Please provide me with Plagiarism Report.Class reading and Chapters are attached belowIn Class, materials must be used only. No Outside source.QUESTION Write a 5-7 page paper (double spaced, 12 point

The W on derfu l W orld o f A dam S m it h

W hat w as th at n ew v is io n? A s w e m ig ht e x pect, it w as n ot a S ta te b ut a

S yste m — more p re cis e ly , a S yste m o f P erfe ct L ib erty . B ut it w ould b e a

m is ta k e to p lu nge in to its e x tr a o rd in ary c o ncep tio n u ntil w e h ad m ad e th e

a cq uain ta n ce o f i ts n o l e ss e x tr a o rd in ary — certa in ly u nusu al— au th or.

A v is ito r to E ngla n d in th e 1 760s w ould q uite p ro bab ly h av e le arn ed o f a

c erta in A dam S m ith o f th e U niv ers ity o f G la sg ow . D r. S m ith w as a w ell-

k now n, i f n ot a f a m ous, m an ; V olta ir e h ad h eard o f h im , D av id H um e w as h is

i n tim ate , s tu den ts h ad t r a v ele d a ll t h e w ay f ro m R ussia t o h ear h is l a b ore d b ut

e n th usia stic dis c o urs e . In ad ditio n to bein g re n ow ned fo r his sc h ola stic

a cco m plis h m en ts , D r. S m ith w as k now n a s a r e m ark ab le p ers o nality . H e w as,

f o r ex am ple , noto rio usly ab se n tm in ded : once, w alk in g alo ng in earn est

d is q uis itio n w ith a f rie n d, h e f e ll i n to a t a n nin g p it, a n d i t w as s a id t h at h e h ad

b re w ed h im se lf a b ev era g e o f b re ad a n d b utte r a n d p ro nounced it th e w ors t

c u p o f te a h e h ad e v er ta ste d . B ut h is p ers o nal q uir k s, w hic h w ere m an y, d id

n ot in te rfe re w ith his in te lle ctu al ab ilitie s. A dam S m ith w as am ong th e

f o re m ost p hilo so phers o f h is a g e.

At G la sg ow , A dam S m ith le ctu re d o n p ro ble m s o f M ora l P hilo so phy, a

d is c ip lin e a g re at d eal m ore b ro ad ly c o nceiv ed i n t h at d ay t h an i n o urs . M ora l

P hilo so phy co vere d N atu ra l T heo lo gy, E th ic s, Ju ris p ru den ce, an d P olitic al

E co nom y: it

th us ra n ged a ll th e w ay fro m m an ’s s u blim est im puls e s to w ard

o rd er a n d h arm ony to h is s o m ew hat le ss o rd erly a n d h arm onio us a ctiv itie s in

t h e g rim mer b usin ess o f g ougin g o ut a l iv in g f o r h im se lf .

Natu ra l th eo lo gy— th e s e arc h f o r d esig n in th e c o nfu sio n o f th e c o sm os—

h ad b een a n o bje ct o f t h e h um an r a tio naliz in g i m puls e f ro m e arlie st t im es; o ur

t r a v ele r w ould h av e f e lt q uite a t e ase a s D r. S m ith e x pounded t h e n atu ra l l a w s

t h at u nderla y t h e s e em in g c h ao s o f t h e u niv ers e . B ut w hen i t c am e t o t h e o th er

e n d o f th e s p ectr u m — th e s e arc h fo r a g ra n d a rc h ite ctu re b en eath th e h urly -

b urly o f d aily lif e — our tr a v ele r m ig ht h av e fe lt th at th e g ood d octo r w as

r e ally s tr e tc h in g p hilo so phy b ey ond i ts p ro per l im its .

For if th e E nglis h so cia l sc en e o f th e la te e ig hte en th c en tu ry su ggeste d

a n yth in g, it w as m ost e m phatic ally n ot ra tio nal o rd er o r m ora l p urp ose . A s so on a s o ne lo oked a w ay f ro m th e e le g an t liv es o f th e le is u re c la sse s, s o cie ty

pre se n te d its e lf a s a b ru te s tr u ggle f o r e x is te n ce in its m ean est f o rm . O uts id e

th e d ra w in g r o om s o f L ondon o r th e p le asa n t r ic h e sta te s o f th e c o untie s, a ll

th at o ne sa w w as ra p acity , c ru elty , a n d d eg ra d atio n m in gle d w ith th e m ost

ir ra tio nal an d b ew ild erin g cu sto m s an d tr a d itio ns o f so m e still earlie r an d

alr e ad y a n ach ro nis tic d ay. R ath er th an a c are fu lly e n gin eere d m ach in e w here

each p art c o uld b e s e en to c o ntr ib ute to th e w hole , th e b ody s o cia l r e se m ble d

one of Ja m es W att’s str a n ge ste am m ach in es: bla ck , nois y , in eff ic ie n t,

dan gero us. H ow c u rio us th at D r. S m ith s h ould h av e p ro fe sse d to s e e o rd er,

desig n, a n d p urp ose i n a ll o f t h is !

Suppose , fo r ex am ple , our vis ito r had gone to se e th e tin m in es of

Corn w all. T here h e w ould h av e w atc h ed m in ers lo w er th em se lv es d ow n th e

bla ck sh afts , an d o n re ach in g b otto m d ra w a can dle fro m th eir b elts an d

str e tc h o ut fo r a s le ep u ntil th e c an dle g utte re d . T hen fo r tw o o r th re e h ours

th ey w ould w ork th e o re u ntil th e n ex t tr a d itio nal b re ak , th is tim e f o r a s lo ng

as it to ok to sm oke a p ip e. A fu ll h alf -d ay w as sp en t in lo ungin g, h alf in

pic k in g a t t h e s e am s. B ut h ad o ur v is ito r t r a v ele d u p n orth a n d n erv ed h im se lf

ag ain st a d esc en t in to th e p its o f D urh am o r N orth um berla n d, h e w ould h av e

se en so m eth in g quite dif f e re n t. H ere m en an d w om en

work ed to geth er,

str ip ped to th e w ais t, an d so m etim es re d uced fro m pure fa tig ue to a

whim perin g h alf -h um an sta te . T he w ild est an d m ost b ru tis h cu sto m s w ere

pra ctic ed ; se x ual ap petite s aro use d at a g la n ce w ere g ra tif ie d d ow n so m e

dese rte d s h aftw ay ; c h ild re n o f s e v en o r t e n w ho n ev er s a w d ay lig ht d urin g t h e

win te r m onth s w ere u se d a n d a b use d a n d p aid a p itta n ce b y t h e m in ers t o h elp

dra g a w ay th eir tu bs o f c o al; p re g nan t w om en d re w c o al c ars lik e h ors e s a n d

ev en g av e b ir th i n t h e d ark b la ck c av ern s.

But it w as n ot ju st in th e m in es th at lif e a p peare d c o lo rfu l, tr a d itio nal, o r

fe ro cio us. O n th e la n d, to o, an o bse rv an t tr a v ele r w ould h av e se en sig hts

hard ly m ore s u ggestiv e o f o rd er, h arm ony, a n d d esig n. In m an y p arts o f th e

co untr y b an ds o f a g ric u ltu ra l p oor r o am ed in s e arc h o f w ork . F ro m th e W els h

hig hla n ds, C om pan ie s o f A ncie n t B rito ns (a s th ey s ty le d th em se lv es) w ould

co m e tr o opin g dow n at harv est tim e; so m etim es th ey had one hors e ,

unsa d dle d a n d u nbrid le d , fo r th e e n tir e c o m pan y; s o m etim es th ey a ll s im ply

walk ed . N ot in fre q uen tly th ere w ould be only one of th e lo t w ho sp oke

Englis h an d so co uld se rv e as in te rm ed ia ry betw een th e ban d an d th e

gen tle m en f a rm ers w hose la n ds th ey a sk ed p erm is sio n to a id in h arv estin g. I t

is n ot s u rp ris in g t h at w ag es w ere a s l o w a s s ix pen ce a d ay.

And fin ally , h ad o ur v is ito r sto pped a t a m an ufa ctu rin g to w n, h e w ould

hav e se en still o th er re m ark ab le sig hts — but a g ain , n ot su ch a s to b eto ken

ord er to th e u ned ucate d e y e. H e m ig ht h av e m arv ele d a t th e f a cto ry b uilt b y th e b ro th ers L om be in 1 742. It w as a h uge b uild in g fo r th ose d ay s, fiv e

hundre d f e et l o ng a n d s ix s to rie s h ig h, a n d i n sid e w ere m ach in es d esc rib ed b y

Dan ie l D efo e a s c o nsis tin g o f “ 2 6,5 86 W heels a n d 9 7,7 46 M ovem en ts , w hic h

work 7 3,7 26 Y ard s o f S ilk -T hre ad e v ery tim e th e W ate r- W heel g oes ro und,

whic h i s t h re e t im es i n o ne m in ute .” E qually w orth y o f n ote w ere t h e c h ild re n

who te n ded th e m ach in es ro und th e c lo ck fo r tw elv e o r fo urte en h ours a t a

tu rn , c o oked th eir m eals o n th e g rim y b la ck b oile rs , a n d w ere b oard ed in

sh if ts i n b arra ck s w here , i t w as s a id , t h e b ed s w ere a lw ay s w arm .

A s tr a n ge, c ru el, h ap hazard w orld th is m ust h av e a p peare d to e ig hte en th -

cen tu ry a s w ell a s to o ur m odern e y es.

All th e m ore r e m ark ab le , th en , to f in d

th at it c o uld b e r e co ncile d w ith a s c h em e o f M ora l P hilo so phy e n vis io ned b y

Dr. S m ith , a n d th at th at le arn ed m an a ctu ally c la im ed to f a th om w ith in it th e

cle ar- c u t outlin es of gre at purp ose fu l la w s fittin g an overa rc h in g an d

mean in gfu l w hole .

What s o rt o f m an w as t h is u rb an e p hilo so pher?

“I a m a b eau in n oth in g b ut m y b ooks,” w as th e w ay A dam S m ith o nce

desc rib ed h im se lf , p ro udly s h ow in g o ff h is tr e asu re d lib ra ry to a frie n d. H e

was c erta in ly n ot a h an dso m e m an . A m ed allio n p ro file s h ow s u s a p ro tr u din g

lo w er lip th ru st u p to m eet a la rg e aq uilin e n ose an d h eav y b ulg in g ey es

lo okin g o ut fro m h eav y lid s. A ll h is lif e S m ith w as tr o uble d w ith a n erv ous

aff lic tio n; his head sh ook, an d he had an odd an d stu m blin g m an ner of

sp eech .

In a d ditio n, th ere w as h is n oto rio us a b se n tm in ded ness. I n th e 1 780s, w hen

Sm ith w as in h is la te fif tie s, th e in hab ita n ts o f E din burg h w ere re g ula rly

tr e ate d to th e a m usin g s p ecta cle o f th eir m ost illu str io us c itiz en , a ttir e d in a

lig ht- c o lo re d co at, k nee b re ech es, w hite silk sto ck in gs, b uck le sh oes, fla t

bro ad -b rim med b eav er h at, a n d c an e, w alk in g d ow n th e c o bble d s tr e ets w ith

his e y es f ix ed o n in fin ity a n d h is lip s m ovin g in s ile n t d is c o urs e . E very p ace

or tw o h e w ould h esita te a s if to c h an ge h is d ir e ctio n o r e v en re v ers e it; h is

gait w as d esc rib ed b y a f rie n d a s “ v erm ic u la r.”

Acco unts of his ab se n ce of m in d w ere co m mon. O n one occasio n he

desc en ded in to h is g ard en c la d o nly in a d re ssin g g ow n a n d, fa llin g in to a

re v erie , w alk ed f if te en m ile s b efo re c o m in g t o . A noth er t im e w hile S m ith w as

walk in g w ith a n e m in en t frie n d in E din burg h, a g uard p re se n te d h is p ik e in

sa lu te . Sm ith , w ho had been th us honore d on co untle ss occasio ns, w as

su dden ly h ypnotiz ed b y th e s a lu tin g s o ld ie r. H e re tu rn ed th e h onor w ith h is

can e a n d th en f u rth er a sto nis h ed h is g uest b y f o llo w in g e x actly in th e g uard ’s

fo ots te p s, d uplic atin g w ith h is c an e e v ery m otio n o f th e p ik e. W hen th e s p ell

was b ro ken , S m ith w as s ta n din g a t t h e h ead o f a l o ng f lig ht o f s te p s, c an e h eld

at th e r e ad y. H av in g n o id ea th at h e h ad d one a n yth in g o ut o f th e o rd in ary , h e gro unded h is s tic k a n d t o ok u p h is c o nvers a tio n w here h e h ad l e ft o ff .

This a b se n t- m in ded p ro fe sso r w as b orn in 1 723 in th e to w n o f K ir k cald y,

County F if e , S co tla n d. K ir k cald y b oaste d a p opula tio n o f f if te en h undre d ; a t

th e tim e o f S m ith ’s b ir th , n ails w ere s till u se d a s m oney b y s o m e o f th e lo cal

to w nsp eo ple . W hen h e w as f o ur y ears o ld , a m ost c u rio us i n cid en t t o ok p la ce.

Sm ith w as k id nap ed b y a b an d o f p assin g g ypsie s. T hro ugh th e e ff o rts o f h is

uncle (h is fa th er h ad d ie d b efo re h is b ir th ), th e g ypsie s w ere tr a ced an d

purs u ed , a n d i n t h eir f lig ht t h ey a b an doned y oung A dam b y t h e r o ad sid e. “ H e

would h av e m ad e, I f e ar, a p oor g ypsy ,” s a y s o ne o f h is e arly b io gra p hers .

