Adam Smith's "New" Liberal Imperialism

The English term, ‘empire’ is derived from the Latin imperium for ‘to command’ or ‘to control.’ It is no surprise that when Smith uses ‘empire’ he tends to associate it with the Roman version. But he recognizes that he, too, lives in a empire. In his recent presentations that I witnessed my good friend, Ryan Hanley, is much taken by the rather pessimistic, final sentence of Wealth of Nations that illustrates this very point: “ If any of the provinces of the British empire cannot be made to contribute towards the support of the whole empire, it is surely time that Great Britain should free herself from the expence of defending those provinces in time of war, and of supporting any part of their civil or military establishments in time of peace, and endeavour to accommodate her future views and designs to the real mediocrity of her circumstances.” (WN 5.3.92, 947)

The particular ‘provinces’ Smith has in mind are, of course, the ‘American’ colonies who (it’s 1776) seem tempted to go it alone unwilling to pay the taxes that would contribute to the maintenance of their defense by the British empire. This is not the only reason Smith thinks they are ready to leave; in Book 4, he had suggested that the leaders of the American colonies prefer the stature they gain from their local significance (WN 4.7.C.68-74, pp. 619-622)

In fact, Smith seems to be suggesting that the ordinary corruption that made the British constitution function could not be extended to bribe them into supporting the imperial interests: “It would be absolutely impossible to distribute among all the leading members of all the colony assemblies such a share, either of the offices or of the disposal of the offices arising from the general government of the British empire, as to dispose them to give up their popularity at home and to tax their constituents for the support of that general government, of which almost the whole emoluments were to be divided among people who were strangers to them.” (WN 4.7.C.69, 619) The British empire had become too large to function in the way Walpole had managed to do so through the earlier half of the eighteenth century.

It’s often forgotten today (although regular readers know I am increasingly fascinated by it) that Wealth of Nations had proposed an alternative vision to real mediocrity and Walpole-ian corruption. A parliamentary union or federal parliament, first in Westminster and then, as population keeps growing, north America. As Jennifer Pitts puts it in her Turn to Empire: the rise of Imperial Liberalism in Britain and France liberalism, “For the American colonies, Smith favored either complete emancipation or complete political and economic integration, both of which he believed would be politically so unpopular as to be impossible to institute peacefully.” (p. 54)

Despite the theme of her book, Pitts does not develop what ‘complete political and economic integration’ means for Smith. In his terminology, this is an imperial project that would ‘complete’ the British constitution. In fact, Smith makes this very point by contrasting it with the fate of the Roman republic:

Though the Roman constitution, therefore, was necessarily ruined by the union of Rome with the allied states of Italy, there is not the least probability that the British constitution would be hurt by the union of Great Britain with her colonies. That constitution, on the contrary, would be completed by it, and seems to be imperfect without it. WN 4.7.c.624, 777

This idea of completing and perfecting the constitution (and empire) is echoed in the final paragraph in the lines just before Smith prophecies Britain’s real mediocrity:

This empire, however, has hitherto existed in imagination only. It has hitherto been, not an empire, but the project of an empire; not a gold mine, but the project of a gold mine; a project which has cost, which continues to cost, and which, if pursued in the same way as it has been hitherto, is likely to cost immense expence, without being likely to bring any profit; for the effects of the monopoly of the colony trade, it has been shewn, are, to the great body of the people, mere loss instead of profit. It is surely now time that our rulers should either realize this golden dream, in which they have been indulging themselves, perhaps, as well as the people; or, that they should awake from it themselves, and endeavour to awaken the people. If the project cannot be compleated, it ought to be given up. (WN 5.3.92, 947)

Despite the low odds, Smith is proposing a new kind of empire, one that is federal in character in which the colonies will have, in addition to the colonial assemblies, representatives in the "States General of the British Empire," (WN 5.3.68, 933) The point is thereby to extend “the British system of taxation…to all the different provinces of the empire.” (WN 5.3.68, 934; emphasis added.) To what degree this ‘all’ is meant to include the North American colonists only (as I used to think), or, in fact, all of Britain’s global dominions (including colonized inhabitants), as Maria Pia Paganelli suggested to me, is an interesting question.

