FANDOM


AdamSmith1790

Adam Smith (1723-1790). Engraving by John Kay (1742-1826), 1790. Courtesy Wikimedia Commons.

Adam Smith
Classical economics
Born 5 June 1723
Kirkcaldy, Scotland
Died 17 1790(1790-Template:MONTHNUMBER-17) (aged 67)
Edinburgh, Scotland
Nationality British
Influences [
Signature 128px

Adam Smith (5 June 1723 - 17 July 1790) was a Scottish moral philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment,[1] Adam Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Smith is cited as the father of modern economics and is still among the most influential thinkers in the field of economics today.[2]

LifeEdit

by Leslie Stephen [3]

YouthEdit

Smith, born at Kirkcaldy, was the only child of Adam Smith, writer to the signet, by Margaret, daughter of John Douglas of Strathendry, Fifeshire. The father, a native of Aberdeen, had been private secretary to Hugh Campbell, 3rd earl of Loudoun, who in 1713 gave him the comptrollership of customs at Kirkcaldy. The salary was 40l. a year, probably much increased by fees. The elder Smith died in April 1723.[4]

The younger Adam Smith was brought up by his mother, and the bond between them came to be exceptionally close. When about 3 years old he was carried off by gipsies, but speedily recovered.[5] He was a delicate child, and already inclined to the fits of absence of mind which were a lifelong characteristic.

He was sent to the burgh school of Kirkcaldy, and was beginning Latin by 1733, as appears from the date in a copy of Eutropius with his name. Among his school-fellows was John Oswald (afterwards bishop of Raphoe), brother of James Oswald. The brothers Adam, the architects, who lived in Kirkcaldy, were also friends of his boyhood.

Smith was sent to Glasgow for the session of 1737-8, and studied there for four sessions. He learnt some Greek under Alexander Dunlop, and acquired taste for mathematics under Robert Simson, to whom he refers with great respect (Moral Sentiments, pt. iii. chap. 2). Matthew, father of Dugald Stewart, whom he couples with Simson as a 1st-rate mathematician, was a fellow-student and lifelong friend. The most important influence, however, was that of Francis Hutcheson, whose teaching both on moral and economic questions had considerable affinity to the later doctrines of his pupil.

A letter written by David Hume to Hutcheson (4 March 1740) shows that a "Mr. Smith" had made an abstract of the Treatise of Human Nature, by which Hume was so well pleased as to send a copy of his book through Hutcheson to the compiler. Whether "Mr. Smith" was Adam Smith is, however, uncertain.

At OxfordEdit

Smith obtained a Snell exhibition to Balliol College, Oxford, in 1740. The exhibitions were then worth 40l. a year. According to the founder's will, the exhibitioners were to take orders in the episcopal church in Scotland. The regulation was not enforced after the union. According to Stewart, however, Smith was intended to take orders, but did not find the "ecclesiastical profession suitable to his taste."

Smith went to Oxford on horseback in June 1740, and stayed there without interruption till 1746. His name does not appear in the list of graduates, but Thorold Rogers infers from the title of ‘dominus’ given to him in the buttery books that he took the B.A. degree in 1744.

Smith's famous remarks upon the English universities in the Wealth of Nations imply that he owed little to the official system of tuition. He read, however, industriously for himself; he had access to the college library, obtained a wide and accurate knowledge of Greek as well as of English literature, and employed himself in translations from the French with a view to the improvement of his style. M'Culloch reports "on the best authority" that he was once found reading Hume's Treatise, and severely reprimanded.

Letters from Smith to his mother, quoted by Brougham, show that he had suffered from ‘an inveterate scurvy and shaking of the hand,’ and had, as he thought, cured himself by tar-water. He also speaks of a "violent fit of laziness"’ which had confined him to his elbow-chair for 3 months.

He was probably overworked and solitary. The Scottish students were regarded with dislike at Oxford, and the only friend mentioned is John Douglas (1721–1807), also a Fifeshire man, and afterwards bishop of Salisbury.

LecturerEdit

Smith returned to Kirkcaldy in 1746. He was acquainted with Henry Home, lord Kames, and, at Kames's suggestion, gave a course of lectures upon English literature in 1748-9. These were afterwards burnt by his own direction; but they had been seen by Hugh Blair, who acknowledges in his own lectures that he had taken "some ideas" from them, and was thought to have taken them too freely.

Smith, as appears from various allusions in his writings, held the ordinary opinions of the leading critics of his time. He preferred Racine to Shakespeare, and specially admired Swift, Dryden, Pope, and Gray. He told a contributor to the Bee that he had never been able to make a rhyme, but could compose blank verse "as fast as he could speak." He naturally shared Johnson's contempt for blank verse. When Boswell reported this coincidence, Johnson replied, ‘Had I known that he loved rhyme so much … I should have hugged him.’ Smith probably edited the edition of the poems of William Hamilton (1704–1754) of Bangour, published at this time (Rae, pp. 49–51).

Smith repeated his literary lectures for 3 winters, and gave also some lectures upon economic topics. These are known only from a quotation by Dugald Stewart, which shows that he was strongly opposed to government interference with "the natural course of things."

Professor at GlasgowEdit

Smith appears to have made 100l. by a course of lectures (Burton, Hume, ii. 46), and his reputation presumably led to his unanimous election to the chair of logic at Glasgow on 9 January 1751. He began his official lectures in October. They were chiefly devoted to "rhetoric and belles-lettres." He also acted as substitute for Craigie, the professor of moral philosophy, who was sent to Lisbon for his health, and died in the following November.

Upon Craigie's death, Smith was transferred to the chair of moral philosophy (29 April 1752). He was supported by his friend William Cullen, also professor at Glasgow, and both of them desired that David Hume might succeed to the chair of logic; but Smith admits that this would be against public opinion.

Smith's new professorship seems to have been superior in point of money to the old one. There was an endowment of about 70l. a year; the fees amounted to about 100l.; and Smith had a house in the college, where his mother and his cousin, Jane Douglas, lived with him. He moved to 2 other houses in succession during his professorship; but they were demolished with the old college buildings.

There were some 300 students in the college, of whom about 80 or 90 attended the moral philosophy class. Most of them were preparing for the ministry, and about a third were Irish presbyterians. Smith gave lectures during the session at 7.30 A.M., followed by an ‘examination’ at 11, besides some private lectures. John Millar (1735–1801) describes his course to Dugald Stewart. It included 4 topics: natural theology, ethics, containing the substance of his Moral Sentiments, the theory of those political institutions which are founded upon "justice," that is, of jurisprudence, a treatise upon which is promised, though it was never completed, at the end of the Moral Sentiments; and of the political institutions founded upon "expediency," a topic which corresponds to the Wealth of Nations.

Millar says that his manner, "though not graceful, was plain and unaffected;" that he spoke at first with hesitation, but warmed up as he proceeded, especially when in view of possible controversy, and then spoke with great animation and power of illustration. He used, according to the elder Alison (Sinclair, Old Times and Distant Places, p. 9), to watch some particular student of expressive countenance, and be guided by such hearer's attentiveness or listlessness.

The lectures became famous, especially after Smith's publication of the Moral Sentiments. Lord Shelburne sent his younger brother Thomas to study under Smith, and Voltaire's friend, Theodore Tronchin, a physician at Geneva, sent a son for the same purpose in 1761.

Smith, as Mr. Rae shows from the college records, took a very active part in business during his professorship. He was employed to conduct various legal matters, such as a controversy with Balliol over the Snell exhibitions. He was ‘quæstor’ or treasurer from 1758 to 1764, and curator of the chambers let to students; he was dean of faculty from 1760 to 1762; and in 1762 was appointed vice-rector, in which capacity he had to preside over all college meetings. The number of quarrels among the professors, of which Reid complains upon succeeding Smith, shows that this position was no sinecure.

