Adam Smith, revisited

The perception of Adam Smith, too often claimed by ignorant liberal market extremists as one of theirs (as the founder or father of modern capitalism, or laissez-faire economics, and so on), has undergone a significant change, at least among those who actually have read parts of his oeuvre, and especially among those that have read more than his classic “The Wealth of Nations” (1776). Behavioral economists, in particular, have taken to gut Smith’s earlier “Theory of Moral Sentiments” (1759). Unfortunately, many behavioralist economists seem to have gotten out of it little more than some tantalizing quotation to decorate their articles on human foibles or social preferences. To the extent that Smith’s work on astronomy, methodology, rhetoric, languages, and jurisprudence, continues to be ignored, it remains poorly understood and is likely to continue to serve as an inkblot test for political priors.

There is no excuse for that kind of cavalier appropriation of the history of economic thought. At least half a dozen biographies are out there, from Dugald Stewart (Smith’s first biographer of sorts, still extremely insightful), over Scott and Rae, to more recent ones such as the two editions of Ian Ross’s often celebrated attempt to write the ultimate (his)story of Smith life and work. I personally found Stewart’s – as short, and short on biographic detail, as it is – always the best primer. No longer.

Nicholas Phillipson recently published a brilliant attempt to reflect on Smith’s life and work as well as the circumstances in which they unfolded. It’s a veritable tour de force but one worth every minute it takes to read it. Indeed it is a must-read for everyone who is interested in what Smith really said.

What makes Phillipson’s book so truly outstanding, and indeed astounding, is his knowledge of the place and times in which Smith grew up. Phillipson had earlier written a similar biography on David Hume (first edition 1989, of which a new and revised edition was published recently) , Smith’s best intellectual buddy,  but it is Phillipson’s detailed knowledge of the culture and society of eighteenth-century Edinburgh and Scotland, and England for that matter, that contributes to the insights laid out in this book .

Says Phillipson, “I wanted to write about Smith’s life and works in a way which would throw light on the development of an extraordinary mind and an extraordinarily approachable philosophy at a remarkable moment in the history of Scotland and of the Enlightenment.” ( xiii) He succeeds brilliantly in that undertaking, often relying on Smith’s own device of engaging in conjectural history, i.e., telling the most likely story based on the facts that he can muster (of which there are many; Phillipson has done his homework well).

Phillipson refers to the standard sources – e.g., Stewart, Scott, Rae, Ross (the first edition), and the editors of the Glasgow/Liberty editions of Smith’s oeuvre, but he goes significantly beyond (selective) reliance of standard sources. He connects, for example, the geography of key places that Smith lived in with the political and social circumstances in which he lived, and then with the emergence of Smith’s ideas about our capacity for sociability.

The Oxford period, generally neglected by commentators, is here given prominence in Smith’s intellectual development. Phillipson urges us to reconsider the way French Literature  might have shaped Smith’s moral philosophy. He also convincingly shows that Smith’s first philosophical investigations on the origin and evolution of language and jurisprudence, which together became the basis for his entire system, were attempts to become a “perfect Humean” (71) in providing more systematic accounts of topics Hume had neglected. Phillipson also highlights Smith’s effort in reconstructing his Lectures on Jurisprudence during his last year at Glasgow University “so as to bring questions about the duties of government to the fore”, as if he was already preparing the ground for The Wealth of Nations (172-173, 175).

The picture of Smith’s character that emerges in Phillipson’s thirteen chronologically ordered chapters  is that of a precocious doted-on only child and adolescent who was brought up by a pious mother who he adored, who was extraordinarily deeply and widely read, who was inspired to a significant degree by Francis Hutcheson and David Hume, who wrote beautifully yet carefully (guided by his early thinking about Rhetoric and Belle Lettres), who early in his life lectured in rudimentary form about the big themes that he was to write about in his key published works, who spent thirteen years – during which he wrote his highly influential The Theory of Moral Sentiments (TMS) and which he called “the happiest and most honourable period of my life” (268) — as philosophy professor at Glasgow, who then resigned to accompany as a tutor a young Duke while traveling Europe (especially Paris), who – after a few months in London – spent a decade in Kirkcaldy to prepare what was for a long time perceived to be his opus magnum, The Wealth of Nations, and who then spent another decade  as influential Commissioner of Customs while revising his published works and trying to make progress on others, who was well-connected – indeed “born into the middling ranks of Scottish society” (8) – and socially savvy (in that he understood well what might be too offensive), and who throughout his life was noted for his extraordinary memory as well as his considerable absent-mindedness and social awkwardness (the latter being particularly contextual).

