Adam Smith’s sympathies for the labouring poor
Recent research has shown that Adam Smith was not opposed to poor relief but on the contrary sympathetic to the labouring poor, and that it was only after his death that classical Political Economy became decidedly inimical to poor relief and social security. This happened mainly in the 1790s, and the blame for this shift belongs to Joseph Townsend, Malthus, Bentham, and Burke, not to Smith.
There is only aspect of the Poor Laws Smith criticized (and indeed mentioned at all), namely the Settlement regulations. He argued for their abolition because he wanted freedom of movement even for poor workers. But he never stated that poor relief as such violates market freedom, nor did he advocate that it should be administered in a more deterrent way. Meanwhile he pointed out how other government interference in the labour market almost always favoured the employers and disadvantaged workers, and some of his statements might even be read as an endorsement of intelligent labour market regulation in the interest of workers. Furthermore Smith stated that higher wages would be advantageous and spoke out against the 'utility-of-poverty' beliefs that low wages are better for discipline and competitiveness.
Emma Rothschild convincingly demonstrates how Adam Smith's ideas were seen by contemporaries as subversive, as a critique of the status quo in England and even more so in France, and as one of the inspirations for the French Revolution. Obviously all the aristocratic and corporate privilege, monopolies, and other restrictions on market freedom prevailing as part of the Ancien Régime in much of the Continent were even more severe than those existing in England, and most if not all of them benefitted the privileged few at the expense of the poor and not-so-privileged many. Thus it is easy to see that, on the Continent even more so than in England, Adam Smith and his contemporaries had good reasons to believe that more market freedom would not only increase prosperity but lead to more equality and less poverty as well. Considering the status quo at the time, there was in many respects no trade-off but complementarity between free markets, egalitarianism, and poverty alleviation. Of course, this makes it all the more startling and tragic that the science that – one might say – helped bring down the Paris Bastille would become the science in whose name the New Poor Law "bastilles" were erected.
In fact, Joseph Townsend (Dissertation on the Poor Laws, 1786) seems to have been the first one to argue that 'letting markets operate freely' would or should involve letting people fend for themselves even in case of destitution and starvation. He also claimed that poverty and hunger must always exist (and freely operating market mechanisms would make sure they affect those people who deserve it most), whereas Smith had stated that mass misery is incompatible with progress. Townsend did not advocate the workhouse test, however – on the contrary, he strongly condemned workhouses and other deterrent measures, realizing that they would deter many 'deserving' applicants while attracting a very problematic mix of the most shameless and the most desperate people. In Townsend's view abolishing any right to relief was the only solution, the alternatives being either draconian deterrent measures or over-generosity encouraging 'idleness' and overpopulation (he had such ideas before Malthus and in all likelihood influenced the latter).
It seems that Townsend's ideas were perceived as extreme by contemporaries, but the same views were to gain much more influence later, when taken on by Malthus. It was Edmund Burke in his Thoughts on Scarcity who advocated that governments should not 'meddle with people's subsistence' even during famines, and this came to be seen as 'Adam Smith's view on famine policy' even though this interpretation of Smith is dubious at best. Meanwhile even Malthus did in fact allow for government aid to famine victims, and he also admitted in later editions of his Essay that the Poor Laws may be less disastrous than he originally thought, but "Malthusianism" nevertheless most strongly spread the belief that all poor relief and famine relief is dangerous and should cease. In the end, the Benthamite idea of less-eligibility and deterrent workhouses came to be enshrined as a sort of compromise or 'third way' for those who wanted to retain a right to relief for the poorest but at the same time had come to be too afraid that over-generosity would lead to near-universal idleness and reckless early marriages among the poor.
Hollander, Samuel. "On Malthus’s Population Principle and Social Reform." History of Political Economy 18.2 (1986): 187–235.
Philipp Lepenies. "Of Goats and Dogs: Joseph Townsend and the Idealisation of Markets — a Decisive Episode in the History of Economics." Cambridge Journal of Economics 38 (2014) 447–57.
Rothschild, Emma. "Adam Smith and Conservative Economics." The Economic History Review 45.1 (1992): 74–96.
Rothschild, Emma. "Social Security and Laissez Faire in Eighteenth-Century Political Economy." Population and Development Review 21.4 (1995): 711–44.
Jones, Gareth Stedman. An End to Poverty? A Historical Debate. New York: Columbia University Press, 2004.
Sen, Amartya. "Uses and Abuses of Adam Smith." History of Political Economy 43.2 (2011): 257-71.
Williams, Callum. "Famine: Adam Smith and Foucauldian Political Economy." Scottish Journal of Political Economy 62.2 (2015): 171–90.
Created 29 August 2015