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Benevolent Adam Smith

The Glasgow Edition of the Works and Correspondence of Adam Smith, I. The Theory of Moral Sentiments

by Adam Smith, edited by D.D. Raphael, by A.L. Macfie.
Oxford University Press, 422 pp., $33.00

The Glasgow Edition of the Works and Correspondence of Adam Smith, II. An Inquiry into the Nature and Causes of the Wealth of Nations

by Adam Smith, edited by R.H. Campbell, edited by A.S. Skinner, textual editor W.B. Todd
Oxford University Press, 2 vols., 1162 pp., $55.00

Essays on Adam Smith

edited by A.S. Skinner, edited by Thomas Wilson
Oxford University Press, 672 pp., $37.50

A number of great works appeared in 1776—Jefferson’s Declaration of Independence, Paine’s Common Sense, Smith’s Wealth of Nations, the first volume of Gibbon’s Decline and Fall, and the first volume of Bertotti-Scamozzi’s Buildings and Designs of Andrea Palladio. The bicentennial of all five publications was celebrated in 1976; but Smith received the most illuminating tribute—the launching of Oxford University Press’s Glasgow Edition of Smith’s works, a beautifully edited series that will in time include a new biography and all the important Smith fragments and correspondence. These give us the materials to break Smith out of the prison of his popular reputation as the rationalizer of greed.

Smith anniversaries have been uncommonly fruitful affairs. The centennial prompted Bagehot’s essays on the man and his works. The sesquicentennial produced a series of Chicago lectures that became classics of their kind—Paul Douglas on the paradox of value, Jacob Viner on the inaccuracy of calling Smith a laissez-faire purist, Melchior Palyi on the early impact of Smith.1 Contributors to this new Glasgow volume of Essays are still arguing with Douglas and Viner, still drawing on Palyi’s work.

But the bicentennial outshines former efforts. It can draw on advances in textual scholarship, and on a fortuitous discovery—that of a new (and fuller) set of student’s notes from Smith’s course on jurisprudence. This discovery made it possible for Ronald Meek and Andrew Skinner to redate the sequence of Smith’s fragments on the division of labor, in a seminal article that appeared long enough before the celebration to let the Glasgow editors and some of the essayists absorb its importance.2

The most inclusive approach to Smith looks to what the Germans call “das Adam Smith Problem“—the difficulty of reconciling the 1759 Theory of Moral Sentiments (henceforth referred to as MS) with the 1776 Wealth of Nations (henceforth WN). In the first book, Smith based human happiness and virtue on the “fellow feeling” one has for others:

We have always, therefore, the strongest disposition to sympathize with the benevolent affections. They appear in every respect agreeable. We enter into the satisfaction both of the person who feels them, and of the person who is the object of them. [MS pp. 38-39].3

But WN does not speak of sympathy with others as the driving force of social life. It grounds the wealth of nations in the love of self:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. [WN pp. 26-27]

Joseph Schumpeter thought it barely conceivable that two such different works could issue from the same brain. Viner, in his 1926 Chicago lecture, spoke of the “irreconcilable divergence” between the two works. Germans tried to solve the Problem with an “Umschwungstheorie,” postulating a complete transvaluation of values between 1759 and 1776. But that seems precluded by the fact that Smith revised his MS text, without altering its basic thesis, fourteen years after publishing WN.

It is not surprising that the Problem gets much attention, not only in the long introductions to the Glasgow texts but in the Essays on Adam Smith (henceforth Essays) and The Market and the State (henceforth Market).4 The fact that so many people still circle around this irritant makes it premature to say the Problem has been solved—though the most serious student of it in these papers, D.D. Raphael, finally dismisses it as a pseudo problem.5 The truth seems to be, rather, that maturing scholarship on two subjects may in time put the Problem to rest. The first of these is Smith’s central concept of the division of labor, the second is Smith’s debt to the philosopher Francis Hutcheson, under whom Smith studied in Glasgow in the 1730s. Naturally, both these subjects are affected by Meek’s and Skinner’s redating of the pre-WN material.

1. Division of Labor

The starting point of The Wealth of Nations is the famous tale of a pin’s manufacture by “about eighteen” separate operations.

…to make the head requires three distinct operations; to put it on is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands…. If they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they could certainly not each of them have made twenty, perhaps not one pin in a day…. The division of labor…so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labor. [WN, p. 15]

No one can neglect the division of labor in Smith’s thinking. But W.R. Scott focused sharper attention on this concept when, in 1937, he published the “Early Draft” (henceforth ED) of The Wealth of Nations. This looks like a prospectus for a publisher, written when Smith was first planning his work. Thus Scott dated it after 1763 (i.e., after his dating for the notes on jurisprudence and around the time of Smith’s first work on WN in France). This allowed for the extraordinary fact that division of labor is not only the starting point of ED but almost its whole point. There is very little on stock accumulation or competition, the subjects that had drawn attention away from division of labor in many studies of WN. Scott’s dating put ED early in Smith’s thinking; but it did make scholars look harder at division of labor as the kernel from which that thinking had developed.

Meek and Skinner, for a reason to be looked at shortly, date ED even earlier, before 1763. That might seem further to demote the concept of division of labor, making it an even more primitive element in Smith’s thought. But Meek and Skinner also let us see how Smith’s characteristic method grew directly from the concerns he absorbed from Francis Hutcheson.

