From the invisible hand to the rabble: Smith, Hegel and social ontology

With growing wealth inequality today, early understandings of the capitalist market, whether justificatory or critical, are receiving greater attention in economic theorising. While G.W.F. Hegel is often considered an obscure metaphysician by economists, I argue his social ontology helps theorise the normative relationship between the market, labour and social freedom. Influenced by Adam Smith, Hegel thinks that civil society as a ‘system of needs’ is necessary for social freedom. However, it has unresolvable contradictions. The propensity for poverty and ‘moral degradation’ gives rise to a ‘rabble’—‘the worm in civil society’—which lacks recognition. I shed new light on longstanding issues in Hegel’s economic theorising by contending that his social ontology and construal of human labour differs from Smith and in effect challenges the ontological individualism of classical political economy and mainstream economics alike. Hegel’s idea of social freedom as mutual recognition gives insight to Marx’s value-form critique of capitalism.