Adam Smith was born 300 years ago today, on June 16, 1723.
To discuss Adam Smith, Michael Durčák interviewed Dan Klein, director of the Adam Smith Program at the George Mason University Department of Economics.
Adam Smith would have celebrated his 300th birthday on June 16. If he were alive, what would you wish him?
Happinesswhich in his case especially corresponds to the approval and satisfaction of the man within the breast.
He was Scottish and part of the so-called Scottish Enlightenment. Can you explain what that was about?
The Scottish thinkers of the period 17001800 are a thing, but not a homogeneous thing. In my view, David Hume and Adam Smith are above the others, and rather alike (Hume smiles upon Smiths improvements).
So, what are Hume and Smith about? Hume said: [L]iberty is the perfection of civil society; but still authority must be acknowledged essential to its very existence.
Hume and Smith explained that libertymeaning, the government not messing with other peoples stuff, instead allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty, and justiceis justly aspirational. That is the main theme of The Wealth of Nations.
But authority, essential to liberty, presupposes the treading on liberty, for a specialness of the authority that Hume speaks of is that it institutionalizes its messing with other peoples stuff. It does thingsovertlythat would be criminal if done by your neighbor or trading partner. Hume and Smith confront the paradox and suggest a way forward. Smith called it the liberal plan of liberty, equality, and justice. For a while we got with the program, and had the liberal era.
What kind of man was Smith? Do we know any interesting facts about his career and personal life?
He was intensely private about certain things. He probably had some love affairs, but we do not know much about them. At the age of 36 he produced a great work, the first edition of The Theory of Moral Sentiments, and announced plans for two future great works, one of which he delivered, The Wealth of Nations, the other, on jurisprudence, he did not. His 13 years as professor at Glasgow he remembered as by far the most useful, and, therefore, as by far the happiest and most honourable period of my life.
What fulfilled him besides science? And was economics his primary interest? For example, for Isaac Newton, it wasnt physics that was primary, it was theology.
Yes, as, for Newton, physics was to theology, so, for Smith, economics was to moral philosophy. Economics was but another topic under the sublime umbrella.
What was the resonance of his ideas among his contemporaries?
The Wealth of Nations had immediate and ever-enduring resonance, at least among all good people. The Theory of Moral Sentiments is quite another story. It was well received initially, but dissatisfactions grew, especially as it was revisedand very substantially in 1790, the year that Smith died. It soon after fell into oblivion, where it remained for about 170 years, coming out of oblivion really only after 1980.
Did he have hard opponents?
No, I wouldnt say that he had opponents who came at him hard, or directly. Criticism of the Moral Sentiments goes public only after he died in 1790. The only exception was his friend Lord Kames, but I wouldnt say the criticism was hard or unfriendly. Hume, on the other hand, has enemies and unfriendly opponents, but Hume, especially in his A Treatise of Human Nature, was something of a wag. Hume repeatedly expressed concern that the opposition he drew would redound to the detriment of his friends, like Smith.
Were his origins a factor? After all, he was Scottish, and the United Kingdom hadnt existed for even a century...
Yes, his origins were a factor in his originality and genius. The three greatest Britons of the 18th century, in my opinion, were Hume, Smith, and Burke, and all three originated from the peripheryHume and Smith from Scotland, Burke from Ireland. Being from the periphery gives one a perspective on what the American sociologist Edward Shils called the central zone. Being from the periphery gives one an outside perspective, and helps one avoid the taboos, denials, hypocrisies, vanities, and groupthink of the central zone. But, seeing such things, it also enables one to appreciate the responsibilities of the central zone, and how to better live up to those responsibilities.
Also, I think it was significant that after the Union between the Scottish and English Parliaments, in 1707, a large part of the political class in Scotland removes to Westminster, opening up, within Scotland, cultural space for the likes of Hutcheson, Hume, and Smith. They become cultural royalty, partly because a portion of the political class had to a significant degree vacated.
Was he himself fulfilling the stereotype that is still somewhat held of Scots as being stingy?
I dont think so. When he died his estate executors found that he had given away a lot of his wealth to charitable causes. Smith would be the first to tell you, in Aristotelian fashion, that frugality is a virtue, straddled by the vice of deficiency (profusion) and vice of excess (stinginess, avarice).
How is he perceived in his homeland today?
My understanding is that the average Scot is quite left-wing. If so, they might claim Smith, but Smith and leftism dont really mix.
You like to say that Scotland is better than America. In what way?
Im not sure what statements of mine you are referring to. Hume and Smith are probably my two favorite thinkers, and they are from Scotland. Rather than Scotland better than America, what I am prepared to say is that the best of the 18th century is better than the best of either the 19th or 20th centuries.
Did Smith have relations with continental enlighteners such as the French ones like Voltaire?
He met Voltaire and said some positive things about him, but, actually, no, I would not say that Smith sustained any very rich relationship with any of the continental figures. Smith was a sporadic correspondent; Hume sometimes pesters him about it.
It is possible that Smith wrote more letter than we knowhe burned all his letters, and the ones we have are because the counterparty preserved them or copies of them. Smith made only one trip outside of Britain, a two-and-a-half-year visit to France with an excursion to Switzerland.
Does society back then compare to today? If so, in what ways?
The political sensibility was quite different. The beauty of aristocracy is that there is a small and quite closed group of people who rule, and then there is everyone else who are ruled. I say beauty because it meant that those who ruled had a real enduring responsibility in ruling, and everyone knew it. They were the central zone, and they knew it. Responsibility with power is nobility, and nobility was a thing. Meanwhile, the ruled, the people who were governed, knew very well that their rulers were a separate group with separate interests and with very little knowledge or concern for them. People therefore were not readily suckered into the peoples romance. That delusion came later, with democracy and new technologies. The democratic mythos opened the doors to rulers arguably with less responsibility and accountability than the aristocrats had had.
