Seeking Adam Smith
Profits and the Well-Being of America

More on Richard T. Ely

By Jonathan B. Wight

In an earlier post, I introduced readers to the work of Richard T. Ely (1854-1943), one of the founders of the American Economic Association and a leader of the progressive movement. 

Ely also published in 1889, An Introduction to Political Economy (Chautauqua Press: New York).

It was refreshing to read such a pluralist text that is analytical and ethically sensitive.  Here is Ely, near the start of his principles text, addressing the issue of the “moral limits to markets” (that’s not his term, but it applies):

“What is the real origin of the feeling that it is not creditable to drive a hard bargain with a near relative or friend?  It can hardly be said that there is any rule of morality to forbid it.  The feeling seems to me to bear the traces of the old notion that men united in natural groups do not deal with one another on principles of trade…. the old feeling of brotherhood [forbids] hard bargains.”

Second, Ely talks about progress in somewhat the same terms as Adam Smith, namely, that pain is produced when a situation is out of harmony with our moral sentiments. That is, the impetus for social progress comes about from feelings of disequilibria (not rational arguments alone). 

Ely speculates that the identified social problems of his day were thus partly the reflection of a higher ethical standard.  Ethical standards arise as a result of the progress in religion (think of Ralph Waldo Emerson) and: 

“[because of] the development of humane sentiments in all classes.  Things trouble us now which one hundred years ago we would have taken as a mere matter of course.  The contradiction between things as they are and our social ideal is painful.”

This is a lovely insight.  When we note the many problems we see around us, many of these are simply the result of overall progress!  If we hadn’t progressed, we wouldn’t see these issues as problems—we wouldn’t have the “lenses” to see them, because our moral sentiments would not have been aroused. 


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