Fro m h is e arlie st d ay s, S m ith w as a n a p t p upil, a lth ough e v en a s a c h ild

giv en to f its o f a b str a ctio n. H e w as o bvio usly d estin ed f o r te ach in g, a n d s o a t

se v en te en he w en t to O xfo rd on a sc h ola rs h ip — mak in g th e jo urn ey on

hors e b ack — an d th ere h e r e m ain ed f o r s ix y ears . B ut O xfo rd w as n ot th en th e

cita d el o f le arn in g w hic h it la te r b ecam e. M ost o f th e p ublic p ro fe sso rs h ad

lo ng a g o g iv en u p e v en a p re te n se o f t e ach in g. A f o re ig n tr a v ele r r e co unts h is

asto nis h m en t o ver a p ublic d eb ate th ere in 1 788. A ll f o ur p artic ip an ts p asse d

th e allo tte d tim e in p ro fo und sile n ce, each ab so rb ed in re ad in g a p opula r

novel o f th e d ay. S in ce in str u ctio n w as th e e x cep tio n ra th er th an th e ru le ,

Sm ith s p en t t h e y ears l a rg ely u ntu to re d a n d u nta u ght, r e ad in g a s h e s a w f it. I n

fa ct h e w as o nce n early e x pelle d f ro m t h e u niv ers ity b ecau se a c o py o f D av id

Hum e’s A

Tre a tis e o f H um an N atu re

w as f o und in h is r o om s— Hum e w as n o

fit r e ad in g m atte r, e v en f o r a w ould -b e p hilo so pher.

In 1 751— he w as n ot y et tw en ty -e ig ht— Sm ith w as o ff e re d th e C hair o f

Logic a t th e U niv ers ity o f G la sg ow , a n d s h ortly th ere afte r h e w as g iv en th e

Chair o f M ora l P hilo so phy. U nlik e O xfo rd , G la sg ow w as a s e rio us c en te r o f

what h as co m e to b e calle d th e S co ttis h E nlig hte n m en t, an d it b oaste d a

gala x y o f t a le n t. B ut i t s till d if f e re d c o nsid era b ly f ro m t h e m odern c o ncep tio n

of a u niv ers ity . T he p rim p ro fe sso ria l g ro up d id n ot en tir e ly ap pre cia te a

certa in le v ity an d en th usia sm in Sm ith ’s m an ner. H e w as accu se d of

so m etim es s m ilin g d urin g re lig io us s e rv ic es (n o d oubt d urin g a re v erie ), o f

bein g a fir m frie n d o f th at o utr a g eo us H um e, o f n ot h old in g S unday c la sse s

on C hris tia n e v id en ces, o f p etitio nin g t h e

Sen atu s A cad em ic u s f o r p erm is sio n

to d is p en se w ith p ra y ers o n th e o pen in g o f c la ss, a n d o f d eliv erin g p ra y ers

th at s m ack ed o f a c erta in “ n atu ra l re lig io n.” P erh ap s th is a ll fits in to b ette r

pers p ectiv e if w e re m em ber th at S m ith ’s o w n te ach er, F ra n cis H utc h eso n,

bro ke n ew g ro und a t G la sg ow b y r e fu sin g t o l e ctu re t o h is s tu den ts i n L atin !

The d is a p pro val c o uld n ot h av e b een to o s e v ere , f o r s m ith r o se to b e d ean

in 1 758. U nquestio nab ly h e w as h ap py a t G la sg ow . I n th e e v en in gs h e p la y ed

whis t— his a b se n t- m in ded ness m ad e h im a s o m ew hat u ndep en dab le p la y er—

atte n ded le arn ed so cie tie s, an d liv ed a q uie t lif e . H e w as b elo ved o f h is stu den ts , n ote d a s a le ctu re r— ev en B osw ell c am e to h ear h im — an d h is o dd

gait a n d m an ner o f s p eech g ain ed t h e h om ag e o f i m ita tio n. L ittle b usts o f h im

ev en a p peare d i n b ookse lle rs ’ w in dow s.

It w as n ot m ere ly h is e ccen tr ic p ers o nality th at g av e h im p re stig e. I n 1 759

he p ublis h ed a b ook t h at m ad e a n i n sta n t s e n sa tio n. I t w as e n title d

The T heo ry

of M ora l S en tim en ts

, a n d i t c ata p ulte d S m ith i m med ia te ly i n to t h e f o re fro nt o f

Englis h philo so phers .

Theo ry

w as an in quir y in to th e orig in of m ora l

ap pro batio n a n d d is a p pro val. H ow d oes it h ap pen th at m an , w ho is a c re atu re

of s e lf -in te re st, c an f o rm m ora l ju dgm en ts in w hic h s e lf -in te re st s e em s to b e

held in a b ey an ce o r tr a n sm ute d to a h ig her p la n e? S m ith h eld th at th e a n sw er

la y i n o ur a b ility t o p ut o urs e lv es i n t h e p ositio n o f a t h ir d p ers o n, a n i m partia l

obse rv er, a n d in th is w ay to fo rm a s y m path etic n otio n o f th e o bje ctiv e (a s

oppose d t o t h e s e lf is h ) m erits o f a c ase .

The b ook a n d its p ro ble m s a ttr a cte d w id esp re ad in te re st. In G erm an y

das

Adam S m ith P ro ble m

b ecam e a f a v orite s u bje ct f o r d eb ate . M ore im porta n tly ,

fro m o ur p oin t o f v ie w , th e tr e atis e m et w ith th e fa v or o f a n in tr ig uin g m an

nam ed C harle s T ow nsh en d.

Tow nsh en d is o ne o f th ose w onderfu l fig ure s w ith w hic h th e e ig hte en th

cen tu ry s e em s to a b ound. A w itty a n d e v en le arn ed m an , T ow nsh en d w as, in

th e w ord s o f H ora ce W alp ole , “ a m an e n dow ed w ith e v ery g re at ta le n t, w ho

must h av e b een th e g re ate st m an o f h is a g e, if o nly h e h ad c o m mon s in cerity ,

co m mon ste ad in ess, an d co m mon se n se .” Tow nsh en d’s

fic k le n ess w as

noto rio us; a q uip o f th e tim es p ut it th at M r. T ow nsh en d w as ill o f a p ain in

his sid e, but declin ed to sp ecif y w hic h sid e. A s ev id en ce of his la ck of

co m mon se n se , it w as T ow nsh en d, as C han cello r of th e E xch eq uer, w ho

help ed p re cip ita te t h e A m eric an R ev olu tio n, f ir s t b y r e fu sin g t h e c o lo nis ts t h e

rig ht to ele ct th eir ow n ju dges an d th en by im posin g a heav y duty on

Am eric an t e a.

But his politic al sh orts ig hte d ness notw ith sta n din g, Tow nsh en d w as a

sin cere stu den t o f p hilo so phy a n d p olitic s, a n d a s su ch a d ev ote e o f A dam

Sm ith . W hat is m ore im porta n t, h e w as in a p ositio n to m ak e h im a n u nusu al

off e r. I n 1 754, T ow nsh en d h ad m ad e a b rillia n t a n d lu cra tiv e m arria g e to th e

Counte ss o f D alk eith , t h e w id ow o f t h e D uke o f B uccle u ch , a n d h e n ow f o und

him se lf c astin g a b out f o r a t u to r f o r h is w if e ’s s o n. E ducatio n f o r a y oung m an

of th e u pper c la sse s c o nsis te d la rg ely o f th e G ra n d T our, a sta y in E uro pe

where o ne m ig ht a cq uir e th at p olis h s o h ig hly p ra is e d b y L ord C heste rfie ld .

Dr. A dam S m ith w ould b e a n id eal c o m pan io n fo r th e y oung d uke, th ought

Tow nsh en d, a n d a cco rd in gly h e o ff e re d h im f iv e h undre d p ounds a y ear p lu s

ex pen se s a n d a p en sio n o f f iv e h undre d p ounds a y ear f o r l if e . I t w as t o o g ood

an o ff e r to b e d eclin ed . A t b est S m ith n ev er r e aliz ed m ore th an o ne h undre d se v en ty pounds fro m th e fe es w hic h , in th ose day s, pro fe sso rs co lle cte d

dir e ctly fro m th eir stu den ts . It is p le asa n t to n ote th at h is p upils re fu se d to

accep t a re fu nd fro m D r. S m ith w hen h e le ft, sa y in g th at th ey h ad a lr e ad y

been m ore t h an r e co m pen se d .

The tu to r an d H is y oung G ra ce le ft fo r F ra n ce in 1 764. F or eig hte en

month s th ey s ta y ed in T oulo use , w here a c o m bin atio n o f a b om in ab ly b orin g

co m pan y a n d S m ith ’s e x ecra b le F re n ch m ad e h is s e d ate lif e a t G la sg ow lo ok

lik e d is sip atio n. T hen th ey m oved o n to th e s o uth o f F ra n ce (w here h e m et

an d w ors h ip ed V olta ir e a n d r e p uls e d th e a tte n tio ns o f a n a m oro us m arq uis e ),

th en ce t o G en ev a, a n d f in ally to P aris . T o r e lie v e th e t e d iu m o f t h e p ro vin ces,

Sm ith b eg an w ork o n a tr e atis e o f p olitic al e co nom y, a s u bje ct o n w hic h h e

had le ctu re d at G la sg ow , d eb ate d m an y ev en in gs at th e S ele ct S ocie ty in

Edin burg h, a n d d is c u sse d a t le n gth w ith

his b elo ved f rie n d D av id H um e. T he

book w as to b e

The W ea lth o f N atio ns

, b ut it w ould b e tw elv e y ears b efo re it

was f in is h ed .

Paris w as b ette r g oin g. B y th is tim e S m ith ’s F re n ch , a lth ough d re ad fu l,

was g ood e n ough to e n ab le h im to ta lk a t le n gth w ith th e f o re m ost e co nom ic

th in ker in F ra n ce. T his w as F ra n ço is Q uesn ay, a p hysic ia n in th e c o urt o f

Louis X V a n d p ers o nal d octo r t o M me. P om pad our. Q uesn ay h ad p ro pounded

a sc h ool o f eco nom ic s k now n as P hysio cra cy an d d ev is e d a ch art o f th e

eco nom y c alle d a

ta ble a u é co nom iq ue

. T he

ta ble a u

w as tr u ly a p hysic ia n ’s

in sig ht: i n c o ntr a d is tin ctio n t o t h e i d eas o f t h e d ay, w hic h s till h eld t h at w ealth

was th e so lid stu ff o f g old a n d silv er, Q uesn ay in sis te d th at w ealth sp ra n g

fro m p ro ductio n a n d th at it flo w ed th ro ugh th e n atio n, fro m h an d to h an d,

re p le n is h in g t h e b ody s o cia l l ik e t h e c ir c u la tio n o f b lo od. T he

ta ble a u

m ad e a

vast im pre ssio n— Mir a b eau th e eld er ch ara cte riz ed it as an in ven tio n

dese rv in g of eq ual ra n k w ith w ritin g an d m oney. B ut th e tr o uble w ith

Physio cra cy w as th at it in sis te d th at o nly th e a g ric u ltu ra l w ork er

pro duced

tr u e w ealth b ecau se N atu re la b ore d a t h is sid e, w here as th e m an ufa ctu rin g

work er m ere ly a lte re d its fo rm in a “ ste rile ” w ay. H en ce Q uesn ay ’s s y ste m

had b ut lim ite d u se fu ln ess f o r p ra ctic al p olic y. T ru e, it a d vocate d a p olic y o f

la is se z-fa ir e

—a ra d ic al dep artu re fo r th e tim es. But in desc rib in g th e

in dustr ia l s e cto r a s p erfo rm in g o nly a s te rile m an ip ula tio n, i t f a ile d t o s e e t h at

la b or c o uld p ro duce w ealth w here v er i t p erfo rm ed , n ot j u st o n t h e l a n d.

To s e e t h at l a b or, n ot n atu re , w as t h e s o urc e o f “ v alu e,” w as o ne o f S m ith ’s

gre ate st in sig hts . P erh ap s th is w as th e c o nse q uen ce o f h av in g g ro w n u p in a

co untr y t h at b ustle d w ith t r a d e, r a th er t h an i n t h e o verw helm in gly a g ric u ltu ra l

se ttin g o f F ra n ce. W hate v er t h e c au se , S m ith c o uld n ot a ccep t t h e a g ric u ltu ra l

bia s of th e Physio cra tic cu lt (Q uesn ay ’s fo llo w ers , lik e M ir a b eau , w ere

noth in g if n ot a d ula to ry ). S m ith h ad a p ro fo und p ers o nal a d m ir a tio n fo r th e Fre n ch d octo r— had it n ot b een fo r Q uesn ay ’s d eath ,

The W ea lth o f N atio ns

would hav e been ded ic ate d to him — but P hysio cra cy w as fu ndam en ta lly

unco ngen ia l t o S m ith ’s S co ttis h v is io n.

In 1 766 t h e t o ur w as b ro ught t o a n a b ru pt h alt. T he

duke’s y ounger b ro th er,

who h ad jo in ed th em , c au ght a fe v er, a n d d esp ite th e fra n tic a tte n tio ns o f

Sm ith ( w ho c alle d in Q uesn ay ), d ie d in a d elir iu m . H is G ra ce r e tu rn ed to h is

esta te s a t D alk eith , a n d S m ith w en t fir s t to L ondon, a n d th en to K ir k cald y.

