With the importance attached to Adam Smith [1723-1790] as a founding father, if you will, of economics as a "science" [not accurate, by the way] and his imputed role in conceptualizing capital "C" Capitalism, I think it is important to go back in time to get closer to source materials with which to evaluate his contributions and to keep in context the interpretations and extrapolations made of his works by subsequent authors and especially by politicians and polemicists. In this pursuit, I have re-read his central works, reviewed his principal biographers and, especially, opinions of his contemporaries.
In short, Adam Smith was a radical, a capital "L" Liberal, friend of David Hume, member of the Scottish Enlightenment and well-known to such as Rousseau and others who are credited with the ideas underlying both French and American Revolutions. In his time, his main thesis on morals was neither popular nor especially well-known by British aristocracy or establishment. Smith's thesis in his Theory of Moral Sentiments is that all our moral sentiments arise from sympathy, empathy or 'fellow-feeling' as he called it. The principle objects of our moral perceptions are the actions of others. Our moral judgments of ourselves are applications to ourselves of decisions made about the conduct of others. In applying these judgments to ourselves, we acquire a sense of duty and a feeling of its paramount authority over all our other principles of action. In this context, it is easier to see that Smith's work on political economy was, in part, an act of moral outrage at the mercantilism and industrial policies of European governments, especially British and French. Smith argued mostly from "wide and keen observation of social facts and his perpetual tendency to dwell on these and elicit their significance, instead of drawing conclusions from abstract principles."
As words like "Conservative" and "Liberal" have lost context in the current political jargon, it is helpful to remember that they have roots both in etymology and practice at any given time. "Liberal" proceeds from the Latin, "Liber," free, state of being free, freedom and "liberalis," that which befits a free person. Conservative comes from Latin, "Conservare," to keep fully, to preserve and to protect. In it, there is a sense of service to that which has value. In Sanskrit, the root is "seva." Both "seva" and "service" are moral statements which brings us back to Adam Smith and his Theory of Moral Philosophy. In the upside down world of today's political doublespeak, an 18th century Scottish Conservative is a Radical, Liberal Commie Symp. Now we have Adam Smith in context.
By way of background, Adam Smith began his academic preparation at the University of Glasgow [Scotland] in his 14th year, 1737. Except for six years at Oxford [1740-1746], he remained in Scotland, first in Kirkaldy for two years with his mother, then Edinburgh where he continued or began influential friendships which included David Hume. At Oxford, rather than prepare for ordination as his family expected, he studied rhetoric and belle lettres. At Glasgow University, he was first appointed to the chair of Logic in 1751 and succeeded to the chair of Moral Philosophy in 1752 until he left in 1763. He spent considerable time in pre-revolutionary France during 1764-1766 where he was evidently influenced by Physiocrats, followers of Jean Claude Marie Vincent de Gournay [1712-1759], whose motto was laissez faire, laissez passer which, for them, involved customs problems. They wanted open borders [in Europe] which, in mercantilist times, was heretical. Smith spent the balance of his life giving public lectures and writing. In 1778, he was appointed to the Board of Customs.
In his works on moral philosophy, within which he considered Inquiry into the Nature and Causes of the Wealth of Nations to be included, Smith concerned himself primarily with moral systems approached through the nature of morality and the motive of morality. According to Schneider, "While in general he betrays his sympathy for an ethics of benevolence based on sentiment, he is clearly repudiating the attempt to reduce morality to any one trait or single motive. Especially,..., is he interested in the interrelations of justice, benevolence and prudence. Given man's sympathetic or social sentiments, he tries to prove that a sense of propriety, a sense of merit, a sense of benevolence, and a sense of prudence can be explained as natural growths of man's social consciousness or feeling, whereas justice cannot depend on our sense of justice but must find its embodiment objectively in law.[xix]"
"Thus Wealth of Nations is not based, as some have maintained, on a psychology of self-interest, but on a theory of natural laws of prudence [dictates of right reason] or social art of self-command, which is not a theory of motivation at all, but a theory of moral judgment. For the psychology of propriety, benevolence, justice and prudence we must turn to the Theory of Moral Sentiments; for the 'natural law' or objective embodiment of these same virtues we must turn to jurisprudence and political economy. The two approaches complement each other.[xxii]"
"The principle of laissez-faire as conceived by Adam Smith is, therefore, not primarily an attack on government or a reliance on the automatic workings of the divine government in which he believed, but a principle of individual independence. 'Let's go!' 'Let us act for ourselves', is a better general maxim than a loyal subject's prayer for protection 'Guard us, help us, ye mighty'" This was the meaning which French merchants had given laissez faire and this was its meaning for Adam Smith. Similarly, competition was conceived by him not as a type of struggle, but as a positive interest in 'improvement.' As a theory of polity this formula supplanted both the mercantilist reliance on money and the physiocratic reliance on resources. It was intended to free and stimulate enterprising adventurers or entrepreneurs. It is in this context, too, that Smith's theory of labor as the origin of value is to be interpreted. By labor he meant productive labor; and by production he meant production of capital or wealth. It is important to keep in mind that the Wealth of Nations was conceived not as a treatise on national welfare or the greatest happiness, but merely of 'public opulence,' of economy in the Scottish sense: for Smith's theory of justice and benevolence we must turn elsewhere."[xxiii]"
Also of instruction is Smith's comments on "the influence of commerce on manners," "Whenever commerce is introduced into any country, probity and punctuality always accompany it." [Lectures on Justice, Police, Revenue and Arms, Part II, paragraph 17].
For further clarity on links between the Wealth of Nations and Smith's works on moral philosophy, Glenn R. Morrow in The Ethical and Economic Theories of Adam Smith: A Study in the Social Philosophy of the 18th Century, according to Schneider, "...refutes the thesis that the psychology in the Wealth of Nations is inconsistent with the psychology in the Theory of Moral Sentiments. Smith may have been many things, but he was neither inconsistent nor latent schizophrenic. A book which has appeared since this discussion paper was first written in late 1989 is Kenneth Lux's Adam Smith's Mistake, How a moral philosopher invented economics and ended morality. Lux has also co-authored Humanistic Economics. Both books add welcome dimension to the discussion.
Pages: 1 2
Adam Smith is on Our Side
Home
Download
