book a few months ago and gotta say that I really enjoyed it. It’s also great (at least for me) to see somebody who is very much involved in grassroots or front-line struggle engaging in this kind of scholarship. Where does this fit into your typology?
16 May, 2012 at 10:31 pm
Good point re the typology. It’s an ongoing project …
Graeber’s book is a good read, but it has it’s problems: a transhistorical assumption where anthropology provides the secrets to human behaviour, thereby assuming human nature is the same (he shares this deep assumption with Smith); a lack of any sustained economic analysis, especially in terms of class; and a bewildering adherence to the idealist ‘axial age’. But I have drawn more from him than I have to criticise.
16 May, 2012 at 10:53 pm
Fair enough. I’ve noticed that this approach to anthropology seems common amongst a good many thoughtful contemporary anarchists. I was thinking about that a bit… perhaps every political movement wants to root itself in some sort of foundational (authoritative?) discipline and this is the one that anarchists find most appealing and useful (despite the feelings many anarchists have about authorities of any kind?)… just an half-formed thought…
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