Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
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Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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SMITH, Adam. The name of Adam Smith is the greatest in political economy. He has had the singular fortune to stamp his impress ineffaceably on the intellectual world as well as on the world of facts. Adam Smith is not only the acknowledged founder of economic science, but the authority appealed to, and who inspired Sir Robert Peel and Huskisson, those dauntless ministers of his ideas. His life, wholly devoted to study and thought, passed away modestly and peacefully. The information we possess regarding him is small. We shall endeavor more especially, within the limited space allowed us, to bring into relief the facts calculated to make known the character of the man and to explain the works of the thinker.


—The little village of Kirkaldy, in Fifeshire, in Scotland, had the honor of being the birthplace of Adam Smith, who was born there, on June 5, 1723. His father, who was comptroller of the customs, had died several months before Adam Smith was born. His mother watched over his childhood, and she more than once had cause to fear for his life; for his constitution was frail and sickly. When he was only three years old, he was playing before his uncle's house, when a band of gypsies passing by kidnapped him. The alarm was given; his uncle gathered his friends together, overtook the kidnapers in a neighboring wood, and rescued his nephew.


—From the school in Kirkaldy. in which he received his early education, Adam Smith went, in 1737, to the university of Glasgow. He there attended the lectures on moral philosophy of the illustrious head of the Scotch school, Hutcheson, whose teaching made a decided impression upon the mind of Adam Smith. He appreciated the solid and practical worth of it, and all his writings show that he adopted its exalted spiritualism, its solid common sense and its strong morality. He always retained a filial feeling for Hutcheson, and never spoke of him but with the expression of the sincerest admiration and the deepest gratitude.


—Intended by his family for the church, Adam Smith was admitted to Baliol college, at Oxford. The future philosopher at first applied himself, with marked preference, to the study of mathematics and of the physical sciences. He knew not only the theory of these sciences, but had devoted much time to their history. These successive endeavors of the human intellect in the search of truth had a charm which delighted his investigating mind. From the sciences he passed to literature, and, after a stay of seven years, he read with equal facility the Latin, Greek, French and Italian poets. He frequently exercised himself in translating from the French, with a view to his improvement in the art of writing. He regarded this exercise as eminently calculated to perfect one's style.


—After completing his studies at Oxford, he returned to Kirkaldy. Determined to give up the ministry, he decided to live with his mother, in the peace which she alone could bring him, and to limit his ambition to the uncertain hope of obtaining one of those modest offices to which literary talent then led in Scotland. In 1748 he began to put his projects into execution, by opening at Edinburgh, where he came to establish himself, a public course of rhetoric and belles lettres. These lectures attracted a large number of hearers, and in a short time gave him substantial fame; for in 1751 he was appointed to the chair of logic in the university of Glasgow, and the following year to that of moral philosophy, left vacant by the death of Thomas Craigie, the successor of Hutcheson. He filled this chair for thirteen years, and always looked upon this period of his life as the most useful to his fellow-men as well as the happiest to himself. The brilliancy of his reputation gathered around him a crowd of students eager to hear him. The subjects of his course became the fashionable study; and his opinions the principal object of the discussions which entertained literary societies. Certain inflections of the professor's voice even, and certain favorite expressions of his, became matters of imitation. The talents of Mr. Smith, said one of his hearers, appeared nowhere to so great advantage as in the exercise of his duties as professor. In delivering his lectures he relied almost entirely upon his readiness in extemporizing. His style, though lacking, it is true, in grace, was clear, and free from affectation, and as he was seen to be interested in his subject, he never failed to interest his hearers. Each discourse consisted commonly in distinct propositions, which he made it his study successively to prove and explain. These propositions, stated in general terms, had often, from the very extent of their subject, an appearance of paradox. In his endeavors to develop them, it was not unusual to see him at first appear as if embarrassed and not thoroughly master of his subject, and even speaking with a kind of hesitation. But as he went on, the subject seemed to grow before him; his manner became warm and animated, and his expressions easy and flowing. In delicate points susceptible of controversy, you would have recognized without difficulty that he secretly entertained the thought of some opposition to his opinions, and that he consequently felt obliged to maintain them with the greater energy and vehemence. The abundance and the variety of his explanations and illustrations threw light upon his subject, as he handled it.