Desp ite H um e’s e n tr e atie s, th ere h e s ta y ed , f o r th e b ette r p art o f th e n ex t te n

years , w hile th e g re at tr e atis e to ok sh ap e. M ost o f it h e d ic ta te d , sta n din g

ag ain st h is f ir e p la ce a n d n erv ously r u bbin g h is h ead a g ain st th e w all u ntil h is

pom ad e h ad m ad e a d ark s tr e ak o n th e p an elin g. O ccasio nally h e w ould v is it

his f o rm er c h arg e o n h is e sta te s a t D alk eith , a n d o nce in a w hile h e w ould g o

to L ondon to d is c u ss h is id eas w ith th e lite ra ti o f th e d ay. O ne o f th em w as

Dr. S am uel J o hnso n, to w hose s e le ct c lu b S m ith b elo nged , a lth ough h e a n d

th e ven era b le le x ic o gra p her had hard ly m et under th e m ost am ia b le of

cir c u m sta n ces. S ir W alte r S co tt te lls u s th at J o hnso n, o n fir s t s e ein g S m ith ,

atta ck ed h im fo r s o m e s ta te m en t h e h ad m ad e. S m ith v in dic ate d th e tr u th o f

his c o nte n tio n. “ W hat d id J o hnso n s a y ?” w as th e u niv ers a l in quir y . “ W hy, h e

sa id ,” s a id S m ith , w ith th e d eep est im pre ssio n o f re se n tm en t, “ h e s a id , ‘Y ou

lie !’” “ A nd w hat d id y ou re p ly ?” “ I s a id , ‘Y ou a re a s o n o f a — !’” O n s u ch

te rm s, s a y s S co tt, d id th ese tw o g re at m ora lis ts f ir s t m eet a n d p art, a n d s u ch

was t h e c la ssic al d ia lo gue b etw een t w o g re at t e ach ers o f p hilo so phy.

Sm ith m et as w ell a ch arm in g an d in te llig en t A m eric an , o ne B en ja m in

Fra n klin , w ho pro vid ed him w ith a w ealth of fa cts ab out th e A m eric an

co lo nie s a n d a d eep a p pre cia tio n o f th e r o le th at th ey m ig ht s o m ed ay p la y. I t

is u ndoubte d ly d ue to F ra n klin ’s in flu en ce th at S m ith s u bse q uen tly w ro te o f

th e c o lo nie s th at th ey c o nstitu te d a n atio n “ w hic h , in deed , s e em s v ery lik ely

to b eco m e o ne o f th e g re ate st an d m ost fo rm id ab le th at ev er w as in th e

world .”

In 1 776,

The W ea lth o f N atio ns

w as p ublis h ed . T w o y ears la te r S m ith w as

ap poin te d C om mis sio ner o f C usto m s fo r E din burg h, a sin ecu re w orth six

hundre d p ounds a y ear. W ith h is m oth er, w ho liv ed u ntil sh e w as n in ety ,

Sm ith liv ed o ut h is b ach elo r’s lif e in p eace a n d q uie t; s e re n e, c o nte n t, a n d in

all l ik elih ood a b se n t- m in ded t o t h e e n d.

And t h e b ook?

It h as b een c alle d “ th e o utp ourin g n ot o nly o f a g re at m in d, b ut o f a w hole

ep och .” Y et i t i s n ot, i n t h e s tr ic t s e n se o f t h e w ord , a n “ o rig in al” b ook. T here

is a lo ng lin e of obse rv ers befo re Sm ith who hav e ap pro ach ed his

unders ta n din g of th e w orld : L ock e, S te u art, M an dev ille , P etty , C an tillo n, Turg ot, n ot to m en tio n Q uesn ay an d H um e ag ain . S m ith to o k fro m all o f

th em : t h ere a re o ver a h undre d a u th ors m en tio ned b y n am e i n h is t r e atis e . B ut

where o th ers h ad fis h ed h ere a n d th ere , S m ith sp re ad h is n et w id e; w here

oth ers h ad c la rif ie d t h is a n d t h at i s su e, S m ith i llu m in ate d t h e e n tir e l a n dsc ap e.

The W ea lth o f N atio ns

i s n ot a w holly o rig in al b ook, b ut i t i s u nquestio nab ly a

maste rp ie ce.

It is , fir s t of all, a huge pan ora m a. It open s w ith a fa m ous passa g e

desc rib in g th e m in ute s p ecia liz atio n o f la b or in th e m an ufa ctu re o f p in s, a n d

co vers , b efo re i t i s d one, s u ch a v arie ty o f s u bje cts a s “ th e l a te d is tu rb an ces i n

th e A m eric an co lo nie s” (e v id en tly S m ith th ought th e R ev olu tio nary W ar

would b e o ver b y t h e t im e h is b o ok r e ach ed t h e p re ss), t h e w aste fu ln ess o f t h e

stu den t’s l if e a t O xfo rd , a n d t h e s ta tis tic s o n t h e h errin g c atc h s in ce 1 771.

A g la n ce a t th e in dex c o m pile d fo r a la te r e d itio n b y C an nan s h ow s th e

ra n ge o f S m ith ’s re fe re n ces a n d th oughts . H ere a re a d ozen e n tr ie s fro m th e

le tte r A :

Abassid es, o pule n ce o f S ara cen e m pir e u nder

Abra h am , w eig hed s h ek els

Abyssin ia , s a lt m oney

Acto rs , p ublic , p aid f o r t h e c o nte m pt a tte n din g t h eir p ro fe ssio n

Afric a, p ow erfu l k in g m uch w ors e o ff t h an E uro pean p easa n t

Ale h ouse s, t h e n um ber o f, n ot t h e e ff ic ie n t c au se o f d ru nken ness

Am bassa d ors , t h e f ir s t m otiv e o f t h eir a p poin tm en t

Am eric a [ a s o lid p ag e o f r e fe re n ces f o llo w s]

Appre n tic esh ip , t h e n atu re … o f t h is b ond s e rv itu de e x pla in ed

Ara b s, t h eir m an ner o f s u pportin g w ar

Arm y, … n o s e cu rity t o t h e s o vere ig n a g ain st a d is a ff e cte d c le rg y.

In fin e p rin t th e in dex g oes o n fo r s ix ty -th re e p ag es; b efo re it e n ds it h as

to uch ed o n e v ery th in g: “ R ic h es, t h e c h ie f e n jo ym en t o f, c o nsis ts i n t h e p ara d e

of; P overty , s o m etim es u rg es n atio n to in hum an c u sto m s; S to m ach , d esir e f o r

fo od bounded by narro w cap acity of th e; Butc h er, bru ta l an d odio us

busin ess.” W hen w e h av e fin is h ed th e n in e h undre d p ag es o f th e b ook w e

hav e a liv in g p ic tu re o f E ngla n d in th e 1 770s, o f a p pre n tic es a n d jo urn ey m en

an d ris in g c ap ita lis ts , o f la n dlo rd s a n d c le rg ym en a n d k in gs, o f w ork sh ops

an d f a rm s a n d f o re ig n t r a d e.

The book is heav y goin g. It m oves w ith all th e delib era tio n of an en cy clo ped ic m in d, b ut n ot w ith th e p re cis io n o f a n o rd erly o ne. T his w as a n

ag e w hen a u th ors d id n ot s to p to q ualif y th eir id eas w ith

ifs , a nds

, a n d

buts

,

an d it w as a n e ra w hen it w as q uite p ossib le f o r a m an o f S m ith ’s in te lle ctu al

sta tu re v ir tu ally to e m bra ce th e g re at b ody o f k now le d ge o f h is tim es. H en ce

Wea lth

duck s noth in g, min im iz es noth in g, fe ars noth in g. W hat an

ex asp era tin g book! A gain an d ag ain it re fu se s to w ra p up in a co ncis e

se n te n ce a co nclu sio n it has la b orio usly arriv ed at over fif ty pag es. T he

arg um en t is s o fu ll o f d eta il a n d o bse rv atio n th at o ne c o nsta n tly h as to c h ip

aw ay th e orn am en ta tio n to fin d th e ste el str u ctu re th at hold s it to geth er

undern eath . C om in g to s ilv er, S m ith d eto urs f o r s e v en ty -fiv e p ag es to w rite a

“d ig re ssio n” o n it; c o m in g to re lig io n, h e w an ders o ff in a c h ap te r o n th e

so cio lo gy o f m ora lity . B ut f o r a ll i ts w eig htin ess, t h e t e x t i s s h ot t h ro ugh w ith

in sig hts , o bse rv atio ns, a n d w ell- tu rn ed p hra se s th at im bue th is g re at le ctu re

with lif e . I t w as S m ith w ho f ir s t c alle d E ngla n d “ a n atio n o f s h opkeep ers ” ; it

was Sm ith w ho w ro te , “B y natu re a philo so pher is not in gen iu s an d

dis p ositio n half so dif f e re n t fro m a str e et porte r, as a m astif f is fro m a

gre y hound.” A nd o f th e E ast In dia C om pan y, w hic h w as th en ra v ag in g th e

East, h e w ro te : “ It is a v ery s in gula r g overn m en t in w hic h e v ery m em ber o f

th e a d m in is tr a tio n w is h es to g et o ut o f th e c o untr y … a s s o on a s h e c an , a n d

to w hose in te re st, th e d ay a fte r h e h as le ft it a n d c arrie d h is w hole fo rtu ne

with

him , i t i s p erfe ctly i n dif f e re n t t h ough t h e w hole c o untr y a s s w allo w ed u p

by a n e arth quak e.”

The W ea lth o f N atio ns

is in n o s e n se a te x tb ook. A dam s m ith is w ritin g to

his a g e, n ot to h is c la ssro om ; h e is e x poundin g a d octr in e th at is m ean t to b e

of im porta n ce in ru nnin g an em pir e , n ot an ab str a ct tr e atis e fo r acad em ic

dis tr ib utio n. T he d ra g ons th at h e s la y s (s u ch a s th e M erc an tilis t p hilo so phy,

whic h ta k es o ver tw o h undre d p ag es to d ie ) w ere a liv e a n d p an tin g, if a little

tir e d , i n h is d ay.

And fin ally , th e b ook is a re v olu tio nary o ne. T o b e su re , S m ith w ould

hard ly hav e co unte n an ced an upheav al th at dis o rd ere d th e gen tle m an ly

cla sse s a n d e n th ro ned th e c o m mon p oor. B ut th e im port o f

The W ea lth o f

Natio ns

i s r e v olu tio nary , n oneth ele ss. S m ith i s n ot, a s i s c o m monly s u ppose d ,

an ap olo gis t fo r th e up-a n d-c o m in g bourg eo is ; as w e sh all se e, he is an

ad m ir e r o f th eir w ork b ut su sp ic io us o f th eir m otiv es, a n d m in dfu l o f th e

need s o f th e g re at la b orin g m ass. B ut it is n ot h is a im to e sp ouse th e in te re sts

of a n y c la ss. H e is c o ncern ed w ith p ro m otin g th e w ealth o f th e e n tir e n atio n.

And w ealth , to A dam S m ith , co nsis ts o f th e g oods th at

all

th e p eo ple o f

so cie ty c o nsu m e, a lth ough n ot, o f c o urs e , in e q ual a m ounts . T here w ill b e

poverty a s w ell a s w ealth i n t h e S ocie ty o f N atu ra l L ib erty .

Noneth ele ss, th is is a d em ocra tic , a n d h en ce r a d ic al, p hilo so phy o f w ealth . Gone is th e n otio n o f g old , tr e asu re s, k in gly h oard s; g one th e p re ro gativ es o f

merc h an ts o r f a rm ers o r w ork in g g uild s. W e a re in th e m odern w orld , w here

th e f lo w o f g oods a n d s e rv ic es c o nsu m ed b y e v ery one c o nstitu te s t h e u ltim ate

aim a n d e n d o f e co nom ic l if e .

And n ow , w hat o f th e v is io n? A s w e sh all se e, it c an not b e so sim ply

desc rib ed a s H obbes’s p rin cip le o f s o vere ig n p ow er. S m ith ’s v is io n is m ore

lik e a b lu ep rin t fo r a w hole n ew m ode o f s o cia l o rg an iz atio n, a m ode c alle d

Politic al E co nom y, o r, i n t o day ’s t e rm in olo gy, e co nom ic s.

At t h e c en te r o f t h is b lu ep rin t a re t h e s o lu tio ns t o t w o p ro ble m s t h at a b so rb

Sm ith ’s atte n tio n. F ir s t, h e is in te re ste d in la v in g b are th e m ech an is m b y

whic h s o cie ty h an gs to geth er. H ow is it p ossib le fo r a c o m munity in w hic h

ev ery one

is busily fo llo w in g his se lf -in te re st not to fly ap art fro m sh eer

cen tr if u gal f o rc e? W hat is it th at g uid es e ach in div id ual’s p riv ate b usin ess s o

th at i t c o nfo rm s to t h e n eed s o f th e g ro up? W ith n o c en tr a l p la n nin g a u th ority

an d n o s te ad yin g in flu en ce o f a g e-o ld tr a d itio n, h ow d oes s o cie ty m an ag e to

get t h ose t a sk s d one w hic h a re n ecessa ry f o r s u rv iv al?

These q uestio ns le ad S m ith to a fo rm ula tio n o f th e la w s o f th e m ark et.

What h e s o ught w as “ th e i n vis ib le h an d,” a s h e c alle d i t, w here b y “ th e p riv ate

in te re sts an d passio ns of m en ” are le d in th e dir e ctio n “w hic h is m ost

ag re eab le t o t h e i n te re st o f t h e w hole s o cie ty .”

But th e la w s o f th e m ark et w ill b e o nly a p art o f S m ith ’s in quir y . T here is

an oth er q uestio n th at in te re sts h im : w hith er s o cie ty ? T he la w s o f th e m ark et

are lik e th e la w s th at e x pla in h ow a s p in nin g to p s ta y s u prig ht; b ut th ere is

als o th e q uestio n o f w heth er th e to p, b y v ir tu e o f its s p in nin g, w ill b e m oved

alo ng t h e t a b le .