Smith was a patron of James Watt, who was enabled by the college to set up as mathematical-instrument maker in Glasgow in spite of the trade privileges of the town; he advised Robert Foulis [q. v.] when starting an academy of design at Glasgow, and supported the university typefoundry established by his friend Wilson, the professor of astronomy. It is remarkable that Smith was active in the opposition carried on by the university and the town council to building a theatre in Glasgow. Smith approved of playgoing; he speaks strongly in the ‘Wealth of Nations’ against the fanatical dislike of the theatre, and agreed with Hume in supporting John Home in the agitation about ‘Douglas.’ He may, as Mr. Rae suggests, have had excellent reasons for discriminating between theatres at Glasgow and theatres at Paris; but his motives must be conjectural. Smith also took a leading part in protesting against the claim of a professor to vote upon his own election to another professorship, and in favour of the deprivation of another for going abroad with a pupil in defiance of the refusal of his colleagues to grant leave of absence.

Social LifeEdit

Smith joined in the social recreations characteristic of the time. He belonged to a club founded by Andrew Cochrane, provost of Glasgow, for the discussion of trade (Carlyle, Autobiogr. p. 73). Sir James Stewart Denham [q. v.] found soon afterwards that the Glasgow merchants had been converted by Smith to free-trade in corn; and such matters had doubtless been discussed at the club. Smith was also a member of the Literary Society of Glasgow, founded in 1752; and on 23 Jan. 1753 read a paper upon Hume's ‘Essays on Commerce’ (Maitland Club Notes and Documents). He and his friend Joseph Black, the chemist, joined the weekly dinners of the ‘Anderston Club,’ and Watt testifies that he was kindly welcomed at this club by his superiors in education and position. Smith's orthodoxy seems to have been a little suspected at Glasgow, partly on account of his friendship with Hume.

It does not appear precisely at what time this friendship began. Hume did not settle at Edinburgh until Smith was leaving for Glasgow. In 1752 they were in correspondence, and Hume was consulting Smith about his essays and his projected history. Smith frequently visited his friend at Edinburgh. He was elected a member of the Philosophical Society, to which Hume was the secretary upon its revival in the same year; and in 1754 was 1 of 15 persons present at the first meeting of the Select Society, started by the painter Allan Ramsay, which became the ‘Edinburgh Society for encouraging Arts, Sciences, Manufactures, and Agriculture in Scotland.’

Smith presided at a meeting on 19 June 1754; and gave notice of discussions upon naturalisation and upon the policy of bounties for the export of corn. Many economic topics were discussed at this society (see Scots Mag. for 1757), which also, like the Society of Arts (founded in 1753 in London), offered premiums in support of its objects and manufactures. It moreover proposed to teach Scots to write English, and incurred ridicule, which probably led to its extinction in 1765 (see Campbell's ‘Ellenborough’ in Lives of the Chancellors).

Smith also contributed to the Edinburgh Review of which 2 numbers only appeared. He reviewed Johnson's Dictionary in the 1st number, and in the 2nd proposed an extension of the Review to foreign literature, adding an account of the recent writings of French celebrities, including Rousseau's Discourse on Inequality. Suspicions as to the orthodoxy of the writers, and an erroneous belief that Hume was concerned in it, led to the discontinuance of the Review[6]

In 1758 Hume was anxious that Smith should succeed to an expected vacancy in the chair of the ‘Law of Nature and Nations,’ in the gift of the crown. The holder, he thought, was willing to resign it for 800l., and ‘the foul mouths of all the roarers against heresy’ could be easily stopped. Smith, however, did not become a candidate. In 1762 Smith was an original member of the ‘Poker Club,’ so called because intended to stir up public opinion on behalf of a Scottish militia, though in practice it seems to have done little beyond promoting conviviality.

Theory of Moral SentimentsEdit

In 1759 Smith published his ‘Theory of the Moral Sentiments.’ The book was warmly welcomed by Hume, who reported its favourable reception in London (Letter of 12 April 1759), and was highly praised in the Annual Register in an article attributed to Burke. Smith was henceforth recognised as one of the first authors of the day. He visited London for the first time in 1761. It was probably on this occasion (see Rae, p. 153) that he accompanied Lord Shelburne on the journey, and urged his principles with such ‘benevolence’ and ‘eloquence’ as permanently to affect the mind of his companion (Stewart, Works, x. 95).

It is probable also that a famous interview took place at this time with Dr. Johnson. They certainly had a rough altercation at the house of William Strahan, Smith's publisher. Scott afterwards told a story according to which the two moralists met at Glasgow, and ended a discussion relating to Smith's account of Hume's last illness by giving each other the lie in the coarsest terms. The story involves palpable anachronisms. as Johnson's only visit to Glasgow was before Hume's death. This is gratifying to biographers who are shocked by the anecdote. That something of the kind took place at Strahan's, however, is undoubted, and may have been the foundation of Scott's story (Boswell, Johnson, ed. Hill, iii. 331, v. 369; other versions are in Wilberforce Correspondence, 1840, i. 40 n., and Edinburgh Review, October 1840; see Rae, pp. 155–8).

Among the admirers of Smith's Moral Sentiments was Charles Townshend (1725–1767). He was stepfather of Henry Scott, third duke of Buccleuch [q. v.], and told Hume as soon as the book came out that he should like to place the duke under Smith's charge. He visited Smith at Glasgow in the summer. In October 1763, when the duke was about to leave Eton, the offer of a travelling tutorship was made accordingly, and accepted by Smith. He was to have his travelling expenses, with 300l. a year and a life-pension of the same amount. He applied for leave of absence in the following November, undertaking to pay over his salary to a substitute, and returning to his pupils the fees for his class. He had to force the money upon them (Tytler, Kames, i. 278). Soon after starting upon his travels he sent in his resignation (Rae, pp. 168–72).

In FranceEdit

Smith left London for Paris with the duke in February 1764. They met Hume at Paris, and proceeded almost immediately to Toulouse. They were joined in the autumn by the duke's younger brother, Hew Campbell Scott, and stayed at Toulouse for 18 months, making a few excursions. They visited Montpellier during the session of the states of Languedoc; and Smith, though he could never talk French perfectly, went into society and was pleased with many of the provincial authorities.

In August 1764 the party started for a tour through the south of France and went to Geneva, where they spent two months. Smith saw Voltaire, for whom he always had a profound respect. When Rogers in 1789 spoke of some one as "a Voltaire," Smith replied emphatically: "Sir, there has been but one Voltaire."[7] He also met Charles Bonnet and Georges Louis Le Sage, the professor of physics.

In December he went to Paris; Hume left shortly afterwards, but introduced Smith to his Parisian friends. During the next 10 months Smith had much intercourse with philosophers in Parisian salons. He saw Holbach, Helvetius, D'Alembert, Necker, Turgot, and Quesnay. Morellet, with whom he became especially intimate, afterwards translated the Wealth of Nations. Condorcet says that Turgot not only discussed economic questions with Smith, but continued to correspond with him afterwards. Stewart (Works, x. 47) denies, and apparently on sufficient grounds, that this correspondence ever existed; and no letters have been found. At a later period, however, Smith certainly obtained a valuable document through Turgot's ‘particular favour’ (Sinclair, Correspondence, i. 388).

The influence of the French economists upon Smith's opinions has been much discussed; but it is clear that the facts of the intercourse at this time throw no doubt upon the view that Smith reached his main theories independently; and that he was influenced only so far as discussions with eminent men of similar tendencies would tend to clear and stimulate his mind. He told Rogers in 1789 that he thought Turgot (Clayden, Early Life of Rogers, p. 95) to be an honest man, but too little acquainted with human nature — a remark which may have been suggested by Turgot's later career.

While in Paris Smith had some concern in Hume's quarrel with Rousseau [see under Hume, David, (1711–1776)], and was anxious, as long as possible, to prevent Hume from making the affair public. A story is told of Smith's love of an English lady at this time, and the love of a French marquise for Smith. Neither passion was returned (Currie, Corresp. 1831, ii. 317). Stewart also mentioned a disappointment in an early and long attachment to a lady who survived him (Works, x. 97), but nothing more is known of any romance in his life.

On 18 October 1766 Smith's younger pupil, Hew Campbell Scott, was murdered in the street in Paris. Smith at once returned with the remains, reaching Dover on 1 Nov. He stayed in London superintending a third edition of the Moral Sentiments and reading in the British Museum. He returned to Kirkcaldy, where he lived with his mother and his cousin Jane Douglas, who had retired thither from Glasgow after his resignation of the professorship.