—He divided his course into four parts; the first three included natural theology and moral philosophy, and particularly the moral principles which relate to justice. In the first part of his course he examined the various political regulations which are not founded upon the principle of justice, but upon that of expediency, and the object of which was to increase the wealth, power and prosperity of the state. From this point of view he considered the political institutions relating to commerce, to finance, and to ecclesiastical and military establishments. What he taught upon these various subjects forms the substance of the work since published under the title "An Inquiry into the Nature and Causes of the Wealth of Nations." This exact evidence proves, that, since 1753, although this part of his course was limited to the consideration of economic legislation, Adam Smith had formed an opinion on the fundamental questions of political economy. It is impossible to determine wherein the opinions of the professor of moral philosophy differed from those of the author of the "Wealth of Nations," since nothing remains to us of his teaching but this indication of one of his disciples. However, Adam Smith only followed the example of his master whom he reverenced, in introducing the consideration of economical order into his course of moral philosophy, and it is perhaps to the single chapter of the "Manual of Moral Philosophy" of Hutcheson, in which he treats of value, of exchange, etc., that we owe the "Wealth of Nations."


—From this period also his friendship with Hume, who had just published the second part of his "Essays" (1752), dates. In the nine discourses on political economy contained in this work, Hume, in attacking the erroneous theories of the mercantile system and of protective duties, determined the true principles of the nature of wealth, the profit of capital, and the solidarity of interests. This friendship, precious to both of them, kept up by their daily relations, to which Adam Smith brought profound convictions and an ardent love of humanity, and his friend a cold and jesting skepticism, which took away nothing from the sincerity of his affection, this friendship, which is a eulogy for both of them in this age of irritable vanity and literary jealousies, lasted until the end of Hume's life, and it is permissible to believe that the author of the "Essays" exercised an influence over his friend favorable to the direction of his thoughts toward political economy. This we know certainly, that the principal merchants of Edinburgh, then a very commercial town, shared Smith's views in the matter of customs, and that he himself drew from their conversation on the subject that knowledge of facts which characterizes his great work.


—Half a century later, the most illustrious propagator of his doctrines, J. B. Say, crossed over to Glasgow. I wished to see, he wrote, the place which was the cradle of sound doctrines in political economy. I was conducted to a long, narrow room, where everything still remained as in Smith's time. An arm chair of old black eather towered between two of the windows, and I confess that I could not seat myself in it without very strong emotion mingled with respect. It is my inmost conviction that sound ideas of political economy will change the face of the world; now, can a man look coolly at the source of a great river? Remarkable coincidence! At the same period at which, in his Glasgow attic, Smith was uttering his first principles on political economy; under the chateau of Versailles, the same ideas were germinating in the head of Quesnay, and prompting his articles in the Encyclopedie (1756).


—It was after he had been for seven years professor of moral philosophy at Glasgow, that Adam Smith published his "Theory of the Moral Sentiments." The fundamental principle of this theory is, that the actions of others are the only source of our moral perceptions. The judgments which we pass as to the morality of our own acts, are but a personal application of the judgments which we pass on the acts of our fellow-men. It is this moral approbation which Smith calls fellow-feeling. In the first part of his book he explains how we learn to judge of the conduct of others; in the second, how, in applying this judgment to ourselves, we rise to the idea of a duty to be performed. "Smith is in the right," well says M. Cousin, "when he develops the charms of sympathy, when he urges us to have ceaselessly before our eyes the conditions upon which others sympathize with us, and bestow upon us all that is sweetest to the human heart, to wit, the approbation and good will of our fellow-men. Smith's mistake is to have believed, or to have appeared to believe, that fellow-feeling is itself the good. The two differ in principle; and it is of consequence that this difference should be made manifest, firstly, for the truth's sake, then for the sake of virtue itself; for virtue is impaired at its very foundation, if it pursues an end not its own; and it is all over with virtue, if, when by reason of a going astray of opinion. it comes to be wanting in fellow feeling, and it is no longer able to maintain itself by its own power, and to be sufficient unto itself." For, indeed, sympathy or fellow-feeling, a noble and entirely personal feeling, are only a result of our organization; and Adam Smith, by assigning it the first place as the source of human actions, sacrificed to it the principle itself of which it is only the sign, conscience itself, that rule which subsists invariably and sovereignly obligatory above the caprices of the imagination and of the heart, and above the force of circumstances.


