Note: This is a “Midrash”, gloss, or “digested read” of Albert O. Hirschman’s book, The Passions and the Interests. It is decidedly not a critical analysis or a review of his work. As such it presents the author’s arguments as he makes them, and does not attempt an evaluation. It is presented here in the spirit of an apprentice student attempting to come to terms with the work of the master, and if it helps you with your own researches (or gives you any intellectual pleasure!), please consider reading it in its entirety—it’s not a long book by any means.

(As a side note, this is perhaps the least metabolized of my “digested reads”: While Hirschman’s prose is clear and precise, the wealth of detail in his arguments forced me to compress him far, far less than I would have liked!) 



This book concerns itself broadly with “the political consequences [and] correlates of economic growth” in the seventeenth and eighteenth centuries, a time when theories of economics, human nature, politics and ethics were all interstitial with one another (3); and its narrower concerns are the emergence of the “‘spirit’ of capitalism” and its march toward dominating political economic thought by the dawning of the nineteenth century. Hirschman sees his book as differing form “Marxian and Weberian analyses” in that it sees the new beliefs “aris[ing] out of the old” as much as it is a triumph of the new over the old—as capitalism “taking on” or “assault[ing]” the prior “systems of ideas and […] socioeconomic relations”(4).


PART ONE: How the Interests were Called Upon to Counteract the Passions

The Idea of Glory and Its Downfall

Hirschman chooses to begin by quoting Weber’s The Protestant Ethic and the Spirit of Capitalism on the very implausibility of its rise:

“Now, how could an activity, which was at best ethically tolerated, turn into a calling in the sense of Benjamin Franklin?” In other words: How did commercial, banking, and similar money-making pursuits become honorable at some point in the modern age after having stood condemned or despised as greed, love of lucre, and avarice for centuries past? (9)

A knight fighting a dragon, 15th-century woodcut / Rauner Special Collections Library, Wikimedia Commons

A knight fighting a dragon, 15th-century woodcut

This is because “striving for glory” was what dominated the aristocratic culture of the centuries before capitalism’s rise, while commerce was denounced by the likes of St. Augustine “as one of the three principal sins of fallen man, lust for power […] and sexual lust being the other two.”  Power receives the only partial exemption from his otherwise “even-handed” denunciation of all three lusts, as the desire for glory which accompanies it is a vice which produces the “‘civil virtue'” of love of one’s “‘earthly fatherland'”(10).


Tree of Vices (arbor vitiorum) (ca. 1200)

Even at this early stage in our history, before medieval “spokesmen for the chivalric, aristocratic ideal” broadened the pursuit of honour and glory into a positive virtue, we see the notion that “one vice may check another.” By the time of Montesquieu in the early 18C, glory has even been transformed into an “‘Invisible Hand'” which guides men to unwittingly perform public good while consciously pursuing “their private passions”—which even at that point were still concerned with “the search for glory, rather than with the desire for money.

Yet early on, Augustine’s reluctant nod to glory was a rarity, even in his own teachings, and the central thrust of Christian thought from Aquinas to Dante portrayed it as “both vain (inanis) and sinful” (11). It was only as the “influence of the Church receded” during the Renaissance that glory became “the only justification of life”, as it was in Ancient Greece. Glory-seeking reaches its peak with the drama Corneille (1606–84), though even in the work of his contemporaries, there is to be seen a desire to “‘demol[ish] the hero”, as

all the heroic virtues were shown to be forms of mere self-preservation by Hobbes, of self-love by La Rochefoucauld, of vanity and of frantic escape from real self-knowledge by Pascal. The heroic passions were portrayed as demeaning by Racine after having been denounced as foolish, if not demented, by Cervantes.

But such attacks were not made in the defense of any newer (e.g. bourgeois) ethos, however (12). Rather, these denunciations hearkened back to Augustine’s ranking of vices, as mostly having “equality in ignominy”. So, how are we to explain that, “less than a century later, the acquisitive drive and the activities associated with it, such as commerce, banking, […] came to be widely hailed”? Unsurprisingly, this question has a “complex and roundabout” answer.



Man “as he really is”

The Renaissance begins to formulate an answer to the above, though through theories of the state rather than through individual ethics: with Machiavelli and “his fundamental and celebrated distinction between ‘the effective truth of things’ and those utopian ‘imaginary republics'” of naively idealized human nature (13) —a science of which seemed achievable during the 17C, with Hobbes modelling his Leviathan on Galileo and Spinoza, in his Tractatus Politicus, furthering the critique of “philosophers who ‘conceive men not as they are but as they would like them to be’.” By the time of the 18C, e.g. with Vico, this desire for a science of human nature is routinely asserted, with even Rousseau wishing to base his Contrat social upon a firmer foundation than imagined, Platonic republics (14)


Repressing and Harnessing the Passions/The Principle of the Countervailing Passion

The reason for the above is that ethical commandments and the “threat of damnation” were increasingly seen as ineffective at restraining our harmful passions (15). Three alternatives to “religious command” were proposed:

1) The Augustinian “appeal to coercion and repression”, as elaborated by Calvin, and somewhat related to Hobbes’s theory of the “transactional […] Covenant” between the (absolute) sovereign and the (obedient) masses.

Mephistopheles and Faust in Goethe’s Faust (1808)

2)Harnessing the passions” as a metaphor in which the state acts as “a transformer, a civilizing medium” over our unbridled desires—as Pascal maintained that man “‘has managed to tease out of concupiscence an admirable arrangement’ and ‘so beautiful an order'” (16). Vico himself saw “‘three great vices'” (“‘ferocity, avarice, and ambition'”) whose “‘private utility'”, when used properly “‘mak[e] national defense, commerce, and politics'” in the well-run state (17)—presaging such concepts as “Hegel’s Cunning of Reason”, Freudian “sublimation”, and “Adam Smith’s Invisible Hand”, not to mention Mandeville’s Fable of the Bees, in which “‘private vices’ [become] ‘public benefits'”(18).


