Though Adam Smith and James Madison can both be said to be representative of liberalism, their views on human nature diverged in significant respects, especially with regard to their approach to the question of how nations should deal with deviant expressions of human nature. In this essay, I will elaborate the views of these figures, focusing especially on their solutions to this question, while arguing through analogy that Smith’s positive solutions in The Wealth of Nations are more conducive to societal health than Madison’s views as expressed in Federalist #10.
Before considering their solutions, let us elaborate upon the commonalities in their views of human nature. The salient commonality on which I will focus is the observation that humans are selfish, but what this means for society is viewed in different lights in Federalist #10 and The Wealth of Nations. In The Wealth of Nations, Smith observes that “[i]t is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” (Book I, Chapter II) Smith is arguing here that self-interest confers a positive benefit to society. That is, in our commercial relationships with other people, we do not appeal to their sense of pity or compassion for their providing us the goods which we seek, but rather we appeal to their proclivity toward self-interest, just as they appeal to ours with their product offerings. For Smith, this selfishness (along with the division of labour which arises from the human proclivity to “truck, barter and trade”) (ibid) is part and parcel of the circumstances which allow human societies to function as efficiently as they do.
Madison, contrarily, focuses on the dangers of self-interest among the governed, seeing instead the hazards that can arise from men’s passions, especially those passions which arise from the unequal distribution of wealth. Writing in Federalist #10 Madison says,
A zeal for different opinions concerning religion, concerning government, and many other points, as well of speculation as of practice; an attachment to different leaders ambitiously contending for pre-eminence and power; or to persons of other descriptions whose fortunes have been interesting to the human passions, have, in turn, divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to co-operate for their common good. (2)
Consider the contrast between Smith’s and Madison’s views. Whereas Smith sees human self-interest and the propensity of humans to truck, barter, and trade as leading to mutual cooperation among the population, and thus a sort of harmonious existence, Madison sees self-interest and its individual manifestation as leading to the rise of factions (ibid), which he paints as a threat to liberty.
His solution to this threat to liberty is a republican form of government, or as I refer to it, the negative regulation of human behavior. Imagine a large public reservoir of water which is contaminated with various salts and various other impurities such that it has turned the water a shade of dark brown. Consider this body of water to be a representation of all human behavior, where clear water is the end intention, and the impurities represent the various poisons of self-interest which lead to the rise of faction, and thus of the majoritarian oppression of which Madison was frightened. In Madison’s solution, the water passes through filters in the dam such that most of the impurities are diluted and the final result is a glass of water which is not perfectly clear, but wherein the impurities have been filtered out such that while some still exist, they do not exist in amounts great enough to poison the body. In this regard, Madison’s solution is negative: it does not seek positive action to purify the water, but rather in a passive process the water is purified to some extent.
In the same way, a republican form of government contains various filters on human behavior, such as having representatives who deliberate upon the interests of their constituency and express a charitable version of it (preventing corrupting effects of direct democracy); or having a sufficiently large territory and diversity of views such that any majoritarian inclination must compete with many others. Any human desire or cooperative endeavor must pass through these filters before they can be expressed, thus limiting human expression to some extent.
Let us contrast this solution with Smith’s, which I refer to as the positive regulation of human behavior. Consider that while Smith did see the complexity of human society arising from self-interest, the division of labour, etc., he was not ignorant of the societal ills which might arise in the lowest classes of human society in advanced capitalist nations (nor among the other classes, but for different reasons). In Book V, Chapter I, Article II (last paragraph) of The Wealth of Nations, Smith writes,
The same thing may be said of the gross ignorance and stupidity which, in a civilized society, seem so frequently to benumb the understandings of all the inferior ranks of people. A man without the proper use of the intellectual faculties of a man, is, if possible, more contemptible than even a coward, and seems to be mutilated and deformed in a still more essential part of the character of human nature. Though the state was to derive no advantage from the instruction of the inferior ranks of people, it would still deserve its attention that they should not be altogether uninstructed. The state, however, derives no inconsiderable advantage from their instruction. The more they are instructed the less liable they are to the delusions of enthusiasm and superstition, which, among ignorant nations, frequently occasion the most dreadful disorders. An instructed and intelligent people, besides, are always more decent and orderly than an ignorant and stupid one. They feel themselves, each individually, more respectable and more likely to obtain the respect of their lawful superiors, and they are therefore more disposed to respect those superiors.
So while Smith can see a more nuanced result of human society than might be painted simply by deferring to his appreciation for the cooperation that can result from self-interest, he also sees the negative implications thereof. His solution, however, is different. If we can imagine again the same body of water being filtered through the dam of republican government, Smith’s approach to state sponsored education is like adding chlorine to the reservoir, purifying it to some extent before it even enters the filtering process. He is not content, therefore, to simply filter the negative aspects of human nature, but to positively combat them through education.
Of course, Smith did not advocate the sort of universal education that many contemporary liberals do, so it likely would not be correct to say that the resultant tap water in his conception of capitalism would be unclouded. Only that it takes extra, positive steps, unaccounted for in Madison’s view, which serve to further eliminate impurities.