—Singular inconsistency of the spirit of system; it is the philosopher of sympathy, the too exclusive defender of the sentiments of benevolence and commiseration, whom the opponents of political economy have accused of selfishness and of implacable hardness to the misery of his fellow-men! If these blind traducers of economic doctrine did not recall that the economist of Glasgow had written and proved that those who feed, clothe and lodge the entire body of the nation, should have a large enough share in the product of their work to be sufficiently fed, lodged and clothed, they should at least have been careful that their attacks were directed against the philosopher who had made sympathy the only motive of our actions and the law of duty.


—Toward the end of 1763 the wish to visit the continent, and the liberal offers which were made him, determined Smith to accompany the young duke of Buccleugh in the travels which he contemplated undertaking. He sent to the rector of the university of Glasgow his resignation of the office he had filled for thirteen years. Universal regret was felt, and the university recorded its thought upon the register, and said that "the university could not refrain from expressing its sincere regret at the removal of Dr. Smith, whose distinguished virtues and amiable qualities had won for him the esteem and affection of his colleagues, and who had honored the university by his genius and the extent of his knowledge. His elegant and ingenious 'Theory of the Moral Sentiments' had won for him the esteem of men of taste and letters all over Europe. His happy talent of throwing light upon the most abstract subjects, his assiduity in communicating useful knowledge, and the exactness in discharging the duties of his position, which characterized him as a professor, were for the young men intrusted to his care a source of enjoyment as well as of sound instruction." Smith and the duke of Buccleugh embarked for the continent in March, 1764. After a stay of ten or twelve days at Paris, they took up their residence at Toulouse, which had just witnessed the execution of the unfortunate Calus. They spent eighteen months here in the society of the principal members of the parliament of that city. From Toulouse they proceeded toward Geneva, crossing by a circuitous route through the southern provinces of France; after a sojourn of two months in this city they returned to Paris. This was in December, 1765, and they remained there until October of the following year.


—Smith had long been familiar with French literature. He was acquainted with the works of J. J. Rousseau, and from a letter of Hume's we learn that he had read Helvetius' l' Esprit, and Voltaire's Condide. Furnished with letters of introduction from Hume, the Scotch philosopher met with the most flattering reception from Alembert, Helvetius, Marmontel and Madame Riccoboni. He was admitted to the society of the Duchesse d'Anville, and became especially intimate with a son of the Due de La Rochefoucauld. This noble and generous mind began later a translation of the "Theory of the Moral Sentiments," which he did not finish, and the grateful philosopher, who had in his first edition associated the name of the author of the Maximes with that of Mandeville, took care to drop from the second his criticism on the grandfather of his friend.


—The physiocratic school was at this time in all the ardor of the strife against the partisans of the mercantile and restrictive system. It had been for several years in possession of the doctrine which made it what it was; for in 1758 Quesnay had published his Tableau économique, printed at Versailles, under the eye of the king. The very year in which Smith left England, Le Trosne, then king's advocate at Orleans, publicly professed the master's principles in a discourse on the decadence of the magistracy; and during his sojourn in Paris, the Ephémérides du Citoyen, for the purpose of opposing the principles of Quesnay, and the Journal de l'agriculture, du commerce et des finances, under the direction of Dupont de Nemours, to defend them, were established. At this same time one of the most enlightened economists, Abeille, published a pamphlet on exclusive privileges in matters of commerce, which was very favorably received. Thus Smith was witness, during his stay in Paris, of the contest of economical systems. Unfortunately, no details of this period of his life, so interesting in the history of science, have come down to us. We learn from Dugald Stewart that he took pleasure in conversing with Turgot, and that he corresponded with Quesnay, but nothing further. Dupont de Nemours is more explicit, and represents him as having been his condisciple at Quesnay's. "Dupont de Nemours," says J. B. Say, "told me that he often met Adam Smith in that society, perhaps the most respectable in Europe, and that he was there regarded as a judicious and simple man, but as one who had not yet shown what he was capable of." What is beyond all doubt, is the profound esteem which Smith always preserved for the ingenious and thoughtful founder of the physiocratic school. He intended to dedicate his great work to him, and only the death of Quesnay (1774) prevented the realization of this noble thought. It is certain that Turgot conceived a high opinion of his ability, and Condorcet relates, that, after his retirement from the ministry, he kept up a correspondence with Smith. These two great minds, the beauty of whose characters vied with the loftiness of their intellect, were worthy to understand each other, but there remains no trace of this interchange of letters. The papers left by Turgot have revealed none; those of Adam Smith were destroyed before his death by his own order, and his most intimate friends never had any knowledge of this correspondence.


