The crucial qualifications have commonly been dropped, however, as they enter contemporary ideology in the hands of Smith's latter-day disciples. Thus in introducing the Chicago bicentennial edition of Smith's classic, George Stigler writes that "Americans will find his views on the American colonies especially instructive. He believed that there was, indeed, exploitation -- but of the English by the colonists." What he actually believed was that there was exploitation of the English by the "particular order of men" in England who were the architects of policy in their own interest, and a "grievous tax" upon the colonies as well. By removing Smith's emphasis on the basic class conflict, and its crucial impact on policy, we falsify his views, and grossly misrepresent the facts, though constructing a useful instrument to mislead in the service of wealth and power. These are common features of contemporary discussion of international affairs. And of much else: condemnation of the harmful effects of the Pentagon system on the economy, for example, is at best extremely misleading if it does not emphasize that for the architects of policy and the interests they represent (notably, advanced sectors of industry), the effects have hardly been harmful.

Not surprisingly, social policy regularly turns out to be a welfare project for the rich and powerful. Imperial systems, in particular, are one of the many devices by which the poor at home subsidize their masters. And while studies of the cost effectiveness of empire and domination for "the nation" may have academic interest, they are only marginally relevant to the study of policy formation in societies in which the general public is expected to stand aside -- that is, all existing societies.

The conclusions, however, are far more general. As indicated by the example of the Pentagon system, the same considerations apply to domestic as to international policy. State power has not only been exercised to enable some to reap wealth beyond the dreams of avarice while devastating subject societies abroad, but has also played a critical role in entrenching private privilege at home. In early modern Holland and England, the government provided the infrastructure for capitalist development, protected vulnerable and crucial production (wool, fisheries) and subjected them to close regulation, and used its monopoly of violence to impose wage labor conditions on formerly independent farmers. Centuries ago, "European societies were also colonized and plundered, less catastrophically than the Americas but more so than most of Asia" (Thomas Brady): "The rapid economic development yielded by the English path proved extremely destructive, both of traditional property rights at home and of institutions and cultures throughout the world." A process of "rural pacification" took place in the developing countries of Europe. "The massive expropriation of the peasantry, which happened in the fullest sense only in England," may well have been the basis for its more rapid economic development as peasants were deprived of property rights they managed to retain in France, and forced into the labor market; "it was precisely the absence of [freedom and property rights] that facilitated the onset of real economic development" in England, Robert Brenner argues in his penetrating inquiry into the origins of European capitalism. The common people had ample reasons to resist "the march of progress," or to seek to deflect it to a different path that sought to preserve and extend other values: "ideas of community, of togetherness, of the whole superseding the parts, and of the common good that transcends ever particular good" (Brady).

Such ideas animated the "vast communal movements" of pre-capitalist Europe, Brady writes, and "brought elements of self-government into the hands of the Common Man," arousing "contempt and sometimes fear in the traditional elites." The common people who sought freedom and the common good were "craftsmen of shit," "rabble" ("canaille") who should "die of starvation." They were condemned by the Emperor Maximilian as "wicked, crude, stupid peasants, in whom there is neither virtue, noble blood, nor proper moderation, but only immoderate display, disloyalty, and hatred for the German nation" -- the "anti-Americans" of their day. The democratic upsurge in 17th century England evoked harsh denunciation of the "rascal multitude," "beasts in men's shapes," "depraved and corrupt." Twentieth century democratic theorists advise that "The public must be put in its place," so that the "responsible men" may "live free of the trampling and the roar of a bewildered herd," "ignorant and meddlesome outsiders" whose "function" is to be "interested spectators of action," not participants, lending their weight periodically to one or another member of the leadership class (elections), then returning to their private concerns (Walter Lippmann). The great mass of the population, "ignorant and mentally deficient," must be kept in their place for the common good, fed with "necessary illusion" and "emotionally potent oversimplifications" (Wilson's Secretary of State Robert Lansing, Reinhold Niebuhr). Their "conservative" counterparts are only more extreme in their adulation of the Wise Men who are the rightful rulers -- in the service of the rich and powerful, a minor footnote regularly forgotten.¹⁸

The rabble must be instructed in the values of subordination and a narrow quest for personal gain within the parameters set by the institutions of the masters; meaningful democracy, with popular association and action, is a threat to be overcome. These too are persistent themes, that only take new forms.

Adam Smith's nuanced interpretation of state interference with international trade extended to the domestic scene as well. The praise in his opening remarks for "the division of labor" is well-known: it is the source of "the greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied," and the foundation of "the wealth of nations." The great merit of free trade, he argued, is that it contributes to these tendencies. Less familiar is his denunciation of the inhuman consequences of the division of labor as it approaches its natural limits. "The understandings of the greater part of men are necessarily formed by their ordinary employments," he wrote. That being so, "the man whose life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding...and generally becomes as stupid and ignorant as it is possible for a human creature to be... But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it." Society must find some way to overcome the devilish impact of the "invisible hand."

Other major contributors to the classical liberal canon go much further. Wilhelm von Humboldt, who inspired John Stuart Mill, described the "leading principle" of his thought as "the absolute and essential importance of human development in its richest diversity," a principle that is not only undermined by the narrow search for efficiency through division of labor, but by wage labor itself: "Whatever does not spring from a man's free choice, or is only the result of instruction and guidance, does not enter into his very nature; he does not perform it with truly human energies, but merely with mechanical exactness"; when the laborer works under external control, "we may admire what he does, but we despise what he is."¹⁹

Smith's admiration for individual enterprise was tempered still further by his contempt for "the vile maxim of the masters of mankind": "All for ourselves, and nothing for other people." While the "mean" and "sordid" pursuits of the masters might yield incidental benefit, faith in this consequence is mere mysticism, quite apart from the more fundamental failure to comprehend the "leading principle" of classical liberal thought that Humboldt stressed. What survives of these doctrines in contemporary ideology is an ugly and distorted image, contrived in the interests of the masters.²⁰

¹⁸ Brady, in Tracy, Merchant Empires. Brenner, in Aston and Philpin, Brenner Debate, 62; see particularly ch. 10. DD, ch. 12.

¹⁹ Smith, Wealth, Bk. I, Ch. I (i, 7); Bk. V, Ch. I, Pt. III, Art. II (ii, 302-3). In the detailed index, the entry for "division of labor" does not list Smith's condemnation of its consequences. Humboldt, see FRS.

²⁰ Smith, Wealth, Bk. III, Ch. IV (i, 437).