Adam Smith was a Scottish philosopher, back in the 1700s. He wrote a couple of well known books, you might’ve heard of them. They were called “The Theory of Moral Sentiments” and “An Inquiry into the Nature and Causes of the Wealth of Nations”, better known as “The Wealth of Nations”. I recently read a summary of and commentary on The Wealth of Nations. I couldn’t bring myself to read the original in its entirety, it’s a doorstopper of a book, in language that’s too archaic for me to make much progress. The summary was plenty interesting though. As he was the first to popularly articulate these ideas, I believe we have Smith to thank for free markets as well as many social freedoms.

One of the things I took away from the book was Smith’s very pragmatic assessment of how Europe moved from serfdom / slavery / feudalism to a comparatively free society (which we beneficiaries of Western economic progress get to enjoy). It’s a powerful idea. I’m going to try and sum it up.

Note that quotes are from The Wealth of Nations.

Essentially, during the decline of the Roman Empire and the takeover of Europe by warring barbarians, Europe sank “into the lowest state of poverty.” Trade ceased, towns burned, and much land was left uncultivated. But though the rule of law and legal title to property was destroyed, what resulted was not some kind of socialist paradise. The vacuum of power wasn’t filled with hippie communes or anarchists. It was filled with more and worse power. Nothing was “left without a proprietor”, usually of the warring tribal chieftain kind. They grabbed as much land as they could. Not really to enrich themselves, they were already rich, because shopping is easy when you do it with an army behind you. Also there wasn’t much to shop for. What they did with the land was reduce the workers to serfdom, and grab as much of the produce as they could. The more land they had, the more produce they had. The more produce, the larger an army they could feed. The larger the army, the more powerful they were…“Land was considered as the means, not of subsistence merely, but of power and protection…authority…flowed from the state of property.”

The tribal chieftains gradually evolved into the nobles and kings that Europe grew to be so familiar with. They kept feudal estates in one piece through institutions such as entail and primogeniture. The nobles did not allow themselves to sell any part of their land, “upon the most absurd of all suppositions…that every successive generation of men have not an equal right to the earth and to all that it possesses.” The restrictions on land conveyance allowed the lords to make sure that everyone’s livelihood depended on them.

The nobles had another reason to maintain the economic upper hand. Warriors weren’t very good farmers, they were too busy defending their land or extending their domain, and slaves don’t make very good workers, so the land didn’t produce very much. If their serfs were given their own land, they would be more productive with it than the nobles were. Because it was theirs, they would have more incentive to improve it, to invest in it. This was prevented by the nobles. If Johnny McFarmer with a little plot and a couple of cows gets really productive and gets together with a few others, soon they might be able to afford more hired goons than the feudal lords. They couldn’t allow that. So slaves they remained, attached to the land.

It was capitalism that began the gradual process of freeing the serfs. Property equaled power, as we’ve just seen. Power sprang from the limited commodity of land. There was limited power, because there was limited land. Power that one person had was power another person did not have, because he didn’t have the land. However, with the development of money, and the correlation of power with money instead of land, capitalism increased the scope of power, and separated it from the need to dominate human beings to the same extent.

As mentioned, the nobles’ lands did not yield much. Here, Smith made a convincing economic argument against slavery: “If great improvements are seldom to be expected from great proprietors, they are least of all to be expected when they employ slaves for their workmen…the work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any. A person who can acquire no property can have no interest but to eat as much and to labour as little as possible.” It’s hardly a rallying cry for abolitionists, but this cold calculation does much more for humanity than any number of Underground Railroads.

Feudal serfs may have been inclined to chill and eat (when there was food) but they weren’t fools. They took advantage of the nobility’s hectic raping, pillaging and crusading schedule to conduct some trade on their own accounts. Some trade was necessary to keep things going, so the lords allowed it, but charged ‘protection’. “In those days protection was seldom granted without valuable consideration…taxes used to be levied upon the persons and goods of travelers.” The serfs had to pay up when they crossed a lord’s land, went over his bridge, carried goods to market or set up a booth. The English names for the taxes were “passage, pontage, lastage and stallage” which to me sounds like a nice, well established law firm.

With the need to maintain standing armies, the lords were always short of funds. Eventually some enterprising serfs figured out that their lord would prefer a nice guaranteed lumpsum payment up front, rather than the uncertain dribble of taxes from traveling merchants. They began making set payments and were free from the many small fees and taxes. They began prospering, and eventually some of them were able to band together to more efficiently bribe the nobles. The first Corporations were born. The Corporations would guarantee an even larger lump-sum payment to the nobles, and take care of the hassle of collecting the taxes. This left the noblemen with more time for raping, pillaging and fighting. However, by agreeing to collect their own taxes, the Corporations were free from bailiffs showing up to collect taxes. Free from supervision by the nobles. Gradually, the members of the corporations, with money and astuteness, began gaining control over their own lives, “that they might give away their own daughters in marriage, that their children should succeed to them, and that they might dispose of their own effects by will…The principle attributes of…slavery being thus taken away from them, they now…became really free in our present sense of the word Freedom.”

So, it turns out that wealthy corporations, instead of distorting property rights and freedoms, were a source of them. Today, freedom may be a basic human right. But there was a time when freedom as a concept was something alien. As a society, we very gradually came up with the concept of freedom, and its source was simple: We bought our way to being Free.

There were no rousing speeches, no great heroes, no martyrs. We paid for our freedoms, in installments, over the centuries, without realizing it. All we were trying to do was look out for our own interests and make some money. “A revolution of the greatest importance to the public happiness was in this manner brought about by two different orders of people, who had not the least intention to serve the public.” Capitalism: Win.

To be continued… eventually.