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Istvan Hont and Michael Ignatieff, ''Wealth and Virtue:  The Shaping of Political Economy in the Scottish Enlightenment'', 1983.
Istvan Hont and Michael Ignatieff, ''Wealth and Virtue:  The Shaping of Political Economy in the Scottish Enlightenment'', 1983.

Jerry Muller, ''Adam Smith in his Time and Ours'',
Jerry Muller, ''Adam Smith in his Time and Ours'',1993.

'''Kevin E. Dodson'''
'''Kevin E. Dodson'''

Revision as of 08:19, 22 May 2017

Smith, Adam (1723-1790): Scottish philosopher and political economist.

Born in Kircaldy in Scotland, Adam Smith was raised in the middle-class family of a public official. In 1737, he attended the University of Glasgow where he was a student of Hutcheson, Francis, who exercised a profound influence on his thought. He left the University to 1740 to study classical literature at Oxford. In 1750, he was appointed to the Chair of Logic at the University of Glasgow and a year later to the Chair of Moral Philosophy, which Hutcheson had held. During this time, he published his Theory of Moral Sentiments in 1759 and lectured on a variety of topics including rhetoric and jurisprudence, the notes from which were preserved by his students.

In 1764, Smith resigned from the University to accompany the young Duke of Buccleuch as a tutor on his tour of the continent. After settling for a few months in Paris, where he frequented the intellectual circles of the philosophes, he returned to Great Britain in 1766. In 1776, he published his seminal An Inquiry in the Nature and Causes of the Wealth of Nations. After the work’s publication he was appointed Commissioner of Customs in Scotland, from which he became involved in issues of free trade for Ireland.

Smith’s two great masterworks are the Theory of Moral Sentiments and The Wealth of Nations and the difficulty of reconciling the doctrines of the two having become known as “The Adam Smith Problem.” With The Theory of Moral Sentiments, Smith gained international attention with his incorporation of Christian and Stoic views in a sophisticated and original reworking of Scottish moral sense theory, which asserted that humans have a distinctive moral sense that enables them to distinguish between right and wrong, virtue and vice. Smith identified two capacities, sympathy and imagination, as fundamental in matters of morality. The capacity for sympathy binds society together by enabling persons to transcend narrow self-interest and interesting them in the circumstances of others. Imagination permits one to project oneself into the situation of another and view oneself from that other person’s point of view. Taken together, persons are able to assume the standpoint of an impartial spectator in evaluating theirs and other’s actions and character. The book went through six editions in his lifetime with a final revised edition published the year he died.

Smith’s The Wealth of Nations was the first great treatise on economics and founded the discipline. Smith’s goal was to promote economic growth in order to generate a high-wage economy that would redound to the benefit of the majority. Influenced by the doctrines of physiocrats such as Quesnay, François, Smith criticized the dominant mercantilist view, which defined national wealth in terms of the accumulation of specie and sought to generate a net inflow of it by means of restrictions on trade. Instead, Smith defined national wealth in terms of the goods produced by human labor, with their relative prices determined by the amount of labor involved in their production. The primary source of economic growth, then, was the increasing productivity of that labor, generated by division of labor into different tasks. Along with Ferguson, Adam, Smith was one of the first to call attention to the economic importance of specialization.

As a matter of government policy, Smith argued for free trade and free markets. According to Smith, human beings have a natural tendency to trade, and the pursuit of self-interest by economic agents increased production and was coordinated as if by an invisible hand to promote the general well-being. Thus, mercantilist restrictions were counterproductive. Smith did identify the tendency monopoly and the formation of cartels as impediments to trade in need of redress by the government. Furthermore, government action was required in areas where the market did not function effectively. Hence, he proposed public works to expand the physical infrastructure, thereby extending the market and its consequent division of labor, and public support for education as an investment in human capital.

Though generally laudatory of the free market, Smith was concerned with some of its negative, dehumanizing effects. Specialization and the predominance of exchange relationships threatened to undermine the imagination and sympathy required for moral conduct. Education, religion, and voluntary associations operating in a robust public sphere were necessary counterweights to these negative consequences. Furthermore, commerce tends to detach the merchant from his community and weaken his devotion to it. Smith advised merchants to make their fortunes in trade and invest it in land.

Further Reading:

Istvan Hont and Michael Ignatieff, Wealth and Virtue: The Shaping of Political Economy in the Scottish Enlightenment, 1983.

Jerry Muller, Adam Smith in his Time and Ours,1993.

Kevin E. Dodson