July 28, 2018 Dear Reader

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Jack Goldstone (at length) on the Early Modern, draft of The Problem of the `Early Modern’ World
What mattered is that in some nations, the world-wide revolts and rebellions of the 17^th century, due to particular cultural frameworks prevailing among certain elites, produced liberalizing regimes, overturning the grip of government and religion on society and breaking the monopoly on power of traditional elites. . . . During these centuries Asian civilizations underwent major growth and extension of their market networks, developed new technologies for the production of cotton and ceramics, and greatly expanded the size of their populations and economies. . . .
Despite the continuing strength of other forces, such as the aristocracy in England and the bureaucracy in France and the army in Germany. This allowed economic growth to continue. The natural corruptions this time usually worked in growth-favoring directions. {But the ethical link was severed: next volume; but do not anticipate much }

The present moment [1830] is one of great distress. . . . Yet is the country poorer than in 1790? . . . . A single breaker may recede; but the tide is evidently coming in. If we were to prophesy that in the year 1930 a population of fifty millions, better fed, clad, and lodged than the English of our time, will cover these islands; that Sussex and Huntingdonshire will be wealthier than the wealthiest parts of the West Riding of Yorkshire now are, . . . that machines constructed on principles yet undiscovered will be in every house. . . many people would think us insane. . . . If any person had told the Parliament met in perplexity and terror after the crash in 1720 that in 1830 the wealth of England would surpass all their wildest dreams, . . . that London would be twice as large and twice as populous, and that nevertheless the rate of mortality would have diminished to one half of what it was then, . . . that stage coaches would run from London to York in twenty-four hours, that men would be in the habit of sailing without wind, and would be beginning to ride without horses, our ancestors would have given as much credit to the prediction as they gave to Gulliver’s Travels. Yet the prediction would have been true . . . . We cannot absolutely prove that those are in error who tell us that society has reached a turning point, that we have seen our best days. But so said all who came before us, and with just as much apparent reason. . . . On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?

Macaulay,

“Southey’s Colloquies on Society” (1830)

The bourgeoisie . . . has put an end to all feudal, patriarchal, idyllic relations. . . . It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all forms of Exoduses of nations and crusades. . . . National one-sidedness and narrow-mindedness become more and more impossible. . . . The bourgeoisie . . . draws all, even the most barbarian, nations into civilization . . . . The bourgeoisie has . . . rescued a considerable part of the population from the idiocy of rural life. . . . The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. . . . [W]hat earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

Marx and Engels

The Communist Manifesto, 1848, Part I

F. L. Bender, ed., Norton Critical Edition,

W. W. Norton, NY, 1988, pp. 57-59

If it's freedom one should be able to measure the difference between Japan and England. Foreign trade is utterly trivial in Japan, some 1 or 2 % of national income. My integration project is the economic trace of freedom. When the price structure is the same in two countries they are in trade, and restrictions are not effective. Also samurai's rice allotment was quite large, and the class was, too—more like Eastern than Western Europe.\

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Christopher Berry, 1992, p. 76: “What is necessary [in Smith] for social existence is not beneficence, since a company of merchants can subsist without it (TMS, 86), but justice. Society cannot subsist at all among individuals who are ready to injure each other” [bring in Field]. Further, Smith wrote, “we may often fulfill all the rules of justice by sitting still and doing nothing” (TMS, p. 82). Justice in modern freedom is laissez faire, quite contrary to the civic action of ancient freedom.

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How to solve the problem of fitting individual morality into social:

The Classical Republican Problem
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The market spreads American habits of cooperation with strangers. In America, noted Santayana, “co-operation is taken for granted, as something that no one would be so mean or short-sighted as to refuse” (p. 196), and it is “private interests which are the factors in any co-operation” (p. 226). He does not here mean that prudence only makes for cooperation: “When interests are fully articulated and fixed, co-operation is a sort of mathematical problem,” in the manner of Hobbes; but Santayana saw much more arising from “a balance of faculties.”⁵²⁴

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The effect of the French Revolution on the Scottish Enlightenment was similar to the effect of the Cold War on American progressivism. As Dwyer notes (p. 190), the inauguration of the Edinburgh Review in 1802 “hammered the nails in its coffin”: a spirit of party took hold, exactly as in the Cold War.

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The education system of Scotland was superb, much better than England’s from the local school dominie [??] to Adam Smith, Professor of Moral Philosophy. Edinburgh University (as it was called) alone had in 1780 about 1000 students including English dissenters (Smout, p. 354), which was two or three times that in Oxford and Cambridge combined. The universities were independent of religion, after a struggle early in the 18^th century, and thus secular philosophy flourished as it could not possibly at Oxbridge, where all instructors had to take holy orders. Further, the teaching was superb. Why? Because the students paid to professors directly (Adam Smith makes much of this). Law was the standard way to get rid of younger son of a laird not advance as a poor man, or even a merchant’s son. The law was Continental, and commonly entailed therefore a Continental education.

