The Individual in Society: Papers on Adam Smith

A. L. Macfie

• Publisher: Taylor & Francis
• Year: 2013
• eBook ISBN: 9781136508998
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Adam Smith's Wealth of Nations has been among the world books for over two hundred years and has gathered a mythology, which does scant justice to the actual book. One reason for this was that the Wealth of Nations was one of a series of studies through which Smith hoped to complete his system of moral, social and natural philosophy. The Individual in Society illustrates this system, especially in relation to Smith's other major work, The Theory of Moral Sentiments and examines its relation to the Wealth of Nations. Included are:
* Chapters on the views of important commentators such as Zeyss, Eckstein, Jacob Viner and James Bonar
* Discussion of the ethical and sociological background of Smith's work and its influence on the thought of the next century.

1 INTRODUCTORY

DOI: 10.4324/9781315016528-1

these papers have arisen more from circumstance than from intention. The first in time was written as an address to be given after the unveiling of a plaque on the site of Adam Smith’s house in Kirkcaldy: a request not to be refused by one who had grown up under the influence of W. R. Scott and so felt under some obligation to continue his work, on succeeding him. Before 1950, I had had no more than the interest felt in Adam Smith by all teachers of the subject. My specialization had lain elsewhere. But events tended to underline my special obligation. In 1955 I was asked to give the address at one of the earliest Annual General Meetings of the revived Scottish Economic Society. Into its constitution had been written the resolve to publish a series of Scottish Economic Texts taken from the works of the classical Scottish writers. It therefore appeared suitable to offer a review of the whole Scottish tradition in economic thought.

Through these exercises knowledge and interest grew, and the next task was more enthusiastically accepted. Ninteen fifty-nine was the two hundredth anniversary of the publication of Smith’s Theory of Moral Sentiments, an event which it seemed proper his old University should recognize. The two articles then written were originally written as one argument. But it appeared that this was at once too short for a monograph and too long for an article: hence the split. The two longer articles that follow them are more specialized, and therefore more for specialists, than any of the others. They also arose from circumstance. It is intended to mark the two hundredth anniversary of that annus mirabilis (especially for Adam Smith devotees) 1776, by a new edition of his Works. I have been heavily engaged with the Theory of Moral Sentiments. And I have found that especially the variorum toil of comparing its six editions sentence by sentence has tended at once to deepen my knowledge and to define my convictions about the book. (The only other writer on Adam Smith I know of who has been subjected to the same harsh discipline is Dr. Walther Eckstein, and I know he has had the same experience.) These two articles (as well as the Address) here appear for the first time.

The papers that follow these are on rather a different level. Especially after the1959 articles appeared, I was asked to write reviews on the Scottish classics. They are here offered as filling in?the background, and indicating Smith’s wide range of interest, and his veryconsiderable influence on later writers. The review of Dr. Cropsey’s book is included?because it represents a very different interpretation of Smith’s general philosophy,one which certainly deserves full consideration. The Address prepared for Kirkcaldy?(but unfortunately, for me at least, not delivered owing to illness) balances themore ethical and economic picture given by the previous papers with examples of his?interest in social theory, which was as keen in Smith’s thinking as any. The examplesgiven deal with his reflections on defence, on what we would call planning, on?education, and on the issues between centralized and federal forms of governmentwhich arose out of the union of the English and Scottish Parliaments as well as out?of the dispute with the American colonies. The article on John Millar develops theprobability that Millar’s work was one definite link between Adam Smith and his?contemporaries, and the two Mills and Ricardo of the next century. The final articlegives broader background on the classical economists in general rather than on Smith?in particular.

In the first five papers, I have kept to the order of appearance, partly because this order shows the growth of the enquiry, and partly because, I hope, it develops a logic of its own. As is usual, the sequence is from the general to the particular, until, in the articles on the Impartial Spectator and on the Invisible Hand the treatment is narrowly specialized, and the going correspondingly heavy. The subsequent papers will afford, it is hoped, deserved relief.

Before arranging the collection, I had feared there might be considerable duplication, especially between the 1959 and the 1966 papers. But, unless I am biased (which I am) this does not materially occur (some important quotations are repeated). The approach to the Moral Sentiments is different in the four papers on it, and I hope complementary. Especially, the link between the individual and society is differently treated in the earlier as against the later articles. In the earlier ones, the vanity-pride-magnanimity link is described, whereas in the later ones the sympathy-impartial spectator argument is central.