Mandeville’s Fable of the Bees (1714)

Mandeville particularly singled out luxury as possessing this particular power, influencing Smith’s  in this regard, though the latter “blunted the edge of Mandeville’s shocking paradox by substituting for ‘passion’ and ‘vice’ such bland terms as ‘advantage’ and ‘interest’ (19). Though this retreat from generality towards the specificity of economic interest would later become “a major tenet of 19C liberalism”(19), not all thinkers would focus on a single passion, as both Herder and Hegel viewed “the passions of men [as] conspir[ing] to the general progress of mankind or to the World Spirit”, serving “some higher world-historical purpose of which they are totally unaware.” Similar in its Pollyanna-like optimism is Goethe in his Faust, where Mephisto is depicted “as ‘a portion of that force that always wills evil and always brings forth good”.

This is strikingly akin to Herder, who states:

Johann Gottfried Herder (1744-1803)

All passions of man’s breast are wild drives of a force which does not know itself yet, but which, in accordance with its nature, can only conspire toward a better order of things.

3) To “fight fire with fire”: to “utilize one set of comparatively innocuous passions to countervail another more dangerous and destructive set”(20), as the first of the above solutions “assume[s] the problem away” while the second relies on a mysterious “alchem[y]” by which private vices transmute into social virtue.

Traditional views of vice often saw them performing in a “psychomachy” or drama of struggle, depicted as an “unholy trinity” (e.g. in Dante, of “pride, envy and greed”(21), or with Kant “ambition, lust for power, and greed”) over with, on the terrain of Man’s soul, Virtue does battle. The major passions were also believed to be inseparable from one another, and to “feed on each other” an idea “reinforced by their being ordinarily contrasted as a bloc with the dictates of reason or the requirements of salvation.” A more realistic age would “pit [them] against one another”, however, “to the benefit of […] mankind” in general—as seen in the quite different beliefs of men such as Bacon and Spinoza. The former, a politician of some practical experience, would find an experimental method “‘to set affection against affection and to master one by another […]as in the government of states it is sometimes necessary to bridle one faction with another […]'” (22).

Baruch Spinoza (1632-77)

Both Spinoza and Hume would take the experimental baton further down the track. First, Spinoza “emphasize[d] the strength and autonomy of the passions so that the real difficulties of attaining the final destination [of his system in The Ethics…of] the triumph of reason and love of God over the passions”(23):

 An affect cannot be restrained nor removed unless by an opposed and stronger affect […] we do not] delight in blessedness because we restrain our lusts; but, on the contrary, because we delight in it, therefore we are able to restrain them (24).


David Hume (1711-76)

No fan of Spinoza’s, Hume was nevertheless even “more radical in proclaiming the imperviousness of the passions to reason; ‘reason is, and ought only to be the slave of the passions,'” he famously wrote. Thus he needed one passion to “function as the counterpoise to another”—or even to have, as with avidity or greed, one passion “countervail itself” through “an alteration of its direction'”(25), whatever that means! More successfully (as well as specifically), in his critique of Mandeville, “he argues that although luxury is an evil, it may be a lesser evil than ‘sloth’, which might result from banishing luxury. Similarly, Hume also “advocated restraining the ‘love of pleasure’ by the ‘love of gain’, or, strangely, restraining the excesses of ambition with a via a passion for the sublime aesthetics of…astronomy! (26)

“Nothing can be more destructive,” says Fontenelle, “to ambition and the passion for conquest, than the true system of astronomy. What a poor thing is even the whole globe in comparison [to] the infinite extent of nature?” This consideration is evidently too distant ever to have any effect. Or, if it had any, would it not destroy patriotism as well as ambition?

Or, putting it more generally, reason “‘is nothing but the act of choosing those passions which we must follow for the sake of our happiness'”(27).

In this Hume was typical of his century, which had “widely rehabilitated” both the passions as well as human nature itself, as seen in a telling quip of the French philosophe Helvetius, circa 1758: “One becomes stupid as soon as one ceases to be passionate.” Yet in spite of this rise in our esteem for the passions as a whole, “the countervailing-passion remedy continued to be advocated” (28). Such countervailing passions gained the term [self-] “interest” at this point, as when, again, Helvetius says that “‘[…] only a passion can triumph over a passion […] The moralists might succeed in having their maxims observed if they substituted […] the language of interest for that of injury.” Fear of punishment will never motivate as well as appeals to self-interest, in other words.

This new ethical language thence migrated to the nascent American states, to be enshrined in Alexander Hamilton’s Federalist at the level of the legislature, where “‘ambition must be made to counteract ambition'” via the “checks and balances” attained by the “division of powers among the various branches of government” (29-30), presented, of course, as (by then) “an application of the widely accepted and thoroughly familiar principle of countervailing passion.”


“Interest” and “Interests” as Tamers of the Passions

A ranking of these passions was thus needed: which would needed to be tamed, and which would do the taming? (31)

Thomas Hobbes (1588-1679)

Going back over the history of the idea once more, we see in Hobbes, the “‘Feare of Death'” must be eradicated to satisfy the desire of “‘commodious living'”: Man’s interest in living well is thus depicted of being opposed to His passion or fear of dying (32). At this state (mid-17C), interest is not merely restricted to its later, economic meaning, however: “rather, it comprised the totality of human aspirations, but denoted an element of reflection with respect to the manner in which these aspirations were to be pursued.”


But it is “Machiavelli [who] stands at the source of the flow of [these] ideas” (33). 

Niccolò Machiavelli (1469-1527)

For he “initiated the train of thought that that developed into the notion of pitting passions against passions” and deployed the “initially synonymous terms interesseand ragione di stato [‘state-reason’]” to separate his realist political philosophy from “moralizing precepts”: it was then possible to imagine “a ‘sophisticated, rational will, untroubled by passions and momentary impulses,’ that would give clear and sound guidance to the prince.” Or, as the Huguenot statesman, the Duke of Rohan (1579–1638) put it: “‘Princes order their people around and interest orders princes around” (34). Here, reason is “downgraded to the purely instrumental role of figuring out where the true interest of the state lies”, of course.