Edinburgh has about the population of Iowa City (thus, too Athens and Florence). The little towns modeled themselves after one or the other, mad for learning or for enterprise (Smout 1969, p. 342). Edinburgh was the home and model of Bildungsbürgertum, Glasgow of commercial middle class. Smout quotes Hugo Arnot in 1779: dependent “chiefly upon the college of justice, the seminaries of education and the inducement which as a capital it afford to genteel people to reside in it” (Smout p. 355). Riotous, like London yet as it was said, “a part of the state” (Chambers, quoted in Smout, p. 345). Only 2 people died in the eight major riots between 1740 and 1791.

James Stuart, Critical Observations on the Buildings and Improvements of London, pp. 41,42,47, cited in (Langford, p. 425): virtue in cities greater. Langford argues that “the pursuit of genteel status and the acquisition of polite manners in some measure united a class which in other respects appeared diverse and divided” (Langford, p. 59). “Gentility was the most prized of all possessions in eighteenth-century Britain” (Langford, p. 329). Joseph Massie’s table of 1759: Annual family income above L40 = 2/5 of the population, by Massie’s table and Lindert/Williamson revisions (EEH 1982: 395-408). Earning L50 and above, about 1/5 or a little less. Per capital income at about L10 a head. About L20 was subsistence for a family. “The apparently limitless appetite of the middling ranks for social status, as powerful a motive to enterprise and industry as the lust for worldly goods” (Langford, p. 65). (Langford, p. 71 claims there were manuals of advice for middling folk. Find them.

The “sentimental revolution” of the 1760s and 1770s expressed “the middle-class need for a code of manners which challenged aristocratic ideals and fashions” (Langford, p. 461). A bourgeois audience led to the sentimental revolution, which led in turn to personal ethics [ethics rather than morality], which supported Romanticism. “The English contribution to the use of sentiment was to turn it into a tool of piety rather than paganism” (Langford, p. 467). Hume remarked testily of the English that they were “relapsing into the deepest stupidity, Christianity and ignorance.”⁵²⁵
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Respectability: with it came religious tolerance. It became gradually vulgar to be anti-Catholic.

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Smith’s moral sentiments can be brought into U-Max in various ways. One is minimization of regret, “regret” being a discounted future sum of deviations from desirable behavior which may be simply pleasurable, which is the utilitarian case, or adhering to a desirable character. The “desirable character” could be defined in a religious way, as adherence to The Law, or to the Life of Christ. Smith secularizes it as the sentiments of the “Impartial Observer” which is an intellectual tactic common to the 18^th century, as in Kant’s Reason; or indeed in Hume and Bentham’s Utility. But in any case a regret depends on memory, and therefore on culture and morality. One contemplates not doing the right thing, by whatever standards one adheres to, and reflects on a life of regret. Lord Jim in Conrad’s novel betrays his duty as chief mate of the Patna, bound for Mecca with pilgrims aboard. He regrets all his life his impulsive act of abandoning ship.

The notion of regret brings society into maximization. The Impartial Observer views some patterns of consumption and production as better: among other virtues expressed in consumption, a pattern with room for charity and great-heartedness; and among those expressed in production, for enterprise and prudence. The economist asks whether the patterns can be reduced to the shape of the utility function in which case nothing is gained over rude utilitarianism. Or, better, he asked whether the patterns contain empirical content. They do. To bury the Impartial Observer in the head of an isolated consumer, and treat it therefore as economists do as an unanalyzed datum, “taste,” is a scientific mistake. Smith offers hundreds of empirical regularities concerning the Observer: for example, that the Observer takes a dim view of anger (pp. 35-38) but a bright view of benevolence (p. 38ff).

Ambition was linked in Smith of course with avarice, p. 50; but with spirit, too, in a good sense, p. 55); though on the whole a “passion” and dangerous: “And thus, place, that great object which divides the wives of aldermen, is the end of half the labors of human life; and is the cause of all the tumult and bustle, all the rapine and injustice, which avarice and ambition have introduced into this world.”⁵²⁶

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Smith wrote a three-page encomium on bourgeois virtues: The “private man,” as against “the man of rank and distinction,” “has no other fund to pay [for followers], but the labor of his body, and the activity of his mind. He must cultivate these therefore; he must acquire superior knowledge in his profession, and superior industry in the exercise of it. He must be patient in labor, resolute in danger, and firm in distress.”⁵²⁷