—It is, nevertheless, difficult to suppose, that, during the nine months which he spent in Paris, in society where economical topics were the order of the day, the conversation of so many men in whom he recognized great learning and distinguished ability, and of whom he declared that their doctrine approached the nearest to the truth, should have been without influence on the formation of his principles. But to what extent it is impossible, in the absence of any written document, to determine. Must we infer, as have some, from the solicitous and minute care taken by Smith shortly before his death to have his manuscripts—among which were the lectures delivered at Glasgow on economic subjects—destroyed, that he had an especial interest in leaving nothing from which the succession of his ideas could be conjectured? This is a pure hypothesis, as well as a most improbable one; and does nothing but complicate a problem, the solution of which it is impossible to give.


—Back in England in October, 1766, Smith returned to Kirkaldy, where he lived for ten years near his mother, and in the society of some of the friends of his childhood. His friend Hume, then librarian of the faculty of advocates at Edinburgh, strove several times, but in vain, to draw him away from his solitude. "I want to know what you have done," Hume wrote to Smith, in 1769, "and I intend to exact a strict account from you of the use you are making of your time in your retreat." Four years later, he added: "I will not accept the excuse of your health, which I regard only as a subterfuge invented by indolence and love of solitude. In truth, if you continue to listen to those two little evil advisers, you will end by breaking completely with society, to the detriment of both the parties interested."


—It was from this stubborn meditation of six years that the great work came which was to immortalize his name. The "Inquiry into the Nature and Causes of the Wealth of Nations," which he had begun to write in 1771, and which appeared in March, 1776, disclosed the secret of his long retreat. A month afterward Hume congratulated him in the following glowing terms: "My dear Mr. Smith, your work has afforded me the greatest pleasure; and in reading it, I emerged from a state of painful anxiety. It is a work, the expectation of which kept in such suspense yourself. your friends and the public, that I trembled to see it appear; but at last I am relieved. Not that—reflecting how much attention this reading exacts, and how little disposed the public is to bestow such—I must not still distrust for some time the first breath of popular favor; but there are in it depth, solidity, subtle penetration, and a multitude of curious facts: such merits should, sooner or later, fix the attention of public opinion. If you were here, at my fireside, I should contest some of your principles. But this and a hundred other things can be discussed only in conversation. I hope that it will be soon, for the state of my health is very bad, and will not admit of a very long delay." These sad presentiments were not long in being realized. Four months later, Hume was no more; Smith felt his death keenly, and has left us, in the touching account which he gave of his friend's death, and in the merited eulogy of his character, the trace of his bitter regrets.


—Hume simply anticipated the judgment of posterity, which, in its admiration, has associated the name of Smith with those of Grotius and Montesquieu. Smith indeed gave to economic science the character of certitude, which these two great men had impressed upon international law and political science. He placed it upon a basis which the progress of the human mind may perhaps enlarge, but never displace. The great principle which is the starting point of all economic phenomena, he lays down in the beginning of his work: The annual labor of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always either in the immediate produce of that labor or in what is purchased with that produce of other nations. These words contained a revolution in the order of economic ideas. Breaking with the opinions generally received in his own age, he at the same time separated himself from the partisans of the mercantile system, who made all wealth consist in the precious metals, and from the physiocrates, who regarded the soil as the only source of it. Instead of gold and silver, and the fertility of the land, what does he place at the summit of his science? Man, of whom labor is the manifestation; man with his productive powers, the potency of which is immeasurably increased by the division of employments and the accumulation of capital. The classes of producers who had been regarded by the physiocrates as tributaries of landed property, raised by him to the rank in which their services class them in society, are hence forth respectable and useful by the same title as the others. He invites all, under the rule of the law of labor, to the exploitation of the material world, to the enrichment of individuals and nations, to the fusion of interests, and in subjecting them to the same obligations toward the state, he claims for them liberty in the choice of their work, in the movement of capital and the circulation of products.