To S m ith an d th e gre at eco nom is ts w ho fo llo w ed him , so cie ty is not

co nceiv ed a s a s ta tic a ch ie v em en t o f m an kin d w hic h w ill g o o n re p ro ducin g

its e lf , u nch an ged a n d u nch an gin g, fro m o ne g en era tio n to th e n ex t. O n th e

co ntr a ry , s o cie ty i s s e en a s a n o rg an is m t h at h as i ts o w n l if e h is to ry . I n deed , i n

its e n tir e ty

The W ea lth o f N atio ns

i s a g re at t r e atis e o n h is to ry , e x pla in in g h ow

“th e s y ste m o f p erfe ct lib erty ” ( a ls o c alle d “ th e s y ste m o f n atu ra l lib erty ”)—

th e w ay S m ith r e fe rre d t o c o m merc ia l c ap ita lis m — cam e i n to b ein g, a s w ell a s

how i t w ork ed .

But u ntil w e h av e f o llo w ed S m ith ’s u nra v elin g o f th e la w s o f th e m ark et,

we c an not tu rn to th is la rg er a n d m ore fa sc in atin g p ro ble m . F or th e la w s o f

th e m ark et th em se lv es w ill b e a n in te g ra l p art o f th e la rg er la w s th at c au se

so cie ty to p ro sp er o r d ecay. T he m ech an is m b y w hic h th e h eed le ss in div id ual

is k ep t i n l in e w ith e v ery body e ls e w ill a ff e ct t h e m ech an is m b y w hic h s o cie ty

its e lf c h an ges o ver t h e y ears . Hen ce w e b eg in w ith a lo ok a t th e m ark et m ech an is m . It is n ot th e s tu ff

th at e x cite s t h e i m ag in atio n o r s tir s t h e p uls e . Y et, f o r a ll i ts d ry ness, i t h as a n

im med ia cy th at s h ould le ad u s to c o nsid er it w ith a re sp ectf u l e y e. N ot o nly

are t h e l a w s o f t h e m ark et e sse n tia l t o a n u nders ta n din g o f t h e w orld o f

Adam

Sm ith , b ut th ese sa m e la w s w ill u nderlie th e v ery d if f e re n t w orld o f K arl

Marx , a n d th e s till d if f e re n t w orld in w hic h w e liv e to day. S in ce w e a re a ll,

know in gly o r o th erw is e , u nder th eir s o vere ig nty , it b eh ooves u s to s c ru tin iz e

th em r a th er c are fu lly .

Adam S m ith ’s l a w s o f t h e m ark et a re b asic ally s im ple . T hey t e ll u s t h at t h e

outc o m e o f a c erta in k in d o f b eh av io r i n a c erta in s o cia l f ra m ew ork w ill b rin g

ab out p erfe ctly d efin ite an d fo re se eab le re su lts . S pecif ic ally th ey sh ow u s

how th e driv e of in div id ual se lf -in te re st in an en vir o nm en t of sim ila rly

motiv ate d in div id uals w ill r e su lt in c o m petitio n; a n d th ey f u rth er d em onstr a te

how c o m petitio n w ill r e su lt i n t h e p ro vis io n o f t h ose g oods t h at s o cie ty w an ts ,

in th e q uan titie s th at s o cie ty d esir e s, a n d a t th e p ric es s o cie ty is p re p are d to

pay. L et u s s e e h ow t h is c o m es a b out.

It co m es ab out in th e fir s t p la ce b ecau se se lf -in te re st acts as a d riv in g

pow er to g uid e m en to w hate v er w ork s o cie ty is w illin g to p ay f o r. “ It is n ot

fro m th e b en ev ole n ce o f th e b utc h er, th e b re w er, o r th e b ak er th at w e e x pect

our din ner,” sa y s S m ith , “b ut fro m th eir re g ard to th eir se lf -in te re st. W e

ad dre ss o urs e lv es, n ot to th eir h um an ity , b ut to th eir s e lf -lo ve, a n d n ev er ta lk

to t h em o f o ur n ecessitie s, b ut o f t h eir a d van ta g es.”

But s e lf -in te re st i s o nly h alf t h e p ic tu re . I t d riv es m en t o a ctio n. S om eth in g

els e m ust pre v en t th e push in g of pro fit- h ungry in div id uals fro m hold in g

so cie ty u p to e x orb ita n t ra n so m : a c o m munity a ctiv ate d o nly b y s e lf -in te re st

would b e a c o m munity o f ru th le ss p ro fite ers . T his re g ula to r is c o m petitio n,

th e c o nflic t o f t h e s e lf -in te re ste d a cto rs o n t h e m ark etp la ce. F or e ach m an , o ut

to d o h is b est fo r h im se lf w ith n o th ought o f s o cia l c o nse q uen ces, is fa ced

with a f lo ck o f s im ila rly m otiv ate d i n div id uals w ho a re e n gag ed i n e x actly t h e

sa m e purs u it. H en ce, each is only to o eag er to ta k e ad van ta g e of his

neig hbor’s g re ed . A m an w ho p erm its h is s e lf -in te re st to ru n a w ay w ith h im

will f in d t h at c o m petito rs h av e s lip ped i n t o t a k e h is t r a d e a w ay ; i f h e c h arg es

to o m uch f o r h is w are s o r if h e r e fu se s to p ay a s m uch a s e v ery body e ls e f o r

his w ork ers , h e w ill f in d h im se lf w ith out b uyers in th e o ne c ase a n d w ith out

em plo yees in th e oth er. Thus very m uch as in

The

Theo ry of M ora l

Sen tim en ts

, th e s e lf is h m otiv es o f m en a re tr a n sm ute d b y in te ra ctio n to y ie ld

th e m ost u nex pecte d o f r e su lts : s o cia l h arm ony.

Consid er, fo r e x am ple , th e p ro ble m o f h ig h p ric es. S uppose w e h av e o ne

hundre d m an ufa ctu re rs o f g lo ves. T he s e lf -in te re st o f e ach o ne w ill c au se h im

to w is h to r a is e h is p ric e a b ove h is c o st o f p ro ductio n a n d th ere b y to r e aliz e an e x tr a p ro fit. B ut h e c an not. I f h e r a is e s h is p ric e, h is c o m petito rs w ill s te p

in a n d ta k e h is m ark et a w ay f ro m h im b y u nders e llin g h im . O nly if a ll g lo ve

man ufa ctu re rs c o m bin e a n d a g re e to m ain ta in a so lid fro nt w ill a n u nduly

hig h p ric e b e ch arg ed . A nd in th is case , th e co llu siv e co alitio n co uld b e

bro ken b y a n e n te rp ris in g m an ufa ctu re r f ro m a n oth er f ie ld — sa y, s h oem ak in g

—who d ecid ed to m ove h is c ap ita l in to g lo ve m an ufa ctu re , w here h e c o uld

ste al a w ay t h e m ark et b y s h ad in g h is p ric e.

But th e la w s o f th e m ark et d o m ore th an im pose a c o m petitiv e p ric e o n

pro ducts . T hey als o se e to it th at th e p ro ducers o f so cie ty h eed so cie ty ’s

dem an ds f o r th e

quantitie s

o f g oods it w an ts . L et u s s u ppose th at c o nsu m ers

decid e th ey w an t m ore g lo ves th an a re b ein g tu rn ed o ut, a n d fe w er sh oes.

Acco rd in gly th e p ublic w ill s c ra m ble fo r th e s to ck o f g lo ves o n th e m ark et,

while th e s h oe b usin ess w ill b e d ull. A s a r e su lt g lo ve p ric es w ill te n d to r is e

as c o nsu m ers tr y to b uy m ore o f th em th an th ere a re r e ad y a t h an d, a n d s h oe

pric es w ill te n d to fa ll a s th e p ublic p asse s th e s h oe s to re s b y. B ut a s g lo ve

pric es r is e , p ro fits in th e g lo ve in dustr y w ill r is e , to o; a n d a s s h oe p ric es f a ll,

pro fits i n s h oe m an ufa ctu re w ill s lu m p. A gain s e lf -in te re st w ill s te p i n t o r ig ht

th e b ala n ce. W ork ers w ill b e r e le ase d f ro m t h e s h oe b usin ess a s s h oe f a cto rie s

co ntr a ct th eir o utp ut; th ey w ill m ove to th e g lo ve b usin ess, w here b usin ess is

boom in g. T he re su lt is q uite o bvio us: g lo ve p ro ductio n w ill ris e a n d sh oe

pro ductio n f a ll.

And th is is e x actly w hat s o cie ty w an te d in th e f ir s t p la ce. A s m ore g lo ves

co m e o n th e m ark et to m eet d em an d, g lo ve p ric es w ill f a ll b ack in to lin e. A s

fe w er s h oes a re p ro duced , th e s u rp lu s o f s h oes w ill s o on d is a p pear a n d s h oe

pric es w ill a g ain ris e u p to n orm al. T hro ugh th e m ech an is m o f th e m ark et,

so cie ty w ill h av e c h an ged t h e a llo catio n o f i ts e le m en ts o f

pro ductio n t o f it i ts

new d esir e s. Y et n o o ne h as is su ed a d ic tu m , a n d n o p la n nin g a u th ority h as

esta b lis h ed sc h ed ule s of outp ut. S elf -in te re st an d co m petitio n, actin g one

ag ain st t h e o th er, h av e a cco m plis h ed t h e t r a n sitio n.

And o ne f in al a cco m plis h m en t. J u st a s t h e m ark et r e g ula te s b oth p ric es a n d

quan titie s o f

goods

a cco rd in g to th e f in al a rb ite r o f p ublic d em an d, s o it a ls o

re g ula te s th e

in co m es

o f th ose w ho co opera te to p ro duce th ose g oods. If

pro fits in o ne lin e o f b usin ess a re u nduly la rg e, th ere w ill b e a ru sh o f o th er

busin essm en in to th at f ie ld u ntil c o m petitio n h as lo w ere d s u rp lu se s. I f w ag es

are o ut o f lin e in o ne k in d o f w ork , th ere w ill b e a ru sh o f m en in to th e

fa v ore d o ccu patio n u ntil it p ay s n o m ore th an c o m para b le jo bs o f th at d eg re e

of s k ill a n d tr a in in g. C onvers e ly , if p ro fits o r w ag es a re to o lo w in o ne tr a d e

are a, th ere w ill b e a n e x odus o f c ap ita l a n d la b or u ntil th e su pply is b ette r

ad ju ste d t o t h e d em an d.

All th is m ay s e em s o m ew hat e le m en ta ry . B ut c o nsid er w hat A dam S m ith has d one, w ith h is im petu s o f s e lf -in te re st a n d h is re g ula to r o f c o m petitio n.

Fir s t, h e h as e x pla in ed h ow p ric es a re k ep t f ro m r a n gin g a rb itr a rily a w ay f ro m

th e a ctu al c o st o f p ro ducin g a g ood. S eco nd, h e h as e x pla in ed h ow s o cie ty c an

in duce its p ro ducers o f c o m moditie s to p ro vid e it w ith w hat it w an ts . T hir d ,

he h as p oin te d o ut w hy h ig h p ric es a re a s e lf -c u rin g d is e ase , fo r th ey c au se

pro ductio n i n t h ose l in es t o i n cre ase . A nd f in ally , h e h as a cco unte d f o r a b asic

sim ila rity o f in co m es a t e ach le v el o f th e g re at p ro ducin g s tr a ta o f th e n atio n.

In a w ord , h e h as fo und in th e m ech an is m o f th e m ark et a se lf -re g ula tin g

sy ste m f o r s o cie ty ’s o rd erly p ro vis io nin g.

Note “ se lf -re g ula tin g.” T he b eau tif u l c o nse q uen ce o f t h e m ark et i s t h at i t i s

its o w n g uard ia n . If o utp ut o r p ric es o r c erta in k in ds o f re m unera tio n s tr a y

aw ay fro m th eir s o cia lly o rd ain ed le v els , fo rc es a re s e t in to m otio n to b rin g

th em b ack to th e fo ld . It is a c u rio us p ara d ox th at th us e n su es th e m ark et,

whic h is th e a cm e o f in div id ual e co nom ic f re ed om , is th e s tr ic te st ta sk m aste r

of a ll. O ne m ay a p peal th e r u lin g o f a p la n nin g b oard o r w in th e d is p en sa tio n

of a m in is te r; b ut th ere is n o a p peal, n o d is p en sa tio n, fro m th e a n onym ous

pre ssu re s o f th e m ark et m ech an is m . E co nom ic f re ed om is th us m ore illu so ry

th an a t fir s t a p pears . O ne c an d o a s o ne

ple ase s in th e m ark et. B ut if o ne

ple ase s to d o w hat th e m ark et d is a p pro ves, th e p ric e o f in div id ual f re ed om is

eco nom ic r u in atio n.

Does th e w orld re ally w ork th is w ay ? T o a v ery re al d eg re e it d id in th e

day s o f A dam S m ith . E ven in h is tim e, o f c o urs e , th ere w ere a lr e ad y f a cto rs

th at a cte d a s r e str a in ts a g ain st th e f re e o pera tio n o f th e m ark et s y ste m . T here

were c o m bin atio ns o f m an ufa ctu re rs w ho rig ged p ric es a rtif ic ia lly h ig h a n d

asso cia tio ns o f jo urn ey m en w ho r e sis te d th e p re ssu re s o f c o m petitio n w hen it

acte d to lo w er th eir w ag es. A nd a lr e ad y th ere w ere m ore d is q uie tin g s ig ns to

be re ad . T he L om be bro th ers ’ fa cto ry w as m ore th an a m ere m arv el of

en gin eerin g an d a so urc e of w onderm en t to th e vis ito r: it beto ken ed th e

co m in g o f la rg e-s c ale in dustr y a n d th e e m erg en ce o f e m plo yers w ho w ere

im men se ly pow erfu l in div id ual acto rs in th e m ark et. T he ch ild re n in th e

co tto n m ills c o uld su re ly n ot b e c o nsid ere d m ark et fa cto rs o f e q ual p ow er

with th e e m plo yers w ho b ed ded , b oard ed , a n d e x plo ite d th em . B ut f o r a ll its

dev ia tio ns f ro m t h e b lu ep rin t, e ig hte en th -c en tu ry E ngla n d a p pro ach ed , e v en i f

it d id n ot w holly co nfo rm to , th e m odel th at A dam S m ith h ad in m in d.

