Jacob Viner on Providence and the Invisible Hand

I recently read Jacob Viner's The Role of Providence in the Social Order. The obligatory first thing to say about this work is how unimaginable it would be today to see anything like this historic erudition in a contemporary economist. That's just part of the larger tragic story of the discipline of economics abandoning its own intellectual history.

Viner wishes to bring out the connection between the founding ideas of modern economics and a long tradition of Christian providence. Frankly, as intellectual history, the lectures are a bit unsatisfactory. They lack the depth of Funkenstein's book on the topic (see here), and they lack the philosophical elegance of Hirschman's The Passions and the Interests.

The book is extremely sketchy in its grand portrayal of Christian natural theology, but that's not really its main target, so perhaps Viner can be forgiven. (I think the lectures would have been better if he just began with Newton and Leibniz. Viner is much more interesting on how they played with watchmaker metaphors of divine causation than he is on Augustine). 

The core thesis is that providentialism underwrites fundamental tenets of the modern economic worldview. The first is that a new conception of providence justifies the hitherto universally scorned practice of global commerce:

(1) providence favors trade between peoples as a means of promoting the universal brotherhood of man; (2) to give economic incentives to peoples to trade with each other providence has given to their respective territories different products. (32)

According to an ancient and venerable tradition, nothing breeds more vice than commerce. Merchants travelling to distant lands bring back threatening foreign vices. The luxury goods themselves sold by the merchants are sources of great moral corruption. And the impulse to conquer the world with trade represents the height of human hubris--just think of Ulysses' wanderlust that lands him in Dante's inferno. 

This ancient view began to be inverted in late antiquity through the influence of a Stoic pagan, Libanius, on his Christian students (St. Basil and St. John Chrysostom). The new view that emerges is that God has deliberately distributed resources in different countries so as to induce global commerce and human fraternity. 

Viner cites a wonderful example of this argument being made in 1894 as part of a Congressman's argument in favor of free trade. Unfortunately with a quick google I couldn't find the full cite:

God could have made this world, if He had wanted to, with exactly the same climate and soil all over it, so that each nation would have been entirely independent of any other nation. But He didn't do that. He made this world so that every nation in it has got to depend for something upon some other nations. He did that to promote kinship among the different people. Let us drop this unnatural business. There is no end to the ingenuity of man. You can fix up a scheme, if you want, for raising oranges in Maine, but a barrel of those oranges would make William Waldorf Astor's pocketbook sick. . . . You can raise polar bears on the Equator if you spend money enough, but it would take a king's ransom to do it. 

The providential defense of global trade was also somewhat cynically tied to interpretations of the Genesis account of the Tower of Babel. The common reading of that story--God's condemnation of cosmopolitan hubris--was used by some as a patriotic critique of the universalist tendencies of global trade, but by others as evidence for that God sought to promote global trade by dividing up the world into different nations. 

One final intriguing point here is that the entirety of Hechsher-Ohlin trade theory can be found in these providential arguments! Thomas Hutchinson, of all people, is credited with a deeply prescient account of H-O international trade equilibrium.

Hutchinson: "The great creator of the universe in infinite wisdom has so formed the earth that different parts of it, from the soil, climate, &c. are adapted to different produce, and he so orders and disposes the genius, temper, numbers and other circumstances relative to the inhabitants as to render some employments peculiarly proper for one country, and others for another, and by this provision a mutual intercourse is kept up between the different parts of the globe" (52-3).

The second contribution of providence theory to modern economics is the theodicy-based defense of economic inequality. A long tradition of British philosophy reacted against Hobbes' challenge that natural self-interest led to anarchy, and needed to be held in check by a powerful sovereign. The sentimental school--led by Shaftesbury and later Hutcheson--argued that disinterested benevolence is a far more powerful motivation than Hobbes accepted. The selfish school--led by theological utilitarians like John Gay and William Paley--reject any innate moral sense, but argued that an enlightened pursuit of self-interest will lead us to act in an ethical manner. The most blunt version of this self-interest comes not from some neo-Platonic account of the harmony of the soul, but from the explicit threat of eternal condemnation for vicious conduct. (Eighteenth century Anglican theology debates sound extremely crude on Viner's presentation).

Adam Smith's account of moral sentimentalism from TMS comes out of this tradition. For Smith, our reason is fallible, but God has fortunately planted in us natural sentiments that incline us to benefit our family, friends, neighbors, and countrymen. This is what leads Viner to conclude: "Smith's system of thought, including his economics, is not intelligible if one disregards the role he assigns in it to the teleological elements, to the 'invisible hand'" (82).

Viner finishes with some broader reflections on how the modern economic apology for inequality flows from these theodicy accounts. Since Aristotle it had been argued that communal ownership of property was deeply inefficient. A new line of argument (the one Viner claims was very rarely advanced) was that economic inequality mirrored the transcendent hierarchical order of creation. Another neo-Stoic line of argument was that inequality of wealth will not lead to the inequality of happiness, but indeed if anything the poor should be happier than the wealthy! (You can think here of Smith's parable of the poor man's son).

With that--and with some charming if boilerplate comments on how intellectual history teaches economists to be humble--Viner concludes. The lectures raise some interesting issues, and the discussion in particular of the providential tendency of trade to produce human fraternity is illuminating. But the canvassing of views on inequality is quick and somewhat superficial, and Viner doesn't do much to advance beyond my guess of what the common-sense understanding of this history already was.