Adam Smith's Critique of International Trading ... - Political Theory
Adam Smith's Critique of International Trading ... - Political Theory
Adam Smith's Critique of International Trading ... - Political Theory
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Muthu / Smith’s <strong>Critique</strong> <strong>of</strong> <strong>International</strong> <strong>Trading</strong> Companies 207<br />
tendencies <strong>of</strong> commerce upon European mores, but rather due to what Smith<br />
envisioned as the geopolitical changes internationally, especially the greater<br />
power <strong>of</strong> non-European nations, that global communication would eventually<br />
foment. 42 Only this could start to confront the power <strong>of</strong> international<br />
trading companies and their client states: globalization would thus produce<br />
less inequitable conditions internationally that would begin to mitigate—<br />
primarily by the threat <strong>of</strong> violence—the long train <strong>of</strong> severe inequities and<br />
injustices that globalization itself had produced for centuries.<br />
Given that Smith’s enlightened narrative about global commerce works<br />
within a still unfree, corrupt, and oppressive system <strong>of</strong> colluding companies<br />
and states, the prospect <strong>of</strong> mutual fear, rather than mutual friendship, does<br />
much <strong>of</strong> the work <strong>of</strong> ensuring that nations exploit one another less <strong>of</strong>ten and<br />
less severely. Under ideal conditions, Smith argues that “commerce . . . ought<br />
naturally to be, among nations, as among individuals, a bond <strong>of</strong> union and<br />
friendship.” In a nonideal context—that is, in the world that Smith saw himself<br />
inhabiting and that he assumed would continue into future generations—<br />
he notes bluntly that commerce is instead “the most fertile source <strong>of</strong> discord<br />
and animosity” (IV.iii.c.9; 493). The greater equality <strong>of</strong> force among<br />
nations that he envisions in the future, then, would produce not a union <strong>of</strong><br />
friendship, but a second-best alternative that depends upon the countervailing<br />
animosities that geopolitical equity makes possible. Thus, even in his<br />
sole optimistic prognosis about the future <strong>of</strong> global relations, one in which<br />
companies and states will begin to <strong>of</strong>fer “some sort <strong>of</strong> respect” for others,<br />
Smith remained deeply ambivalent about the effects <strong>of</strong> globalization upon<br />
human welfare.<br />
Notes<br />
1. For a recent example <strong>of</strong> the standard monopoly-based understanding <strong>of</strong> Smith’s criticism<br />
<strong>of</strong> international trading companies, see Deepak Lal, Reviving the Invisible Hand<br />
(Princeton, NJ: Princeton University Press, 2006); for instance, at p. 196: “Most <strong>of</strong> the companies<br />
were chartered monopolies, and as such they roused the ire <strong>of</strong> <strong>Adam</strong> Smith.”<br />
2. For two <strong>of</strong> the best recent critiques <strong>of</strong> this conventional view, see Emma Rothschild,<br />
Economic Sentiments: <strong>Adam</strong> Smith, Condorcet, and the Enlightenment (Cambridge, MA:<br />
Harvard University Press, 2001); and Samuel Fleischacker, On <strong>Adam</strong> Smith’s Wealth <strong>of</strong><br />
Nations (Princeton, NJ: Princeton University Press, 2004). See also the following essays in<br />
The Cambridge Companion to <strong>Adam</strong> Smith, ed. Knud Haakonssen (Cambridge: Cambridge<br />
University Press, 2006): Pratap Bhanu Mehta, “Self-Interest and Other Interests,” 246-69; and<br />
Knud Haakonssen and Donald Winch, “The Legacy <strong>of</strong> <strong>Adam</strong> Smith,” 366-94.<br />
3. For a nuanced and detailed interpretation along these lines that begins to link these<br />
European concerns to the global scale <strong>of</strong> production, consumption, manufacturing, and trade<br />
in the eighteenth century, see Istvan Hont, Jealousy <strong>of</strong> Trade: <strong>International</strong> Competition and