As an aside, I use ‘new’ here to suggest that it anticipates Constant’s idea of a “new kind of federalism,” that would prevent despotism within each federated state.[1] The ‘old’ federalism is agnostic on the structure of each federated state (and, thereby, permits local despotism). We know that when Constant wrote his Principles of Politics he was deeply immersed in Smith’s Wealth of Nations.[2]

Be that as it may, it would be a mistake to see Smith’s new kind of globalizing imperialism as driven by concerns over tax policy only. I have noted in the past that Smith id also interested in what I have called a ‘functionalist’ argument how free trade itself shapes political integration, that is, the development of a peaceful (continental) empire: "Were all nations to follow the liberal system of free exportation and free importation, the different states into which a great continent was divided would so far resemble the different provinces of a great empire." (WN 4.5.b.39, 538) To be sure, this literally says that free trade is structurally analogous to life under empire. But since in wider context he is arguing for free trade, this can also be read as: if one adopts free trade, as Smith urges, the trading parties will seem transformed and politically integrated as if or structurally analogous to (“resemble”) a continent-wide empire.

Smith goes on to emphasize an important humanitarian feature of his account of empire, which links it to his argument for free trade:

As among the different provinces of a great empire the freedom of the inland trade appears, both from reason and experience, not only the best palliative of a dearth, but the most effectual preventative of a famine; so would the freedom of the exportation and importation trade be among the different states into which a great continent was divided. (WN 4.5.b.39, 538)

For Smith ‘empire’ entails (intra-imperial) free trade. That is to say, the freedom of trade within empires are themselves an excellent way to manage and prevent the risk of famine. Peacefully completing the British constitution in a parliamentary union — and, looking ahead to the nineteenth century, Smith is explicit this would involve the Catholic Irish (WN 5.3.89, 944) — is a means to induce the hunger-fighting benefits of an actual empire.

Smith’s interest in combatting famine is signaled from the opening pages of the Wealth of Nations. In the “Introduction and plan” of the work Smith introduces us to the great risk of perishing “with hunger” in poor nations. (Intro.4., WN 10) And this he contrasts with circumstances “in a well-governed society,” with an advanced division of labor that generates “that universal opulence which extends itself to the lowest ranks of the people.” (WN 1.1.10, 22)

As I have hinted above, Smith’s plan for a new kind of liberal imperialism — federal, representative, and pacific in character — was still-born. Victorian imperial liberalism turned out (as Pitts shows) to be quite different in character. But it was not without influence, for it did shape the liberal federalism of Constant, Bentham, and Kant.

To be continued.

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[1] Levy, Jacob T. "Federalism and the old and new liberalisms." Social Philosophy and Policy 24.1 (2007): 306-326. Levy quotes Benjamin Constant, “On Municipal Power, Local Authorities, and a New Kind of Federalism,” in Principles of Politics Applicable to All Representative Governments, in Constant, Political Writings, ed. and trans. Biancamaria Fontana (Cambridge: Cambridge University Press, 1988), 253–54. See also Eric Schliesser. (2024). “Once Upon A Time in America: Retelling the Tale of New Federalism.” Isonomia Quarterly, 2(1). https://isonomiaquarterly.com/archive/volume-2-issue-1/once-upon-a-time-in-america-retelling-the-tale-of-new-federalism/

[2] In her “Introduction” to her translation and edition, Benjamin Constant: Political Writings, (Cambridge University Press, 1988) Biancamaria Fontana writes, “The 1806 draft [of Constant’s Principle of Politics] in particular can be read as a close commentary on Smith’s Wealth of Nations,” (p. 32).