The Wealth of NationsEdit

Smith was now occupied with the composition of the Wealth of Nations.

He visited the Duke of Buccleuch, who had been married on 3 May 1767, and whose settlement at Dalkeith was the occasion of a great entertainment. The duke testified afterwards that they had never had a disagreement, and the friendship lasted till Smith's death. Smith then stayed quietly at Kirkcaldy, and in February 1770 Hume writes to him of a report that he was going to London with a view to the publication of his book. Smith, however, was delayed in his work, partly by ill-health; and Hume in April 1772 complains that he was "cutting himself off entirely from human society."

In 1772 his friend William Pulteney recommended him to the directors of the East India Company as member of a commission of inquiry into their administration to be sent to India. Smith, in a letter of 5 September 1772 (Rae, p. 253), states his willingness to accept the appointment, but the scheme was soon afterwards abandoned. Smith mentions that his book would have been ready for the press but for bad health, for "too much thinking upon one thing" and other "avocations" due to public troubles; probably, as Mr. Rae suggests, liabilities incurred by the Duke of Buccleuch through the failure of Heron's bank.

Smith went to London with the manuscript of his book in the spring of 1773, leaving directions with Hume as to the disposal of his other manuscripts in the event of his death. He was in London frequently, if he did not stay there continuously, during the next 4 years (Rae, p. 263). In 1775 he was elected a member of ‘The Club;’ he is mentioned by Horace Walpole, Bishop Percy, and others; and it is said that he often met Franklin and carefully discussed chapters of the Wealth of Nations with Franklin, Dr. Price, and "others of the literati" (Watson, Annals of Philadelphia, i. 553). Various passages in the book show that it was undergoing revisions at this time.

The Wealth of Nations was at last published on 9 March 1776. He seems to have received 500l. from Strahan for the 1st edition, and published the later editions upon half profits (Rae, p. 285). The book succeeded at once, and the 1st edition was exhausted in 6 months.

According to Mr. Rae it was not mentioned in the House of Commons till 11 November 1783, when Fox quoted a maxim from that "excellent book" (Parl. Hist. xxiii. 1152). As Fox admitted to Charles Butler (Reminiscences, i. 176) that he had never read the book and could never understand the subject, the allusion is the stronger testimony to its general authority. It was never even "mentioned in the House again" (that is, of course, in the very imperfect reports) "until 1787," nor in the House of Lords till 1793. During the American war, however, Lord North, in imposing new taxes, seems to have taken some hints from the Wealth of Nations, especially in the house-tax (1778) and the malt-tax (1780) (see Rae, pp. 290–4; and Dowell, Taxation, ii. 166–73). Pitt studied the book carefully, applied its principles in the French treaty of 1786, and spoke of it with veneration when introducing his budget on 17 Feb. 1792 (Parl. Hist. xxix. 834). Whether it be true or not, as Buckle said, that the ‘Wealth of Nations’ was, ‘in its ultimate results, probably the most important that had ever been written’ (Hist. Civilisation, i. 214), it is probable that no book can be mentioned which so rapidly became an authority both with statesmen and philosophers.

Hume wrote a warm congratulation, with a judicious hint of criticism. His health was breaking, and Smith had intended to bring him from Edinburgh after the publication of his Wealth of Nations. Hume, however, started by himself, and met Smith, on his way northwards, at Morpeth. Smith had to go on to Kirkcaldy to see his mother, who was ill. Hume committed the care of his posthumous publications to Smith, and especially desired him to guarantee the appearance of the Dialogues on Natural Religion. Smith made difficulties, on the ground of the probable clamour and possible injury to his own prospects. He promised to preserve a copy of the book if entrusted to him; but different arrangements were finally made by Hume for the publication. Smith refused to receive a legacy of 200l. left to him by Hume, only, as he thought, in consideration of the performance of this task. Smith, however, promised Hume that he would correct the other works, and add to the autobiography an account of Hume's behaviour in his last illness. Smith was present at a final dinner which Hume gave to his friends in Edinburgh on 4 July 1776.

The Life, with the promised account of the illness in a letter to Strahan, was published in 1777. Smith spoke in the strongest terms of Hume's virtues, to the great offence of the orthodox. The letter appeared to be intended to show how one who was not a Christian could die. Smith probably did not appreciate its significance to others. He was attacked in a scurrilous Letter to Adam Smith … by one of the people called Christians, i.e. George Horne, afterwards bishop of Norwich. Of this he never took notice.

Later yearsEdit

In January 1777 he was again in London, but returned to Kirkcaldy, and there received his appointment as commissioner of customs in December following. The appointment may have been due to the Duke of Buccleuch, or, as Mr. Rae (p. 320) thinks probable, to Lord North and Sir Grey Cooper, the secretary of the treasury, in recognition of the suggestions about taxes in the ‘Wealth of Nations.’ The appointment was 600l. a year, and the Duke of Buccleuch refused Smith's offer to resign the pension.

Smith was therefore now well off, and took Panmure House in the Canongate (still standing), where he settled with his mother, his cousin Miss Douglas, and David, son of another cousin, Colonel Robert Douglas of Strathendry. He had a good library, and entertained his friends simply, especially at Sunday suppers. He read Greek, and took a weekly dinner at the ‘Oyster Club,’ of which he and his friends Joseph Black and James Hutton the geologist were the chief members. He was one of five commissioners, and attended to his duties regularly.

Scott gives some singular anecdotes of the absence of mind for which he was always remarkable, and especially of one occasion upon which he automatically imitated the military salute made by a stately porter (‘John Home’ in Misc. Works, vol. xix.). He was becoming infirm; and though his duties were not severe, they occupied him sufficiently to prevent him from completing new original work. He apologises to his publisher in December 1782 for his idleness (Rae, p. 362). He was now, however, preparing a 3rd edition of the Wealth of Nations, to which he made considerable additions.

He was consulted by William Eden (afterwards Lord Auckland) and the secretary to the board of trade in 1779 in regard to free trade with Ireland (Letters in Rae, pp. 350–4, from English Historical Review of April 1886), and in 1783 in regard to the regulations of the American trade. Smith was a steady whig, and heartily approved of Fox's East India Bill.

In 1784 Burke passed through Edinburgh on his way to be installed as lord rector of Glasgow. "Burke," as Smith said (Bisset, ii. 429), "is the only man I ever knew who thinks on economic subjects exactly as I do without any previous communication having passed between us." They were at this time in political agreement, and Smith, after receiving Burke at Edinburgh, accompanied him to Glasgow and upon an excursion to Loch Lomond (Dalzel, University of Edinburgh, i. 42). Burke was elected a fellow of the Royal Society of Edinburgh in June 1784. This society had been founded in the previous year, superseding the old Philosophical Society. Smith was one of the 4 presidents of the literary branch, Robertson, Blair, and Cosmo Gordon being his colleagues. In August 1785 Burke again visited Scotland in company with Windham, and renewed his intercourse with Smith.

Smith's mother died on 23 May 1784 in her 90th year. His grief was so intense as to surprise his friends, and was the more trying as his own health was declining. In the winter of 1786–7 he had an attack which caused serious alarm. In April he went to London to consult John Hunter. He was much wasted, but was able to go into society. He met Pitt on several occasions. They dined together at Henry Dundas's house at Wimbledon, when Pitt told him to be seated first; "for we are all your scholars" (Kay, Edinburgh Portraits, p. 75). George Wilson reports to Bentham (14 July) that Smith is "much with the ministry," and engaged in some researches for which the clerks at the public offices are to give him every facility. Wilberforce also talked about the society recently started for extending the Scottish fisheries (Wilbeforce, Correspondence, i. 40). Smith observed, "with a certain characteristic coolness," that the only result would be the loss of every shilling invested. He was not far wrong.

In November 1787 Smith was elected lord rector of Glasgow. He acknowledged the honour in a warm letter of thanks to the principal (Rae, p. 411), and was installed on 12 December, but he gave no inaugural address. In 1788 he was in much better health. He lost his cousin, Jane Douglas, who had lived with him for many years, in the autumn.

