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A stronger explanation is provided by our demonstration that the term “interests” actually carried—and therefore bestowed on money-making—a positive and curative connotation deriving from its recent close association with the idea of a more enlightened way of conducting human affairs, private as well as public.
La Rochefoucauld dissolved the passions and almost all virtues into self-interest, and in England Hobbes carried out a similar reductionist enterprise.
As happens frequently with concepts that are suddenly thrust to the center of the stage—class, elite, economic development, to name some more recent examples—interest appeared so self-evident a notion that nobody bothered to define it precisely.
Once passion was deemed destructive and reason ineffectual, the view that human action could be exhaustively described by attribution to either one or the other meant an exceedingly somber outlook for humanity. A message of hope was therefore conveyed by the wedging of interest in between the two traditional categories of human motivation.
As an ardent admirer of St. Augustine, Bossuet saw little to choose between passion and interest. For him both “interest and passion corrupt man,” and he warns against the temptations of the royal court as both “the empire of interests” and the “theater of the passions.”
Naturally, once the meaning of interests was narrowed to material advantage, the idea that “Interest Governs the World” was bound to lose much of its earlier appeal. In fact, the phrase turns into a lament, or into a denunciation of cynicism, when a character in Schiller’s play Wallenstein’s Tod exclaims:
Denn nur vom Nutzen wird die Welt regiert.t
A more weighty objection to the possibility of a mutual gain arising from a situation in which all parties steadfastly pursue their interests derived from the fact that in international politics the interests of the principal parties are often exactly opposite to one another.
The by-product of individuals acting predictably in accordance with their economic interests was therefore not an uneasy balance, but a strong web of interdependent relationships. Thus it was expected that expansion of domestic trade would create more cohesive communities while foreign trade would help avoid wars between them.
Inconstancy actually came to the fore as a central difficulty in creating a viable social order after Machiavelli’s and Hobbes’s extreme pessimism about human nature (and about the resulting “state of nature”) gave way to more moderate views in the second half of the seventeenth century.
In the Treatise Hume had specifically contrasted the “love of gain,” which is characterized as “perpetual” and “universal,” with other passions, such as envy and revenge, that “operate only by intervals, and are directed against particular persons.”
Here Montesquieu seems to marvel at money’s being an exception to what became known in modern economics as the law of decreasing marginal utility. About one hundred fifty years later the German sociologist Georg Simmel made some illuminating remarks on this very subject. Normally, he said, the fulfilment of human desire means an intimate acquaintance with all the diverse facets of the desired object or experience, and this acquaintance is responsible for the well-known dissonance between desire and fulfilment, which takes most frequently the form of disappointment; but the desire for any given
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To be sure, some notes of alarm were sounded already in early eighteenth-century England where the Bank crisis of 1710, the South Sea Bubble of 1720, and the widespread political corruption of the age of Walpole gave rise to concerns that the old order was being undermined by money.
The Johnsonian epigram about the innocuousness of “money getting” had its counterpart in France. In fact, the identical term “innocent” can be found as a characterization of commercial activities in the preamble of the 1669 edict that declared seaborne commerce to be compatible with nobility:
Subsequently another, at first sight even odder term caught on. There was much talk, from the late seventeenth century on, about the douceur of commerce: a word notoriously difficult to translate into other languages (as, for example, in la douce France), it conveys sweetness, softness, calm, and gentleness and is the antonym of violence. The first mention of this qualification of commerce I have been able to find occurs in Jacques Savary’s Le parfait négociant, the seventeenth-century textbook for businessmen:
“Das ist der doux commerce!”
But in France even more than in England it may also have had much to do with the lenses with which people looked at different social groups: anyone who did not belong to the nobility could not, by definition, share in heroic virtues or violent passions.
In this way everything was well: an activity such as the rationally conducted acquisition of wealth could be categorized and implicitly endorsed as a calm passion that would at the same time be strong and able to triumph over a variety of turbulent (yet weak) passions. It is precisely this dual character of the acquisitive drive that Adam Smith stresses in his well-known definition of the desire of bettering our condition as “a desire which, though generally calm and dispassionate, comes with us from the womb, and never leaves us till we go into the grave.”
If the “interests-versus-passions thesis” is nevertheless quite unfamiliar, it is so partly owing to its having been superseded and obliterated by the epochal publication, in 1776, of The Wealth of Nations.
By drawing on a wide range of sources I have attempted to show that the thesis was part of what Michael Polanyi has called the “tacit dimension,” that is, propositions and opinions shared by a group and so obvious to it that they are never fully or systematically articulated.
The passions that most need bridling belong to the powerful, who are in a position to do harm on a huge scale and were believed to be particularly well endowed with passions in comparison to the lesser orders.
MONTESQUIEU saw many virtues in commerce, and the relation he asserted between the expansion of commerce and the spread of gentleness (douceur) has already been noted.
Montesquieu describes here first how commerce was hampered by the prohibition of interest-taking by the church and was consequently taken up by the Jews; how the Jews suffered violence and constant extortions at the hands of nobles and kings; and how eventually they reacted by inventing the bill of exchange (lettre de change).
And the chapter ends with the sentence that is a crown witness for the thesis of this essay and has been chosen as its epigraph: And it is fortunate for men to be in a situation in which, though their passions may prompt them to be wicked (méchants), they have nevertheless an interest in not being so.2
It is astonishing that the bill of exchange has been discovered only so late, for there is nothing so useful in the world”b—and in Esprit des lois he makes much of the subdivision of wealth into land (fonds de terre) and movable property (effets mobiliers) of which the bill of exchange is part.
