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CHAPTER 1
ADAM SMITH: THE MAN AND HIS BOOK
On 9 March 1776, there was published in London a book in two quarto-sized volumes, each of over five hundred pages, bearing the title: An Inquiry into the Nature and Causes of THE WEALTH OF NATIONS, and described on the title-page as being by ‘Adam Smith, LL.D. and F.R.S. Formerly Professor of Moral Philosophy in the University of Glasgow’. The publisher was William Strahan, and the price of the two volumes was £1 16s.
There was no great rush to buy it, and the reviewers were in no hurry to give it notice in the press. But the author had no reason to complain of its reception among those whose opinion he held in most high regard. To quote but one example, we find Edward Gibbon describing it within three weeks of its publication as ‘an excellent work … an extensive science in a single book, and the most profound ideas expressed in the most perspicuous language’.
The ‘extensive science’, it need hardly be said, is economics, or political economy as it was generally called in Adam Smith’s time (and indeed much later); and it says a good deal for Gibbon’s acumen that he was able to recognise that Adam Smith had succeeded in elevating into a science what had been hitherto the subject of unrelated speculation and disordered observation. Posterity has agreed with his evaluation, so that there is nothing extravagant in hailing Adam Smith as the founder of the science of economics.
Nearly two hundred years have passed since The Wealth of Nations was published, and in all that time it has never gone out of print. Nor is it ever likely to do so. For it is one of those books that have changed men’s minds, their ways of thinking, and it may be expected to continue to go on doing so as long as men are perplexed by the problems of wealth and poverty, the satisfaction of the basic necessities of human existence.
It was in the Britain of the eighteenth century that these problems emerged from the study and the counting-house to become the matter of public discussion and decision. For that development Adam Smith was mainly responsible, and thus there is surely no need for apology or explanation in applying his name to this collection of ‘documents’ intended to illustrate the everyday life of ‘the great body of the people’ (his phrase), living in the country and the century to which he himself belonged.
Before examining the ‘documents’, however, it is only fitting that we should know something of Adam Smith, the man himself and the circumstances of his life, and of the book which he wrote and left as an abiding legacy to Mankind.
The Man
Adam Smith was a Scotsman, or Scotchman as he would probably have preferred to say it, and this is one of the most important things about him. For he possessed in abundant measure the peculiarly Scottish quality of canniness; and only a canny man, one who was knowing and shrewd and carefully calculating, could have written The Wealth of Nations.
He was born (on 5 June 1723) at Kirkcaldy, a small place in Fifeshire, on the east coast of Scotland, looking across the Firth of Forth to Edinburgh. Thus he was a Lowlander; and the only part of Scotland that he knew really well was the Lowlands that stretch south-west from Kirkcaldy through Edinburgh to Glasgow. So far as has been ascertained, he never crossed the ‘Highland line’. He seems never to have felt any such urge as that which sent the elderly Dr Johnson (as typically English as Adam Smith was Scottish) to explore the unmapped and largely unknown region of the Scottish Highlands in the company of that eager young Scot, James Boswell.
It has been remarked that there were very few ‘Macs’ among his acquaintance. In religion, he was a Presbyterian, adhering like most of his countrymen to the Established Church of Scotland; while as for politics, he may be numbered among the Whigs, and as such was a firm supporter of the Hanoverian dynasty. The romantic accompaniments of the Jacobite legend left him completely cold.
Adam Smith’s father, also Adam Smith, was a native of Aberdeen-shire, but early in life removed to Edinburgh where he practised as a Writer to the Signet (more or less equivalent to the English solicitor). Clearly a man of parts and enterprise, he entered the government service, and was private secretary to the Earl of Loudoun when he was Secretary of State for Scotland. Then in 1713 or 1714 he received the appointment of comptroller of the customs at Kirkcaldy, in which he continued until his death early in 1723. This was some months before the birth of his son. As a posthumous child, then, Adam Smith was brought up by his mother – Margaret Douglas, daughter of a laird or small landowner in the neighbourhood – who was a woman of fine character, lived to a great age, and was the last as she had been the first, and perhaps the only, woman in his life.
Round about 1730, when he was seven, Adam Smith was sent to the Burgh school at Kirkcaldy which comprised two rooms, in one of which the master taught and in the other the usher or second master. The master in Adam Smith’s time was David Millar, who had the reputation of being an excellent teacher. The curriculum was very much on the lines of grammar schools in England, which means that the basis of instruction was the Latin grammar. This is clear enough from the report of a committee of inquiry that was set up by the Burgh council in 1732. Five of the six classes seem to have spent most of their time translating Latin passages into English, and then back again into Latin, coupled with ‘storing their minds’ with ‘vocables’, i.e. Latin words. The sixth class, in which were the juniors, were taught to read (mostly from the Bible), write, and ‘accompt’, that is, to do simple sums.
In 1737, when he was fourteen, Adam Smith was entered at the College, or University, of Glasgow, as a student. He spent three years there, receiving a sound classical education as it was understood in those days. He won no special distinction as a scholar, and seems never to have joined any of the students’ societies or clubs; but all the same, the impress of the place was on him to the end of his days. The teachers as a class were first rate, and one in particular influenced him greatly – Francis Hutcheson, who held the chair of moral philosophy. Hutcheson (1694–1746) was one of the founders of the typically Scottish ‘common sense’ school of philosophy. He was inclined to take a remarkably optimistic view of human nature and the human situation, and he has a place in the dictionaries of quotations with his saying, ‘That action is best, which procures the greatest happiness for the greatest numbers.’ He was a firm advocate of Liberty in every sphere, even in matters of religion – which so scandalised the clergy of the city that they tried to get him censured for heresy. Half a century later Adam Smith made public acknowledgement of his debt to ‘the never-to-be forgotten Hutcheson’.