In 1789 Smith employed himself upon a revision of the Moral Sentiments, the previous editions of which had remained unaltered. The suppression of a reference to Rochefoucauld, whom he had coupled with Mandeville, was criticised, very needlessly, as a concession to a private friendship with Rochefoucauld's grandson (Stewart, x. 46 n.). The suppression of another passage, in which he had said that the Christian doctrine of the atonement coincided with natural religion, was brought to notice in consequence of a reference to the original edition by Archbishop Magee. On hearing of the suppression Magee said that it was a proof that Smith had been seduced by the infidel Hume.

The statement that the Criterion of his friend John Douglas was written to meet Smith's difficulties as to the miracles is regarded as doubtful by Mr. Rae (p. 129), who observes that it cannot be traced beyond Chalmers's Dictionary. There can in any case be no doubt that Smith was a sincere theist, and that he especially lays great stress upon the doctrine of final causes. It is probably as clear that he was not an orthodox believer. His characteristic shrinking from ‘clamour’ explains his reticence as to deviations from accepted opinions. But his warm admiration for Hume, Voltaire, and Rousseau was scarcely compatible with complete disapproval of their religious doctrines; and not to express such disapproval, had he felt it, would have been cowardly rather than reticent. He no doubt shared the rationalism of most contemporary philosophers, though in the sense of optimistic deism. Smith argues, in the Wealth of Nations, that society is so constituted that each man promotes the interests of all by attending to his own interests, and in the Moral Sentiments that sympathy induces us to approve such conduct as tends to this result. In both cases a belief in the argument from design is clearly implied.

In the spring of 1790 Smith was plainly failing. When he became aware of his state he sent for his friends Hutton and Black, and insisted upon their burning 16 volumes of his manuscripts. They did so without knowing what were the contents. Smith's mind seemed to be relieved. He afterwards had some friends to supper, as usual, but was forced to retire early, using a phrase which has been variously reported (Clayden, Samuel Rogers, p. 168; Stewart, x. 75 n.; Sinclair, Old Times and Distant Places). It cannot be known whether he adjourned the meeting to another place or to another and a better world. He died on 17 July 1790, and was buried in the Canongate churchyard.

Smith left his property to his cousin, David Douglas (afterwards Lord Reston), who was to follow the instructions of Hutton and Black in regard to his works, and to pay an annuity of 20l. to Miss Janet Douglas, and on her death 400l. to Andrew Cleghorn. His property was less than had been expected from the modesty of his establishment; and Stewart found the cause to be that he had secretly given away sums ‘on a scale much beyond what would have been expected from his fortune.’

Smith, according to Stewart, never sat for his portrait, though a painting by T. Collopy in the National Museum of Antiquities at Edinburgh has been taken to represent Smith because the ‘Wealth of Nations’ is inscribed on a book in the picture. Tassie, who had seen Smith, executed two medallions in 1787. From one (with a wig), now in the National Portrait Gallery of Scotland, a drawing was made by J. Jackson, engraved for publication in 1811, and also engraved for editions of the ‘Wealth of Nations.’ Other engravings are by J. Beugo in the ‘Scots Magazine’ for June 1801, and by H. Horsburgh for m'Culloch's edition of the ‘Wealth of Nations,’ 1828. Another (without a wig), now in the possession of J. R. Findlay, esq., of Edinburgh, has not been engraved. Two portraits were drawn by Kay for the ‘Edinburgh Portraits.’

Smith's library passed to the heirs of his nephew. Part now belongs to the nephew's grandson, the Rev. Dr. Bannerman, who in 1884 presented a portion to New College, Edinburgh; part to another grandson, Professor R. O. Cunningham, who presented a portion to Queen's College, Belfast. Other books were sold. Mr. James Bonar compiled a catalogue (1894) of these and of such other books as could be traced. This includes about 2,200 volumes, or probably about two-thirds of the whole. The catalogue marks the passages in which Smith quotes the books named. Mr. Bonar also gives a plan of Smith's house at Kirkcaldy, a copy of his will, and an account of his portraits by J. M. Gray.

WritingEdit

Smith's works are: 1. Articles upon Johnson's Dictionary, and the general state of literature of Europe, in Nos. 1 and 2 (all published) of the (old) ‘Edinburgh Review,’ 1755; the review was reprinted in 1818. 2. ‘The Theory of Moral Sentiments,’ 1759; to the second edition (1761) was added a ‘Dissertation on the Origin of Languages;’ a sixth edition, ‘with considerable additions and corrections,’ appeared in 1790; a French translation was published in 1764, and one (by Blavet) in 1774. 3. ‘An Inquiry into the Nature and Causes of the Wealth of Nations,’ 1776, 2 vols. 4to; the 2nd (1778) is unaltered; the 3rd (1784), in 3 vols. 8vo, has ‘additions and corrections,’ which were separately printed in the same year; the 4th and 5th, reproductions of the 3rd, appeared in 1786 and 1789; and a 9th in 1799. A French translation by Blavet was published in 1781, after appearing in the ‘Journal de l'Agriculture’ (1779–80); a second, by Roucher and the Marquise de Condorcet, in 1790; and a third, by Garnier, in 1802 (republished in 1843 with commentaries). A Danish translation by Dräbye was published in 1779–80; a German, by J. F. Schuler, in 1776–8; and one by Garve by the end of the century. The Italian translation was published in 1780; a Spanish translation in 1792, though it had been previously suppressed in Spain by the inquisition; and a Dutch translation in 1796. An edition by W. Playfair, in 3 vols. 8vo, appeared in 1805; by D. Buchanan, 4 vols. 8vo, appeared in 1814. One by J. R. M'Culloch, in 4 vols. (1828), went through four editions, and was republished in 1 vol. in 1863); one (by E. G. Wakefield), appeared, in 4 vols. in 1839, one by Thorold Rogers, in 2 vols., in 1869; and one by J. T. Nicholson in 1884. 4. ‘Essays on Philosophical Subjects’ (with Dugald Stewart's ‘Life’ prefixed), 1795, published by his executors. The first three are upon ‘the principles which lead and direct philosophical inquiries,’ as illustrated by the history of ‘Astronomy,’ of ‘Ancient Physics,’ and of ‘Ancient Logic and Metaphysics.’ The others are upon the ‘Nature of that Imitation which takes place in what are called the Imitative Arts;’ upon the ‘Affinity between Music, Dancing, and Poetry;’ upon the ‘Affinity between certain English and Italian verses,’ and ‘Of the External Senses.’ 5. ‘Lectures on Justice, Police, Revenue, and Arms … by Adam Smith … reported by a Student in 1793,’ edited by Edwin Cannan, 1896. The ‘Collected Works’ were published in 1811–12, 5 vols. 8vo.[3]

The Theory of Moral SentimentsEdit

Main article: The Theory of Moral Sentiments

In 1759, Smith published The Theory of Moral Sentiments. He continued making extensive revisions to the book, up until his death.[N 1] Although The Wealth of Nations is widely regarded as Smith's most influential work, it is believed that Smith himself considered The Theory of Moral Sentiments to be a superior work.[9]

In the work, Smith critically examines the moral thinking of his time, and suggests that conscience arises from social relationships.[10] His goal in writing the work was to explain the source of mankind's ability to form moral judgements, in spite of man's natural inclinations towards self-interest. Smith proposes a theory of sympathy, in which the act of observing others makes people aware of themselves and the morality of their own behavior.[11]

Scholars have traditionally perceived a conflict between The Theory of Moral Sentiments and The Wealth of Nations; the former emphasizes sympathy for others, while the latter focuses on the role of self-interest.[12] In recent years, however, some scholars[13][14][15] of Smith's work have argued that no contradiction exists.[16] They claim that in The Theory of Moral Sentiments, Smith develops a theory of psychology in which individuals seek the approval of the "impartial spectator" as a result of a natural desire to have outside observers sympathize with them. Rather than viewing The Wealth of Nations and The Theory of Moral Sentiments as presenting incompatible views of human nature, some Smith scholars regard the works as emphasizing different aspects of human nature that vary depending on the situation.