There is little new in the basic story line presented above, even though one might be surprised to learn that during his professorship in Glasgow Smith was a “cult figure” for students who could buy his portrait bust at local bookshops and a “guru” for merchants turned free traders by his influence (136).

What is new, and what to some extent leads to a revision of the caricature of Smith as a mere scholar, is evidence compiled by Phillipson that shows that Smith, not with-standing his well-documented  and frequently mentioned  absent-mindedness and social awkwardness, was very much a man of the world. That was reflected in his membership in multiple clubs as well as his being

“a serious university librarian, acquiring stocks of classical literature, contemporary history, philosophy, law and, interestingly, commerce. … By 1754 Smith had also gained a reputation for property management. … By the late 1750s he was in charge of the university’s accounts and the university’s dealings with the town council on property matters and the students’ tax liability. … By the late 1750s seniority and competence had established him as one of the most powerful and heavily worked members of the College. He was Quaestor from 1758 to 1760, Dean of the Faculty – twice –  from 1760 to 1762 and Vice-Rector from 1762 to 1764. … by the end of his professorial career he had also been drawn into the thick of the complicated and often acrimonious political life of the College.” (131)

Similarly, Phillipson argues that Smith, after Townsend’s death, was importantly involved in reviving the Buccleuch estates (see 202 – 204), being quite possibly instrumental in devising an intriguing incentive-compatible scheme meant to encourage agricultural improvements (204), and quite possibly guiding Buccleuch through treacherous financial waters when the Ayr Bank (of which Buccleuch was one of the founders and capital guarantors) crashed in 1772 and left the Buccleuch estates to remain seriously encumbered for seven decades (206 – 207). Plus, already when Smith came back from France in 1766, his advice was sought by top political figures.

“He was able to move in political circles at a time when the future of Anglo-American relations, the role of the East India Company in the government of India and public finance and taxation were under discussion, all matters of importance to the Wealth of Nations.” (201)

When he returned to London in 1773 – “In the spring of 1773 Smith decided to end his Kirkcaldy retreat and to finish the Wealth of Nations (WN) in the capital. He needed company and American news.” (209) — , things were not any different: “The three years Smith spent in London … were notably sociable … .” (210) It was, “[h]owever, the American question that appears to have absorbed most of his energies … . “ (211)

Phillipson provides considerable detail about the immense work load that Smith was burdened with when he became Commissioner of Customs (255 – 268). In fact, Phillippson argues that this appointment was “a misjudgement of historic proportions” ( 209) on Buccleuch’s part: “The Commissionership of Customs was certainly honourable and lucrative, but it proved to be time consuming and wearisome and was to leave Smith constantly bewailing the lack of time for pursuing his many philosophical projects.” (209)

In sum, Phillipson’s book is a very fine read indeed. In my view it is the most insightful book yet on Smith’s life and work; it will be hard to match. It is a must-read for Smith scholars, and should be of considerable interest to others, not only  economists. Even though it only came out a few months ago it has been reviewed widely and – mostly – to overwhelming acclaim. Detractors tend to be people who found it too challenging and too academic (see some of the reviewers on Amazon).

I have written, together with Benoit Walraevens, a (long) review on which especially the second part of this blog entry draws heavily; the review has been published in History of Economic Ideas. If you are interested in reading our review in all its glory but have trouble accessing a copy, please send a request to a.ortmann ( at ) unsw (dot) edu (dot) au.

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