After three years at Glasgow Smith was awarded an Exhibition at Balliol College, Oxford. He was at Oxford from 1740 to 1746, and his experience was far from happy. He learnt practically nothing from the teachers: as he remarked in The Wealth of Nations years afterwards, ‘the greater part of the public professors at Oxford have, for these many years, given up even the pretence of teaching’. Furthermore, as a Scotsman he was something of a social outcast, and he was always dreadfully poor. His exhibition was worth only £40 a year, and by the time he had paid £30 for his food and £5 for tutors’ fees, he had only £5 left for books and all other expenses. In all the time he was at Oxford he never went home once – for the very good reason that he could not afford to. Fortunately, the college had an excellent library, and here he largely educated himself by reading, not only the Greek and Latin classics but the prose and poetry of the great masters of French and Italian literature. After he had taken his B.A. he became entitled to a reader’s ticket at the Bodleian Library, and this, too, he made the fullest use of.
2. Glasgow College, on the occasion of an art exhibition held in 1762 in honour of the birthday of King George III.
Returning home to Kirkcaldy in 1746 he was for some time at a loose end, until he was invited to give some public lectures in Edinburgh on English literature. These were highly popular, and, his gift for popular exposition having been thus demonstrated, he was elected in 1751 to the professorship of logic at his old university at Glasgow. The year following he was transferred to the chair of moral philosophy which suited him much better, as the holder was in a position to lecture on practically any subject that appealed to him. Thus opened a period of some twelve years, which he long afterwards declared to have been ‘by far the most useful, and therefore by far the happiest and most honourable period’ of his life.
At the college his lectures were warmly appreciated by the students, and the authorities were quick to discover that he was possessed of a sound business sense that made him a most useful member of the faculty in all matters of administration. In the city, too, he made many friends, for he was no academic recluse but one who loved to mix with his fellow men of whatever class and situation. Notwithstanding these many outside interests he remained still the scholar, and the publication in 1759 of his Theory of Moral Sentiments won him something of a European reputation. Three years later the university conferred upon him the honorary doctorate of laws.
But he was not destined to remain an academic. Among the appreciative readers of Smith’s Theory was the prominent politician Charles Townshend, who had married the widowed mother of the young Duke of Buccleuch and was at the time seeking a suitable person to accompany the youth on the customary ‘grand tour’ of the continent. Townshend considered there could be no better choice than the author of so excellent a book, and forthwith he approached Adam Smith. The terms he offered were generous, and Smith felt obliged to accept, although characteristically he insisted on returning to his students that part of the term’s fees which he considered he had not rightly earned.
From the spring of 1764 until the late autumn of 1766 Smith and his young charge were in France, at first at Toulouse and latterly in Paris, where Smith was able to meet many of the most eminent persons of the time. Probably the man he was most at home with was Dr François Quesnay, one of the royal physicians and the acknowledged master of (as they came to be described in The Wealth of Nations) ‘a pretty considerable sect, distinguished in the French republic of letters by the name of the Economists’. (Another name for them is the Physiocrats). These economic thinkers constituted the opposition to the Mercantilists, whose principles had been those officially approved and adopted in France since the days of Louis XIV a hundred years before. Whereas the Mercantilists held that a wealthy country was one abounding in money and strongly favoured the state encouragement of the manufacturing interests, the Economistes took the contrary view, that ‘the labour which is employed on land is the only productive labour’, and they therefore championed the interests of the agriculturists. Adam Smith, while thinking that some of the Economists’ notion were ‘too narrow and confined’, yet allowed that Quesnay’s system was perhaps ‘the nearest approximation to the truth that has yet been published upon the subject of political economy’. For Quesnay himself Adam Smith retained a deep admiration; and although he was never his disciple he carried away from their conversations much that was of value to him when he set about the presentation of his own conclusions.
For some months after returning to England, Adam Smith was in London, spending much of his time in the reading-room of the British Museum. In the spring of 1767 he went back to Kirkcaldy and settled in the old home still presided over by his now aged mother, with a cousin, Miss Jean Douglas, who did the housekeeping. Here he dictated every morning to a secretary, to such good purpose that most of his book was in manuscript by 1772. But there was still a great deal of revision to do, much of which was completed in London. Then at length, the book was published in the spring of 1776.
For a couple of years Adam Smith remained in London, where he was a member of the Johnsonian club and circle; but in 1778 he was appointed by Lord North, the prime minister, on the recommendation of Smith’s former pupil the Duke of Buccleuch, one of the Commissioners of Customs in Scotland. This required his settlement in Edinburgh, and, since the salary attached to his new post was the substantial one of £500 a year, plus £100 a year in respect of the commissionership of stamp duties which went with it, he was able to afford a large house in a good residential district (Panmure House, in the Canongate), to which he lost no time in bringing his mother and Miss Douglas.
For some years his life in Edinburgh was happy and successful. He had money enough to indulge his favour...