These views ignore that Smith's visit to France (1764–66) changed radically his former views and that The Wealth of Nations is an inhomogeneous convolute of his former lectures and of what Quesnay taught him.[17] Before his voyage to France in The Theory of Moral Sentiments, Adam Smith refers to an "invisible hand" ("By preferring the support of domestic to that of foreign industry, [an individual] intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other eases, led by an invisible hand to promote an end which was no part of his intention."),[18] which ensures that the gluttony of the rich helps the poor, as the stomachs of rich are so limited that they have to spend their fortune on servants. After his visit to France, Smith considers in the Wealth of Nations (1776) the gluttony of the rich as unproductive labour. The micro-economical/psychological view in the tradition of Aristotle, Puffendorf and Hutcheson,[19] Smith's teacher, – elements compatible with a neoclassical theory – changed to the macro-economical view of the classical theory Smith learned in France.Template:Clarify

The Wealth of NationsEdit

Main article: The Wealth of Nations
File:19th-century building at location where Adam Smith lived, 1767-1776.jpg

There is a fundamental disagreement between classical and neoclassical economists about the central message of Smith's most influential work: An Inquiry into the Nature and Causes of the Wealth of Nations. Neoclassical economists emphasise Smith's invisible hand,[20] a concept mentioned in the middle of his work – book IV, chapter II – and classical economists believe that Smith stated his programme for promoting the "wealth of nations" in the first sentences.

Smith used the term "the invisible hand" in "History of Astronomy"[21] referring to "the invisible hand of Jupiter" and twice – each time with a different meaning – the term "an invisible hand": in The Theory of Moral Sentiments[22] (1759) and in The Wealth of Nations[23] (1776). This last statement about "an invisible hand" has been interpreted as "the invisible hand" in numerous ways. It is therefore important to read the original:

As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other eases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

Those who regard that statement as Smith's central message also quote frequently Smith's dictum:[24]

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

File:Wealth of Nations title.jpg

Smith's statement about the benefits of "an invisible hand" is certainly meant to answer Mandeville's contention that "Private Vices ... may be turned into Public Benefits".[25] It shows Smith's belief that when an individual pursues his self-interest, he indirectly promotes the good of society. Self-interested competition in the free market, he argued, would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and warned of their "conspiracy against the public or in some other contrivance to raise prices."[26] Again and again, Smith warned of the collusive nature of business interests, which may form cabals or monopolies, fixing the highest price "which can be squeezed out of the buyers".[27] Smith also warned that a true laissez-faire economy would quickly become a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. Smith states that the interest of manufacturers and merchants "...in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public...The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention."[28]

The neoclassical interest in Smith's statement about "an invisible hand" originates in the possibility to see it as a precursor of neoclassical economics and its General Equilibrium concept. Samuelson's "Economics" refers 6 times to Smith's "invisible hand". To emphasize this relation, Samuelson[29] quotes Smith's "invisible hand" statement putting "general interest" where Smith wrote "publick interest". Samuelson[30] concluded: "Smith was unable to prove the essence of his invisible-hand doctrine. Indeed, until the 1940s no one knew how to prove, even to state properly, the kernel of truth in this proposition about perfectly competitive market."

Very differently, classical economists see in Smith's first sentences his programme to promote "The Wealth of Nations". Taking up the physiocratical concept of the economy as a circular process means that to have growth the inputs of period2 must excel the inputs of period1. Therefore the outputs of period1 not used or usable as input of period2 are regarded as unproductive labour as they do not contribute to growth. This is what Smith had learned in France with Quesnay. To this French insight that unproductive labour should be pushed back to use more labour productively, Smith added his own proposal, that productive labour should be made even more productive by deepening the division of labour. Deepening the division of labour means under competition lower prices and thereby extended markets. Extended markets and increased production lead to a new step of reorganising production and inventing new ways of producing which again lower prices, etc., etc.. Smith's central message is therefore that under dynamic competition a growth machine secures "The Wealth of Nations". It predicted England's evolution as the workshop of the World, underselling all its competitors. The opening sentences of the "Wealth of Nations" summarize this policy:

The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes ... . [T]his produce ... bears a greater or smaller proportion to the number of those who are to consume it ... .[B]ut this proportion must in every nation be regulated by two different circumstances;

  • first, by the skill, dexterity, and judgment with which its labour is generally applied; and,
  • secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed [emphasis added].[31]

LegacyEdit

Smith's Wealth of Nations is generally admitted to have originated the study of political economy as a separate department of scientific inquiry. It is therefore discussed in every manual and history of the subject. Its merit is due on one side to the great range of his historical knowledge, to the ingenuity and sound judgment with which he applies his principles to a number of concrete cases, and to the literary skill which makes him always animated, in spite of digressions and a diffuse style. On the other side, his exposition of abstract principles, though inevitably imperfect, owed part of its success to the completeness with which it represented the dominant tendencies of contemporary thought, and especially the revolt against obsolete restrictions of all kinds. The ‘Smithianismus’ of German writers was supposed to represent the unqualified acceptance of the laissez-faire theory; and Buckle's enthusiastic panegyric represents the view taken at the time by a zealous adherent of that doctrine. Smith was too practical to accept the view as absolutely as his disciples. His sympathy with the general tendency has incidentally suggested much controversy as to his relation to previous writers of similar views. The most elaborate investigation of his obligations to his predecessors will be found in Professor Hasbach's ‘Untersuchungen über Adam Smith’ (1891). Smith's relation to the French economists, already discussed by Dugald Stewart, was elucidated by the reports of his Glasgow lectures in 1763, published with an introduction by Mr. Cannan. The report, though very imperfect, shows the manner in which Smith had treated the subject before his visit to France, and the subject's relation to his general scheme. Mr. Cannan sums up his view by saying that Smith had worked out his theory upon the division of labour, money, prices, and differences of wages before going to France, but had acquired from the ‘physiocrats’ the perception that a ‘scheme of distribution’ was necessary, and ‘tacked his own scheme (very different from theirs) on to his already existing theory of prices’ (Lectures, p. xxxi). Other monographs upon Smith's relations to other writers are Oncken's A. Smith and Immanuel Kant (1877), Feilbogen's Smith and Turgot (1893), and Skarzynski's Adam Smith als Moralphilosoph und Schöpfer der Nationalökonomie. Many other references are given in Cossa's Introduction to the Study of Political Economy (English, 1893), and a full bibliography, by Mr. J.P. Anderson, is in the appendix to Mr. Haldane's Adam Smith.[3]

Criticism and DissentEdit

Prominent interpretation, as well as criticism, of Smith's views on the societal merits of unregulated labor management by the ruling class is expressed by Noam Chomsky as follows: "He's pre-capitalist, a figure of the Enlightenment. What we would call capitalism he despised. People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn people into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits."[32]

Other worksEdit

File:Adam Smith Grave.JPG

Shortly before his death, Smith had nearly all his manuscripts destroyed. In his last years, he seemed to have been planning two major treatises, one on the theory and history of law and one on the sciences and arts. The posthumously published Essays on Philosophical Subjects, a history of astronomy down to Smith's own era, plus some thoughts on ancient physics and metaphysics, probably contain parts of what would have been the latter treatise. Lectures on Jurisprudence were notes taken from Smith's early lectures, plus an early draft of The Wealth of Nations, published as part of the 1976 Glasgow Edition of the works and correspondence of Smith. Other works, including some published posthumously, include Lectures on Justice, Police, Revenue, and Arms (1763) (first published in 1896); and Essays on Philosophical Subjects (1795).[33]

RecognitionEdit

On 21 May 1767 he was elected a Fellow of the Royal Society.[3]

In 2009, Smith was named among the 'Greatest Scots' of all time, in a vote run by Scottish television channel STV.[34]

In economics and moral philosophyEdit

The Wealth of Nations was a precursor to the modern academic discipline of economics. In this and other works, Smith expounded how rational self-interest and competition can lead to economic prosperity. Smith was controversial in his own day and his general approach and writing style were often satirized by Tory writers in the moralizing tradition of Hogarth and Swift, as a discussion at the University of Winchester suggests.[35] In 2005, The Wealth of Nations was named among the 100 Best Scottish Books of all time.[36] Former British Prime Minister Margaret Thatcher, it is said, used to carry a copy of the book in her handbag.[37]

