Right on the money - and more
An Enlightened Life
By Nicholas Phillipson
Yale Univ. 346 pp. $32.50
Say "Adam Smith" (1723-1790), and many people will know that he wrote "The Wealth of Nations" (1776), the foundational treatise of modern economic thought. But for most of us Smith has usually been more honored (or vilified) than actually read. Too often he has been reduced to a phrase - "the invisible hand" - or to his advocacy of what we now call laissez-faire capitalism. Many people aren't even aware of what he regarded as his greatest work, "The Theory of Moral Sentiments" (1759).
Thus, one good reason to read Nicholas Phillipson's excellent intellectual biography is to gain a more nuanced understanding of Smith and, in particular, of his vision of an all-embracing science of man.
Born in the small town of Kirkcaldy, Scotland, and brought up by a widowed mother to whom he was devoted, Smith made himself immensely erudite in the way of so many 18th-century philosophers. A youthful student of the ancient Stoics, he became an admirer of his contemporary Voltaire; a superb university teacher at Glasgow and Edinburgh (one of his pupils was Samuel Johnson biographer James Boswell); and, in due course, the second-greatest luminary of what's often called the Scottish Enlightenment. The greatest, David Hume (1711-1776), that most likable and readable of all modern philosophers, was his best friend. "I am positive you are wrong in many of your Speculations," Hume once teased Smith, "especially where you have the Misfortune to Differ from me."
While some 18th-century thinkers talked constantly about themselves (Rousseau) or were memorably chronicled by disciples (Johnson), Adam Smith resolutely guarded his privacy. He left few letters and insisted that all his manuscripts - apart from an essay on the history of astronomy - be destroyed by his executors.
He did occasionally travel outside Scotland: to Oxford for the equivalent of postgraduate study (mostly consisting of intense private reading); to London, where he got to know Edmund Burke and other members of Johnson's "Club"; and even to Europe as the tutor of the young Duke of Buccleuch. During his last dozen years, his position on the Scottish Board of Customs made impossible any sustained scholarship, even though he had long planned to write "a sort of Philosophical History of all the different branches of Literature, of Philosophy, Poetry and Eloquence" and "a sort of theory and History of Law and Government."
As Phillipson explains, "The Theory of Moral Sentiments " is Smith's attempt to "develop a coherent and plausible account of the processes by which we learn the principles of morality from the experience of common life." At its heart lies the fundamental importance of sympathy, of the ethical power of the imagination. In essence, we can through our imaginations identify with the suffering or joy of others. "I judge of your sight by my sight, . . . of your resentment by my resentment, of your love by my love. I neither have, nor can have, any other way of judging about them." Smith concluded that we gradually learn to evaluate conduct through the growth of "an impartial spectator," derived from our experiences of sociability and daily life. "We may like," Phillipson summarizes, "to believe that the voice of the impartial spectator is the eternal voice of conscience or of the deity, but in reality his voice is that of the world to which we belong." The virtuous man or woman needs self-command in order to live a life suitably directed by the impartial spectator.
As the years went by, Smith's thinking about society led him to economics and its sometimes unpalatable truths: "Till there be property there can be no government, the very end of which is to secure wealth, and to defend the rich from the poor." Smith soon grew convinced that labor established value, arguing, in Phillipson's words, that the "opulence of a nation was to be measured in terms of the flow of consumable goods and not its reserves of gold and silver."
When Phillipson discusses "The Wealth of Nations," it's hard not to discern parallels between Smith's time and our own. For instance, the collapse of Scotland's great Ayr Bank caused severe economic damage for half a century. It resulted, Phillipson says, from "the insatiable demand for credit from projectors and improvers anxious to cash in on a boom. The bank expanded rapidly, its notes being said to have represented two-thirds of the entire paper currency of the country. But it overtraded, discounting bills of exchange almost on demand and accruing a dangerous amount of insecure debt." Sound familiar?
Perhaps surprisingly, "The Wealth of Nations" also cautions against the commercial sector's inherent rapacity and monopolizing spirit. The interests of the nobility, merchants and manufacturers, Smith maintains, are never the same as those of the general public. In fact, he states almost axiomatically that "the government of an exclusive company of merchants, is, perhaps, the worst of all governments for any country whatever." Rather, we should avoid all obstructions to trade, whether through attempted monopoly or through government regulation, and we should focus on domestic industry. Our innate self-regard may then lead to a greater general prosperity. As Smith says, in his most famous sentences: "By preferring the support of domestick 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 cases, led by an invisible hand to promote an end which was no part of his intention."
There's far more to Smith's arguments about what Phillipson calls "the exchange and circulation of goods, services and sentiments" than can be touched on here. But in the last resort, says Phillipson, "The Theory of Moral Sentiments" and "The Wealth of Nations" were together a call to Smith's contemporaries "to take moral, political and intellectual control of their lives and the lives of those for whom they were responsible." That's still a call worth heeding.
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