I have made no changes in the texts. Any comments or changes in view that might seem desirable today are given in the new footnotes which are enclosed in square brackets.

So circumstantial a collection of papers invites two possible criticisms. The first is that there is excessive concentration on Smith. But this has its point. It is my conviction that Smith has rarely been properly estimated by economists who have not specialized on him in particular, and on the history of economic and ethical thought in general. What is here written seeks to emphasize that he himself would not have regarded his work as primarily economic. For him it was broadly social, fitting into that title the political as well as the psychological and ethical aspects of individuals living in societies. Two facts have tended to over-emphasize the economic side of his work. The first was the immense economic impact of the Wealth of Nations, arising considerably out of the way it could be used to support the more dominant economic forces of his and later times. The second is his genius for choosing and using factual data. He was at home in facts. He enjoyed ferreting them out, and giving them their proper weights. This suited his shrewd commonsense, so typical of those who live on the eastern seaboard of Scotland.

The second criticism is that there has been no very strong interest in the history of economic thought since the war. But this has always varied with fashion; and the under-current of interest in the long run has always been strong. Smith has always attracted research in many, often unexpected, parts of the world. Certainly, the general concern in history ebbed between the two wars of this century, with our growing concern with statistical and mathematical analysis. Not so long ago, I can remember a request from the editor of a journal not to send any more articles on history of thought—and not long before that, a similar request about articles on economic method, as the editor was rather deluged with them. Well, today one hardly ever sees an article on economic method. Yet one may properly feel that the first discipline any student, beginning a degree in any faculty, should learn is just what the sciences can do, and especially what they cannot do. Among the British universities, only at Keele, Lord Lindsay’s dream child, is this attempted, so far as I know. Is this only fashion? One can hardly avoid the fear that we are in constant peril of being caught up in our present social atmosphere; that where it is so generally believed that machines using physical forces can do so much, we tend to the ultimate blasphemy that they can take over our human responsibilities, which we feel so heavy. However this may be, one contrary indication is a recent growth of interest in history of thought. This again may reflect a contemporary need. Many young nations are seeking their take-off into industrial space. The economic thinking of the seventeenth, eighteenth and nineteenth centuries is probably more suited to their needs than the sophistication of the twentieth. And the Wealth of Nations, which grew from a region itself just achieving its take off, may be specially grateful to them.

However, these two subjects, method and history of economic thought, are much more closely related than has just been indicated —or at least they were in the eighteenth century. For method to the writers of that century was much more than mere method, or technique as it is apt to be to us. As an intense interest in the facts and in induction from them, it was in itself one aspect of a history and philosophy of society which was broadly held by all the closely related writers of the Scottish school, from Hutcheson, Steuart and Kames to Dugald Stewart; a method they applied to all the sciences, whereas today each so often has its own, Greek to the others. It was also the Scottish version of a European view of these studies, that of the Enlightenment. To mention only two, two who specially inspired them all, we may choose Montesquieu and Voltaire. Montesquieu, with his earthy grasp of fact, his constant interest in travellers’ reports, marks one initial chapter of modern anthropology. And Voltaire was a fountain-head, especially as to history. It is so also with Rousseau. The point of main contrast with today is that these men were all in close intellectual touch, breathed the same intellectual air, and so formed a European view (then the world view, apart from the unknown Orient). This is worth our close attention just because such a European foundation of belief simply does not exist today. And, if we are to prosper, we must recreate it; though it may be that the optimistic eighteenth century vision of a world culture, ever widening in an educated society, cannot revive in our day until the nations have recovered from the deep wounds they suffered in the wars, which have turned their energies inwards; and have then solved their immediate problem of living together at all. The eighteenth century should at least encourage us by showing how a European view is possible.

A similar contrast exists in their view of history and the philosophy of society. To them the history of society was a philosophy of history. They took the view, without questioning it, that a philosophy of society must in method be historical. For societies themselves were natural growths in their own unique environments, and interpreting that growth implied a theory of growth. It is true, they were short of facts, whereas we are overwhelmed by them. But even so, the contrast is worth our study. Today any suggestion of a philosophy of history is often regarded as confused thinking. But one of the continuing problems of philosophy has been just what is a fact. Our present abstention from theory about history may be only another example of withdrawal. It is not of course intended here to denigrate the twentieth as against the eighteenth century—that would be pointless and stupid. The eighteenth century had its obvious faults and gaps. Especially, its culture touched only the very few, whereas we have started, if only started, in the advanced countries, on the huge problem of raising the intellectual stature of the masses, now that mere poverty can be avoided. And we are still hampered by the mistakes, if not worse, of the nineteenth century; whereas the eighteenth century has a fairly clear if limited history of evolution from the Renaissance. Yet, if we can find the courage and vision to soldier on, this early achievement of such a European culture may serve as a model and an earnest that it is not quite impossible.