In light of the arguments put forward by Smith and other economic theorists in Britain, academic belief in mercantalism began to decline in England in the late 18th century. During the Industrial Revolution, Britain embraced free trade and Smith's laissez-faire economics, and via the British Empire, used its power to spread a broadly liberal economic model around the world, characterized by open markets, and relatively barrier free domestic and international trade.[38]

George Stigler attributes to Smith "the most important substantive proposition in all of economics." It is that, under competition, owners of resources (for example labor, land, and capital) will use them most profitably, resulting in an equal rate of return in equilibrium for all uses, adjusted for apparent differences arising from such factors as training, trust, hardship, and unemployment.[39]

Paul Samuelson finds in Smith's pluralist use of supply and demand as applied to wages, rents, profit a valid and valuable anticipation of the general equilibrium modeling of Walras a century later. Smith's allowance for wage increases in the short and intermediate term from capital accumulation and invention added a realism missed later by Malthus, Ricardo, and Marx in their propounding a rigid subsistence-wage theory of labour supply.[40]

On the other hand, Joseph Schumpeter dismissed Smith's contributions as unoriginal, saying "His very limitation made for success. Had he been more brilliant, he would not have been taken so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used more difficult and ingenious methods, he would not have been understood. But he had no such ambitions; in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along."[41]

Classical economists presented competing theories of those of Smith, termed the "labour theory of value". Later Marxian economics descending from classical economics also use Smith's labour theories, in part. The first volume of Karl Marx's major work, Capital, was published in German in 1867. In it, Marx focused on the labour theory of value and what he considered to be the exploitation of labour by capital.[42][43] The labour theory of value held that the value of a thing was determined by the labor that went into its production. This contrasts with the modern understanding of mainstream economics, that the value of a thing is determined by what one is willing to give up to obtain the thing.

File:Adam Smith Theatre, Bennochy Road, Kirkcaldy.jpg

The body of theory later termed "neoclassical economics" or "marginalism" formed from about 1870 to 1910. The term "economics" was popularized by such neoclassical economists as Alfred Marshall as a concise synonym for "economic science" and a substitute for the earlier, broader term "political economy" used by Smith.[44][45] This corresponded to the influence on the subject of mathematical methods used in the natural sciences.[46] Neoclassical economics systematized supply and demand as joint determinants of price and quantity in market equilibrium, affecting both the allocation of output and the distribution of income. It dispensed with the labour theory of value of which Smith was most famously identified with in classical economics, in favour of a marginal utility theory of value on the demand side and a more general theory of costs on the supply side.[47]

The bicentennial anniversary of the publication of The Wealth of Nations was celebrated in 1976, resulting in increased interest for The Theory of Moral Sentiments and his other works throughout academia. After 1976, Smith was more likely to be represented as the author of both The Wealth of Nations and The Theory of Moral Sentiments, and thereby as the founder of a moral philosophy and the science of economics. His homo economicus or "economic man" was also more often represented as a moral person. Additionally, economists David Levy and Sandra Peart in "The Secret History of the Dismal Science" point to his opposition to hierarchy and beliefs in inequality, including racial inequality, and provide additional support for those who point to Smith's opposition to slavery, colonialism, and empire.[48] They show the caricatures of Smith drawn by the opponents of views on hierarchy and inequality in this online article. Emphasized also are Smith's statements of the need for high wages for the poor, and the efforts to keep wages low. In The “Vanity of the Philosopher”: From Equality to Hierarchy in Postclassical Economics Peart and Levy also cite Smith's view that a common street porter was not intellectually inferior to a philosopher,[49] and point to the need for greater appreciation of the public views in discussions of science and other subjects now considered to be technical. They also cite Smith's opposition to the often expressed view that science is superior to common sense.[50]

Smith also explained the relationship between growth of private property and civil government:

Men may live together in society with some tolerable degree of security, though there is no civil magistrate to protect them from the injustice of those passions. But avarice and ambition in the rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the passions which prompt to invade property, passions much more steady in their operation, and much more universal in their influence. Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days' labour, civil government is not so necessary. Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property. (...) Men of inferior wealth combine to defend those of superior wealth in the possession of their property, in order that men of superior wealth may combine to defend them in the possession of theirs. All the inferior shepherds and herdsmen feel that the security of their own herds and flocks depends upon the security of those of the great shepherd or herdsman; that the maintenance of their lesser authority depends upon that of his greater authority, and that upon their subordination to him depends his power of keeping their inferiors in subordination to them. They constitute a sort of little nobility, who feel themselves interested to defend the property and to support the authority of their own little sovereign in order that he may be able to defend their property and to support their authority. Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.[51]
File:Adam smith note.jpg

Portraits, monuments, and banknotesEdit

File:Adam Smith statue.jpg

Smith has been commemorated in the UK on banknotes printed by two different banks; his portrait has appeared since 1981 on the £50 notes issued by the Clydesdale Bank in Scotland,[52][53] and in March 2007 Smith's image also appeared on the new series of £20 notes issued by the Bank of England, making him the first Scotsman to feature on an English banknote.[54]

A large-scale memorial of Smith by Alexander Stoddart was unveiled on 4 July 2008 in Edinburgh. It is a Template:Convert-tall bronze sculpture and it stands above the Royal Mile outside St Giles' Cathedral in Parliament Square, near the Mercat cross.[55] 20th century sculptor Jim Sanborn (best known for the Kryptos sculpture at the United States Central Intelligence Agency) has created multiple pieces which feature Smith's work. At Central Connecticut State University is Circulating Capital, a tall cylinder which features an extract from The Wealth of Nations on the lower half, and on the upper half, some of the same text but represented in binary code.[56] At the University of North Carolina at Charlotte, outside the Belk College of Business Administration, is Adam Smith's Spinning Top.[57][58] Another Smith sculpture is at Cleveland State University.[59]

ResidenceEdit

Adam Smith resided at Panmure house from 1778-90. This residence has now been purchased by the Edinburgh Business School at Heriot Watt University and fundraising has begun to restore it.[60][61] Part of the Northern end of the original building appears to have been demolished in the 19th century to make way for an iron foundry.

As a symbol of free market economicsEdit

File:Sanborn-CSU.jpg

Smith has been celebrated by advocates of free market policies as the founder of free market economics, a view reflected in the naming of bodies such as the Adam Smith Institute in London, the Adam Smith Society[62] and the Australian Adam Smith Club,[63] and in terms such as the Adam Smith necktie.[64]

Alan Greenspan argues that, while Smith did not coin the term laissez-faire, "it was left to Adam Smith to identify the more-general set of principles that brought conceptual clarity to the seeming chaos of market transactions". Greenspan continues that The Wealth of Nations was "one of the great achievements in human intellectual history".[65] P. J. O'Rourke describes Smith as the "founder of free market economics".[66]

However, other writers have argued that Smith's support for laissez-faire (which in French means leave alone) has been overstated. Herbert Stein wrote that the people who "wear an Adam Smith necktie" do it to "make a statement of their devotion to the idea of free markets and limited government", and that this misrepresents Smith's ideas. Stein writes that Smith "was not pure or doctrinaire about this idea. He viewed government intervention in the market with great skepticism ... yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system. He did not wear the Adam Smith necktie." In Stein's reading, The Wealth of Nations could justify the Food and Drug Administration, the Consumer Product Safety Commission, mandatory employer health benefits, environmentalism, and "discriminatory taxation to deter improper or luxurious behavior".[67]

Similarly, Vivienne Brown stated in The Economic Journal that in the 20th century United States, Reaganomics supporters, The Wall Street Journal, and other similar sources have spread among the general public a partial and misleading vision of Smith, portraying him as an "extreme dogmatic defender of laissez-faire capitalism and supply-side economics".[68] In fact, The Wealth of Nations includes the following statement on the payment of taxes:

The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state."[69]

Moreover, in this passage Smith goes on to specify progressive, not flat, taxation:

The rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion"[70]

Smith even specifically named taxes that he thought should be required by the state, among them luxury goods taxes and tax on rent. He believed that tax laws should be as transparent as possible and that each individual should pay a "certain amount, and not arbitrary," in addition to paying this tax at the time "most likely to be convenient for the contributor to pay it".[69] Smith goes on to state that:

Every tax, however, is, to the person who pays it, a badge, not of slavery, but of liberty."[71]

