Self-​Interest and Social Order in Classical Liberalism: Mandeville on the Benefits of Vice

Ironically, given F.A. Hayek’s praise for Mandeville’s treatment of spontaneous order, Francis Hutcheson criticized Mandeville for his constructivism—Hayek’s label for the erroneous belief that societies and major institutions were consciously constructed, or designed. Hutcheson, contrary to Mandeville, maintained that societies did not originate from deliberate calculations of self-​interest, such as the perceived utility of mutual security from external dangers. Rather, early societies were formed “without any art of deliberation, indeed without any previous command of the will,” even when there was “no prospect of private advantage.” This is far more Hayekian than Mandeville’s theory (which he discussed at length in the second volume of The Fable of the Bees) that societies originated in estimates of personal utility, specifically, from the desire to mitigate the dangers posed by wolves, lions, boars, bears, and so forth.

Since I will be discussing Hutcheson later in this series, I shall not pursue his objections to Mandeville in more detail for now. I mention this subject because Hayek’s ideas about the early history of classical liberalism, which have influenced many libertarian scholars, are misleading in some respects, and sometimes seriously so. The doctrine of natural rights, as defended by Hutcheson and the natural-​law school of liberalism generally (but not by Mandeville), was “rationalistic” in Hayek’s pejorative sense of the term. Yet when we take a close look at those ideas we will sometimes find them more congenial to Hayek’s social and political philosophy than what we find in the writings of Mandeville and other “anti-​rationalists.” Hayek exacerbated the problem when he differentiated between the “French” (rationalist) and “English” (anti-​rationalist) schools of classical liberalism—a Burkean distinction (later developed more fully by the political theorist Francis Lieber in his 1849 article, “Anglican and Gallican Liberty”) with little foundation in the history of classical liberalism. Hayek’s dichotomy was rendered plausible only by his selective cherry-​picking of representatives for each school. His line of demarcation is so porous and indistinct as to be virtually useless in our effort to understand the intellectual history of classical liberalism and the major disagreements among liberals.

Now, having satisfied my editorial proclivities, let’s begin our examination of some of Mandeville’s fundamental ideas by taking a brief look at his celebrated rhymed allegory, The Grumbling Hive: or, Knaves turn’d Honest, which was originally published anonymously in 1705. Mandeville later said of this piece:

This poem begins:

Mandeville explained how the prosperity of this hive was made possible by the widespread practice of traditional vices.

The popular vices in the hive included fraud and theft.

Here we see a problem that I mentioned in my previous essay, namely, that Mandeville did not restrict his discussion of the unintended social benefits generated by self-​interested actions within the boundaries of justice; he applied the same reasoning to various crimes. And this is what largely precipitated the hostile criticisms later voiced by those classical liberals, such as Adam Smith, who agreed that self-​interested actions generate social benefits that were not intended by the acting agent (Smith’s “invisible hand”), but who refused to include unjust, or rights-​violating, actions in the category of socially beneficial actions.

Indeed, elsewhere Mandeville argued for the economic benefits of shipwrecks, which create employment for those workers needed to replace lost vessels. He also claimed that similar benefits flow from major disasters, such as the Great London Fire of 1666, which gutted the city and left around 70,000 people without homes. It is scarcely possible to conceive of more stark examples of what Frédéric Bastiat called the Broken Window Fallacy, a type of faulty economic reasoning that ignores opportunity costs. The labor and capital needed to replace lost ships and buildings merely restore the status quo; and if not for such disasters those resources would have been used to satisfy other economic opportunities that had to be sacrificed to replace what had been destroyed. An especially frustrating element in Mandeville’s economic reasoning, as a number of his critics were quick to point out, is that it shows no understanding of opportunity costs.

This is not to say that Mandeville failed to distinguish personal vices from crimes; he did make that distinction; but, lacking a theory of rights, he was vague on how and where the line should be drawn between the two categories. Instead, he repeatedly said that dexterous and skillful politicians should manage the problem by regulating vices so that they do not create more harm than good. We find this argument in his 1724 tract, A Modest Defence of Publick Stews: or, An Essay Upon Whoring , which calls for legalized but regulated prostitution. This vice, whether legal or illegal, will always be widespread “as long as it is the Nature of Man…to have a Salt Itch in the Breeches [and] the Brimstone under the Petticoat.” Laws against prostitution do little if anything to curb the practice; they merely drive underground the problems associated with this vice. “What avails it then to affect to conceal that which cannot be concealed, and that which if carried on openly and above-​board would become only less detrimental, and of consequence more justifiable?”

The same line of reasoning is also found in The Fable of the Bees: Or, Private Vices, Publick Benefits. “The Passions of some People,” Mandeville wrote, “are too violent to be curb’d by any Law or Precept; and it is Wisdom in all Governments to bear with lesser Inconveniences to prevent greater.” Legal prostitution, if wisely regulated by government, will yield better results than illegal prostitution. In a manner surprisingly similar to the defense of legal prostitution given many centuries earlier by the sainted Catholic theologian Thomas Aquinas (in Summa Theologica), Mandeville defended his position as follows:

As we see here, Mandeville appealed to the social utility of vices, as determined in specific cases by politicians, as the determining factor when deciding whether particular vices should be legal or illegal. Individual rights, such as the right of a woman to use her own body as she sees fit, played no role in Mandeville’s reasoning. Thus in explaining the benefits of various vices, Mandeville meant that their social consequences are beneficial as a whole, regardless of the motives behind immoral actions or how such actions may harm the person who engages in them. This naturally raises the key question of what Mandeville himself meant by “virtue” and “vice,” but that topic must await my next essay. I shall conclude this essay by explaining the conclusion reached by Mandeville in The Grumbling Hive.

In a send up of the Societies for the Reformation of Manners (which I discussed in my last essay), Mandeville considered what would happen if some pious, moralistic bees succeeded in eradicating all vices from their hive. After Jove granted their wish, the result was a society without prosperity.