Bishop Butler (1692-1752)

For Bishop Butler (1692–1752), this meant that “princely interest” or “‘reasonable-self-love'” could be rhetorically deployed alongside received morality and contra the “‘imprudent'” passions, though it remained practically “unhelpful” to the prince, since “whereas the traditional standards of virtuous behavior were difficult to attain, interest turned out to be correspondingly difficult to define“(35). When applied to “groups or individuals within the state”, however, interest “prospered remarkably” (my italics).

How this trickle-down process (36) manifested itself differed between its implementation in England (where it turned into the idea of the “national interest”) and France (which was heavily influenced by Rohan’s On the Interest of Princes and States of Christendom (1639).


Anthony Ashley Cooper, the 3rd Earl of Shaftesbury (1671–1713)

In England’s case the [Stuart] Restoration [of 1660, with Charles II] began a discussion concerning tolerance of religious minorities (the interest of, e.g. Catholics vs that of the state), which then expanded to include the notion of group and individual economic interest. This, for the [third] Earl of Shaftesbury (1671–1713) meant “the ‘desire of those conveniences, by which we are well provided for, and maintained'”(37). And Hume made synonyms of “‘passion of interest'” and “‘interested affection'” with “‘avidity of acquiring possessions'” and “‘love of gain'”, even as the notion of “plenty” became part of the definition of the “public interest” (my italics).

In France, “intérêt” in the sense of “a disciplined understanding of what it takes to advance one’s power” came into play in e17C, with the court nobles as well as Louis XIV (1638–1715) himself both seen to be “interested”—in wealth, but chiefly in “power and influence “(38). However, even in 1666, La Rochefoucauld, writing in his Maximes, warned the reader not to give credence to this newer sense, stating that it was to keep to its earlier meaning concerning “‘honor or glory'”.

This “drift” in definition could be due to (1) “the old association of interest and money-lending”(39), perhaps, or (2) the “affinity of rational calculation […] with the nature of economic activities, but in the specific case of France it may be that (3) “with power so concentrated [in the absolutist sovereign …], economic interests constituted the only portion of an ordinary person’s total aspirations in which important ups and downs could be visualized”, in Adam Smith’s (1723–1790) later sense of “the ‘desire of bettering our condition'”.

Hirschman says that “no other explanation” than “the beginnings of economic growth” is needed to account for this semantic shifting—”perhaps”(40). This much becomes clear, however:  while with Machiavelli it was certainly “pruden[t]” to “pursue all of one’s passions in an orderly and reasonable manner”, the narrowing of interest to its economic sense, and the idea that a passion for economic gain could come to be “employed to oppose and bridle such other passions as ambition, lust for power, or sexual lust”(41), all of this would have “greatly surprised and outraged” Machiavelli, who believed that “economics and politics dwell in two separate spheres”—an “illustrat[ion] [of] how unintended consequences flow from human thought.


Interest as a New Paradigm

If “the idea of an opposition between interests and passions” first arose with Rohan in the context of the sovereign and statecraft, it soon widened into something of a “fad” (42), with Hobbes and La Rochefoucauld in the 17C coming to reduce almost all human motivations and activities to “self-interest”, and then Helvétius (1715–71) in the 18C maintaining that both the human world and the physical world were governed by unalterable  “laws”—by those of interest and  movement, respectively (43). In fact, interest was considered to be so “self-evident” as to preclude definition. And how interest related to that eternal Platonic dichotomy, reason vs the passions, was also unexamined—except to thenceforth assume that “passion was […] destructive and reason ineffectual,” leaving hope for humanity in the hands of interest alone, since “interest was seen to partake in effect of the better nature of each, as the passion of self-love upgraded and contained by reason, and as reason given direction and force by that passion.”

So, originally, the idea of self-interest did not have the “bleak” connotative baggage it later came to acquire (44). Yet some critics still remained unconvinced of interest’s efficacy: while [the theologian] Bossuet (1627–1704) thought that “‘both ‘interest and passion corrupt man'”, Spinoza (1632–1677) doubted whether “reasonable, deliberate ‘self-love’ could be a match for the passions”:

All men certainly seek their advantage, but seldom as sound reason dictates; in most cases appetite is their only guide, and in their desires and judgments of what is beneficial they are carried away by their passions, which take no account of the future or of anything else. (Tractatus Theologico-politicus, Chapter V)

The idea was not without its immediate critics, however, with the English Marquis [Marquess] of Halifax (1633–95) questioning Man’s ability to perceive his own interest (45), and the French  Cardinal de Retz [Jean François Paul de Gondi] (1613–1679) maintaining in his Mémoires that the passions make such a subtle, unconscious influence on one’s motives as to make them indistinguishable from interest, even so far as to “‘propel the most important affairs of state'”—a thought later to be taken up by Alexander Hamilton. Philosopher [Jean de] La Bruyère (1645–96), for his part, employed agonistic terms in describing how the stronger passions could easily “defeat” reason and “gain the upper hand” over interest (46), while a bit later the British thinkers [the Third Earl of] Shaftesbury (1671–1713) and Bishop [Joseph] Butler (1692–1752) argued respectively that “‘passion, humour, caprice […] and a thousand other springs'” are involved in running “‘this machine'” called the world, and that rather abstract and often “‘distan[t]'” self-interest can easily be overcome by the sheer immediacy of feelings such as “‘love of imitation'” and even “‘indolence'”.

Shaftesbury and Butler’s insights must be viewed in the context of a shift from the 17C to the 18C the connotations surrounding the passions moved from “wholly vicious and destructive” to being lauded as “the essence of life and as a potentially creative force”: the passions can make the world “a better place  than one in which interest alone would call the tune” (47). This change came about because of the Enlightenment’s rejection of the 17C “tragic and pessimistic” understanding of human nature, when with (e.g.) Hume we see the elevation of such other-directed feelings as “‘gratitude […] friendship, [and] generosity'” above “‘selfish considerations'” in terms of their ability to influence the decisions of the sovereign (48).