Does Adam Smith have significant contributions in other fields of science?
I regard Smith as offering a whole moral-philosophy outlook, spanning moral theory, jural theory, political theory, economic theory, psychology, sociology, and so on. Perhaps his great contribution is to offer his sort of big outlook. This outlook builds on Hume and others, however, so its not Smiths contribution alone. So far as I know, Smith was the first to liken the precise and accurate rules of commutative justice to the rules of grammar, while the loose, vague, and indeterminate rules of all other virtues are like the rules in aesthetics. His History of Astronomy is a marvelous essay in the philosophy of science, along the lines of Thomas Kuhn. His Lectures on Jurisprudence has many interesting and valuable ideas, including the four-stage theory of societies (hunters, shepherds, agriculture, commerce), important ideas about the extending of the principle of ownership, through those four stages, fascinating thoughts on polygamy, and, generally speaking, a narrative of how we ever got to liberal civilization. Smiths historical narrations are, by the way, once again heavily dependent on Hume. And then there is Smiths language essay, telling us that our modern languages, notably Englishwhich have lopped off inflections, instead using prepositions, helping verbs, and other separate words placed in fixed syntactical orderwhereby every natural event is split and divided into relational elements separated and detachedcannot put the pieces back together to express organic wholes as well as a highly inflected language like Latin could.
In what ways were his ideas so revolutionary?
I quoted Hume on authority as essential to liberty.
Smith presupposed authority and asked: OK, so what policies should the legislator, the policymaker, adopt? Here he defined the liberal plan, and helped to christen it liberal. And then he gave 900 pages to justifying it. He is perhaps the greatest founding father of liberalism.
Did he have any inspiration? Did he build on anyone?
Whereas some scholars tend to drive wedges between Hume and Smith, I see Hume and Smith more as a tag-team. Hume was 12 years older than Smith. Again, Hume smiles on Smiths developments.
Smith also was surely influenced greatly by his Glasgow professor Francis Hutcheson, who was also a great man (hes probably my third favorite 18th century Scot).
I suspect that Smith was also high on Grotius. I also speculate that Smith loved and identified with Plato. The author he most strikingly praises highly and repeatedly in his Lectures on Rhetoric and Belles Lettres is Thucydides.
Why is he considered the founder of economics as a science?
I suppose it is because he had the moral authority to say that it is morally legitimate to treat economic activity (along with the governmental rules it operates under) as a somewhat distinct body of knowledge, or science, and he proceeded to do that in The Wealth of Nations. From his reputation from the Moral Sentiments, he made economics moral, and hence legitimate.
How and in what ways are his ideas still relevant today? What can Adam Smith teach us?
The liberal plan is as worthy as ever. Smith felt that the governmentalization of social affairs sucks. And it still sucks. Government is a Godzilla; it is something to be managed, like gravity, like friction, like death.
You might say you dont need Adam Smith to know that governmentalization sucks. Fair enough. Smith also offers a rich invitation to virtue, and to how to think about virtue. Im not sure others have superseded him on that score.
And all the parts come together: There is virtue in understanding that governmentalization sucks and in lending a hand in managing that sucky Godzilla.
Try to explain to a lay reader what makes this book so special and still relevant today.
Its not easy to express that specialness briefly. Poor Richard (that is, Benjamin Franklin) said: An empty bag will not stand upright. TMS and WN, together, stand upright.
The bag offered by TMS helps to organize the objects inside the bag. It matters whether the bag is of silk, burlap, suede, or toughened leather, or some combination. And there is the design of the bag itself, which will affect the ordering it lends to the objects.
And then, from both works but especially WN, there are the objects inside the bag. Smith gives us 1250 pages in his two great works, plus more in the essays and lectures, full of judgment in concrete cases and issues. These moments of analysis and judgment are objects that, within the organizing bag of TMS, all stand upright.
Why did the book fall into obscurity for almost 200 years?
TMS is nonfoundationalist in ethics and epistemology; relatedly, it allegorizes in its theorizing. TMS subtly grapples with the reality of asymmetric knowledge within the human being. Also, TMS contains quite a bit of esoteric writingmore than WN does.
And if we look at his second book, The Wealth of Nations?
It brilliantly befriends the governors and persuades them to govern less. It is brilliant in its anti-imperialism and call for universal goodwilland free tradeamong nations, while recognizing the focal points of homeranging from ones own being, to the family, the neighborhood, the country. He would have hated institutions that pretend to provide global governance. Godzilla, bigger, vainer, and less accountable.
Who all drew on Smiths ideas? Lets talk about statesmen first.
Lots, especially on Wealth of Nations. He really did help to establish a presumption of libertythat is, allowing every man to pursue his own interest his own way as a presumption. If you are going to contravene that principle, the burden of proof is on you to give a darned good reason.
And when it comes to economists?
Again, everyone. By the way, Carl Menger loved Smith and saw himself as continuing the liberal tradition of Smith.
Who are Smiths followers today?
Today, Smith has an extraordinarily wide appealmany disciplines, many political outlooks, many different parts of the world, many religious perspectives. TMS, in particular, now appeals to many people. After 1980, there were growing numbers of people who did not hold TMSs nonfoundationalism against it.
Who should read these books today, and how should they read them?
Beginners might do well to begin with an inexpensive paperback The Wisdom of Adam Smith, published by Liberty Fund. The quotations give you a feeling for Smiths voice and character.