Additionally, Smith outlined the proper expenses of the government in The Wealth of Nations, Book V, Ch. I. Included in his requirements of a government is to enforce contracts and provide justice system, grant patents and copyrights, provide public goods such as infrastructure, provide national defense, and regulate banking. It was the role of the government to provide goods "of such a nature that the profit could never repay the expense to any individual" such as roads, bridges, canals, and harbours. He also encouraged invention and new ideas through his patent enforcement and support of infant industry monopolies. He supported public education and religious institutions as providing general benefit to the society. Finally he outlined how the government should support the dignity of the monarch or chief magistrate, such that they are equal or above the public in fashion. He even states that monarchs should be provided for in a greater fashion than magistrates of a republic because "we naturally expect more splendor in the court of a king than in the mansion-house of a doge."[72] In addition, he was in favor of retaliatory tariffs and believed that they would eventually bring down the price of goods. He even stated in Wealth of Nations:

The recovery of a great foreign market will generally more than compensate the transitory inconvenience of paying dearer during a short time for some sorts of goods."[73]

Noam Chomsky has argued[N 2] that several aspects of Smith's thought have been misrepresented and falsified by contemporary ideology, including Smith's reasons for supporting markets and Smith's views on corporations. Chomsky argues that Smith supported markets in the belief that they would lead to equality, and that Smith opposed wage labor and corporations.[74] Economic historians such as Jacob Viner regard Smith as a strong advocate of free markets and limited government (what Smith called "natural liberty") but not as a dogmatic supporter of laissez-faire.[75]

Economist Daniel Klein believes using the term "free market economics" or "free market economist" to identify the ideas of Smith is too general and slightly misleading. Klein offers six characteristics central to the identity of Smith's economic thought and argues that a new name is needed to give a more accurate depiction of the "Smithian" identity.[76][77] Economist David Ricardo set straight some of the misunderstandings about Smith's thoughts on free market. Most people still fall victim to the thinking that Smith was a free market economist without exception, though he was not. Ricardo pointed out that Smith was in support of helping infant industries. Smith believed that the government should subsidise newly formed industry, but he did fear that when the infant industry grew into adulthood it would be unwilling to surrender the government help.[78] Smith also supported tariffs on imported goods to counteract an internal tax on the same good. Smith also fell to pressure in supporting some tariffs in support for national defense.[78] Some have also claimed, Emma Rothschild among them, that Smith supported a minimum wage.[79] although Smith had written in his book The Wealth of Nations:

"The price of labour, it must be observed, cannot be ascertained very accurately anywhere, different prices being often paid at the same place and for the same sort of labour, not only according to the different abilities of the workmen, but according to the easiness or hardness of the masters. Where wages are not regulated by law, all that we can pretend to determine is what are the most usual; and experience seems to show that law can never regulate them properly, though it has often pretended to do so." (Source: The Wealth of Nations, Book 1, Chapter 8)

FootnotesEdit

  1. The 6 editions of The Theory of Moral Sentiments were published in 1759, 1761, 1767, 1774, 1781, and 1790 respectively.[8]
  2. See chapters 2, 5, 6, and 10 of his Understanding Power, New Press (February 2002), along with his Year 501: The Conquest Continues, primarily chapter 1, South End Press, 1993.