There are also other reasons why this resurgence of interest may be welcomed. One is the emphasis that history throws on the human side of economic theories. Especially, in eighteenth century Scotland we see men whose intellectual stature we probably acknowledge as greater than ours (we ought to), struggling with problems similar to our own, but by different methods. We see where they succeed, where they fail. If we have any comparative critical sense, this must suggest where we are failing, and what else we might try. It should convince us that each age has its unique problems, springing from its special stresses. And therefore it should impress on us that there is no absolute economic theory, only a body of thought relevant mainly to those contemporary facts from which it springs. Examples recur. John Stuart Mill’s dogmatism about the completeness of economic theory in his day is just a reflection of a relatively prosperous environment, a certain middle-class myopia, and of a clear-cut though superficial theory of ethics and society. It is a warning against complacency. The marginal theory may well seem to have reached near perfection, logically at least. But the harsh facts of economic life between the wars inevitably burst through (using their instrument, Keynes), to become the concern of economists and of the macro-economic theories of growth that these facts demanded. This ready reaction to facts was especially characteristic of Smith; and this contributes largely to make his work interesting for each age. It is also the best corrective to the natural tendency especially of academic economists to be absorbed by theory almost as a work of art—theory for theory’s sake—or, more dangerous, technique for technique’s sake. One reason for this contemporary danger may be that while universities are probably more influential today than they were then, academic economists, like many other scientists, are less in the whole world, more in regions of their own, than they were in the eighteenth century. Smith gave up his Chair at the age of forty, thirteen years before the Wealth of Nations appeared. Hume was never in a Chair. Ricardo, the Mills, McCulloch were immersed in business or journalism. Perhaps a more general, if vaguer reason is the different stresses on them in the two ages. The great economists of the eighteenth century lived comparatively comfortable lives in relatively placid environments. Justifiably optimistic, in their pleasant club life they felt blessed to be alive; whereas we have fed on bitter fruit, in the pits of evil and suffering on a world scale. When to this you add the sheer difficulty of covering, even broadly, enough modern disciplines, it is not surprising that we tend to grow inward rather than outward, to ward off the seemingly insoluble problems outside, and find peace in our own specialisms and techniques. We have seen exactly the same retreats in modern art, drama and literature. All become more introspective. Yet this offers no solutions to the real problems—only a million to one chance, like that of two satellites colliding. The eighteenth century’s synoptic grasp is certainly right, however much easier it was to them. However difficult to us, we cannot command success without it.

History then impresses the realization that our science has always been an artificial growth, or rather, one facet in actual historical growth. A quick way to suggest this is to apply the great man theory. Suppose Adam Smith had never lived. In view of his great influence on the Mills and Ricardo, economic theory would certainly have taken a rather different course from the one it did, continuously up to Marshall at least. If one looks for another “father” for the science, Sir James Steuart’s Principles of Political Economy is not a fanciful choice. If it had so happened, economic theory would have had a different emphasis.

One further aspect of Adam Smith’s thinking in particular, and of the Scottish school in general, may offer much for our guidance. They in the eighteenth century thought of economics only as one chapter (not the most important) in a general theory of society involving psychology and ethics, social and individual, law, politics, and social philosophy as well. This at least avoided the disintegration in thought, the lack of communication in practice which we almost accept today, though some deplore it without being able to do much about it. Lack of co-ordination in thought will inevitably re-appear in policy and government, and in such programmes as the planning of new regions and towns. In the New Town of Edinburgh we see the wide culture of the eighteenth century. Can we show such a union of all the arts, and (for its time) utilities? Though today we cannot cope with all these disciplines, yet here again the facts keep breaking through, and forcing us to realize that economics is not enough, even for practical economic problems. The very nature of planning, or the welfare state, involves questions of political, legal and social frictions, not to mention individual reactions, ideals and attitudes, which more and more demand the co-operation of all the social sciences. The catalyst of these new factors, for all these sciences, is the disappearance of mere-need poverty as the dominant problem, and the emergence of new problems of affluence—what we might truly call problems of ‘affluence-poverty’, (at least in the more developed states). A tight economic theory may be sufficient for a society where means are inadequate for mere life, combining with recurring stagnation of the economy. It was indeed accepted as adequate in the Utilitarian system. But where we have a relatively free choice among competing positive goods, these would reflect not mere economic necessities, the physiological musts of survival, but the positive valuations of people now able to command this relative affluence. Can these values just be assumed (as actual economic demands), as is legitimate for the more or less fixed budgets of necessities of the poverty economies? If not, we must find out the facts as to what in fact the people are wanting—and this is constantly changing. Must we not also say we should be thinking hard about what they ought to be wanting? If this is so, economics is clearly going to become much more complicated. For in place of a firm if harsh foundation, it will have to build on many actual or assumed bases which are ever changing. For this, contacts between all the social sciences, and some knowledge of and sympathy with all will be needed; perhaps, especially, as a start, with the facts of social and individual psychology. But this was just the eighteenth century approach. Its method was to start with the facts of human nature, with actual motives, with the influence of classes and groups —what bound them together and divided them, with the aesthetic and moral benefits derived from social life. It is on these notes that the Theory of Moral Sentiments especially plays, from its factual start to its later more ethical speculations. This is true also of the Scottish school in general, and of its individual members. It is the method of the age.