Busin ess

was

c o m petitiv e, th e a v era g e f a cto ry

was

s m all, p ric es

did

r is e a n d

fa ll a s d em an d e b bed a n d ro se , a n d c h an ges in p ric es

did

in voke c h an ges in

outp ut a n d o ccu patio n. T he w orld o f A dam S m ith h as b een c alle d a w orld o f

ato m is tic co m petitio n, a w orld in w hic h no ag en t of th e pro ductiv e

mech an is m , o n th e s id e o f la b or o r c ap ita l, w as p ow erfu l e n ough to in te rfe re

with o r to re sis t th e p re ssu re s o f c o m petitio n. It w as a w orld in w hic h e ach

ag en t w as f o rc ed t o s c u rry a fte r i ts s e lf -in te re st i n a v ast s o cia l f re e-fo r- a ll. And t o day ? D oes t h e c o m petitiv e m ark et m ech an is m s till o pera te ?

This is n ot a q uestio n to w hic h it is p ossib le to g iv e a s im ple a n sw er. T he

natu re o f th e m ark et h as c h an ged v astly s in ce th e e ig hte en th c en tu ry . W e n o

lo nger liv e in a w orld o f a to m is tic c o m petitio n in w hic h n o m an c an a ff o rd to

sw im a g ain st th e c u rre n t. T oday ’s m ark et m ech an is m is c h ara cte riz ed b y th e

huge siz e of its partic ip an ts : gia n t co rp ora tio ns an d str o ng la b or unio ns

obvio usly d o n ot b eh av e a s if th ey

were in div id ual p ro prie to rs a n d w ork ers .

Their very bulk en ab le s th em to sta n d out ag ain st th e pre ssu re s of

co m petitio n, t o d is re g ard p ric e s ig nals , a n d t o c o nsid er w hat t h eir s e lf -in te re st

sh all b e in th e lo ng ru n ra th er th an in th e im med ia te p re ss o f each d ay ’s

buyin g a n d s e llin g.

That th ese fa cto rs hav e w eak en ed th e guid in g fu nctio n of th e m ark et

mech an is m is a p pare n t. B ut fo r a ll th e a ttr ib ute s o f m odern -d ay e co nom ic

so cie ty , th e g re at fo rc es o f se lf -in te re st an d co m petitio n, h ow ev er w ate re d

dow n o r h ed ged a b out, s till p ro vid e b asic r u le s o f b eh av io r t h at n o p artic ip an t

in a m ark et sy ste m c an a ff o rd to d is re g ard e n tir e ly . A lth ough th e w orld in

whic h w e liv e is n ot th at o f A dam S m ith , th e la w s o f th e m ark et c an s till b e

dis c ern ed i f w e s tu dy i ts o pera tio ns.

But t h e l a w s o f t h e m ark et a re o nly a d esc rip tio n o f t h e b eh av io r t h at g iv es

so cie ty its c o hesiv en ess. S om eth in g e ls e m ust m ak e it g o. N in ety y ears a fte r

The W ea lth o f N atio ns

, K arl M arx w as to d is c o ver “la w s o f m otio n” th at

desc rib ed h ow c ap ita lis m p ro ceed ed s lo w ly , u nw illin gly , b ut i n elu cta b ly t o i ts

doom . B ut

The W ea lth of N atio ns

alr e ad y had its ow n la w s of m otio n.

How ev er, a lto geth er u nlik e th e M arx is t p ro gnosis , A dam S m ith ’s w orld w en t

slo w ly , q uite w illin gly , to w ard — alth ough, a s w e s h all s e e, n ev er q uite a ll th e

way t o — Valh alla .

Valh alla w ould h av e b een th e la st d estin atio n th at m ost o bse rv ers w ould

hav e p re d ic te d . S ir Jo hn B yng, to urin g th e N orth C ountr y in 1 792, lo oked

fro m h is c o ach w in dow a n d w ro te : “ W hy, h ere n ow , is a g re at f la rin g m ill …

all t h e V ale i s d is tu rb ed … . S ir R ic h ard A rk w rig ht m ay h av e i n tr o duced M uch

Wealth in to h is F am ily a n d in to h is C ountr y , b ut, a s a T ouris t, I e x ecra te h is

Sch em es, w hic h h av in g c re p t in to e v ery P asto ra l V ale , h av e d estr o yed th e

co urs e , a n d th e B eau ty o f N atu re .” “ O h! W hat a d og’s h ole is M an ch este r,”

sa id S ir J o hn o n a rriv in g t h ere .

In tr u th , m uch o f E ngla n d w as a d og’s h ole . T he th re e c en tu rie s o f tu rm oil

whic h h ad p ro dded l a n d, l a b or, a n d c ap ita l i n to e x is te n ce s e em ed t o h av e b een

only a p re p ara tio n fo r s till fu rth er u pheav al, fo r th e re cen tly fre ed a g en ts o f

pro ductio n

beg an to b e c o m bin ed in a n ew a n d u gly fo rm : th e fa cto ry . A nd

with th e fa cto ry c am e n ew p ro ble m s. T w en ty y ears b efo re S ir Jo hn’s to ur,

Ric h ard A rk w rig ht, w ho h ad g otte n t o geth er a l ittle c ap ita l p ed dlin g w om en ’s hair to m ak e w ig s, in ven te d (o r sto le ) th e sp in nin g th ro stle . B ut, hav in g

co nstr u cte d h is m ach in e, h e fo und it w as n ot s o e asy to s ta ff it. L ocal la b or

co uld n ot k eep u p w ith th e “ re g ula r c ele rity ” o f th e p ro cess— wag e-w ork w as

still g en era lly d esp is e d , a n d s o m e c ap ita lis ts fo und th eir n ew -b uilt fa cto rie s

burn ed to th e g ro und o ut o f s h eer b lin d h atr e d . A rk w rig ht w as f o rc ed to tu rn

to c h ild re n — “th eir s m all f in gers b ein g a ctiv e.” F urth er- m ore , s in ce th ey w ere

unuse d to th e in dep en den t lif e of fa rm in g or cra fts , ch ild re n ad ap te d

th em se lv es m ore r e ad ily t o t h e d is c ip lin e o f f a cto ry l if e . T he m ove w as h aile d

as a p hila n th ro pic g estu re — would n ot th e e m plo ym en t o f c h ild re n h elp to

alle v ia te t h e c o nditio n o f t h e “ u npro fita b le p oor” ?

For i f a n y p ro ble m a b so rb ed t h e p ublic m in d, b esid es i ts m ix ed a d m ir a tio n

of an d horro r at th e fa cto ry , it w as th is om nip re se n t pro ble m of th e

unpro fita b le p oor. I n 1 720, E ngla n d w as c ro w ded w ith a m illio n a n d a h alf o f

th em — a s ta g gerin g f ig ure w hen w e r e aliz e th at h er to ta l p opula tio n w as o nly

tw elv e or th ir te en m illio n. H en ce th e air w as fu ll of sc h em es fo r th eir

dis p ositio n. D esp air in g s c h em es, m ostly . F or th e c o m mon c o m pla in t w as th e

in era d ic ab le s lo th o f th e p au per, a n d th is w as m ix ed w ith c o nste rn atio n a t th e

way in w hic h th e lo w er o rd ers a p ed th eir b ette rs . W ork peo ple w ere a ctu ally

drin kin g te a! T he co m mon fo lk se em ed to p re fe r w heate n b re ad to th eir

tr a d itio nal lo af o f ry e o r b arle y ! W here w ould all th is le ad to , ask ed th e

th in kers o f th e d ay ; w ere n ot th e w an ts o f th e p oor (“ w hic h it w ould b e

pru den ce to r e lie v e, b ut f o lly to c u re ,” a s th e s c an dalo us M an dev ille p ut it in

1723) e sse n tia l f o r th e w elf a re o f th e s ta te ? W hat w ould h ap pen to S ocie ty if

th e i n dis p en sa b le g ra d atio ns o f s o cie ty w ere a llo w ed t o d is a p pear?

Conste rn atio n s till d esc rib ed th e p re v ailin g a ttitu de o f h is d ay to w ard th e

gre at, f e arfu l p ro ble m o f th e “ lo w er o rd ers ,” b ut it c erta in ly d id n ot d esc rib e

Adam S m ith ’s p hilo so phy. “ N o s o cie ty c an s u re ly b e flo uris h in g a n d h ap py,

of w hic h b y fa r th e g re ate r p art o f th e n um bers a re p oor a n d

mis e ra b le ,” h e

wro te . A nd n ot o nly d id h e h av e th e te m erity to m ak e s o r a d ic al a s ta te m en t,

but he pro ceed ed to dem onstr a te th at so cie ty w as in fa ct co nsta n tly

im pro vin g; th at it w as b ein g p ro pelle d , w illy -n illy , to w ard a p ositiv e g oal. I t

was n ot m ovin g b ecau se a n yone w ille d it to , o r b ecau se P arlia m en t m ig ht

pass la w s, o r E ngla n d w in a b attle . It m oved b ecau se th ere w as a c o nceale d

dynam ic b en eath t h e s u rfa ce o f t h in gs w hic h p ow ere d t h e s o cia l w hole l ik e a n

en orm ous e n gin e.

For o ne s a lie n t f a ct s tr u ck A dam S m ith a s h e lo oked a t th e E nglis h s c en e.

This w as th e tr e m en dous g ain in p ro ductiv ity w hic h s p ra n g fro m th e m in ute

div is io n a n d sp ecia liz atio n o f la b or. E arly in

The W ea lth o f N atio ns

, S m ith

co m men ts o n a p in f a cto ry : “ O ne m an d ra w s o ut t h e w ir e , a n oth er s tr a ig hts i t,

a th ir d c u ts it, a fo urth p oin ts it, a fif th g rin ds it a t th e to p fo r re ceiv in g th e head ; t o m ak e t h e h ead r e q uir e s t w o o r t h re e d is tin ct o pera tio ns; t o p ut i t o n i s

a p ecu lia r b usin ess; to w hite n it is a n oth er; it is e v en a tr a d e b y its e lf to p ut

th em in to p ap er… . I h av e s e en a s m all m an ufa cto ry o f th is k in d w here te n

men o nly w ere e m plo yed a n d w here s o m e o f th em c o nse q uen tly p erfo rm ed

tw o or th re e dis tin ct opera tio ns. B ut th ough th ey w ere very poor, an d

th ere fo re b ut in dif f e re n tly a cco m modate d w ith th e n ecessa ry m ach in ery , th ey

co uld , w hen t h ey e x erte d t h em se lv es, m ak e a m ong t h em a b out t w elv e p ounds

of p in s in a d ay. T here a re in a p ound u pw ard s o f fo ur th ousa n d p in s o f a

mid dlin g s iz e. T hose t e n p ers o ns, t h ere fo re , c o uld m ak e a m ong t h em u pw ard s

of f o rty -e ig ht t h ousa n d p in s i n a d ay … . B ut i f t h ey h ad a ll w ro ught s e p ara te ly

an d in dep en den tly … th ey c erta in ly c o uld n ot e ach o f th em m ak e tw en ty ,

perh ap s n ot o ne p in a d ay … .”

There i s h ard ly a n y n eed t o p oin t o ut h ow i n fin ite ly m ore c o m ple x p re se n t-

day p ro ductio n m eth ods a re th an th ose o f th e e ig hte en th c en tu ry . S m ith , fo r

all h is d is c la im ers , w as su ff ic ie n tly im pre sse d w ith a sm all fa cto ry o f te n

peo ple to w rite a b out it; w hat w ould h e h av e th ought o f o ne e m plo yin g te n

th ousa n d! B ut th e g re at g if t o f th e d iv is io n o f la b or is n ot its c o m ple x ity —

in deed it sim plif ie s m ost to il. Its a d van ta g e lie s in its c ap acity to in cre ase

what S m ith c alls “ th at u niv ers a l o pule n ce w hic h e x te n ds its e lf to th e lo w est

ra n ks o f

th e p eo ple .” T hat u niv ers a l o pule n ce o f th e e ig hte en th c en tu ry lo oks

lik e a g rim e x is te n ce fro m o ur m odern v an ta g e p oin t. B ut if w e v ie w th e

matte r in its h is to ric al p ers p ectiv e, if w e c o m pare th e lo t o f th e w ork in gm an

in e ig hte en th -c en tu ry E ngla n d w ith th at o f h is p re d ecesso r a c en tu ry o r tw o

befo re , i t i s c le ar t h at, m ean a s h is e x is te n ce w as, i t c o nstitu te d a c o nsid era b le

ad van ce. S m ith m ak es t h e p oin t v iv id ly :

Obse rv e th e a cco m modatio n o f th e m ost c o m mon a rtif ic er o r d ay la b oure r in

a c iv iliz ed a n d th riv in g c o untr y , a n d y ou w ill p erc eiv e th at th e n um ber o f

peo ple o f w hose in dustr y a p art, th ough b ut a s m all p art, h as b een e m plo yed

in p ro cu rin g h im th is a cco m modatio n, e x ceed s a ll c o m puta tio n. T he w oolle n

co at, fo r e x am ple , w hic h c o vers th e d ay -la b oure r, a s c o ars e a n d ro ugh a s it

may s e em , i s t h e p ro duce o f t h e j o in t l a b our o f a g re at m ultitu de o f w ork m en .