—In this framework, in the order which he assigns to them in it, and in a series of searching and concise arguments, his ingenious and profound analyses of the division of labor, the price of goods, the power of saving and the action of capital, credit, banks and duties, range themselves. These different elements of economic science, several of which had already been successfully studied by Locke, Hume, Verri and Turgot, had new light thrown on them by Smith, a light which is diffused over all the parts of the subject of which he treats. Everything is treated with the supreme composure of superior reason and immutable good sense, which, carried thus far, amounts to genius. No contemporary passion disturbed the serenity of his judgment. The principles which he teaches are not a weapon in his hand, but only the generalized expression of facts conscientiously observed. One thing alone inspired him with an indignation which he could scarcely restrain; the spirit of monopoly.—'No one before Smith had shown with more clearness and foresight the advantages of economic liberty, from the point of view of the conciliation of individual and general interest. But the honor of having extolled the principle of liberty, and of having established it upon its true basis, belongs to the physiocratic school. Smith, in his "Wealth of Nations," faithful in this to the ideas which he had indicated in his course of moral philosophy, considers liberty as necessary to the complete development of the productive forces, and justifies it by economic usefulness and expediency. Quesnay and Turgot demand it as a right, and present it to us as the expression of justice. In fact, liberty, from the economic point of view, is a right, because it has its source in more freedom, and ends in personal responsibility and positive duties; it is just, because it alone is able to insure to man the remuneration which is really due to his efforts, and to the goods, as a consequence, the price which belongs to them. In the eyes of the physiocrates, liberty is not only the most favorable manner of making an equitable division of the fruits of labor and the most powerful stimulant to man's activity, but the manifestation of his conscience, the sign of his right, and the source of his duties. Notwithstanding the deviations into which they have allowed themselves to be drawn by a vicious method rather than by an error of principle, notwithstanding their adventurous incursions into the domain of natural law, it will be the everlasting honor of these worthy heirs to the Cartesian tradition, to have given as a foundation to political economy the grand principles of property, liberty, and individual and collective responsibility, with which all economic questions are necessarily connected. Smith regarded man as a being exclusively productive; and just as in his system of moral philosophy he did not rise to the superior idea of the good, of which sympathy, or fellow-feeling, is but the result, so in political economy he did not ascend to the idea of the just, that is to say, to the first data upon which the economic life of man and of society rests.


—The fault has been found, and justly, with the "Wealth of Nations," of a lack of proper arrangement of the various parts, which prevents the whole of the doctrine from being clearly discerned from the beginning: questions of the greatest importance are often treated there incidentally and à propos of questions which should have been presented only as secondary ones. Thus the author's ideas on the price of things are intercalated in a dissertation on the value of the precious metals during the last four centuries; his notions on money in the chapter on the treaty of commerce; his principles of commercial liberty in the examination of the mercantile-system. But if this great work offends by a lack of method, it none the less remains the finest monument raised to political economy. What a treasury of true ideas, of ingenious and profound observations, does it not offer us! It is by drawing inspiration from the thoughts of the master that his successors have accomplished all the progress which has since marked the advance of economic knowledge. It was by declaring themselves as his disciples that Malthus, by his theory of population, J. B. Say, by that of outlets, and M. Dunoyer, by his valuable studies on productive services, enlarged the domain of science; and the commercial policy of England, which will one day be that of all nations, was inaugurated under his auspices, and triumphed by the help of his arguments.


