The man, his, life and background
Some critics such as Schumpeter (1954, pp. 185-94) notwithstanding, Adam Smith’s major achievement is the early exposition of a new type of social, cultural, economic, legal and political system after the slow but steady erosion of feudalist and agricultural societies and former theoretical concepts such as mercantilism and physiocracy.
The Wealth of Nations (Smith, 1976) is not primarily a partisan pamphlet. Its subject matter is the understanding of the socioeconomic transformation at his time in the context of a history of civilization (the intensive debate about Smith’s work is well documented and accessible in Clark et al., 1966; Skinner and Wilson, 1975; Wilson and Skinner, 1976; Glahe, 1978; Skinner, 1979; Wood, 1984-94; Jones and Skinner, 1992).Although most of his writings were burnt by his literary executor, the complete edition of his works sheds light on his encompassing intent to develop a theory of a new type of society. This comprises his handling of rhetoric and belles-lettres (Smith, 1983, including his essay ‘Considerations concerning the first formation of languages’), essays on philosophical subjects (Smith, 1977, including a highly original theory of science, taking astronomy as an example - see the excellent interpretation by Thomson, 1965), lectures on jurisprudence (Smith, 1982 - the original did not survive, but notes by his students did: see the introduction by Meek et al.), his first published book in 1759 about the theory of moral sentiments (Smith, 1984) and his masterpiece about the wealth of nations, first published in 1776, shortly before the American Declaration of Independence (see the survey of the literature in Muller, 1993, pp. 240-61).
Smith was born in 1723 in Kirkaldy in Scotland. His father was comptroller of customs. Adam Smith himself was commissioner of customs and charity for the last years of his life from 1778 (see West, 1969; Campbell and Skinner, 1982).
When he was four years old, one of the last witch burnings took place; in the hinterland, the Highland clans were still intact. From 1660, the port of Glasgow became a main transit point and from 1740 the trade of tobacco, for example, intensified (Hollander, 1973, ch. 3). A union was established with its big British neighbour in 1707, and Scotland lost its sovereignty and independence; in exchange, the landed aristocracy was represented in the Houses of Parliament in London and the merchants were granted a free trade zone. Scottish intellectuals vacillated between admiration and rivalry with the ‘superior’ British lifestyle (to copy the elegant British prose became an obsession; see Foley, 1976, ch. 1). Their intellectual challenge was in a certain way similar to the countries in transition today: to develop a free, open market and civil society.To understand Smith, his background in Scottish philosophy (David Hume, Francis Hutcheson and, later, James Steuart and James Lauderdale, see Taylor, 1965), which is very different from the later British liberal and empirical philosophy (like that of John Locke and Jeremy Bentham), should be taken into consideration: cosmopolitanism, Calvinism, the Roman law tradition (Cicero and Seneca), French enlightenment and a teleological instead of an ‘evolutionary’-objectivist perspective (Charles Darwin, Karl Marx and Sigmund Freud were still far away) were its unique combination of characteristics. According to this view, man can reasonably instal institutions which are not beyond human common design (but Smith was no meliorist: see Winch, 1978, p. 182); the ‘Introduction and plan of the work’ at the beginning of The Wealth of Nations (1976, Vol. I, pp. 1-4) bears witness to this. The Scots were social moralists, religious sceptics, anti-Benthamite, critical vis-a-vis the human condition and somewhat rebellious (most obvious in John Ruskin and Thomas Carlyle). The function of ‘theory’ is to develop a histoire raisonnee including psychology, ethics, law, politics and social philosophy to make sense of history.
The Scots wanted to give a broad, balanced overall view from different standpoints; logical rigour, that is reasoning from some basic deductive-formal principles, was not their research ideal: theirs was to collect all relevant facts. Inconsistencies were seen as constituent parts of social life which should be reflected in theory. Smith’s understanding of science deviates fundamentally from today’s mainstream methodological and substantial self-understanding (the more unorthodox aspects of Smith are stressed in Ginzberg, 1977, his interventionist attitudes in Viner, 1966). Therefore he is mostly put in the antechamber of economics as a science (see, for example, Screpanti and Zamagni, 1995, pp. 54-71; Blaug, 1978, ch. 2).Actual facts (some hundreds can be found as arguments in The Wealth of Nations), historical and institutional relations and individual experiences (compare Smith’s descriptions of universities) are the Scots’ bread and butter. Although down-to-earth (the material wealth of nations is the cornerstone of his masterpiece), the social division of labour is combined with political, ethical and legal considerations:
They are typically curious about people, men at work, about comparative institutions... They are not concerned with logical processes or sequences, or the framing of abstract hypotheses and their analysis to their utmost limits. They wish to build a truly balanced picture of social life as they found it and the forces which controlled it. (Macfie, 1968, p. 29)
With this sceptical, realist, but optimist social science perspective of the Scottish enlightenment, Smith became a student in Glasgow during 1737-40. He went to Oxford from 1740 to 1746. From 1748 to 1751, he lectured in Edinburgh on belles-lettres and jurisprudence, and in 1751 he became professor in logic and moral philosophy in Glasgow, a position he held until 1763. From 1764 to 1766, he was tutor to the son of the Duke of Buccleuch. Their European travel led them to London, Toulouse, Geneva and Paris, where Smith may have met Montesquieu, Voltaire and Rousseau. His lifelong pension from the Duke made him financially independent. At the age of 40, he left university and, after staying in Kirkaldy and London, 13 years after his Central European travel, he published The Wealth of Nations. Smith (who never married) was personally a sceptical, detached and emotionally uncommitted personality in everyday life, but his theoretical contributions allow us to feel his bright and objective heart, his zeal for exact knowledge and fair judgement and his optimistic, but sceptical, realism.