Assets of an Interest-Governed World: Predictability and Constancy

The most striking new feature of “a world governed by interest” was the promise of its “predictability” (48–9).  As [economist and Jacobite, Sir] James Steuart (1713–80) noted, concerning politics rather than economics:

CC National Galleries Scotland

Sir James Steuart Denham (1712-1780)

On the one hand, therefore, if a man pursues his interest, he himself will do well since, by definition, “interest will not lie to him or deceive him” —that was the very meaning of the proverb. On the other hand, there is an advantage for others in his pursuing his interest, for his course of action becomes thereby transparent and predictable almost as though he were a wholly virtuous person. (50)

This in spite of the well-known “objection that unpredictability is power,” or that “in international politics the interests of the principal parties are often exactly opposite to one another”(51). But in England, when applied to the domestic problem of the toleration of Catholics and Dissenters, “a certain tension” between competing interests came to be seen as at least potentially stabilizing force in the polity.

Such a positive view of interest and belief in its predictability came to the fore most prominently in economics rather than in politics, however, with the visual metaphor shifting from “an uneasy balance” to “a strong web of interdependent relationships”(52). Also, the passions were notoriously un-predictable, e.g. as viewed by Hobbes as “‘divers’, capricious, easily exhausted and suddenly renewed again,” and by Spinoza as “‘agitat[ing…]'” and making men “‘changeable and inconstant'”(52).

In fact, though men’s natural “inconstancy”  is what bedeviled the pessimistic Hobbes and Machiavelli so much(53), by the 1650s we begin to see a moderation in views of human nature, e.g. with Pufendorf’s version of social contract theory de-emphasized somewhat men’s “‘insatiable desire and ambition'” in favour of the mere inconstancy of friendship—a position embraced by none other than Locke with his notion of the State of Nature as featuring “‘the irregular and uncertain exercise of the Power every Man has of punishing the transgression of others,'” something remedied only by a mutually-binding, enforceable covenant.

Love of money seems to have been deemed the chief culprit in fostering such inconstancy (54): avarice was indeed a constant feature in social relations, with Hume speaking of it as “an ‘obstinate’ [and ‘universal’] passion'” (whereas love itself is “‘restless and impatient, full of caprice and variations'”), Dr. Johnson’s Rasselas declaring it “‘a uniform and intractable vice'”(55), and Montesquieu seeing in it not only the seed of much anxiety, but also (as Georg Simmel later understood him) as a refutation of the “law of decreasing marginal utility”, since the accumulation of money, unlike the accumulation of most goods, never ceases being an end in itself for some men (56). But even such insatiability could in this more optimistic post-Hobbesian age be seen as “a virtue because it implied constancy” and was anyhow mostly “harmless” [!]


Money-Making and Commerce as Innocent and Doux

Finance was suspect after the “Bank crisis of 1710, the South Sea Bubble of 1720, and the widespread political corruption of the age of Walpole (57). Bolingbroke, [a Disraeli to the latter’s Gladstone?] said that “money was [now…] “a more lasting tie than honour, friendship, relation, consanguinity, or unity of affections.'” But though this was to have a lasting influence on the Scottish school, in England and in France “the dominant appraisal of the ‘love of gain’ was positive, if somewhat disdainful,” with Dr. Johnson making the famous quip that “‘There are few ways in which a man can be more innocently employed than in getting money'”(58). This patronizing attitude resulted from the dominance of the English aristocratic ideal, which would not [yet!] lower itself to the “mean, grubby, and uninspiring” level of commerce and trade, and is reflected in the maxim of Vauvenargues (1715–1747) that “‘Interest makes few fortunes,’ implying that “‘a man of quality, by fighting, acquires wealth more honorably and quickly than a meaner man by work.'” Mean, base men were thus “incapable of causing either good or evil on a grand scale, ” leading Hirschmann to wittily conclude that “the triumph of capitalism, like that of many modern tyrants, owes much to the widespread refusal to take it seriously or to believe it capable of great design or achievement” (59).

Baron de Montesquieu (1689-1755)

In France, this innocence was linked to the notion of the “douceur” of commerce, as detailed in Montesquieu’s Esprit des Lois (1748), who notes that

… it is almost a general rule that wherever the ways of man are gentle (moeurs douces) there is commerce; and wherever there is commerce, there the ways of men are gentle. (60)

Similarly, a little later in the century William Robertson, by way of contrasting “the polished nations” with “the rude and barbarous ones” (common mid18C epithets) says in his View of the Progress of Society in Europe (1769):

Commerce tends to wear off those prejudices which maintain distinctions and animosity between nations. It softens and polishes the manners of men. (61)

Etymologically, of course, “commerce” has “long denoted animated and repeated conversation and other forms of polite social intercourse and dealings among persons (frequently between two persons of the opposite sex)”on both sides of the channel, and this baggage was “carried into its “commercial” career an overload of meaning that denoted politeness, polished manners, and socially useful behavior in general”(62), an elision which sits uneasily with us moderns who are aware, like Marx, of how the slave trade and other forms of violent “‘primitive accumulation'” [or seizing of land and goods] was necessary to enable the appearance of such ‘douceur’:

The “cultivation of tobacco, sugar and indigo … does not fail to be advantageous” to the slaves because of “the knowledge of the true God and of Christian religion which is supplied to them as a kind of compensation for the loss of liberty.

—Claude-Étienne Savary (1750–88)


Das ist der doux commerce!

—Marx, Capital (1.24.6)


Money-Making as a Calm Passion

“The opposition between benign and malignant passions […] became the 18C equivalent, especially in England, of the 17C opposition between interests and passions, but the two dichotomies overlapped and coexisted for a prolonged period” (63-4). This was centred in the “sentimental school” of British ethics, encompassing Shaftesbury, Hutcheson and Hume and emerging in reaction to Hobbes, as the former three (re-)emphasised the deprecated tradition of the “‘natural affections’, such as benevolence and generosity” and noted how their action furthered both public and private goods. These are contrasted with  “‘self-affections’ or ‘self-passions'” concern themselves with private and “not necessarily” public good, as well as with “‘unnatural affections’ (inhumanity, envy, etc.)” which can provide neither good. Note that this was a fine distinction not taken up—as with that of the passions vs the interests—by Smith in his Theory of Moral Sentiments!