—Smith passed the two years which followed the publication of the "Wealth of Nations" in London, in the society of the most distinguished men of England, and in frequent intercourse with Gibbon, Burke and Pulteney. In 1778, having been appointed, through the influence of the duke of Buccleugh, commissioner of customs in Scotland, he returned to Edinburgh. It was in this city that the last twelve years of his life glided away. The leisure allowed him by the business of his office was employed to a great extent in the revision of his works, the successive editions of which he superintended with great attention. He had, it is said, the intention of publishing a critical examination of L' Esprit des lois. This study was undoubtedly connected with a treatise on civil and political law which he had undertaken to write. The death of his mother, whom he lost in 1784, and, four years later, that of a cousin of whom he was very fond, were the cause of a grief from which he never wholly recovered. In 1787 the university of Glasgow conferred the title of rector upon him, an honor which he appreciated very highly. From that time his strength gradually failed. When he felt the first attack of the painful malady which was to carry him to the grave, he ordered all his papers to be destroyed. "I intended to have done more," said he to his friends, "and there are materials in my papers which I might have turned to account; but that is out of the question now." His resolution with regard to this had long been taken, as a letter addressed to Hume in 1773 shows. In the month of July, 1790, after severe suffering, borne with courageous resignation, this great man was taken away from science and the world.


—His character was at once affectionate and reserved, frank and lively, and his habits of a simplicity from which he never deviated at any period of his life. His generous and impetuous soul, under an outwardly cold appearance, rose to enthusiasm, when there was question of the great interests of humanity. He spoke little, and when he was forced into his intrenchments, his speech was embarrassed, and his expositions assumed, without his knowledge, a dogmatic form which gave them the semblance of a lesson. This manner of expressing himself was a result of the habit contracted in his public courses on the science, and not of pretension, which was far from his mind, for never was there any one whose modesty was more easily alarmed than his. He was profoundly versed in the philosophic knowledge of the human heart and mind; but he lacked penetration in his judgment of individuals. The studious and retired life which he had led had familiarized him but little with the character and passions of men. His memory was prodigious, but very far from being a ready one. If Adam Smith did not share the brilliant qualities which fell to the lot of several of his contemporaries, he at least had, in the highest degree, that penetrating exactness and firmness of opinion which are perhaps more useful to the progress of the human mind, and which at the same time confer glory on their possessor.*107


Notes for this chapter

While he occupied his chair at Glasgow, Smith was in the habit of giving certain lectures on the elements of political economy, as it was understood in his time, i.e., upon those artificial regulations and restraints of civil society which statesmen conceive to be necessary or expedient. Here he was accnstomed to draw those inferences in favor of a policy of freedom which he afterward expanded into his celebrated work. Neither he, nor, indeed, any one else, had ever elaborated at this time the laws under which the production of wealth is effectually secured.

—The modern science of political economy has been developed from a host of negative inductions. Statesmen, misled by the selfish misrepresentations of reputed experts, have from time to time controlled and misdirected trade in the fancied interests of trade. They have attempted to be wiser than nature. They have seen that order and government have been necessary to the well-being of society, and that confusion and mischief are the invariable result of uninstructed self-interest. But. forgetting that the business of government is to check aggression only, and to secure every man a fair field for the exercise of his own labor, they have unconsciously aided aggression, curtailed liberty, and narrowed the field in which labor could exercise itself. There is of course a border, for the occupation of which the advocates of liberty and control constantly contend. The wisdom of government in the days of Adam Smith, and frequently enough in our own time, is to extend the area of government, and, with it, to assert the just control of an administration over the innocent acts of individuals. Such a line of action on the part of a government may be adopted with the best possible intentions, as Smith shows in the ninth chapter of his fourth book, where he sketches the policy of Colbert. Such a policy found its earliest and most complete refutation in the reasonings which are contained in the "Wealth of Nations." * * It has been objected to Adam Smith and Hume, that they did not foresee the French revolution, intimately as they were acquainted with the state of France. But the objection is shallow What is called political prophecy is often mere guess work, which no wise man will seriously indulge in. The easiest way in which weak men think they can gain a reputation is by sinister predictions of political events. No one can anticipate the conservative forces of society, no one can gather enough information to make a safe induction as to the resistance which may be made to change, or, indeed, as to the forces which will compel change. But there is such a thing as political prescience. It is not difficult to discover the inevitable consequences induced by certain kinds of political action. This faculty Smith possessed in the highest degree, in a far higher degree than Hume, whose sagacity and acuteness he admired so much. Of this prescience his great work is the most noteworthy illustration. No person has ever pointed out with more exactness the effects of a mistaken commercial policy. the invariable reaction from a course of legislation which does not commend itself to the moral sense of a nation, and the mischievous consequences which ensue when a public law gives its sanction to private selfishness. * * The range of the subjects treated in Smith's work is very wide. Social history and the politics of commerce occupy his attention as much as mere abstract reasonings. His educational theories have been generally accepted. His rules of taxation are classical. His vindication of free trade is complete. His criticism of the great company has been the basis of the latest legislation on the Indian empire. His conception of the mutual relations in which nations stand, is as comprehensive as it is generous. It should not be forgotten that Smith did not propose to himself the discovery of a scheme which should make any one country wealthy or prosperous at the expense of the rest of mankind, but how the wealth of nations should be developed. He rose far above the peddling maxim, that the gain of one people is the loss of another Hence his work is international, and has formed an effective protest against those shams of a sordid self-interest which masks itself under the name of patriotism.

