Back in 1996 Sam Fleischacker published “Values Behind the Market: Kant’s Response to the Wealth of Nations,” in History of Political Thought; he made a compelling case that Kant started to engage with Smith’s Wealth of Nations from around 1784 onward. (The first uncontroversial and explicit reference is in the Anthropologie lectures in 1798.)
Before I continue, it is worth noting two things. First, if Kant was, as seems likely, familiar with the contents of Deutsches Museum, — an influential journal founded in 1776 in which people like Jacobi published — he would be familiar with Christian von Dohm’s 1778 essay (and subsequent pamphlet/essay) against Physiocracy. Von Dohm (1751-1820), who was a student of Garve, explicitly draws on Adam Smith. Even if Kant was unfamiliar with the work, it generated a considerable number of responses. Von Dohm later became very famous due to his work promoting Jewish emancipation. So, the role of Von Dohm’s mediation in the reception of Smith is worth exploring in its own right, and also for its potential impact on philosophical luminaries of the age.
Second, Kant clearly was familiar with a number of existing practices and sometimes elaborate proposals that promoted European peace through either federalism, a concert of powers, or partial disarmament. So even when one can show that Kant seems to echo Smith, there are multiple pathways, including common sources, to their mutual agreement.
One other important insight that one can glean from Fleischacker’s original (1996) study (he subsequently frequently returned to conjoining the study of Kant and Smith), is that Kant treats the significance of the Wealth of Nations as a political work. This anticipates the reception of Smith in the revolutionary episodes involving the Swedish liberals (and especially Adlesparre) in 1809 and the Liberales of Spain from 1810 inward. But most crucially, and this is distinctive, Kant sees the connection between financial and commercial independence and tutelage (or Unmündigkeit, that is, without voice), and Fleischacker makes a promising case that this is, in fact, derived from Smith who (like Hume) greatly valued the interdependent independence that modern commercial life provided. (This was first emphasized by Chris Berry.)
So much for set up.
In addition to tracking some of Smith’s views on the relationship between state and religion in Perpetual Peace, Fleischacker notes that there are a number of very clear allusions to Smith in Perpetual Peace (1795) related to the role of debt financing of war. (Since Kant was familiar with ‘‘Of Public Credit’’ (“The Contest of the Faculties” (7:93)), he may have gotten some of these from Hume.)
Now Kant thinks that a system of well designed commercial republics may secure perpetual peace because they have a natural pacifism. (8.311) For
“It is the spirit of trade, which cannot coexist with war, which will, sooner or later, take hold of every people. Since, among all ordered powers subordinate to state authority, the power of money is likely the most reliable, states find themselves forced (admittedly not by motivations of morality) to promote a noble peace” (PP 8.368, translated by David Colclasure in an edition edited by Pauline Kleingeld). [I have modestly adjusged Colclasure’s translation. The German reads: The German reads Weil nämlich unter allen, der Staatsmacht untergeordneten, Mächten (Mitteln), die Geldmacht wohl die zuverläßigste seyn möchte.]
This is a kind of sociological argument. In which in virtue of the spirit of trade being a persistent and so reliable social force, it becomes the preferred means of public policy and so, thereby, promote political integration. This is a functional argument, and on some readings the effect (viz., noble peace) may well not be intended by the state actors.
Even so, Kant offers six reasons for worrying about debt finance in the context of war and thereby undermine the natural pacifism of commercial republics:
the ability to take on potentially unlimited debt prolongs war (8:345).
The availability of debt as a state instrument incentivizes aggressive, mercantile elements in society, when they have access to power, to pursue unpacific foreign policy. (8.345)
Debt financing pushes costs of war onto future generations (and so undermines the incentive to seek peace). (8.311)
It shifts partial control over the war from politics to financial markets.*
International debt generates systemic risk through contagion. It’s worth quoting the passage because I have never seen it mentioned: “prohibition [of non-investment state .debt] ought all the more to serve as the basis of a preliminary article of perpetual peace, since the ultimately unavoidable bankruptcy of one state would necessarily involve other states in the loss, though at no fault of their own, which would thus cause them a public injury.” (8:346)
Punitive debt (in the service of reparations) incentivizes war. (8.351)
Three comments. First, the first four of these claims have counterparts in the Wealth of Nations (and also Hume). But the others strike me as clever developments. (I haven’t re-read WN to double-check.) Although it is worth noting that Smith has a lot of material on domestic financial contagion in Book II. Second, and lurking in all of these is a point that runs through the Wealth of Nations and its polemic against mercantilism: that war-making is profitable for some well connected interests, while damaging to the rest of society (and other countries).
