Mercantilism made use of monopoly of one kind or another, and hence is objectionable, according to Smith. Mercantilism is regulation, and regulation is often carried on for the benefit of the rich and powerful, thus neglecting and oppressing the poor.[XI-19] Smith failed to note, however, that the laissez faire policy likewise favored the rich and powerful and neglected the poor. Mercantilism, according to Smith, considers production and not consumption as the end of industry and commerce, and thus favors one class at the expense of other classes.

“Wherever there is great property,” said Smith, “there is great inequality.” For every very rich man there must be at least 500 poor men, and the affluence of the few supposes the indigence of the many.[XI-20] But no society can be flourishing and happy wherein the greater part of the members are poor and miserable.[XI-21] The laboring men should have “such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.” Poverty does not prevent the procreation of children, but is on the other hand extremely unfavorable to the rearing of children.[XI-22]

Smith pointed out four causes of social inequality:[XI-23] (1) Superiority in personal qualifications, such as strength, beauty, agility of body; or wisdom, virtue, prudence, justice, fortitude, moderation of mind. (2) Superiority of age and experience. (3) Superiority of fortune. Riches give social authority; riches possess power to buy. (4) Superiority of birth, based on family prestige.

Smith extolled the merits of division of labor in industry with the resultant increase in the quantity of work. There are three sets of causal circumstances:[XI-24] (1) the increase of dexterity; (2) the saving of time in passing from one kind of work to another; and (3) the invention of a large number of machines. Smith, however, deplored the deadening effect upon the individual of repeating over and over a simple process, hundreds or thousands of times daily. In summary, Adam Smith (1) applied the concept of natural rights to industrial conditions; (2) developed Hume’s concept of sympathy into a theory of mutual aid between individuals, classes, and nations; and (3) supported the necessity of division of labor.

The natural rights and social contract theories affected in one way or another the thinking not only of the men who have already been considered in this chapter, but also of many other individuals. Blackstone (1723–1780) held that man’s weakness in isolation led to association. The primary group was the patriarchal family. Blackstone was not an advocate of social regulation. His exposition of English law in the Commentaries stood for law itself, and became the bulwark at once of the doctrines of individual rights and property rights in both England and the American colonies. In the United States, its influence remained dominant for more than a century after the founding of the republic.

Although Edmund Burke (1729–1797) believed in a corporate unity of society, he became in his century the chief spokesman of humanity for humanity’s sake. He pleaded for justice for and conciliation with the American colonies; he spoke for the benighted Hindus who were being plundered by English stockholders; and he championed the rights of slaves. He failed, on the other hand, to appreciate the struggles of the French people which culminated in the French Revolution.

Immanuel Kant (1724–1817) declared man in a natural state is both social and unsocial and referred to the “unsocial sociableness” of man. “Man cannot get on with fellows and he cannot do without them.” Man has an inclination to associate with others and also a great propensity to isolate himself from others. He wishes to direct things according to his own ideas and thus courts resistance and conflict. It is this conflict, however, which leads to individual advancement.

Kant laid great stress upon a good will.[XI-25] The individual may have intelligence and sagacity, power and wealth, but he may still be a pernicious and hurtful member of society. He is not even worthy to be happy unless he possesses a good will. A man’s will is good not because of the end he seeks nor because of the results of his activities but because he inherently wills the good. It is this “good will” of Kant which is in conflict with the utilitarianism of Bentham and Mill, and also with modern behavioristic psychology and objective sociology. To Kant, morality is subjective. Social laws may regulate and control man’s conduct but they cannot control his motives.

Johann Fichte (1762–1814) joined with Kant in the interpretation of a good will. He held that property is essential to the development of freedom. However, he pushed the social contract idea to an extreme and developed a doctrine of an idealistic state socialism, including the superiority of Germany among the nations of the world.

Hegel (1770–1831) supported cameralism by developing the State idea, with the implication that Germany would become the supreme State in the world. Hegel even asserted that man has his existence and his ethical status “only in being a member of the State.”[XI-26] Morality is not a matter of striving independently to realize one’s inner self, but of living in accord with the traditions of one’s State.