Adam Smith's Critique of International Trading ... - Political Theory

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206 Political Theory Enlightenment accounts so often were—in another narrative of global commerce, one that is deeply ironic, cynical, and bitter and that seeks to the illuminate the institutional and ideological sources of bloody exploitation. Indeed, Smith follows the passage above by bringing the reader back to modern, grim realities. “In the mean time,” he writes, “one of the principal effects of those discoveries [of the New World and of a direct oceanic route to Asia] has been to raise the mercantile system to a degree of splendor and glory which it could never otherwise have attained to” (IV.vii.c.80; 627). As we have seen, Smith believed that venal state officials were routinely corrupted by companies into thinking that the national interest was synonymous with the interests of the companies that were headquartered in their lands. Surviving within that company-driven mercantile system in a less oppressed manner would require the weakest and most vulnerable populations to acquire—by means of cosmopolitan (if unequal) exchanges across borders—the goods, technologies, and ideas that could eventually be used, or threatened to be used, against the most powerful companies and their governmental clients. 41 Smith’s arguments about international trading companies exemplify a particular strand of eighteenth-century thought that cannot be captured by the standard portrait of “the Enlightenment” ideology of commerce, which is said to justify the rise of modern commerce and to trumpet its pacifying and enlightening effects. Destructive passions on this standard view are said to be replaced by peaceful commercial interests. For Smith, the rise of global commerce and communication presents both great possibilities and gross injustices because it unleashes its own distinctive passions and interests, a variety of forces that might stand in tension with one another—a tension, he hopes, that could gradually, over many generations, politically empower the weak and disempower the strong. Achieving a rough approximation of global justice, in his view, requires a balance of equal political forces, and the ever more frequent exchanges and communications across borders—“from all countries to all countries”—might themselves help to bring this about. Smith’s hope, then, was that global commerce over many centuries (or perhaps over millennia) will yield a greater equality of political power internationally that could begin to realize what he took to be the sacred right of commercial and communicative liberty. Such a right, after all, is for Smith a genuinely human right, one that ought to span widely across borders, oceans, and continents—across “all the different quarters of the world”—and that should be as global in its reach as humanity itself. Yet this will be partly realized, in his view, not because of the harmonious and invisible economic effects of self-interested actors or due to the enlightening
Muthu / Smith’s Critique of International Trading Companies 207 tendencies of commerce upon European mores, but rather due to what Smith envisioned as the geopolitical changes internationally, especially the greater power of non-European nations, that global communication would eventually foment. 42 Only this could start to confront the power of international trading companies and their client states: globalization would thus produce less inequitable conditions internationally that would begin to mitigate— primarily by the threat of violence—the long train of severe inequities and injustices that globalization itself had produced for centuries. Given that Smith’s enlightened narrative about global commerce works within a still unfree, corrupt, and oppressive system of colluding companies and states, the prospect of mutual fear, rather than mutual friendship, does much of the work of ensuring that nations exploit one another less often and less severely. Under ideal conditions, Smith argues that “commerce . . . ought naturally to be, among nations, as among individuals, a bond of union and friendship.” In a nonideal context—that is, in the world that Smith saw himself inhabiting and that he assumed would continue into future generations— he notes bluntly that commerce is instead “the most fertile source of discord and animosity” (IV.iii.c.9; 493). The greater equality of force among nations that he envisions in the future, then, would produce not a union of friendship, but a second-best alternative that depends upon the countervailing animosities that geopolitical equity makes possible. Thus, even in his sole optimistic prognosis about the future of global relations, one in which companies and states will begin to offer “some sort of respect” for others, Smith remained deeply ambivalent about the effects of globalization upon human welfare. Notes 1. For a recent example of the standard monopoly-based understanding of Smith’s criticism of international trading companies, see Deepak Lal, Reviving the Invisible Hand (Princeton, NJ: Princeton University Press, 2006); for instance, at p. 196: “Most of the companies were chartered monopolies, and as such they roused the ire of Adam Smith.” 2. For two of the best recent critiques of this conventional view, see Emma Rothschild, Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment (Cambridge, MA: Harvard University Press, 2001); and Samuel Fleischacker, On Adam Smith’s Wealth of Nations (Princeton, NJ: Princeton University Press, 2004). See also the following essays in The Cambridge Companion to Adam Smith, ed. Knud Haakonssen (Cambridge: Cambridge University Press, 2006): Pratap Bhanu Mehta, “Self-Interest and Other Interests,” 246-69; and Knud Haakonssen and Donald Winch, “The Legacy of Adam Smith,” 366-94. 3. For a nuanced and detailed interpretation along these lines that begins to link these European concerns to the global scale of production, consumption, manufacturing, and trade in the eighteenth century, see Istvan Hont, Jealousy of Trade: International Competition and
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