For Shaftesbury,

money-making does not fit into the intermediate category of “self-passion”: when pursued in moderation, it is promoted all the way to a “natural affection,” which achieves both private and public good, while it is demoted to an “unnatural affection,” which achieves neither, when it is indulged to excess. (65)

Francis Hutchinson (1694-1745)

For his part, Francis Hutcheson “simplifies Shaftesbury’s scheme and distinguishes between benevolent and selfish passions, on the one hand, and calm and violent ‘motions of the will,’ on the other: we can have a “‘calm desire of wealth'” (similar in meaning to the French doux) or a “‘passion of avarice'”, which are contrasted via either the presence or absence of rationality in the making of business decisions, which makes this ‘passion’ equivalent to the 17C meaning of ‘interest’!

Similarly, Hume stated that “‘We must … distinguish betwixt a calm and a weak passion; betwixt a violent and a strong one'” (66), where the former is yet “strong and able to triumph over a variety of turbulent (yet weak) passions.” In this, Hume strikes a similar chord to Smith when he defines “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,”’ making “‘the love of gain prevail over the love of pleasure.'”

Thus we see capitalism begin to be lauded as stimulating what is benign in us and stifling that which is malignant: it can even “repress and perhaps atrophy the more destructive and disastrous components of human nature”!

PART TWO: How Economic Expansion was Expected to Improve the Political Order

The success of Smith’s Wealth of Nations (1776[!]) put paid to the then-tacitly axiomatic “interests-versus-passions thesis” (which originated in statecraft and not in economics), as in that book he  “chose to stress the economic benefits that this pursuit would bring rather than the political dangers and disasters that it would avert” (69).

According to the thesis, whose principal proponents were Montesquieu and Sir James Steuart, the sovereign’s “wilfulness [and] disastrous lust for glory” could be “curbed by [economic] interests” (70).


Elements of a Doctrine — I. Montesquieu

The Spirit of the Laws (1748)

In The Spirit of the Laws (1748), though Montesquieu does worry about the overabundance and inequality of wealth in republics, he nevertheless argues in favour of “a ‘democracy that is based on commerce'” because “‘the riches it creates do not have any bad effect'” (71). In monarchies as well, commerce can be seen to curb “‘the avarice of rulers'” as well as their impetuous or rash actions (“‘les grand coups d’authorité'”) (72), e.g. by their clever invention of “‘invisible wealth which could be sent everywhere without leaving any trace,'” via bills of exchange—which also single-handedly “‘created an immense volume of credit'” (74).


The mainspring whereby commerce enacts its salutary workings is not reason (which is “assigned the role of a comparatively impotent member in a ménage à trois consisting of passion, reason, and interest” (73), the last of which is what really stands in opposition to the unreasonable passions:

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.

Spinoza made the same distinction some years before (1670), and also expressed a preference “for movable over fixed capital,” going “so far as to advocate state property for all real estate, including houses ‘if possible’ […so as] to avoid unresolvable disputes and unextinguishable envy” (75). The movable capital of commerce, though, was “viewed in a wholly benign light” because their interests made men “interdependent” rather than resentful [!].

But Montesquieu’s chief aim is to mount an argument concerning the reigning-in of absolutist state power, about which he agreed with the Englishman Bolingbroke: “‘The love of power is natural; it is insatiable; almost constantly whetted, and never cloyed by possession'” (77). To combat this tendency power must “‘be stopped by power'”, first via the formal separation of powers in government, along with ways in which “the acquisitive urge” could countervail the lust for power by being “incorporated into the proper disposition des choses” (way things were) (78). Thus would the bill of exchange as well as arbitrage limit the reach of the sovereign’s potentially despotic grasp.

The above concerned domestic matters chiefly, but of course, the “virtually permanent state of war” in which Europe besieged itself through out the 17th and 18th centuries was of pressing…interest as well! (79) And perhaps on account of mercantilist doctrine, during this time markets were in fact so limited that an expansion of the commerce of one nation could only be secured by displacing that of another, commerce was characterized as “perpetual combat” by [Jean-Baptiste] Colbert [1619-83, Louis XIV’s First Minister],  and as “a kind of warfare” by Sir Josiah Child [of the East India Company, 1630-99]. Yet for Montesquieu, trade led in one direction: towards peace and mutual dependence between nations (80).


Elements of a Doctrine — II. Sir James Steuart

Steuart’s Inquiry into the Principles of Principles of Political Oeconomy (1767)

While Montesquieu’s proposed use of commerce as a bulwark against despotic rule may have seemed optimistic in absolutist france, 18thC England, [with a crown more dependent upon its aristocracy and financier class and somewhat hemmed in by parliament] proved to be a much more immediately hospitable place for such ideas, as in Sir James Steuart’s Inquiry into the Principles of Political Oeconomy (1767). The thesis of this book, much indebted to Montesquieu, was that “‘private wealth […] makes [the statesman’s] government more complex and more difficult to be carried on” (81-2). This is especially true for the mobile capital of “‘the monied interest'” (as contrasted to the “‘solid property'” of landlords).


At the same time, while fully aware of how mercantilist theory held that trade and industry should “increase the power of the realm and therefore that of the sovereign”, the work of Hume and Robertson showed him how “trade expansion strengthened the position of the “middle rank of men” at the expense of the lords and eventually also of the king” (83). [Beginning with William and Mary, 18thC Kings also learned this very lesson, and] “‘the consequence of this change has been the introduction of a more mild, and a more regular plan of administration.” This means the arbitrary passions of despotism which Montesquieu’s so feared tended to evaporate in the face of the overwhelming power of a “‘complicated modern oeconomy'” (84):

If [the sovereign’s] authority formerly resembled the solidity and force of the wedge (which may indifferently be made use of, for splitting of timber, stones and other hard bodies, and which may be thrown aside and taken up again at pleasure), it will at length come to resemble the delicacy of the watch, which is good for no other purpose than to mark the progression of time, and which is immediately destroyed, if put to any other use, or touched with any but the gentlest hand.(85)

For Steuart, then, if the statesman does “steer” the ship of state, it is now more a matter of “‘fine tuning'” its course, and “exclusively for the common good” (86). Also the metaphor of the watch is a revealing one: the modern economy needs “‘the gentlest hand'”, but is also “‘continually going wrong'”, and skilled, small “interventions are frequently needed” to keep it functioning as designed (87). Also present here is an unspoken parallel to the natural world and its “master clockmaker” God, of course…


Elements of a Doctrine — III. John Millar

John Millar’s Observations Concerning the Distinction of Ranks in Society (1771)

If “Montesquieu and Steuart both believed that the expansion of commerce and industry would eliminate  arbitrary and authoritarian decision making by the sovereign” (the former seeing new financial institutions as the driver, the latter emphasizing the increasing complexity of the economy) (87),  the Physiocrats would seek to entice him to take on a positive role rather than rely upon such a “‘deterrence model'” (88).

