Adam Smith and World Trade

I’m currently reading David Harvey’s Spaces of Hope, which was inspired by the reading material for Vitamin Creative Space’s reading group.

Within a discussion of the realisation of “spaces of utopia” Harvey quotes eighteenth-century economist Adam Smith proposing the global effects of a free market:

[B]y uniting, in some measure, the most distant parts of the world, by enabling them to relieve one another’s wants, to increase one another’s enjoyments, and to encourage one another’s industry, their general tendency would seem to be beneficial. To the natives, however, both of the East and West Indies, all the commercial benefits which can have resulted from these events have been sunk and lost in the dreadful misfortunes which they have occasioned. These misfortunes, however, seem to have arisen rather from accident than from any thing in the nature of those events themselves. At the particular time when these discoveries were made, the superiority of force happened to be so great on the side of the Europeans, that they were enabled to commit with impunity every sort of injustice in those remote countries. Hereafter, perhaps, the natives of those countries may grow stronger, or those of Europe may grow weaker, and the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another. But nothing seems more likely to establish this equality of force than that mutual communication of knowledge and of all sorts of improvements which an extensive commerce from all countries to all countries naturally, or rather necessarily, carries along with it.1

The situation is now similar to that predicted by Adam Smith, but rather than the “East and West Indies” being in the ascendant relative to Europe, we have China taking their place against the perceived Euro-American block. But Smith’s utopian vision of “natural,” or “necessary” commerce, which will work towards an equality, when we look at the Chinese implementations seems to have hit on some uneven developments on the ground.

I think this unevenness is part and parcel of David Harvey’s “uneven geographical developments,” and is one of the reasons why, I think, capitalism will never stabilise – local conditions will always adjust the expected ideals into their realities, in this case realities “with Chinese characteristics.” For one thing you can’t say China practices a “free” market, but it partakes in the WTO who expect certain definitions of freedom (of trade) which, as I understand it, are very unevenly applied between China and the rest of the world.

I’m no apologist for the way things are, just commenting on the way things develop, and as such it’s unfair of me to single out China, as the trade relations between countries are never “free” but are practical realisations of idealised structures: “…the purity of any utopianism of process inevitably gets upset by its manner of spatialization. In exactly the same way that materializations of spatial utopias run afoul of the particularities of the temporal process mobilized to produce them, so the utopianism of process runs afoul of the spatial framings and the particularities of place construction necessary to its materialization.”2

  1. Adam Smith, quoted in Harvey, David (2000), Spaces of Hope, Edinburgh: Edinburgh University Press, p.179 (originally cited in Arrighi, G. (1994) The Long Twentieth Century, London, p.19)
  2. Harvey, David (2000), ibid.
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