—Among economists, Smith possesses the inductive mind in the highest degree. His work not only displays a wealth of varied reading, but is full of facts. Considering, too, how inexact were the statistical data on which he could in his time rely, his sagacity is remarkable. No example of this quality seems to me more striking than his inference that the precarious occupants in the ancient manor must have passed through a métayer tenancy before they reached the independence of the fifteenth-century yeoman, as described by Fortescue. Such was actually the fact, as I have been able to discover from a very large investigation of farm accounts during the epoch referred to by Smith. But, in fact, to be scientific, political economy must be constantly inductive. Half, and more than half, of the fallacies into which persons who have handled this subject have fallen, are the direct outcome of purely abstract speculation. In consequence, though he was the progenitor of the science, and necessarily left it incomplete, Smith is far more frequently in the right than his critics are. Almost every blemish in his work (some few inaccuracies of expression excepted, which arise from a somewhat loose use of terms,) is due to his exaggerated sympathy with the economic theories of his French friends and teachers. It is to this influence that we can trace his errors as to the nature and causes of value, and whatever is defective in his exposition of rent. Even here, however, he seems to me to be much more in the right than Ricardo, who accounts for the origin of rent on grounds which have absolutely no warrant in fact. His most adverse critics have, however, united with his warmest admirers in his vindication of private liberty against the interference of government; that is, in his advocacy of what are called free trade principles. To the modern reader, who recognizes the vast services which the merchants and manufacturers of Great Britain have done for such principles as Smith advocated, the language which the author uses about the mercantile classes seems singularly harsh and bitter. "The passionate confidence of interested falsehood"; the policy of a "great empire" being guided by the policy of "shop-keepers"; "impertinent badges of slavery, imposed by the groundless jealousy of merchants and manufacturers"; "illiberal and oppressive monopolies"; "the mean and malignant expedients of the mercantile system," and similarly pungent comments on the machinations of the trading classes a century ago, are expressions of active animosity against interests which Smith must have thought hostile to the public good. But, at that time, the leading merchants deserved little sympathy from any person who considered this public good as the paramount object of economy and legislation. Their intrigues had prevented the establishment of bonded warehouses. The mercantile classes drove Walpole into the war of the right of search. The real or reputed interests of the same order precipitated and prolonged the seven-years war. The costs of that war, and the sustentation of the East India company, whose conquests had made it bankrupt, led to the uprising of the American colonists, and the war of independence. The merchants who stimulated, and the nabobs and planters who continued, these costly struggles, were no doubt powerful in Change alley. They were, moreover, ready to make the highest biddings for rotten boroughs. But they were detested by the people, and especially by those free-holders in whom, as Smith thought, the strength and hope of the nation resided Macaulay has given, in a few words, a statement of how public opinion estimated these people, in his "Life of Lord Clive, "the greatest of the race.

—The most energetic attack, however, which Smith made on any institution of his time, was that on the East India company. To us the company is a thing of the past. In Smith's day it was the most brilliant phenomenon that the world had ever witnessed. A very few years had created the Indian empire; had changed a few timid and servile traders into a force of heroes, by whom successes had been achieved more amazing than those of Cortez and Pizarro. In the face of this extraordinary prestige, which affected the whole western world, the author of the "Wealth of Nations" dissected the pretensions of the great company, showed that it failed as a trader, and failed as a ruler; and proved that its government was mischievous to its subjects, and its monopoly a wrong upon the English people.—THOROLD ROGERS.


End of Notes

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