Following Hume, Smith and Ferguson, John Millar (1735-1801) envisions a third way: a “feedback or equilibrating mechanism that would restore conditions favorable to the expansion of commerce and industry should they be disturbed” [my italics: see the analogy of the watch, above].


This could happen via the middle classes, who would work “‘to diffuse a Spirit of Liberty and Independence'” in commerce as well as the arts. This would occur via a general increase in manufacturing and agricultural productivity” (89), which should be accompanied by a decrease in inequality, or a “‘gradation of opulence'” in society. Engaging with Locke’s dictum of the “right to rebel” against arbitrary abuses of power, then, Millar claims that in modern commercial nations featuring large, diverse cities, such a rebellion is far more likely to check sovereign power than in pre-modern nations with a scattered population, as coordination by “bands of labourers or artificers” is made possible by their “constant intercourse” and mutual interdependency there (as opposed to the isolated farmer, who can consider only his own self-interest) (90-91). Millar thus envisions how, in such an environment

The strong encourage the feeble; the bold animate the timid; the resolute confirm the wavering; and the movements of the whole mass proceed with the uniformity of a machine, and with a force that is often irresistible.(90)

Thus do “riots and other mass actions” gain a positive connotation for a brief time! By the time Andrew Ure’s Philosophy of Manufactures a few decades later in 1835 they would be typically depicted as “‘vulgar mind[s]'” in a “‘secret cabal'” of the underclass, of course, but for Millar the union of the lower classes with the merchant class in, e.g. the Wilkes riots [which arose when John Wilkes was imprisoned for, among other things, criticising the policies of George III] of 1763-74, showed how the 18th C masses could exercise “‘discriminating purposefulness’ and ‘focused character'” to advance the common good (92-3).


Related yet Discordant Views (The Physiocrats and Adam Smith)

The train of thought heretofore described was not advanced by either Smith or the Physiocrats of France: rather, they “contributed […] to its demise” (93), though they spoke in a similar vocabulary which employed overlapping concepts (e.g. the mechanism of the watch, which for the Physiocrats was too delicate to be “interfere[d] with” (94), or Montesquieu’s “distinction between movable and unmovable property,” which for the Physiocrats was a major issue, as rather than seeing it as a welcome curb on sovereign authority, they viewed it as a seditious overturning of the traditional relationship between the State and its people, as untraceable movable capital would make the merchant the “‘master'” of the sovereign (95).

And though both groups [the Passions and Interest crowd on the one hand, the Physiocrats and Adam Smith on the other] are alarmed by what arbitrary and incompetent use of power can do to a nation’s economy, neither of the latter camp are convinced that “economic expansion” will achieve any “withering away” of such “wrongheadedness” (96). Rather, the Physiocrats will call for a new political order to safeguard the French economy, while Smith would modestly target specific features of the existing English system.

I. The Physiocrats

Three of Adam Smith’s predecessors, the Physiocrats: Francois Quesnay (1694-1774), The Marquis de Mirabeau (1715-1789), and Anne-Robert-Jacques Turgot (1727-1781)

While Montesquieu “set out to […] restrain the passionate excesses of the sovereign,” the Physiocrats “wanted to motivate him to act correctly” within a nexus of power organized so that leaders “are impelled, for reasons of self interest, to promote the general interest” (97, underlining mine). They believed that merely restraining the sovereign would lead to a weak State. Rather, they envisaged a laissez-faire economy backed up by the power of the autocratic ruler who reigned over a system of “‘legal despotism'” (as opposed to the arbitrary kind so derided by Montesquieu) (98), taking Hobbes’ vision of the unity of the sovereign with the body politic of the nation yet one step further: giving the despot skin in the game, as it were, since as “co-owner […] of all the [State’s] productive resources […]any conflicts of interest between him and the country at large would be inconceivable [….]” Such an ideal system would presumably work because the statemen who presided over it were as convinced of the “persuasiveness of their arguments” as the Physiocrats themselves were! (99)

II. Adam Smith and the End of a Vision

Where the physiocrats were concerned with justifying self-interested laissez-faire in political terms, Smith was interested in the economic argument for such a free market, though he really believed that the  “increase in wealth and retrenchment in power go hand in hand” (100), as seen in his account of the erosion of feudalism:

Adam Smith (1723-90)

Before the rise of commerce and industry, the great lords shared the surplus from their estates with large numbers of retainers, who were wholly dependent on the lords and constituted a private army, as well as with their tenants, who paid low rents but had no security of tenure. This state of affairs resulted in a situation in which “the king was … incapable of restraining the violence of the great lords. . . . They [made] war according to their own discretion, almost continually upon one another, and very frequently upon the king; and the open country … [was] a scene of violence, rapine, and disorder.”


But then matters changed as a result of “the silent and insensible operation of foreign commerce and manufactures.” The lords now had something on which they could spend their surplus, which they had previously shared with their retainers and tenants: “a pair of diamond buckles, or . . . something as frivolous and useless,” “trinkets and baubles, fitter to be the playthings of children than the serious pursuits of man,” is the contemptuous way in which Adam Smith refers to the merchandise offered by the townsmen. This merchandise was so attractive to the lords that they decided to do without retainers and to enter into longer-term and generally more businesslike relations with their tenants. In the upshot, “for the gratification of the most childish, the meanest and the most sordid of all vanities they gradually bartered their whole power and authority” and “became as insignificant as any substantial burgher or tradesman in a city.” (101)

Thus, it was because of the rise of commerce that did rulers become incapable of interfering with the running of the economy, although for reasons different from those of Montesquieu  and Steuart (102). Where the latter were concerned with the feudal king (and the restraining of his passions by his interests), Smith focused on the aristocracy, who saw themselves as acting on their passions for increasing their capacity for consumption when they “unwittingly” surrendered their authority to the market. Ironically, this diminution in the power of the English lords ameliorated the position of the English sovereign as much as it did the “newly rising merchants,” and Smith is much less sanguine than Montesquieu about the possibility of reigning in the power of the “central government,” which he sees as an eternal part of the human condition (102-3).

