Reflecting on Adam Smith’s The Wealth of Nations, 245 years later – Foundation for Economic Education
The first ten days in the month of March 1776 brought forth momentous events that played roles in shaping the modern world.
The American Revolutionary War was not quite a year old. On March 2, American troops began shelling the British-occupied city of Boston. Two days later, they reclaimed Dorchester Heights overlooking Boston’s harbor, leading to the Brits’ evacuation of the city within a fortnight. Meanwhile in the South, militia from South Carolina and Georgia attacked a British fleet with fire ships in the Battle of the Rice Boats.
On March 3, American naval commodore Esek Hopkins took Nassau, Bahamas from the British in one of the first engagements of the fledgling American Navy and Marines.
Three thousand miles away in Edinburgh, Scotland on March 9, a professor published a new book in which he noted, “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”
Of these various developments, which do you think produced the greatest long-term consequences?
Correct answer: It was the book with the dog revelation.
Taking Boston was a milestone but arguably, American colonists were sooner or later likely to gain independence regardless of the disposition of one town. The battle in the South was a minor skirmish. The Continental forces left Nassau and returned to Connecticut before month’s end. In the war between the Americans and the British, March came in like the proverbial lion but went out like the quiet lamb.
The book that appeared on March 9, however, was a barnburner. It was An Inquiry Into the Nature and Causes of The Wealth of Nations by the moral philosopher Adam Smith. 245 years ago today, it made its debut. Economics has never been the same since.
In fact, before Smith, Economics wasn’t really much of a science of its own. Not every word in Smith’s book was new and original. Smith drew many ideas from previous thinkers much as, say, Murray Rothbard’s Man, Economy and State drew heavily from Mises, Menger, and more. But Smith pulled together some ideas of others, added many of his own, and presented it all in one comprehensive tome that earned him the title, “Father of Economics.”
The book wasn’t the last word on Economics and Smith didn’t get everything precisely right (who does?). A century later, for example, Austrian economists thoroughly demolished the labor theory of value which Smith (and the classical school) had mistakenly embraced.
Still, Smith’s insights were profound. He blew away the notion that society would be chaotic without the dictates of potentates, postulating a spontaneous order that arises from people constructively pursuing their self-interest. “In the great chessboard of human society,” he wrote, “every piece has a principle of motion of its own, altogether different from that which the legislature chooses to impress upon it.”
A chapter devoted to Smith in my book, Real Heroes: Inspiring True Stories of Courage, Character and Conviction, notes,
The ideas of Adam Smith exerted enormous influence before he died in 1790 and especially in the 19th century. America’s Founders were greatly affected by his insights. The Wealth of Nations became required reading among men and women of ideas the world over. Until his day, no one had more thoroughly and convincingly blown away the intellectual edifice of big government than the professor from Kirkaldy. A tribute as much to him as to any other individual thinker, the world in 1900 was much freer and more prosperous than anyone imagined in 1776.
Any country that produced an enlightened giant like Adam Smith should be immensely and forever proud of it. But alas, the cancel culture has its knives out for him. In the land of his birth—Scotland—and in one of the cities where he wrote and taught—Edinburgh—a few misdirected malcontents are thinking about modifying or removing a statue of him on the Royal Mile.
Why? Not because Smith advocated slavery (he was a fierce opponent of it), but because he simply noted that the evil institution is historically ubiquitous.
How ironic! Small-minded, virtue-signaling activists—who will likely accomplish in their entire lifetimes but a fraction for liberty what Smith bestowed upon us in a single volume—want to bring the great man down. Shameful (and shameless) doesn’t begin to describe just the thought of it. Pray that such iniquity does not materialize.
To describe a process is not to condone it. It is perfectly consistent to argue that slavery is ‘ubiquitous and inevitable’ while wanting to see it curtailed in all its forms. Indeed, Smith was one of history’s greatest allies against slavery—and often quoted by abolitionists in popular anti-slavery literature.
Let’s mark the 245th anniversary of Adam Smith’s hugely influential work not by a senseless re-writing of history or the application of poisonous presentism to his legacy, but by a celebration of his contributions. We can start in that regard with a sample of his wisdom in his very own words:
As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value, every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
[M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. 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. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.
The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard.
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