Simplicity Smith

Here are nine separate essays on different aspects of the whole construction of Adam Smith’s thought, written originally for separate publication during the past eight or nine years, but now reworked to link and hold together. Because of the reworking, the book shows Adam Smith as the creator of a whole system of knowledge including science, anthropology, moral philosophy, psychology and history, as well as the founder of economics. The book brings out both the common features of the different branches of this system and the well-known rift between the human nature of the moral system, with its deep ties of sympathy for others, and the calculating but beneficial selfishness of the human nature of the world of economic relationships. Since Smith held that the types of human society, of political and social structure, were all dictated by the ‘mode of subsistence’, this rift is a fundamental cleavage across the whole span of the system. Because of it, it is in the economic system rather than in the moral that the ‘hidden hand’ of God had an elaborate task to perform.

Part of this study is detective work on the actual constructing of Smith’s economic thought. Assisted by two sets of students’ lecture notes, Professor Skinner is able to show when and how Smith made the link between the ideas of the division of labour and the importance of the extent of the market. For a moment we can enter into the mental processes of this reserved philosopher. Professor Skinner also explores, though with less certainty, the motivation behind Smith’s use of the American story as an instrument with which to attack mercantilist beliefs.

The book brings out Smith’s extraordinary indifference to observation, quantification or experiment – all the methods by which proof is added to theory. When in his early days he wrote on astronomy, it was not the quality of the observation that interested him, or the likelihood of verification, but the simplicity of a theory. Simplicity was the test of rightness. Progress towards the truth meant the reduction of the number of basic principles employed. So long as Newtonian thought was adequate, this could be held. In the world of economics, Smith’s theory was not, of course, simple, but he did offer insights and opinions on the main problems of economic growth. It does not destroy the importance of his ideas that in various instances he can be shown to be wrong in specific statements of fact, and that these are often facts that could have been ascertained. Doubtless economics became much duller when quantification stepped in, yet it is a pity that he did not apply himself – as an economic historian if not as an economic theorist – to collecting evidence on some of his assertions.

The essays repeatedly remind the reader of the links between the different elements in Smith’s whole system. He was probably the first to see that the division of labour not only had enormous effects on production but was also a source of alienation. The man whose ‘whole life is spent in performing a few simple operations’ becomes ‘altogether incapable of judging’ the ‘great and extensive interests of his country’. Even if he had remained capable of such judgment, the political system of Smith’s day would have given him no outlet. It was still bound by the concepts expressed long ago in Ecclesiasticus, and expressed rather more sonorously than by Smith. Craftsmen, says Ecclesiasticus, ‘shall not be sought for in publick counsell.’ But ‘they shall maintain the state of the world, and all their desire is in the work of their craft.’ Eighteenth-century thought had made an enormous step from the primitive idea of Gregory King that labourers subtract from the wealth of the country, and Smith could appreciate the value of labour, even if he stumbled over service occupations. But we cannot fail to note the static nature of the basic ideas of property and power, and hence of the role of the labouring poor, which went through the whole century.

Smith, as Professor Skinner shows, was fascinated by the complexity of society. He also accepted a large area as available for government action. His desire to see the state control the activities of religious groups, and so prevent them ‘persecuting, abusing or oppressing’ one another, gains significance when we remember that he was writing in Scotland. Smith and his allies held that their philosophical history was a science, but it had traces of specific local roots. They could not stop being citizens of 18th-century Scotland even if they spoke as citizens of Britain or of the world. And here again, on the local bearing, we see the split between perception and ignorance in Smith. His comments on the general trend by which magnates lost their judicial and military powers until their relationship with their tenantry became one merely of cash, his comments on the importance of the great internal market of Britain, or on the protection of liberty by law, all these are basic themes of the Scottish story in the 18th century. It seems unlikely that they would have been stressed in the same way by someone based in London or Amsterdam. Against these important assertions of what was happening in his home country we can ignore a few wild remarks about the movements of basic prices.

Smith’s strengths and weaknesses, the contrast between his astonishing insight and his flaws, bring out the problem of the relationship between ideas and facts in all big theoretical developments. It was, for instance, important to grasp the idea of the natural level of wages. It is a pity, though, that Smith did not also see how much of the wage structure of his day was not ‘natural’, but determined by preconceived notions. Then and later, the wages of women were fixed without real attention to the value of the tasks done, and so was the reward for much of the work by skilled artisans. There is another story, big enough for a book on its own, in the social and political assumptions of 18th-century Britain that Smith did not get around even to labelling, let alone exploring.