The s h ep herd , t h e s o rte r o f th e w ool, th e w ool- c o m ber o r c ard er, th e d yer, t h e

sc rib ble r, th e sp in ner, th e w eav er, th e fu lle r, th e d re sse r, w ith m an y o th ers ,

must all jo in th eir dif f e re n t arts in ord er to co m ple te ev en th is hom ely

pro ductio n. H ow m an y m erc h an ts an d carrie rs , besid es, m ust hav e been

em plo yed … how m uch co m merc e an d nav ig atio n … how m an y sh ip -

build ers , s a ilo rs , s a il- m ak ers , r o pe m ak ers … .

Were w e t o e x am in e, i n t h e s a m e m an ner, a ll t h e d if f e re n t p arts o f h is d re ss

an d h ouse h old fu rn itu re , th e c o ars e lin en sh ir t w hic h h e w ears n ex t to h is

sk in , th e s h oes w hic h c o ver h is f e et, th e b ed w hic h h e lie s o n … th e k itc h en - gra te a t w hic h h e p re p are s h is v ic tu als , th e c o als w hic h h e m ak es u se o f fo r

th at p urp ose , d ug f ro m t h e b ow els o f t h e e arth , a n d b ro ught t o h im p erh ap s b y

a l o ng s e a a n d a l o ng l a n d c arria g e, a ll t h e o th er u te n sils o f h is k itc h en , a ll t h e

fu rn itu re o f h is ta b le , th e k niv es a n d f o rk s, th e e arth en o r p ew te r p la te s u pon

whic h h e s e rv es u p a n d d iv id es h is v ic tu als , th e d if f e re n t h an ds e m plo yed in

pre p arin g h is b re ad a n d h is b eer, th e g la ss w in dow w hic h le ts in th e h eat a n d

th e lig ht, a n d k eep s o ut th e w in d a n d th e r a in , w ith a ll th e k now le d ge a n d a rt

re q uis ite f o r p re p arin g t h at b eau tif u l a n d h ap py i n ven tio n … ; i f w e e x am in e, I

sa y, a ll th ose th in gs … w e s h all b e s e n sib le th at w ith out th e a ssis ta n ce a n d

co opera tio n of m an y th ousa n ds, th e very m ean est pers o n in a civ iliz ed

co untr y co uld not be pro vid ed , ev en acco rd in g to w hat w e very fa ls e ly

im ag in e, th e easy an d sim ple man ner in whic h he is co m monly

acco m modate d . C om pare d in deed w ith th e m ore e x tr a v ag an t lu xury o f th e

gre at, h is a cco m modatio n m ust n o d oubt a p pear e x tr e m ely s im ple a n d e asy ;

an d y et i t m ay b e t r u e, p erh ap s, t h at t h e a cco m modatio n o f a E uro pean p rin ce

does n ot a lw ay s s o m uch e x ceed th at o f a n in dustr io us a n d f ru gal p easa n t, a s

th e a cco m modatio n o f th e la tte r e x ceed s th at o f m an y a n A fric an k in g, th e

ab so lu te m aste r o f t h e l iv es a n d l ib ertie s o fte n t h ousa n d n ak ed s a v ag es.

What i s i t t h at d riv es s o cie ty t o t h is w onderfu l m ultip lic atio n o f w ealth a n d

ric h es? P artly it is th e m ark et m ech an is m its e lf , fo r th e m ark et h arn esse s

man ’s c re ativ e p ow ers in a m ilie u th at e n co ura g es h im , e v en fo rc es h im , to

in ven t, i n novate , e x pan d, t a k e r is k s. B ut t h ere a re m ore f u ndam en ta l p re ssu re s

beh in d th e r e stle ss a ctiv ity o f th e m ark et. I n f a ct, S m ith s e es tw o d eep -s e ate d

la w s o f b eh av io r w hic h p ro pel th e m ark et s y ste m in a n a sc en din g s p ir a l o f

pro ductiv ity .

The f ir s t o f t h ese i s t h e L aw o f A ccu m ula tio n.

Let us re m em ber th at A dam Sm ith liv ed at a tim e w hen th e ris in g

in dustr ia l cap ita lis t co uld an d d id re aliz e a fo rtu ne fro m h is in vestm en ts .

Ric h ard A rk w rig ht, a p pre n tic ed to a b arb er a s a y oung m an , d ie d in 1 792

le av in g a n e sta te o f £ 500,0 00. S am uel W alk er, w ho s ta rte d a f o rg e g oin g i n a n

old n ails h op in R oth erh am , le ft a s te el fo undry o n th at s ite w orth £ 200,0 00.

Jo sia h W ed gw ood, w ho s tu m ped a b out h is p otte ry fa cto ry o n a w ooden le g

sc ra w lin g “ T his w on’t d o f o r J o s. W ed gw ood” w here v er h e s a w e v id en ce o f

care le ss w ork , le ft an esta te o f £ 240,0 00 an d m uch la n ded p ro perty . T he

In dustr ia l R ev olu tio n in its e arlie st s ta g es a lr e ad y p ro vid ed a v erita b le g ra b

bag o f ric h es fo r w hoev er w as q uic k en ough, sh re w d en ough, in dustr io us

en ough t o r id e w ith i ts c u rre n t.

And th e o bje ct o f th e g re at m ajo rity o f th e r is in g c ap ita lis ts

was f ir s t, la st,

an d a lw ay s, to

accu m ula te

th eir s a v in gs. A t th e b eg in nin g o f th e n in ete en th

cen tu ry , £ 2,5 00 w as c o lle cte d in M an ch este r fo r th e fo undatio n o f S unday sc h ools . T he s u m to ta l c o ntr ib ute d to th is w orth y c au se b y th e s in gle la rg est

em plo yers in th e d is tr ic t, th e c o tto n s p in ners , w as £ 90. T he y oung in dustr ia l

aris to cra cy had bette r th in gs to do w ith its m oney th an co ntr ib ute to

unpro ductiv e ch aritie s— it had to accu m ula te , an d A dam S m ith ap pro ved

whole h earte d ly . W oe to h im w ho d id n ot a ccu m ula te . A nd a s fo r o ne w ho

en cro ach ed o n h is cap ita l— “lik e h im w ho p erv erts th e re v en ues o f so m e

pio us fo undatio n to p ro fa n e p urp ose s, h e p ay s th e w ag es o f id le n ess w ith

th ose f u nds w hic h th e f ru gality o f h is f o re fa th ers h ad , a s it w ere , c o nse cra te d

to t h e m ain te n an ce o f i n dustr y .”

But A dam S m ith d id n ot a p pro v e o f a ccu m ula tio n f o r a ccu m ula tio n’s s a k e.

He w as, a fte r a ll, a p hilo so pher, w ith a p hilo so pher’s d is d ain f o r th e v an ity o f

ric h es. R ath er, in th e accu m ula tio n o f cap ita l S m ith sa w a v ast b en efit to

so cie ty . F or c ap ita l— if p ut t o u se i n m ach in ery — pro vid ed j u st t h at w onderfu l

div is io n of la b or whic h multip lie s man ’s pro ductiv e en erg y. Hen ce

accu m ula tio n b eco m es a n oth er o f S m ith ’s tw o-e d ged s w ord s: th e a v aric e o f

priv ate g re ed a g ain r e d oundin g to th e w elf a re o f th e c o m munity . S m ith is n ot

worrie d o ver th e p ro ble m th at w ill fa ce tw en tie th -c en tu ry e co nom is ts : w ill

priv ate a ccu m ula tio ns a ctu ally fin d th eir w ay b ack in to m ore e m plo ym en t?

For h im th e w orld is c ap ab le o f in defin ite im pro vem en t a n d th e s iz e o f th e

mark et is lim ite d o nly b y its g eo gra p hic al e x te n t. A ccu m ula te a n d th e w orld

will b en efit, sa y s S m ith . A nd c erta in ly in th e lu sty a tm osp here o f h is tim e

th ere w as n o e v id en ce o f a n y u nw illin gness t o a ccu m ula te o n t h e p art o f t h ose

who w ere i n a p ositio n t o d o s o .

But— an d h ere i s a d if f ic u lty — accu m ula tio n w ould s o on l e ad t o a s itu atio n

where fu rth er accu m ula tio n w ould b e im possib le . F or accu m ula tio n m ean t

more m ach in ery , a n d m ore m ach in ery m ean t m ore d em an d f o r w ork m en . A nd

th is i n t u rn w ould s o oner o r l a te r l e ad t o h ig her a n d h ig her w ag es, u ntil p ro fits

—th e so urc e of accu m ula tio n— were eate n aw ay. H ow is th is hurd le

su rm ounte d ?

It is su rm ounte d by th e se co nd gre at la w of th e sy ste m : th e L aw of

Popula tio n.

To A dam S m ith , la b ore rs , lik e a n y o th er c o m modity , c o uld b e p ro duced

acco rd in g to th e d em an d. If w ag es w ere h ig h, th e n um ber o f w ork peo ple

would m ultip ly ; if w ag es fe ll, th e num bers of th e w ork in g cla ss w ould

decre ase . S m ith p ut i t b lu ntly : “ … t h e d em an d f o r m en , l ik e t h at f o r a n y o th er

co m modity , n ecessa rily r e g ula te s t h e p ro ductio n o f m en .”

Nor is th is q uite so n aiv e a co ncep tio n as it ap pears at fir s t b lu sh . In

Sm ith ’s d ay i n fa n t m orta lity a m ong t h e l o w er c la sse s w as s h ock in gly h ig h. “ It

is n ot u nco m mon,” s a y s S m ith , “ … i n t h e H ig hla n ds o f S co tla n d f o r a m oth er who h as b orn e tw en ty c h ild re n n ot to h av e tw o a liv e.” In m an y p la ces in

Engla n d, h alf th e c h ild re n d ie d b efo re th ey w ere f o ur, a n d a lm ost e v ery w here

half th e c h ild re n liv ed o nly to th e a g e o f n in e o r te n . M aln utr itio n, e v il liv in g

co nditio ns, co ld , an d dis e ase to ok a horre n dous to ll am ong th e poore r

ele m en t. H en ce, a lth ough h ig her w ag es m ig ht h av e a ff e cte d t h e b ir th r a te o nly

slig htly , th ey co uld be ex pecte d to hav e a co nsid era b le in flu en ce on th e

num ber o f c h ild re n w ho w ould g ro w t o w ork in g a g e.

Hen ce, i f t h e f ir s t e ff e ct o f a ccu m ula tio n w ould b e t o r a is e t h e w ag es o f t h e

work in g c la ss, th is in tu rn w ould b rin g a b out a n in cre ase in th e n um ber o f

work ers . A nd n ow th e m ark et m ech an is m ta k es o ver. J u st a s h ig her p ric es o n

th e m ark et w ill b rin g ab out a la rg er p ro ductio n o f g lo ves an d th e la rg er

num ber o f g lo ves in tu rn p re ss d ow n th e h ig her p ric es o f g lo ves, s o h ig her

wag es w ill b rin g a b out a la rg er n um ber o f w ork ers , a n d th e in cre ase in th eir

num bers w ill s e t u p a r e v ers e p re ssu re o n t h e l e v el o f t h eir w ag es. P opula tio n,

lik e g lo ve p ro ductio n, i s a s e lf -c u rin g d is e ase — as f a r a s w ag es a re c o ncern ed .

And th is m ean t th at a ccu m ula tio n m ig ht g o s a fe ly o n. T he ris e in w ag es

whic h it cau se d an d whic h th re ate n ed to m ak e fu rth er accu m ula tio n

unpro fita b le is te m pere d b y th e r is e in p opula tio n. A ccu m ula tio n le ad s to its

ow n u ndoin g, a n d th en is r e sc u ed in th e n ic k o f tim e. T he o bsta cle o f h ig her

wag es is u ndone b y th e g ro w th in p opula tio n w hic h

th ose v ery h ig her w ag es

mad e fe asib le . T here is so m eth in g fa sc in atin g in th is a u to m atic p ro cess o f

ag gra v atio n a n d c u re , stim ulu s a n d re sp onse , in w hic h th e v ery fa cto r th at

se em s to b e le ad in g th e s y ste m to its d oom is a ls o s ly ly b rin gin g a b out th e

co nditio ns n ecessa ry f o r i ts f u rth er h ealth .

And n ow o bse rv e th at S m ith h as c o nstr u cte d fo r so cie ty a g ia n t e n dle ss

ch ain . A s r e g ula rly a n d a s in ev ita b ly a s a s e rie s o f in te rlo ck ed m ath em atic al

pro positio ns, s o cie ty is s ta rte d o n a n u pw ard m arc h . F ro m a n y s ta rtin g p oin t

th e p ro bin g m ech an is m o f th e m ark et fir s t e q ualiz es th e re tu rn s to la b or a n d

cap ita l in a ll th eir d if f e re n t u se s, s e es to it th at th ose c o m moditie s d em an ded

are pro duced in th e rig ht quan titie s, an d fu rth er en su re s th at pric es fo r

co m moditie s a re c o nsta n tly c o m pete d d ow n to th eir c o sts o f p ro ductio n. B ut

fu rth er th an th is , s o cie ty is d ynam ic . F ro m its s ta rtin g p oin t a ccu m ula tio n o f

wealth w ill ta k e p la ce, a n d th is a ccu m ula tio n w ill r e su lt in in cre ase d f a cilitie s

fo r p ro ductio n a n d in a g re ate r d iv is io n o f la b or. S o fa r, a ll to th e g ood. B ut

accu m ula tio n w ill a ls o ra is e w ag es a s c ap ita lis ts b id fo r w ork ers to m an th e

new fa cto rie s. As wag es ris e , fu rth er accu m ula tio n beg in s to lo ok

unpro fita b le . T he s y ste m t h re ate n s t o l e v el o ff . B ut m ean w hile , w ork m en w ill

hav e u se d th eir h ig her w ag es to re ar th eir c h ild re n w ith fe w er m orta litie s.