However, the constancy of “‘ancient evil'” in political affairs is of little consequence to Smith, as

economics can go it alone […] political progress is not needed as a prerequisite for, nor is it likely to be a consequence of, economic advance […]  Politics is the province of the “folly of men” while economic progress, like Candide’s garden, can be cultivated with success provided such folly does not exceed some fairly ample and flexible limits. It appears that Smith advocated less a state with minimal functions than one whose capacity for folly would have some ceiling. (103-4).

Perhaps as a consequence of the above, Smith was  “extraordinarily scathing” about the “chain of events” which led us to this happy modernity, whereas elsewhere he contradicts this impulse and celebrates the wisdom of that “Invisible Hand” which leads economic expansion forward—a contradiction he never resolves. (105)

An Inquiry into the Nature and Causes of the Wealth of Nations (1776)

Smith is also “ambivalent” about that other feature of the modern economy, the “division of labor”, which he famously celebrates at the beginning of the Wealth of Nations only to castigate it later on for causing the “loss of the martial spirit and virtues” in the nation. Commerical/republican man, Smith writes, is beset by “‘the uniformity of his stationary life naturally corrupts the courage of his mind,'” leading to a decline in courageousness and a life marked by “debilitating luxury and corruption,” in which “‘the minds of men are contracted, and rendered incapable of elevation'” (106).

And while on the positive side, men have now become more punctual, their public behaviour more marked by a spirit of “probity” (107), on the whole he held a more negative view than did Montesquieu concerning the supposed “douceur” of commerce. Like Rousseau, he saw it as evidence of “decadence” (just as Ferguson preferred the “rude” society of Scotland to that of “polished” England.

The Theory of Moral Sentiments (1759)

Worse still, perhaps, he not only sees no way for the nobler passions to restrain “avarice,” Smith actually “collaps[es]” all “other  passions into the drive for the ‘augmentation of fortune'” (108). And though (in The Theory of Moral Sentiments (1759)) Smith does try to suggest that it is otherwise, that there are other motives for “economic advance” (such as “vanity”, that “craving for honor, dignity, respect, and recognition” which Rousseau called “amour propre” and which he contrasted with that “‘caring for necessary things'” or focus on “real needs” called “amour de soi”), Smith nevertheless reduces all noneconomic motives into one overarching economic drive (109).

An important consequence of this move is that one “passion cannot be pitted against [another] passion” any longer, since to speak of “ambition, the lust for power, and the desire for respect” is but to speak of of the various guises of the one overarching passion: to “improve [our] material well-being” (109-10).

And if the passion/interest distinction is no longer a valid one after The Wealth of Nations, one reason for this might be that Smith has moved from the analysis of the behaviour of prices to that of the “‘great mob of mankind'”, which were never considered to be exemplars of the so-called nobler passions in the first place (111), and whose “principal concern was [always] with subsistence and material improvement” (112). Thus is Smith most successful at “narrowing the field of inquiry” in social thought, as it came to be self-evident that “the general (material) welfare is best served by letting each member of society pursue his own (material) self-interest”, giving tacit permission to the (after Napoleon, much less optimistic) era of “intellectual specialization and professionalization” which followed him (113).

PART THREE: Reflections on an Episode in Intellectual History

Where the Montesquieu-Steuart Vision Went Wrong

Though perhaps vanquished by 20C history, the ingenious Montesquieu-Steuart “speculations about the salutary political consequences of economic expansion” were indeed followed by over 100 years of relative peace and prosperity in Europe, but they must have met with unforeseen counterforces for that success to be so temporary (117-18). One such counterforce was proposed by Jacobin orator Antoine Joseph Barnave (1761-93), an admirer of Montesquieu and “forerunner of Marx who wrote in his The Introduction to the French Revolution  in the vein of Mandeville that

Antoine Barnave Portrait by Henri Gravedon (British Museum)

Antoine Joseph Barnave (1761-93) (Henri Gravedon, British Museum)

The morals of a commercial nation are not completely those of merchants. The merchant is thrifty; general morals are prodigal. The merchant maintains his morals; public morals are dissolute. (119)

States are not homologies, then, and the “social processes” which form and transform them “are much less transparent and amenable to prediction than was confidently assumed by Montesquieu.”


Ferguson (and, later Tocqueville) was similarly “ambivalent about the advances ‘polished’ nations had achieved over the ‘rude and barbarous’ ones” (119-120).

Adam Ferguson (1723-1816)

Like Adam Smith, he noted the negative effects of the division of labor and commerce on the personality and social bonds of the individual citizen; but he emphasizes them right from the start of the Essay on the History of Civil Society (1767} and formulates his strictures at a more general level. In the process he anticipates not only the younger Marx but Durkheim and Tönnies as he contrasts the solidarity characteristic of closely knit tribes with the “spirit which reigns in a commercial state where … man is sometimes found a detached and a solitary being,” where “he deals with his fellow creatures as he does with his cattle and soil, for the sake of the profits they bring,” and where “the bands of affection are broken.” (120)

And while Ferguson is more willing than Smith to propose that economic and political progress are generally correlated, he too suspects the “corruption of republics through luxury and prodigality” is another undeniable feature of economic advance—though here, too, he puts his own stamp on the matter: acquisitive societies are, through the very turbulence created by their economies,  just as likely to produce a “fear of losing wealth” as wealth itself, and a social mobility which runs in two directions rather than one. Paradoxically, too, such a process, which arises in a context of relative (if economically anarchic) freedom, can produce such a desire for “tranquility and efficiency” as to allow “‘strong’ government[s]” and even despotism to prevail (121).

