In a Forthcoming Book, Robin Paul Malloy Re-Assesses Adam Smith’s Theory of Jurisprudence
If the ghost of Adam Smith were to haunt the undergraduate classrooms of Syracuse University this Halloween Season, he would perhaps be mortified about how his ideas are being remembered. Despite publishing and lecturing extensively during the 18th century on moral philosophy, political economy, and the law, Smith today is most well-known for the image of the “invisible hand of the market” associated with his magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations (1776).
However, E.I. White Chair and Distinguished Professor of Law Robin Paul Malloy believes it’s time to re-assess Smith’s ideas on morality, markets, and justice and to revise the way we apply Smith’s philosophical ideas to the law.
In a forthcoming book—as well as at a talk at the Midwest Law and Economics Association at Marquette University Law School, Oct. 19-22, 2017—Malloy will argue that despite Smith’s deep influence on market theory, the Scottish philosopher intended not for economics but for justice to be the central pillar of society. Justice, Smith believed, is what mediates between self-interested individuals and the demands of society as a whole. Malloy believes that a fuller understanding of Smith’s concepts can better inform the way law is theorized and practiced, for the betterment of individuals, social order, and economic progress.
“The dominant image of Adam Smith as the creator of a dispassionate, mechanical, and wholly rational economic theory emerged from the interpretation of George Stigler and the Chicago School of Economics,” explains Malloy. “Stigler extracted the ‘invisible hand’ as a metaphor for market theory and employed it as a central tenet of economics to advance the idea that rational, self-interested actors could behave in a way that miraculously benefits society as a whole.” Malloy says that lawyers borrowed this somewhat one-dimensional understanding of Smith’s work from economists “and applied it to law in order to advocate for efficient legal rules and in an effort to make the law more scientific by removing moral reasoning from legal judgments.”
However, Malloy’s latest scholarship illustrates that there is much more to Smith’s work than the simple interpretation of the “invisible hand.” After all, in Smith’s other book, The Theory of Moral Sentiments (1759), he develops a theory of morality and provides another of his grand metaphors: the “impartial spectator.” The “impartial spectator” is used to explain how individuals develop moral thinking from the blank slate of birth. Individuals, argued Smith, grow up seeking approval for their moral ideas from other people, or—if the observer is internalized as the “impartial spectator”—from what might be described as a conscience.
“Smith’s plan was in fact to write three books,” continues Malloy. “The Theory of Moral Sentiments, the Wealth of Nations, and a book on jurisprudence.” Malloy explains that Smith, also a lawyer and legal scholar, spent a large part of his life working on a theory of jurisprudence, but when he died he wanted this unfinished work to be burned.
Nevertheless, some of Smith’s legal ideas survived, including lecture notes taken by his students. It’s these theories—and how Smith connected jurisprudence to moral philosophy and economics—that Malloy has been exploring for more than 30 years, in two books (Adam Smith and the Philosophy of Law and Economics and Adam Smith and Law) and several chapters and articles.
The central question of my new book is “What is Smith’s theory of jurisprudence?” says Malloy. “This is a side of Smith that is seldom fully explored by lawyers seeking to apply economics to law.”
In re-reading Smith’s legal theories, Malloy says a third metaphor—the “man in the mirror”—should be added to the “invisible hand” and “impartial spectator.” The “man in the mirror” addresses jurisprudence and the social context in which we act. “The mirror reflects ourselves and the other people with whom we interact,” explains Malloy, adding that with this third concept, an alternative and more complete model of Smith’s moral, legal, and social universe emerges. The “invisible hand” represents the self-interested actions of individuals, which are in tension with the interests of others as represented by the “man in the mirror” who critiques our self-interested actions. In turn these two are mediated by the concept of justice, or the “impartial spectator.”
In fact, observes Malloy, Smith used a legal analogy—the common law magistrate—to explain the role of justice in society. Smith saw the English common law magistrate as someone who must practically weigh the interests of individuals against the mores and norms of society. According to Malloy, reconciling Smith’s ideas about the marketplace, justice, and morality is consistent with the desire for modern societies to increase prosperity and protect liberty. “Economic progress occurs in a framework based on morals and justice,” says Malloy. “This understanding of Smith opens the door to a broader than currently existing dialogue in law concerning the proper relationship between—as well as a more diverse and inclusive approach to—law and economics.”