In showing how the bill of exchange and foreign exchange arbitrage make it less attractive for the powerful to act with their traditional recklessness and violence, Montesquieu does nothing but follow up on the program he had sketched out for himself in the brief essay “On Politics” written twenty-three years before the publication of Esprit des lois:
So that there may be no abuse of power, it is necessary that, through the disposition of things (par la disposition des choses), power be stopped by power.
Nevertheless, in the seventeenth and eighteenth centuries there was increasing concern over international relations and, in particular, over the virtually permanent state of war in which the major powers were embroiled.
Set against the backdrop of a country where, in mid-eighteenth century, no clear remedy against disastrously arbitrary rule was in sight, Montesquieu’s partial reliance on commerce, the bill of exchange, and arbitrage as safeguards against les grands coups d’autorité and war can be interpreted as a counsel of despair or, alternatively, as an extraordinary leap of optimistic imagination.
Here is another spectacular formulation of the idea originally framed by Montesquieu, that owing to the “complicated system of modern oeconomy” the interests would win out over arbitrary government, over the “folly of despotism,” in short, over the passions of the rulers.
The implication was of course that once He had built the clock, it was going to run entirely by itself. Steuart’s watch (= economy) shares with the clock (= universe) the quality of being a finely built mechanism that should not be tampered with by arbitrary outside interference, but by choosing the image of a watch he manages to convey both the impossibility of arbitrary and careless handling and the need for frequent corrective moves by the solicitous and expert “statesman.”
A number of important ideas and concerns are shared by the two groups, but emphasis and conclusions often differ markedly. For example, the idea of the economy as an intricately built mechanism or machine that functions independently of men’s will was one of the most important contributions of the Physiocrats to economic thought.
Similarly, the Physiocrats and Adam Smith shared with their contemporaries the belief in the importance of the distinction between movable and unmovable property.
Finally and most important, the two groups of writers are equally convinced that incompetent, arbitrary, and wasteful policies of the rulers can seriously impede economic progress.
The main impact of The Wealth of Nations was to establish a powerful economic justification for the untrammeled pursuit of individual self-interest, whereas in the earlier literature that has been surveyed here the stress was on the political effects of this pursuit.
With respect to arbitrary decisions and harmful policies of the central government, Smith does not hold out much hope that economic development itself will bring improvements. At one point, when speaking about “the capricious ambition of kings and ministers,” he says specifically: The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy.
It appears that Smith advocated less a state with minimal functions than one whose capacity for folly would have some ceiling.
Smith’s ambivalence toward nascent capitalism was not limited to this instance. Its most famous manifestation is perhaps his treatment of the division of labor, which he celebrates in Book I, only to castigate it in Book V. Much has been written about this contrast.56 Here it is of particular interest that Smith sees the loss of the martial spirit and virtues as one of the unfortunate consequences of both the division of labor and of commerce in general.
There seems to be no place here for the richer concept of human nature in which men are driven by, and often torn between, diverse passions of which “avarice” was only one. Smith was of course fully aware of these other passions and had indeed devoted an important treatise to them. But it is precisely in The Theory of Moral Sentiments that he paves the way for collapsing these other passions into the drive for the “augmentation of fortune.”
Small wonder, then, that Smith himself virtually equates the passions with the interests in a key passage of The Wealth of Nations where the modus operandi of the market society is described:
The two terms “interests” and “passions,” which had so frequently been antonyms in the century and a half that had elapsed since the Duke of Rohan wrote On the Interest of Princes and States of Christendom, appear here, twice in succession, as synonyms.
Here is the other side of Sir James Steuart’s metaphor of the economy as a delicate watch. The need to keep it working—to insure tranquility, regularity, and efficiency—is not just a bar to princely caprice. Ferguson perceives correctly that it can be invoked as a key argument for authoritarian rule, as indeed had already been done by the Physiocrats and as was going to happen over and over again during the next two centuries.
A nation that demands from its government nothing but the maintenance of order is already a slave in the bottom of its heart; it is the slave of its well-being, and the man who is to chain it can arrive on the scene.
for they demonstrate that economic expansion is basically and simultaneously ambivalent in its political effects, whereas Marxist thought imposes a temporal sequence with the positive effects necessarily antedating the negative ones.
Thus the modern political argument for capitalism that is today associated with such authors as Mises, Hayek, and Milton Friedman was originally put forward by none other than Proudhon.
By the middle of the nineteenth century the experience with capitalism had been such that the argument about the benign effects of le doux commerce on human nature had totally changed: it was just because property was now seen as a wild, boundless, and revolutionary force that Proudhon gave it the role of countervailing the equally terrifying power of the state. He actually uses the term “counterweight” and thereby connects his thesis with the intellectual tradition that has been traced here, just as Galbraith was to do for yet another purpose after one more century.
Weber and his followers as well as most of his critics were primarily interested in the psychological processes through which some groups of men became single-minded in the rational pursuit of capitalist accumulation.
My story takes it for granted that some men became so impelled and focuses instead on the reaction to the new phenomenon by what is called today the intellectual, managerial, and administrative elite.
My claim is that the diffusion of capitalist forms owed much to an equally desperate search for a way of avoiding society’s ruin, permanently threatening at the time because of precarious arrangements for internal and external order.
In one of the most attractive and influential of these critiques, the stress is on the repressive and alienating feature of capitalism, on the way it inhibits the development of the “full human personality.”