Third, this pessimism about debt’s role represents a change from “Idea for a Universal History” (1784) where he thought that great financial debt would prevent wars (8:28; see also page 8:113 “On the Common Saying” from 1793). So, this does make one wonder to what degree he really agreed with Smith in the mid 1780s.
What I would like to add to that is the possibility that Smith’s proposal for a federal, parliamentary union with a potentially rotating representative parliament (proportional to taxes) which would provide a political structure for Britain’s Atlantic empire (including Ireland), itself helped shape Kant’s proposal for perpetual peace. This is offered in Book IV and the final pages of WN.
Now, as I noted by itself any resemblance between Smith and Kant could represent common sources. So what follows is unavoidably speculative, even in light of Fleischacker’s work. But I think there are two arguments to suggest that Smith’s federal parliamentary Union is important to Kant.
First, and most important, there is an argument in Smith that is distinctive. Despite public perception, the argument is much more prominent in Kant than in Smith (with whom it is often associated). I quote: "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 [I] free trade is structurally analogous to life under empire. But since he is arguing for free trade, this can also be read as: [II] if one adopts free trade, as Smith urges, the trading parties will eventually seem transformed and politically integrated as if or structurally analogous to (“resemble”) a continent-wide empire. So, lurking in Smith’s economic argument for free trade is a functionalist argument that leads to a kind of pacific political integration of the sort familiar within empire(s).
For Smith, free trade generates the development of a peaceful (continental-wide) empire. So, fundamentally, the argument is that mutual trade does not merely lead to mutual and widespread prosperity, but also that it transforms and integrates the trading parties politically. To be sure, Smith himself realized that in in many contexts trade could be a source of conflict and animosity, and so he did not have a providential faith in its good effects.*
Now, on my reading, Perpetual Peace adopts this functionalist argument for political integration. (And that is, of course, the reason why Perpetual Peace is so often seen as significant to the EU and its self-conception.) Kant doesn’t use the same terms as Smith. But they both offer functional arguments from trade to economic and political integration of continent wide systems. Okay that was the first argument.
The second argument is based on a somewhat odd passage that often gets cited:
nature guarantees perpetual peace through the mechanism of human inclinations itself. To be sure, it does this with a certainty that is not sufficient to foretell the future of this peace (theoretically), but which is adequate from a practical perspective and makes it a duty to work toward this (not simply chimerical) goal.” (PP8:368)
The underlying claim is fairly straightforward. Kant reassures his reader that his normative project (perpetual or at least regional peace) makes no unrealistic assumptions about human nature because it relies on mostly self-regarding ‘inclinations’ and the social force of the pursuit of wealth. And because his project is possible. we have a duty to pursue it and, thereby, work with the tendency of providence.
Now, it is notable that Kant himself adds for good measure that his goal feasible, it is not a chimera. I was very struck by the presence of that word. (I’ll explain that below the pretty diagrams.)
Now, ‘chimera’' in this ordinary sense of an unfounded or impractical conception is relatively modern (late sixteenth century) in English and German. As the Ngram suggests, the word’s relative popularity is very much a late eighteenth century thing in both languages. In fact, Kant uses the word quite frequently. (In his lecture, he even gives a definition of it.)
Okay, as you already suspect, Smith also uses ‘chimera’ at a key point. I quote the passage, where Smith re-introduces his parliamentary union project that would make of the Northern Atlantic Ocean a giant free trade zone:
“Without, however, pretending to determine whether such a union be practicable or impracticable, it may not, perhaps, be improper, in a speculative work of this kind, to consider how far the British system of taxation might be applicable to all the different provinces of the empire, what revenue might be expected from it if so applied, and in what manner a general union of this kind might be likely to affect the happiness and prosperity of the different provinces comprehended within it. Such a speculation can at worst be regarded but as a new Utopia, less amusing certainly, but not more useless and chimerical than the old one.” (WN 5.3.3.1)
Taken by itself the use of chimera and its cognates would surely be a coincidence. But in the context of Fleischacker’s argument, and my own evidence, it’s very unlikely to be coincidence.
I think because utopia and chimera are tropes that recur throughout the strange reception of More’s Utopia in learned European discussions of federalism and European peace. Initially alerted by Quention Skinner (recall) I have traced out some of these already in a number of posts. So let me leave this thread hanging for now.
*Paganelli, Maria Pia, and Reinhard Schumacher. "Do not take peace for granted: Adam Smith’s warning on the relation between commerce and war." Cambridge Journal of Economics 43.3 (2019): 785-797.