Hen ce th e su pply of w ork m en w ill in cre ase . A s popula tio n sw ells , th e

co m petitio n am ong w ork m en w ill pre ss dow n on w ag es ag ain . A nd so accu m ula tio n w ill c o ntin ue, a n d a n oth er sp ir a l in th e a sc en t o f so cie ty w ill

beg in .

This is n o b usin ess c y cle th at S m ith d esc rib es. I t is a lo ng-te rm p ro cess, a

se cu la r e v olu tio n. A nd i t i s w onderfu lly c erta in . P ro vid ed o nly t h at t h e m ark et

mech an is m is n ot ta m pere d w ith , e v ery th in g is in ex ora b ly d ete rm in ed b y th e

pre ced in g lin k. A v ast re cip ro catin g m ach in ery is s e t u p w ith a ll o f s o cie ty

in sid e it: o nly th e ta ste s o f th e p ublic — to g uid e p ro ducers — an d th e a ctu al

physic al r e so urc es o f t h e n atio n a re o uts id e t h e c h ain o f c au se a n d e ff e ct.

But o bse rv e th at w hat is fo re se en is n ot a n u nbounded im pro vem en t o f

aff a ir s . T here w ill assu re d ly b e a lo ng p erio d o f w hat w e call eco nom ic

gro w th — Sm ith d oes n ot u se th e te rm — but th e im pro vem en t h as its lim its .

These d o n ot i m med ia te ly

aff e ct t h e w ork in g m an . T ru e, t h e r is e i n p opula tio n

will e v en tu ally fo rc e w ag es b ack to w ard s u bsis te n ce, b ut fo r m an y y ears , in

Sm ith ’s o pin io n, t h e w ork in g c la ss w ould i m pro ve i ts l o t.

But S m ith w as a b ove a ll a re alis t. In th e

very

lo ng ru n, w ell b ey ond th e

horiz o n, h e s a w th at a g ro w in g p opula tio n w ould p ush w ag es b ack to th eir

“n atu ra l” le v el. W hen w ould th at tim e c o m e? C le arly , it w ould a rriv e w hen

so cie ty h ad ru n o ut o f u nuse d re so urc es a n d in tr o duced a s fin e a d iv is io n o f

la b or a s p ossib le . I n a w ord , g ro w th w ould c o m e t o a n e n d w hen t h e e co nom y

had e x te n ded i ts b oundarie s t o t h eir l im its , a n d t h en f u lly u tiliz ed i ts i n cre ase d

eco nom ic “ sp ace.”

But w hy c o uld n ot th at b oundary b e f u rth er e x pan ded ? T he a n sw er is th at

Sm ith sa w th e all- im porta n t div is io n of la b or as a once-fo r- a ll, not a

co ntin uin g, p ro cess. A s h as b een re cen tly p oin te d o ut, h e d id n ot se e th e

org an iz atio nal an d te ch nolo gic al co re of th e div is io n of la b or as a se lf -

gen era tin g p ro cess o f c h an ge, b ut a s a d is c re te a d van ce th at w ould im part its

stim ulu s a n d t h en d is a p pear. T hus, i n t h e v ery l o ng r u n t h e g ro w th m om en tu m

of s o cie ty w ould c o m e to a h alt— Sm ith o nce m en tio ns tw o h undre d y ears a s

th e lo ngest p erio d o ver w hic h a s o cie ty c o uld h ope to f lo uris h . T here afte r th e

la b ore r w ould re tu rn to h is su bsis te n ce w ag es, th e c ap ita lis t to th e m odest

pro fits o f a sta b le m ark et, a n d th e la n dlo rd a lo ne m ig ht e n jo y a so m ew hat

hig her in co m e a s f o od p ro ductio n r e m ain ed a t th e le v els r e q uir e d b y a la rg er,

alth ough no lo nger gro w in g, popula tio n. For all its optim is tic bold ness,

Sm ith ’s v is io n i s b ounded , c are fu l, s o ber— fo r t h e l o ng r u n, e v en s o berin g.

No w onder, th en , th at th e b ook to ok h old s lo w ly . I t w as e ig ht y ears b efo re

it w as q uote d in P arlia m en t, th e fir s t to d o s o b ein g C harle s J a m es F ox, th e

most p ow erfu l m em ber o f C om mons (w ho a d m itte d la te r th at h e h ad n ev er

actu ally

re a d

th e b ook). It w as n ot u ntil 1 800 th at th e b ook a ch ie v ed fu ll

re co gnitio n. B y th at tim e it h ad g one th ro ugh n in e E nglis h e d itio ns a n d h ad

fo und its w ay to E uro pe an d A m eric a. Its pro ta g onis ts cam e fro m an unex pecte d q uarte r. T hey w ere th e r is in g c ap ita lis t c la ss— th e v ery c la ss th at

Sm ith h ad

ex co ria te d f o r its “ m ean r a p acity ,” a n d o f w hose m em bers h e h ad

sa id th at th ey “ n eith er a re , n or o ught to b e, th e ru le rs o f m an kin d.” A ll th is

was ig nore d in f a v or o f th e g re at p oin t th at S m ith m ad e in h is in quir y :

le t th e

mark et a lo ne

.

What S m ith h ad m ean t b y th is w as o ne th in g; w hat h is p ro ponen ts m ad e

him o ut to m ean w as a n oth er. S m ith , a s w e h av e s a id , w as n ot th e p ro ponen t

of an y one cla ss. H e w as a sla v e to his sy ste m . H is w hole eco nom ic

philo so phy s te m med f ro m h is u nquestio nin g f a ith in th e a b ility o f th e m ark et

to g uid e t h e s y ste m t o i ts p oin t o f h ig hest r e tu rn . T he m ark et— th at w onderfu l

so cia l m ach in e— would t a k e c are o f s o cie ty ’s n eed s

if i t w as l e ft a lo ne

, s o t h at

th e la w s o f ev olu tio n m ig ht ta k e o ver to lif t so cie ty to w ard its p ro m is e d

re w ard . S m ith w as n eith er a n tila b or n or a n tic ap ita l; if h e h ad a n y b ia s it w as

in fa v or o f th e c o nsu m er. “ C onsu m ptio n is th e so le e n d a n d p urp ose o f a ll

pro ductio n,” h e w ro te , an d th en p ro ceed ed to castig ate th ose sy ste m s th at

pla ced t h e i n te re st o f t h e p ro ducer o ver t h at o f t h e c o nsu m in g p ublic .

But in Sm ith ’s pan eg yric of a fre e an d unfe tte re d m ark et th e ris in g

in dustr ia lis ts f o und th e th eo re tic al ju stif ic atio n th ey n eed ed to b lo ck th e f ir s t

govern m en t a tte m pts to re m ed y th e s c an dalo us c o nditio ns o f th e tim es. F or

Sm ith ’s th eo ry d oes u nquestio nab ly le ad to a d octr in e o f

la is se z-fa ir e

. T o

Adam S m ith th e le ast govern m en t is certa in ly th e best: govern m en ts are

sp en dth rif t, ir re sp onsib le , an d unpro ductiv e. A nd yet A dam S m ith is not

necessa rily o ppose d — as h is p osth um ous a d m ir e rs m ad e h im o ut to b e— to

govern m en t a ctio n t h at h as a s i ts e n d t h e p ro m otio n o f t h e g en era l w elf a re . H e

warn s, fo r ex am ple , of th e stu ltif y in g eff e ct of m ass pro ductio n— “th e

unders ta n din gs o f th e g re ate r p art o f m en are n ecessa rily fo rm ed in th eir

em plo ym en ts . T he m an w hose w hole lif e is s p en t in p erfo rm in g a f e w s im ple

opera tio ns … g en era lly b eco m es a s s tu pid a n d ig nora n t a s it is p ossib le f o r a

hum an c re atu re t o b eco m e”— an d p ro phesie s a d eclin e i n t h e m an ly v ir tu es o f

th e l a b ore r, “ u nle ss t h e g overn m en t t a k es s o m e p ain s t o p re v en t i t.”

In deed , fa r fro m b ein g o ppose d to all g overn m en t u nderta k in gs, S m ith

sp ecif ic ally str e sse s th re e th in gs th at g overn m en t sh ould d o in a so cie ty o f

natu ra l lib erty . F ir s t, n ot

su rp ris in gly , it sh ould p ro te ct th at so cie ty a g ain st

“th e v io le n ce a n d in vasio n” o f o th er s o cie tie s. S eco nd, it s h ould p ro vid e a n

“ex act a d m in is tr a tio n o f ju stic e” fo r a ll c itiz en s. A nd th ir d , g overn m en t h as

th e duty of “ere ctin g an d m ain ta in in g th ose public in stitu tio ns an d th ose

public w ork s w hic h m ay b e in th e h ig hest d eg re e a d van ta g eo us to a g re at

so cie ty ,” b ut w hic h “ are o f s u ch a n atu re th at th e p ro fit c o uld n ev er r e p ay th e

ex pen se t o a n y i n div id ual o r s m all n um ber o f i n div id uals .”

Put in to to day ’s la n guag e, S m ith e x plic itly re co gniz es th e u se fu ln ess o f public in vestm en t f o r p ro je cts th at c an not b e u nderta k en b y th e p riv ate s e cto r

—he m en tio ns r o ad s a n d e d ucatio n a s tw o e x am ple s. N eed le ss to s a y, th is is

an id ea th at h as g ro w n c o nsid era b ly in s c o pe s in ce S m ith ’s d ay — one th in ks

of f lo od c o ntr o l, e co lo gic al r e p air , s c ie n tif ic r e se arc h — but t h e i d ea i ts e lf , l ik e

so m uch e ls e , i s i m plic it, n ot e x plic it, i n S m ith ’s u nderly in g v is io n.

What S m ith is a g ain st is th e m ed dlin g o f th e g overn m en t w ith th e m ark et

mech an is m . H e is ag ain st re str a in ts on im ports an d bountie s on ex ports ,

ag ain st g overn m en t la w s th at s h elte r in dustr y fro m c o m petitio n, a n d a g ain st

govern m en t s p en din g f o r u npro ductiv e e n ds. N otic e t h at t h ese a ctiv itie s o f t h e

govern m en t a ll b ear a g ain st th e p ro per w ork in g o f th e m ark et s y ste m . S m ith

nev er fa ced th e p ro ble m th at w as to c au se su ch in te lle ctu al a g ony fo r la te r

gen era tio ns o f w heth er th e g overn m en t is w eak en in g o r str e n gth en in g th at

sy ste m w hen it s te p s in w ith w elf a re le g is la tio n. A sid e f ro m p oor r e lie f, th ere

was v ir tu ally n o w elf a re le g is la tio n in S m ith ’s d ay — th e g overn m en t w as th e

unab ash ed ally of th e govern in g cla sse s, an d th e gre at tu ssle w ith in th e

govern m en t w as w heth er it s h ould b e th e la n dow nin g o r th e in dustr ia l c la sse s

who s h ould m ost b en efit. T he q uestio n o f w heth er th e w ork in g c la ss s h ould

hav e a v oic e in th e d ir e ctio n o f e co nom ic a ff a ir s sim ply d id n ot e n te r a n y

re sp ecta b le p ers o n’s m in d.

The g re at e n em y to A dam S m ith ’s s y ste m is n ot s o m uch g overn m en t

per

se

as m onopoly in an y fo rm . “P eo ple of th e sa m e tr a d e se ld om m eet

to geth er,” sa y s A dam S m ith , “b ut th e co nvers a tio n en ds in a co nsp ir a cy

ag ain st th e p ublic , o r in s o m e d iv ers io n to r a is e p ric es.” A nd th e tr o uble w ith

su ch goin gs-o n is not so m uch th at th ey are m ora lly re p re h en sib le

in

th em se lv es— th ey a re , a fte r a ll, o nly t h e i n ev ita b le c o nse q uen ce o f m an ’s s e lf -

in te re st— as th at th ey im ped e th e f lu id w ork in g o f th e m ark et. A nd o f c o urs e

Sm ith is r ig ht. I f th e w ork in g o f th e m ark et is tr u ste d to p ro duce th e g re ate st

num ber o f g oods a t th e lo w est p ossib le p ric es, a n yth in g th at in te rfe re s w ith

th e m ark et n ecessa rily lo w ers s o cia l w elf a re . I f, a s in S m ith ’s tim e, n o m aste r

hatte r an yw here in E ngla n d can em plo y m ore th an tw o ap pre n tic es o r n o

maste r c u tle r in S heff ie ld m ore th an o ne, th e m ark et s y ste m c an not p ossib ly

yie ld its fu ll b en efits . If, a s in S m ith ’s tim e, p au pers a re tie d to th eir lo cal

paris h es a n d p re v en te d fro m s e ek in g w ork w here w ork m ig ht b e fo und, th e

mark et c an not a ttr a ct l a b or w here l a b or i s w an te d . I f, a s i n S m ith ’s t im e, g re at

co m pan ie s a re g iv en m onopolie s o f fo re ig n tr a d e, th e p ublic c an not re aliz e

th e f u ll b en efits o f c h eap er f o re ig n p ro duce.