It may be objected that after the Darwinian theories of evolution, Freudian psychology and Marxist communism, the eighteenth century view is out of date. But as to the central issue in this book, the individual’s proper relation to society, this can be said. Evolutionary theory may have eroded the more traditional theological theories of society. But it has underpinned the basic view of Hume and Smith (and Aristotle) that man is by nature a social animal. Freudian theories may have intensified the difficulties that arise between the individual and the pressures of conventional social behaviour. But this only makes the issue more important, its solution more vital. And of Marxist communism the same can be said. The world issue today is between the centralized universal control of the state and the liberal theory of the individual. Nothing here has changed. And the study of these eighteenth century thinkers offers us simple, apt models for these very issues.

These lines of speculation have appeared to me sufficient justification for the collection of these papers. For they do describe the detailed interest in all the social sciences, and also the ability to integrate them all, which one of the most distinguished thinkers of his century achieved.

2 THE SCOTTISH TRADITION IN ECONOMIC THOUGHT¹

¹ Delivered at the Annual General Meeting of the Scottish Economic Society on March 24, 1955. Reprinted from the Scottish Journal of Political Economy, vol. II, pp. 81–103.

DOI: 10.4324/9781315016528-2

I

this essay must start with a confession. In undertaking, some months ago, to submit an article on some such subject as ‘The Scottish Tradition in Economic Thought’, I was, it is now clear, in a state of not very creditable ignorance. I had then a rather vague idea that one could in an article say something directly significant on this subject. I had, of course, at various times read the Scots classics in a rather haphazard way; but the effect of reading them all straight through in their proper sequence, in the hope of tracing the individual Scottish thread running through them—the effect of this has been radical. For it has forced the conviction that there is a quite specific doctrine and method in Scots economic thinking, especially clear and influential between roughly 1730 and 1870, and still alive, if not on top. As it shows some of the greatest names—Hume, Smith, the Mills—and also some considerable satellites—Hutcheson, Lauderdale, Rae, McCulloch—it at once appears that a mere article will not do. If there is a Scottish line inspiring these great writings, then only a volume could do it justice. The kind of thesis one would like to examine is the view that between Hutcheson and John Stuart Mill it was that Scottish mode of approach that formed the atmosphere of British economic thought. But this starts many other hares, and the most we can do here is to chase some of them conscientiously.

Our general theme must then be that there is a characteristic Scottish attitude and method which is important in the history of economic thought. It may be called the philosophical approach, though many of us may prefer to call it, equally aptl...

Table of contents

• Cover Page
• Half-Title Page
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Preface
• Table of Contents
• 1. Introductory
• 2. The Scottish Tradition in Economic Thought
• 3. Adam Smith’s Theory of Moral Sentiments
• 4. Adam Smith’s Moral Sentiments as Foundation for his Wealth of Nations
• 5. ‘The Impartial Spectator’
• 6. ‘The Invisible Hand’ in the Theory of Moral Sentiments
• 7. Polity and Economy: An Interpretation of the Principles of Adam Smith by Joseph Cropsey
• 8. Tribute to Kirkcaldy
• 9. John Millar—A Bridge between Adam Smith and Nineteenth Century Social Thinkers?
• 10. The Theory of Economic Policy in English Classical Political Economy by Lionel Robbins
• Index of Names