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The bourgeois man on the Rialto must moderate his passions to a level that strangers will feel sympathy for. But then the sympathy expressed will be comforting. On both counts, the moderation and the comfort, he is made tranquil. “Society and conversation, therefore, are the most powerful remedies for restoring the mind to its tranquility. . . . Men of retirement . . . seldom possess that equality of temper which is so common among men of the world” (I.i.4.10, p. 23). This is not a portrait of an aristocrat (pure self-control, without social contact) or of a peasant (pure love, again without regard to the audience the rhetoric in the situation). It is a portrait of a bourgeois. Smith’s theory is therefore highly rhetorical. Smith had a conjective theory of ethics. Smith was directly and vividly aware of the Problem of the Two Virtues, peasant and aristocratic. Stewart speaks explicitly of “two different sets of virtues” (Stewart, “Account,” p. 282, sec. II. 16.5): the two being Christian and Stoic, love and self-command. “The man of the most perfect virtue . . . is he who joins, to the most perfect command of his own original and selfish feelings, the most exquisite sensibility both to the original and sympathetic feelings of others. The man who, to all the soft, the amiable, and the gentle virtues, joins all the great, the awful, and the respectable, must surely be the natural and proper object of our highest love and admiration” (TMS III.3.35, p. 152). Smith’s theory of sympathy runs parallel with his theory of rhetoric. The speaker, the “person principally involved,” is aristocratic, the audience of “spectators” is peasant-like. The attempts to communicate establish a leveling of sympathy, a republic of virtue.

As Stewart describes it, “our moral judgments with respect to our own conduct are only applications to ourselves of decisions which we have already passed on the conduct of our neighbor.” (Stewart, “Account,” p. 280, sec. II.7) The Spectator adjusts to the play. {Cf. Billig.} To the extent that moral sentiment is an argument, taking place among equals, it is rhetorical and bourgeois. He draws the moral immediately, contrasting the “amiable” virtue of “the spectator to enter into the sentiments of the person principally involved” and the “respectable” virtue of moderating the passions as “the person principally involved,” the actor (p. 23, I.i.5.1). This he brings under one theory: “to restrain our selfish, and to indulge our benevolent actions, constitutes the perfection of human nature” (I.i.5.5, p. 25). “As to love our neighbor as we love ourselves is the great law of Christianity, so it is the great precept of [pagan and Stoic] nature to love ourselves only as we love our neighbor,” that is, with restraint (same).

For example his discussion of anger, which is directed to how the passion plays to an audience. Anger can have utility in frightening the person provoking it, but must be expressed to the Impartial Spectator with caution. Anger, resentment, hatred have utility to the individual “by rendering it dangerous to insult or injure him.”⁵²⁸ But “though their utility to the public, as the guardians of justice, and of the equality of its administration, be not less considerable,” “yet there is still something disagreeable in the passions themselves. . . . It is the remote effect of these passions which are agreeable; the immediate effects are mischief to the person against whom they are directed. But it is the immediate, and not the remote effects of objects which render them agreeable or disagreeable to the imagination.”⁵²⁹ ( “Mere expressions of spite inspire it against nobody, but the man who uses them.”⁵³⁰ “Smaller offenses are always better neglected.” (p. 38) “It must appear, in short, from our whole manner . . . that if we yield to the dictates of revenge, it is with reluctance, from necessity, and in consequence of great and repeated provocations.”⁵³¹ It must appear, says Smith repeatedly. His is a theory of efficacious performances.

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The native-Chinese search engine Baidu had by 2006 had more success in China than Google because it encouraged companies to buy rankings in the search. Americans, from a society that sharply separates the profane from the sacred, are scandalized by such a practice. Money corrupts, they say. Therefore Google will not accept payment for higher ranking. To do so in the United States would undermine belief in the usefulness of the rankings. But ordinary Chinese, with a stronger faith in prudence-only than the Americans, regard willingness-to-pay as itself a certification of excellence. Of course Americans sometimes follow the same reasoning, as when they call the company in the Yellow Pages with the largest advertisement.

Has business is fact become ethical? The propositions seems laughable in an economy of grotesquely high pay for CEOs. An obscure Norwegian-American professor of finance at the University of Iowa's Tippie School of Business named Erik Lie (pronounced, it should be noted, "Lee") in …… [his first paper?] looked into options on company stock. The option to buy at the $10-a-share price the stock was selling for on June 1, 1995 is of course quite valuable if a virtuous CEO by hard work and tacit knowledge can bring the company to profitability, and the share a year later to $20. That's the justification for stock options. It's a good one. Everyone is made better off if companies are run well. What Professor Lie discovered, however, is that management was sweetening the deal by routinely lying about when the option was dated. Suppose the CEO in fact from his incompetence has a year after June 1, 1995 driven down the price of the stock, to $9 a share. How to still make him rich when he leaves? Ah hah: backdate the option, that is, claim that he actually got the option on December 1, 1994, when the stock was languishing at $5 a share. By lying (with apologies to Professor Lie), the management assures its own enrichment. Lie found that thousands of companies were doing this, not just a few bad apples—in late 2006 even the sainted Apple computer company was caught doing it.

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