Hen ce, s a y s S m ith , a ll t h ese i m ped im en ts m ust g o. T he m ark et m ust b e l e ft

fre e to fin d its ow n natu ra l le v els of pric es an d w ag es an d pro fits an d

pro ductio n; w hate v er i n te rfe re s w ith t h e m ark et d oes s o o nly a t t h e e x pen se o f

th e tr u e w ealth o f th e n atio n. B ut b ecau se a n y a ct o f th e g overn m en t— ev en su ch la w s a s th ose re q uir in g th e w hite w ash in g o f fa cto rie s o r p re v en tin g th e

sh ack lin g o f ch ild re n to m ach in es— co uld b e in te rp re te d as h am perin g th e

fre e o pera tio n o f th e m ark et.

The W ea lth o f N atio ns

w as lib era lly q uote d to

oppose t h e f ir s t h um an ita ria n l e g is la tio n. T hus, b y a s tr a n ge i n ju stic e, t h e m an

who w arn ed th at th e gra sp in g eig hte en th -c en tu ry in dustr ia lis ts “g en era lly

hav e an in te re st to deceiv e an d ev en to oppre ss th e public ” cam e to be

re g ard ed a s th eir e co nom ic p atr o n s a in t. E ven to day, in b lith e d is re g ard o f h is

actu al p hilo so phy, S m ith is g en era lly re g ard ed a s a

co nse rv a tiv e

e co nom is t,

where as in f a ct h e w as m ore a v ow ed ly h ostile to th e

motiv es

o f b usin essm en

th an a re m ost c o nte m pora ry l ib era l e co nom is ts .

In a se n se th e v is io n o f A dam S m ith is a te stim ony to th e eig hte en th -

cen tu ry belie f in th e in ev ita b le tr iu m ph of ra tio nality an d ord er over

arb itr a rin ess a n d c h ao s. D on’t t r y t o d o g ood, s a y s S m ith . L et g ood e m erg e a s

th e b y-p ro duct o f s e lf is h ness. H ow lik e th e p hilo so pher to p la ce s u ch f a ith in

a v ast s o cia l m ach in ery a n d to r a tio naliz e s e lf is h in stin cts in to s o cia l

vir tu es!

There i s n oth in g h alf h earte d a b out S m ith ’s a b id in g t r u st i n t h e c o nse q uen ce o f

his p hilo so phic al b elie fs . H e u rg es th at ju dges s h ould b e p aid b y th e litig an ts

ra th er th an b y th e s ta te , s in ce in th at w ay th eir s e lf -in te re st w ill le ad th em to

ex ped ite th e c ase s b ro ught b efo re th em . H e se es little fu tu re fo r th e n ew ly

em erg in g b usin ess o rg an iz atio ns c alle d jo in t- s to ck c o m pan ie s ( c o rp ora tio ns),

sin ce it s e em s h ig hly im pro bab le th at s u ch im pers o nal b odie s c o uld m uste r

th e n ecessa ry s e lf -in te re st to p urs u e c o m ple x a n d a rd uous u nderta k in gs. E ven

th e g re ate st h um an ita ria n m ovem en ts , su ch a s th e a b olitio n o f sla v ery , a re

defe n ded i n h is o w n t e rm s; b est a b olis h s la v ery , s a y s A dam S m ith , s in ce t o d o

so w ill p ro bab ly b e c h eap er i n t h e e n d.

The c o m ple x ir ra tio nal w orld is th us r e d uced to a k in d o f r a tio nal s c h em e

where h um an p artic le s a re m ag netiz ed in a s im ple p ola rity to w ard p ro fit a n d

aw ay fro m lo ss. T he g re at sy ste m w ork s, n ot b ecau se m an d ir e cts it, b ut

becau se s e lf -in te re st a n d c o m petitio n l in e u p t h e f ilin gs i n t h e p ro per w ay ; t h e

most th at m an can d o is to h elp th is n atu ra l so cia l m ag netis m alo ng, to

re m ove w hate v er b arrie rs sta n d b efo re th e fre e w ork in g-o ut o f th is so cia l

physic s, a n d t o c ease h is m is g uid ed e ff o rts t o e sc ap e f ro m i ts t h ra lld om .

And yet, fo r all its eig hte en th -c en tu ry fla v or, its belie f in ra tio nality ,

natu ra l la w , an d th e m ech an iz ed ch ain o f h um an actio n an d re actio n, th e

world o f A dam S m ith is n ot w ith out its w arm er v alu es. D o n ot f o rg et th at th e

gre at in te n ded b en efic ia ry o f th e s y ste m is th e c o nsu m er— not th e p ro ducer.

For t h e f ir s t t im e i n t h e p hilo so phy o f e v ery day l if e , t h e c o nsu m er i s k in g.

Of t h e w hole , w hat h as s u rv iv ed ?

Not th e g re at s c h em e o f e v olu tio n. W e s h all s e e th at p ro fo undly a lte re d b y

th e g re at e co nom is ts t o f o llo w . B ut l e t u s n ot r e g ard t h e w orld o f A dam S m ith as m ere ly a p rim itiv e a tte m pt to a rriv e a t fo rm ula tio ns th at w ere b ey ond h is

gra sp . S m ith w as th e e co nom is t o f p re in dustr ia l c ap ita lis m ; h e d id n ot liv e to

se e th e m ark et sy ste m th re ate n ed b y en orm ous en te rp ris e s, o r h is la w s o f

accu m ula tio n a n d p opula tio n u pse t b y s o cio lo gic al d ev elo pm en ts fif ty y ears

off . W hen S m ith

liv ed an d w ro te , th ere h ad n ot y et b een a re co gniz ab le

phen om en on th at m ig ht b e c alle d a “ b usin ess c y cle .” T he w orld h e w ro te

ab out actu ally ex is te d , an d his sy ste m atiz atio n of it pro vid es a brillia n t

an aly sis o f i ts e x pan siv e p ro pen sitie s.

Yet so m eth in g m ust hav e been m is sin g fro m S m ith ’s co ncep tio n. F or

alth ough h e sa w a n e v olu tio n fo r so cie ty , h e d id n ot se e a re v olu tio n— th e

In dustr ia l R ev olu tio n. S m ith d id n ot se e in th e u gly fa cto ry sy ste m , in th e

new ly tr ie d c o rp ora te f o rm o f b usin ess o rg an iz atio n, o r in th e w eak a tte m pts

of jo urn ey m en to fo rm p ro te ctiv e o rg an iz atio ns, th e fir s t a p peara n ce o f n ew

an d d is ru ptiv ely p ow erfu l so cia l fo rc es. In a se n se h is sy ste m p re su ppose s

th at eig hte en th -c en tu ry E ngla n d w ill re m ain unch an ged fo re v er. O nly in

quan tity w ill it g ro w : m ore p eo ple , m ore g oods, m ore w ealth ; its q uality w ill

re m ain u nch an ged . H is a re t h e d ynam ic s o f a s ta tic c o m munity ; i t g ro w s b ut i t

nev er m atu re s.

But, a lth ough th e s y ste m o f e v olu tio n h as b een v astly a m en ded , th e g re at

pan ora m a o f th e m ark et re m ain s a s a m ajo r a ch ie v em en t. T o b e s u re , S m ith

did n ot “ d is c o ver” th e m ark et; o th ers h ad p re ced ed h im in p oin tin g o ut h ow

th e in te ra ctio n o f s e lf -in te re st a n d c o m petitio n b ro ught a b out th e p ro vis io n o f

so cie ty . B ut S m ith w as th e fir s t to u nders ta n d th e fu ll p hilo so phy o f a ctio n

th at s u ch a c o ncep tio n d em an ded , th e f ir s t to f o rm ula te th e e n tir e s c h em e i n a

wid e a n d s y ste m atic fa sh io n. H e w as th e m an w ho m ad e E ngla n d, a n d th en

th e w hole W este rn w orld , unders ta n d ju st how th e m ark et kep t so cie ty

to geth er, a n d th e f ir s t to b uild a n e d if ic e o f s o cia l o rd er o n th e u nders ta n din g

he ach ie v ed . L ate r eco nom is ts w ill em bro id er S m ith ’s desc rip tio n of th e

mark et a n d w ill in quir e in to th e s e rio us d efe cts th at s u bse q uen tly a p peare d in

it. N one w ill im pro ve o n th e r ic h ness a n d lif e w ith w hic h S m ith im bued th is

asp ect o f t h e w orld .

For Sm ith ’s en cy clo ped ic sc o pe an d know le d ge th ere can be only

ad m ir a tio n. I t w as o nly in th e e ig hte en th c en tu ry th at s o h uge, a ll- e m bra cin g,

se cu re , c au stic , a n d p ro fo und a b ook c o uld h av e b een w ritte n . In deed ,

The

Wea lth o f N atio ns

a n d

The T heo ry o f M ora l S en tim en ts

, to geth er w ith h is f e w

oth er e ssa y s, re v eal th at S m ith w as m uch m ore th an ju st a n e co nom is t. H e

was a p hilo so pher- p sy ch olo gis t- h is to ria n -s o cio lo gis t

who c o nceiv ed a v is io n

th at in clu ded hum an motiv es an d his to ric “sta g es” an d eco nom ic

mech an is m s, a ll o f w hic h e x pre sse d th e p la n o f th e G re at A rc h ite ct o f N atu re

(a s S m ith c alle d h im ). F ro m th is v ie w poin t,

The W ea lth o f N atio ns

is m ore th an a m aste rw ork o f p olitic al e co nom y. I t is p art o f a h uge c o ncep tio n o f th e

hum an a d ven tu re i ts e lf .

More o ver,

Wea lth

co nsta n tly sta rtle s us w ith its pie rc in g obse rv atio ns.

Sm ith a n tic ip ate d V eb le n b y a h undre d a n d f if ty y ears w hen h e w ro te , “ W ith

th e g re ate r p art o f ric h p eo ple , th e c h ie f e n jo ym en t o f ric h es c o nsis ts in th e

para d e o f r ic h es, w hic h in th eir e y e is n ev er s o c o m ple te a s w hen th ey a p pear

to p osse ss th ose d ecis iv e m ark s o f o pule n ce w hic h n obody c an p osse ss b ut

th em se lv es.” H e w as a s ta te sm an a h ead o f h is tim e w hen h e w ro te , “ If a n y o f

th e p ro vin ces o f th e B ritis h E m pir e c an not b e m ad e to c o ntr ib ute to w ard s th e

su pport o f th e w hole e m pir e , it is s u re ly tim e th at G re at B rita in s h ould fre e

hers e lf f ro m th e e x pen se o f d efe n din g th ose p ro vin ces in tim e o f w ar, a n d o f

su pportin g a n y p art o f th eir c iv il o r m ilita ry e sta b lis h m en ts in tim e o f p eace,

an d en deav our to acco m modate h er fu tu re v ie w s an d d esig ns to th e re al

med io crity o f h er c ir c u m sta n ces.”

Perh ap s n o eco nom is t w ill ev er ag ain so u tte rly en co m pass h is ag e as

Adam S m ith . C erta in ly n one w as e v er s o s e re n e, s o d ev oid o f c o ntu m acy, s o

pen etr a tin gly c ritic al w ith out r a n co r, a n d s o o ptim is tic w ith out b ein g u to pia n .

To b e s u re , h e s h are d t h e b elie fs o f h is d ay ; i n f a ct, h e h elp ed t o f o rg e t h em . I t

was a n a g e o f h um an is m a n d r e aso n; b ut w hile b oth c o uld b e p erv erte d f o r t h e

cru ele st a n d m ost v io le n t p urp ose s, S m ith w as n ev er c h au vin is t, a p olo gis t, o r

co m pro m is e r. “F or to w hat purp ose ,” he w ro te in

The T heo ry of M ora l

Sen tim en ts

, “ is a ll t h e t o il a n d b ustle o f t h is w orld ? W hat i s t h e e n d o f a v aric e

an d a m bitio n, o f th e p urs u it o f w ealth , o f p ow er, a n d p re -e m in en ce?”

The

Wea lth o f N atio ns

p ro vid es h is a n sw er: a ll th e g ru bby s c ra b blin g fo r w ealth

an d g lo ry h as i ts u ltim ate j u stif ic atio n i n t h e w elf a re o f t h e c o m mon m an .

At th e en d o f h is lif e , S m ith w as rip e w ith h onors an d re sp ect. B urk e

tr a v ele d to E din burg h to se e h im ; h e w as ele cte d L ord R ecto r at h is o ld

Univ ers ity of G la sg ow ; he sa w

Wea lth

tr a n sla te d in to D an is h , Fre n ch ,

Germ an , I ta lia n , S pan is h . O nly O xfo rd ig nore d h im ; it n ev er d eig ned to g iv e

him a n h onora ry d eg re e. A t o ne tim e P itt th e y ounger, th en P rim e M in is te r,

was m eetin g w ith A ddin gto n, W ilb erfo rc e, a n d G re n ville , a n d A dam S m ith

had b een in vite d to atte n d. A s th e o ld p hilo so pher w alk ed in to th e ro om ,

ev ery one ro se . “ B e s e ate d , g en tle m en ,” h e s a id . “ N o,” re p lie d P itt, “ w e w ill

sta n d u ntil y ou a re f ir s t s e ate d , f o r w e a re a ll y our s c h ola rs .”

In 1 790 S m ith d ie d ; h e w as s ix ty -s e v en . C urio usly , h is p assin g a ttr a cte d

re la tiv ely little notic e; perh ap s peo ple w ere to o busy w orry in g ab out th e

Fre n ch R ev olu tio n an d th e re p erc u ssio ns it m ig ht hav e on th e E nglis h

co untr y sid e. He was burie d in th e Can ongate ch urc h yard with an

unpre te n tio us to m bsto ne; it s ta te s th at A dam S m ith , a u th or o f

The W ea lth o f

Natio ns

, l ie s h ere . I t w ould b e h ard t o c o nceiv e o f a m ore d ura b le m onum en t.