Adam Smith and the Social Contract
Adam Smith presents a picture of the transition from a more basic and feudal system of economy to the capitalist one in plain terms. In Smith’s version of events, the division of labor and strides in development came about as a result of increases in surplus product of farmers and the relaxing of the despotic rule of lords and kings in medieval Europe. This is undoubtedly partly true, and even a positive change. What Smith somewhat passes over his pattern of events is the negative change in social contract brought about by the shift to capitalism. This change in communal life was an earthquake in western society.
The alteration of economic life from feudal to capitalist was a great one. The setup of feudal life took its inspiration from the Bible, the king being god, lords the angels and the serfs humanity (merchants = succubi?). Thus, as Smith says, those who lived on the land “were as dependent on the great proprietor as his retainers” (p. 364), dependent on his generosity in allowing them, quite simply, to live by virtue of his land. The idea was, again, similar to the Bible. Humanity lived by the grace of god, who could take away that life, and indeed the planet, at will. Serving god in the mundane details of running the world were his angels. At the bottom of the chain- humanity.
The egocentricity and self serving justification provided by using the Bible as template (which never goes out of style) aside, the feudal system did at least provide the essentials of life to all people, rich and poor. The serfs, though they lived a miserable and thankless life, were still guaranteed a parcel of land to eke out their subsistence on and were assured security. After the Enclosure, the act of removing the serfs from the land which preceded the explosion of capitalism in Europe, this security and guarantee of subsistence was gone. Now the poor had no commitment of survival and were to be forced to do the same work they had previously, but for less pay. Their labor’s value had been reduced, and they had no solid ground to stand upon. The social contract of centuries was destroyed.
The Enclosure and the advent of large scale capitalist manufacturing brought about a sea change in the western world, most of all in the way people treated and regarded one another. No longer was there a standard and understood way of the world, in which everyone had his or her place and knew it, and was thus pledged a guarantee to life. As Smith says, “before the extension of commerce and manufacture in Europe, the hospitality of the rich exceeded everything which in the present times we can easily form a notion of” (p.363), and this is perhaps even more true now. Smith makes mention of this trend, true, but it is either beyond the scope of his work here or irrelevant to his argument, or both, to merit further exploration.