W. R. Scott had already proved, in 1937, that Smith’s lectures on jurisprudence followed an order of topics used by Francis Hutcheson in his Short Introduction to Moral Philosophy (the basis of Hutcheson’s lectures in the late 1730s when Smith was his student at Glasgow). It puzzled W.L. Taylor6 that Hutcheson put his lecture on price between those on oaths and on contracts. But Hutcheson, like most of the Scottish thinkers of the Enlightenment, was anti-Lockean in his insistence on the fact that man is a social animal, born into a family, sharing communal signs and language as soon as he becomes self-conscious. For the Scots, unlike Locke, no hypothetical “individual” could contract into society (an idea Hume ridiculed). Thus Hutcheson treats trade as an aspect of language, of the signals of mutual need that lead to mutual succoring. Thus trade fits naturally into the discussion of oaths and contracts stressing the “fidelity” of human communication. This is the approach everyone recognizes in Smith’s MS, with its grounding of virtue in sympathy with others. And this is what WN, with its emphasis on self-interest and competitiveness, is supposed to contradict.

But look again at that concept, division of labor. This arises, both in ED and the lecture notes, from a discussion of human cooperation that follows Hutcheson’s line of thought. People agree, Smith argues, to work together on one project by doing different things. The performer of one function cannot try to undercut the performer of another, without defeating the whole cooperative endeavor. Competition does not arise, at this level, for Smith. The same is true for Continental theorists of divided labor—e.g., Turgot and the Marquis de Chastellux. Chastellux argued that only a large division of labor in society allows men to specialize in “philosophy” (science), thus making progress possible—the very point of Smith’s famous Fragment A (now redated by Meek and Skinner to post-April 1763).

The same kind of cooperation that brings men together to share in the production of a pin makes society at large recognize the need for specialization. So Chastellux noted that a developed society will not only feed the scientist, who works for the good of the whole society, but feed as well the soldier, who defends that society.7 One of Smith’s most striking departures from libertarian views was his defense of standing armies.8 It is hard to overstate the importance of this fact. The man thought of as the preeminent enemy of state power seems to grant the state what was considered, in his time, the most dangerous power of all! In this, he agreed with fellow Scots and socializing theorists like Chastellux on the need to divide society’s tasks on a cooperative basis.

But if this is the background of Smith’s thought, how does competition enter such a benevolent system of mutual succor? In one sense, it does not “enter” Smith’s thinking as a fresh element, since it was present in Hutcheson, who preached the virtues of free trade, the need for incentives to industry, and the consequent right to the fruits of one’s own labor. We can, in fact, say that there is a Francis Hutcheson Problem preceding the Adam Smith Problem.

Hutcheson believed in minimal government intervention, because he thought society so natural to men that it needs little regulation. And he, like many philosophes, believed there was a providential machinery disposing men’s actions to a happy outcome, aside even from conscious intention. The invisible hand was ordering many different kinds of social machinery in that optimistic age.

Still, there is a new urgency, apprehended by all, in the way Smith highlighted competitive elements in his system. Most scholars agree now that WN was not original in its parts, just ingenious and thorough in the way it developed and connected available theories. Smith advanced the science of man in rigor, in method. Meek and Skinner allow us to see the very moment when this methodological breakthrough occurred.

The dramatic moment is circumscribable: it occurred at Glasgow, between one Tuesday of 1763 (March 29) and the next Tuesday (April 5), in that academic course covered by the new lecture notes. Indeed, the insight seems to have come by that first Tuesday night, and to have been developed over the weekend. Smith finished, on the first Tuesday, his Hutchesonian discussion of the division of labor. But the very next day he went back over his material, making new points; and the next Tuesday he introduced, out of the order it would later assume, his seminal concept that the division of labor is determined by “the extent of the market,” that is, the size of the area in which products can be sold. In his next year’s lecture notes,9 this insight is incorporated in its logical place; suggesting that it had, in the intervening year, been absorbed within his system and begun its leavening action. The well-known Fragments A and B, going beyond ED in their investigation of the market, treat the material of Smith’s March 20 and April 5 lectures, and reflect this absorbing process. Since ED does not have this material, Meek and Skinner can now date it prior to April 1763. The methodological bridge between the first concept of labor’s division and the larger scheme of WN is the concept of the market’s extent.

  1. 1

    The lectures were collected and published as Adam Smith, 1776-1926 by the University of Chicago Press.

  2. 2

    See Economic Journal 1973, pp. 1094-1116.

  3. 3

    References to MS and WN are to the Glasgow editions reviewed. WN, though published in two volumes, is paginated continuously.

  4. 4

    See MS Introduction, pp. 20-25; WN Introduction, pp. 5-10, 38; Essays pp. 83-99, 132-153, 45, 400, 548, 611; Market pp. 73-105, 299-304.

  5. 5

    MS Introduction, p. 20.

  6. 6

    Francis Hutcheson and David Hume as Predecessors of Adam Smith (Duke University Press, 1965), p. 23.

  7. 7

    De la félicité publique, 1772, Vol. I, pp. 43-44.

  8. 8

    WN pp. 698-708.

  9. 9

    These are the notes heretofore known as “Lectures on Jurisprudence,” for which Meek and Skinner give more evidence to support Cannan’s dating (1763-1764), against Scott’s (1762-1763).

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