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. (122)

Alexis de Tocqueville (1805-1859)

Tocqueville, too, was ambivalent “about the meaning of economic progress for freedom,” and while in Democracy in America (1835) see saw a “‘close tie'” between “‘freedom and industry,'” living in a France under Louis-Phillipe taught him the peril’s of turning that concept into a state religion (in Balzac’s terms, raising “‘above the Constitution […] the holy, venerable, solid, amiable, gracious, beautiful, noble, all-powerful five-franc piece!'” (122-23)

de Tocqueville’s Democracy in America (1835)

Such a form of worship can lead only to a situation in which “‘the taste for material enjoyments…develops more rapidly than the enlightenments and habits of liberty,'” with “the citizens becom[ing] so absorbed by the pursuit of their private interests, [that] it will be possible for a ‘clever and ambitious man to seize power'” (123). This idea, that a progressive bourgeoisie can turn reactionary, would be taken up by Marx in his work on the revolutions of 1848, of course [though Hirschman sees—wrongly—Marx’s analysis as suffering from teleology, unaware of the “richer” “ambivalence” of the work of Ferguson and Tocqueville (124)].


In summary, these two thinkers were troubled in two specific ways:

First of all, so they showed, there is another side to the insight that the modern economy, its complex interdependence and growth constitute so delicate a mechanism that the grands coups d’autorité of despotic government become impossible. If it is true that the economy must be deferred to, then there is a case not only for constraining the imprudent actions of the prince but for repressing those of the people, for limiting participation, in short, for crushing anything that could be interpreted by some economist-king as a threat to the proper functioning of the “delicate watch.”

Secondly, “killing the civic spirit” by having only a minority pursuing political ends while the vast majority seek economic ends (as seen above) can be a recipe for “tyranny” (125)

However, it is also entirely possible for a focus on economic (self-) interest to fan the flames of passions for those who acquire the means to indulge them. For Hobbes this high “income-elastic[ity]” of the passions would “divert man from ‘striving for honour and preferment'” (126), and for Rousseau it meant that such passions, once kindled, were unquenchable:

… With man in society, things are very different: first the necessary must be taken care of, then the superfluous: then come the delights, then the accumulation of immense riches, then of subjects, then of slaves; never is there a moment of respite. What is most remarkable is that the less the needs are natural and pressing the more the passions increase and, what is worse, the power to satisfy them.

Of course, the 19C proved him right, with the economic upheavals of the century making millions “passionately angry, fearful, [and] resentful,” and thus subject to the vicissitudes of such new social ills as “alienation, anomie, ressentiment, [and] Vermassung [“massification”, cf. Henri de Man] —as well as “class struggle,” of course.

Pierre-Joseph Proudhon (1809-65)

As an aside to all of the above, quite another justification for capitalism has modern exponents in Mises, Hayek and Friedman, yet it stems originally from Proudhon of all people: it is that only with the existence of private property can the people experience the conditions (albeit necessary, not sufficient) for dissent (127). Though Proudhon is famous for his “dictum ‘Property is theft,'” he was also wary of the power of the state, and opposed the power of private property, despite its obvious “wild,” anarchic qualities, as a counter to it—only property was strong enough to fight “the equally terrifying power of the state” (128).


The Promise of an Interest-Governed World versus the Protestant Ethic

Thus in the wake of Proudhon’s argument does the Montesquieu-Steuart doctrine outlined above appear rather “extravagant” [or quaint!], and “odd.” Yet it retains interest because of its residual explanatory power, in helping us “puzzl[e]” through how capitalism came to be celebrated, and money-making came to be seen as “an honored occupation” (129).

And if we compare that story to that of Weber’s, in which capitalism arises in the centre of the power structure as “a behavioral equivalent for religious precept” [among the Calvinist elite or “Elect”, as opposed to those “Preterite” many who are foredoomed by predestination], disciplinary precepts which imposed the necessary socially-useful “constraints on both rulers and ruled,” we see that Weber is more interested in the individual, psychological features of those who aspired to control capital, whereas Hirschman brackets-off those aspects and “focuses instead on the reaction to the new phenomenon by what is called today the intellectual, managerial, and administrative elite.” If that reaction was often favourable, it was because of the side-effects of acquisitiveness, not its intrinsic qualities. Also,

Weber claims that capitalistic behavior and activities were the indirect (and originally unintended) result of a desperate search for individual salvation. 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 (130).

If both claims could be true, this second one deserves to be released from relative obscurity, though.


Contemporary Notes

Such erasure is evident in “some contemporary critiques of capitalism” (132):

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.” From the vantage point of the present essay, this accusation seems a bit unfair, for capitalism was precisely expected and supposed to repress certain human drives and proclivities and to fashion a less multifaceted, less unpredictable, and more “one-dimensional” human personality. This position, which seems so strange today, arose from extreme anguish over the clear and present dangers of a certain historical period, from concern over the destructive forces unleashed by the human passions with the only exception, so it seemed at the time, of “innocuous” avarice. In sum, capitalism was supposed to accomplish exactly what was soon to be denounced as its worst feature. 

Yet the Romantics denounced the “empty, petty, and boring” bourgeois world as “lack[ing] nobility, grandeur, mystery, and, above all passion”! Similarly, in the critiques of Marx, Freud and Weber there is little evidence of an awareness that an earlier age thought quite differently about the passions (133), or how in Keynes there is little evidence of how the 18thC (as with Samuel Johnson) liked to imagine economic activity as a comparatively harmless one, to be harnessed for social ends:

Dangerous human proclivities can be canalized into comparatively harmless channels by the existence of opportunity for money-making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandizement. It is better that a man should tyrannize over his bank balance than over his fellow-citizens; and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative. (134)

On the other side of the aisle, Schumpeter, mounting a defense of capitalism, noted that capitalism could not possibly be charged with leading inevitably to “conquest and war, ” since its “rational, calculating” spirit was “averse to risk-taking” on that scale. Certainly a little knowledge of how a previous age saw and wrestled with all of these matters could help in our unending debates over them (135).