See alsoEdit

ReferencesEdit

BibliographyEdit

Template:A Short Biographical Dictionary of English Literature

Further readingEdit

EndnotesEdit

  1. "Great Thinkers of the Scottish Enlightenment". http://www.bbc.co.uk/history/scottishhistory/enlightenment/features_enlightenment_enlightenment.shtml.
  2. Davis, William L, Bob Figgins, David Hedengren, and Daniel B. Klein. "Economic Professors' Favorite Economic Thinkers, Journals, and Blogs," Econ Journal Watch 8(2): 126-146, May 2011.[1]
  3. 3.0 3.1 3.2 3.3 Leslie Stephen, "Smith, Adam," Dictionary of National Biography, 53, 3-10. Wikisource, Web, July 9, 2017.
  4. He has been confused with a cousin, also named Adam Smith, who was living in 1740; see Rae, Adam Smith, 3).
  5. Dugald Stewart, Works, x. 6.
  6. Tytler, Life of Kames, i. 233.
  7. Table Talk, 3rd edit. p. 45.
  8. "Adam Smith, Glasgow Edition of the Works and Correspondence Vol. 1 The Theory of Moral Sentiments [1759"]. The Online Library of Liberty. http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile=show.php%3Ftitle=192&Itemid=27. Retrieved 2010-01-31.
  9. Rae 1895
  10. Falkner, Robert (1997). "Biography of Smith". Liberal Democrat History Group. Archived from the original on 11 June 2008. http://www.liberalhistory.org.uk/item_single.php?item_id=37&item=biography. Retrieved 2008-05-14.
  11. Smith 2002, p. xv
  12. Viner 1991, p. 250
  13. Wight, Jonathan B. Saving Adam Smith. Upper Saddle River: Prentic-Hall, Inc., 2002.
  14. Robbins, Lionel. A History of Economic Thought. Princeton: Princeton University Press, 1998.
  15. Brue, Stanley L, and Randy R Grant. The Evolution of Economic Thought. Mason: Thomson Higher Education, 2007.
  16. There is at least one clear contradiction between The Theory of Moral Sentiments and The Wealth of Nations: The gluttony of the landlords is in the former an "invisible hand" which helps the poor to partake in the landlord's wealth. In "The Wealth of Nations" it is seen as the consumption of unproductive labour, limiting the growth of wealth.
  17. Cannan, Edwin (ed.), 1937, p. xxxix, Editor's Introduction, pp. xxxviii–xli to: Adam Smith, "An Inquiry into the Nature and Causes of the Wealth of Nations", N. Y.: Random House; "These changes [to the earlier lectures by his visit to France] do not make so much real difference to Smith's own work as might be supposed; the theory of distribution, though it appears in the title of Book I., is no essential part of the work and could easily be excised ... But to subsequent [classical] economics they were of fundamental importance. They settled the form of economic treatises for a century at least."
  18. Smith, A., 1982 [1759], "Theory of Moral Sentiment", pp. 184–5 in: The Glasgow edition of the Works and Correspondence of Adam Smith, vol. i", Oxford University Press.
  19. "The learned will at once discern how much ... is taken from the writings of others, from Cicero and Aristotle, and to name no other moderns, from Puffendorf's ... de officio hominis et civis" (Hutcheson, F., 1787, "A Short Introduction to Moral Philosophy", Dublin: McKenzie, p. vii.). In "System" (1755), Hutcheson's begins stating: "The intention of moral philosophy is to direct men to that course of action which tends most effectually to promote their greatest happiness and perfection." (Hutcheson, F., 1755, "A system of moral philosophy", Glasgow: Foulis). In "Inquiry", Hutcheson (1729, 180) explains: "That action is best, which procures the greatest Happiness for the greatest Numbers" (Hutcheson, F., 1729, "An inquiry into the original of our ideas of beauty and virtue", London).
  20. Smith, A., 1976, The Wealth of Nations edited by R.H. Campbell and A.S. Skinner, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 2a, p. 456.
  21. Smith, A., 1980, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 3, p. 49, edited by W.P.D. Wightman and J.C. Bryce, Oxford: Claredon Press.
  22. Smith, A., 1976, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 1, p. 184-5, edited by D.D. Raphael and A.L. Macfie, Oxford: Claredon Press.
  23. Smith, A., 1976, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 2a, p. 456, edited by R.H. Cambell and A.S. Skinner, Oxford: Claredon Press.
  24. Smith, A., 1976, The Glasgow edition, vol. 2a, pp. 26–7.
  25. Mandeville, B., 1724, The Fable of the Bees, London: Tonson.
  26. Smith, A., 1976, The Glasgow edition, vol. 2a, p. 145, 158.
  27. Smith, A., 1976, The Glasgow edition, vol. 2a, p. 79.
  28. Gopnik, Adam. "Market Man". The New Yorker (18 October 2010): 82. http://www.newyorker.com/arts/critics/books/2010/10/18/101018crbo_books_gopnik. Retrieved 27 April 2011.
  29. Samuelson, P. A./Nordhaus, William D., 1989, Economics, 13th edition, N.Y. et al.: McGraw-Hill, p. 825.
  30. Samuelson, P. A./Nordhaus, William D., 1989, idem, p. 825.
  31. Smith, A., 1976, vol. 2a, p. 10, idem
  32. [Excerpted from Class Warfare, 1995, pp. 19–23, 27–31 Source: http://www.chomsky.info/books/warfare02.htm] Retrieved December 2011
  33. The Glasgow edition of the Works and Correspondence of Adam Smith, 1982, 6 volumes; http://oll.libertyfund.org/
  34. The Greatest Scot STV. Retrieved 31 January 2012
  35. "Adam Smith – Jonathan Swift". University of Winchester. http://journalism.winchester.ac.uk/?page=343. Retrieved 2010-02-11.
  36. 100 Best Scottish Books, Adam Smith Retrieved 31 January 2012
  37. David Smith (2010) Free Lunch: Easily Digestible Economics p.43. Profile Books 2010
  38. L.Seabrooke (2006). "Global Standards of Market Civilization". P. 192. Taylor & Francis 2006
  39. Stigler, George J. (1976). "The Successes and Failures of Professor Smith," Journal of Political Economy, 84(6), p. 1202. P p. 1199-1213, Also published as Selected Papers, No. 50 (PDF), Graduate School of Business, University of Chicago.
  40. Samuelson, Paul A. (1977). "A Modern Theorist's Vindication of Adam Smith," American Economic Review, 67(1), p p. 42. Reprinted in J.C. Wood, ed., Adam Smith: Critical Assessments, pp. 498–509. Preview.
  41. Schumpeter History of Economic Analysis. New York: Oxford University Press. p. 185.
  42. Roemer, J.E. (1987). "Marxian Value Analysis". The New Palgrave: A Dictionary of Economics, v. 3, 383.
  43. Mandel, Ernest (1987). "Marx, Karl Heinrich", The New Palgrave: A Dictionary of Economics v. 3, pp. 372, 376.
  44. Marshall, Alfred; Marshall, Mary Paley (1879). The Economics of Industry. p. 2. http://books.google.com/?id=NLcJAAAAIAAJ&pg=PA1#PPA2,M1.
  45. Jevons, W. Stanley (1879). The Theory of Political Economy (2nd ed.). p. xiv. http://books.google.com/?id=aYcBAAAAQAAJ&pg=PR3#PPR3,M1.
  46. Clark, B. (1998). Political-economy: A comparative approach, 2nd ed., Westport, CT: Preagerp. p. 32..
  47. Campos, Antonietta (1987). "Marginalist Economics", The New Palgrave: A Dictionary of Economics, v. 3, p. 320
  48. The Secret History of the Dismal Science
  49. Smith 1977, §Book I, Chapter 2
  50. The “Vanity of the Philosopher”: From Equality to Hierarchy in Postclassical Economics [2]
  51. The Wealth of Nations, Book 5, Chapter 1, Part 2.
  52. "Clydesdale 50 Pounds, 1981". Ron Wise's Banknoteworld. Archived from the original on 30 October 2008. http://aes.iupui.edu/rwise/banknotes/scotland/ScotlandP209-50Pounds-1981-donatedowl_f.jpg. Retrieved 2008-10-15.
  53. "Current Banknotes : Clydesdale Bank". The Committee of Scottish Clearing Bankers. Archived from the original on 3 October 2008. http://www.scotbanks.org.uk/banknotes_current_clydesdale_bank.php. Retrieved 2008-10-15.
  54. "Smith replaces Elgar on £20 note". BBC. 2006-10-29. Archived from the original on 6 April 2008. http://news.bbc.co.uk/1/hi/business/6096938.stm. Retrieved 2008-05-14.
  55. Blackley, Michael (2007-09-26). "Adam Smith sculpture to tower over Royal Mile". Edinburgh Evening News.
  56. Fillo, Maryellen (2001-03-13). "CCSU welcomes a new kid on the block". The Hartford Courant.
  57. Kelley, Pam (1997-05-20). "Piece at UNCC is a puzzle for Charlotte, artist says". Charlotte Observer.
  58. Shaw-Eagle, Joanna (1997-06-01). "Artist sheds new light on sculpture". The Washington Times.
  59. "Adam Smith's Spinning Top". Ohio Outdoor Sculpture Inventory. Archived from the original on 2005-02-05. http://web.archive.org/web/20050205065104/http://www.sculpturecenter.org/oosi/sculpture.asp?SID=1055. Retrieved 2008-05-24.
  60. "The restoration of Panmure House". http://www.adamsmith.org/blog/misc/the-restoration-of-panmure-house.
  61. "Adam Smith's Home Gets Business School Revival". http://www.bloomberg.com/video/adam-smith-s-home-gets-business-school-revival-byl368j8Sii~TiQiBHwEyw.html.
  62. "The Adam Smith Society". The Adam Smith Society. Archived from the original on 2007-07-21. http://web.archive.org/web/20070721032612/http://www.adamsmith.it/presentazione.html. Retrieved 2008-05-24.
  63. "The Australian Adam Smith Club". Adam Smith Club. http://www.adamsmithclub.org/. Retrieved 2008-10-12.
  64. Levy, David (June 1992). "Interview with Milton Friedman". Federal Reserve Bank of Minneapolis. http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3748. Retrieved 2008-09-01.
  65. "FRB: Speech, Greenspan—Adam Smith—6 February 2005". Archived from the original on 12 May 2008. http://www.federalreserve.gov/boarddocs/speeches/2005/20050206/default.htm. Retrieved 2008-05-31.
  66. "Adam Smith: Web Junkie - Forbes.com". 2007-07-05. Archived from the original on 20 May 2008. http://www.forbes.com/free_forbes/2007/0507/086.html. Retrieved 2008-06-10.
  67. Stein, Herbert (1994-04-06). "Board of Contributors: Remembering Adam Smith". The Wall Street Journal Asia: A14.
  68. Brown, Vivienne; Pack, Spencer J.; Werhane, Patricia H. (January 1993). "Untitled review of 'Capitalism as a Moral System: Adam Smith's Critique of the Free Market Economy' and 'Adam Smith and his Legacy for Modern Capitalism'". The Economic Journal 103 (416): 230–232. Template:Citation error. JSTOR 2234351.
  69. 69.0 69.1 Smith 1977, bk. V, ch. 2
  70. Gopnik, A., op cit
  71. [3] Smith, Adam (1776), Penn State Electronic Classics edition, republished 2005, p.704
  72. Smith 1977, bk. V
  73. Smith, A., 1976, The Glasgow edition, vol. 2a, p. 468.
  74. Chomsky 2002, ch. 6
  75. Viner, Jacob (April 1927). "Adam Smith and Laissez-faire". The Journal of Political Economy 35 (2): 198–232. JSTOR 1823421.
  76. Klein, Daniel B. (2008). "Toward a Public and Professional Identity for Our Economics". Econ Journal Watch 5 (3): 358–372. http://econjwatch.org/articles/toward-a-public-and-professional-identity-for-our-economics.
  77. Klein, Daniel B. (2009). "Desperately Seeking Smithians: Responses to the Questionnaire about Building an Identity". Econ Journal Watch 6 (1): 113–180. http://econjwatch.org/articles/desperately-seeking-smithians-responses-to-the-questionnaire-about-building-an-identity.
  78. 78.0 78.1 Buchholz, Todd (December 1990). pp. 38–39.
  79. Martin, Christopher. "Adam Smith and Liberal Economics: Reading the Minimum Wage Debate of 1795–96," Econ Journal Watch 8(2): 110–125, May 2011 [4].;

External linksEdit

About
Books
Audio / video
Etc.
This page uses Creative Commons Licensed content from Wikipedia (view authors).

Template:S-start Template:S-aca Template:Succession box Template:S-end

Template:Navboxes

Template:Template other

}}

Template:Link GA

Template:Link GA Template:Link FA Template:Link FA Template:Link GA

Ad blocker interference detected!


Wikia is a free-to-use site that makes money from advertising. We have a modified experience for viewers using ad blockers

Wikia is not accessible if you’ve made further modifications. Remove the custom ad blocker rule(s) and the page will load as expected.