On Adam Smith’s 300th, classical liberalism remains widely misrepresented
Story by Dan Hannan, Washington Examiner, 6/28/23
EDITORIAL:
Adam Smith is the author of “The Wealth of Nations”, the most famous book on economics ever published. The Founding Fathers based their writing of the Constitution on this book. You can read this book at:
The Wealth of Nations, Adam Smith
http://www.econlib.org/library/Smith/smWN.html
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Three hundred years ago, Adam Smith was born in Kirkcaldy, Scotland. Not long afterward, so the story goes, the greatest economist humanity has produced was snatched by a gypsy gang.
A passing traveler heard distressed wails coming from one of the wagons and alerted the townspeople. A mounted posse was dispatched and, happily for the cause of liberty, the toddler was rescued. Perhaps unsurprisingly after that experience, Smith grew into a nervous man, living with his mother and never marrying.
Smith is the most common surname in the British Isles, but no living Smith descends from the Scottish sage. He had no children, instead leaving behind two books which changed the world.
I described Smith as a great economist, but he saw himself as a moral philosopher. His primary concern was not the functioning of markets, but the maximization of happiness. He in fact wrote three books, one on ethics, one on economics, and one on government. But, being the weird recluse he was, he ordered the third to be destroyed. From what we can infer (his biographer Jesse Norman has done a terrific job of reverse engineering the lost tome from surviving notes, lectures, and letters), it looks like his magnum opus, combining his intellectual brilliance with his deep humanity.
This second attribute is worth stressing, because Smith is often recalled these days as a desiccated economist who cared mainly about productivity. The line of his most often quoted is the one about people being moved by an “invisible hand” — a phrase Smith uses to explain how people acting wholly selfishly will often nonetheless benefit others.
Smith believed that human beings had a natural sympathy with one another that led them to look beyond their immediate prosperity. He grasped that commerce, far from sundering people, draws them together into networks of mutual dependency.
His understanding of trade has never been surpassed. He set out, in convincing prose, a series of ideas that people find as counterintuitive in our own day as in his.
He showed, for example, that there is no virtue in amassing trade surpluses. “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
He explained why protectionism is always self-defeating. “By means of glasses, hotbeds, and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?”
He proved that markets did not render people greedy, but harnessed their desire for wealth to socially productive ends. “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 self-interest.”
In an age that delights in damning Enlightenment heroes for having been white and male, he passes every woke test. He supported the rights of American colonists, backed a wider franchise, and always sympathized with the poor. On the chief retrospective issue for our generation, he was unimpeachable:
“There is not a negro from the coast of Africa who does not possess a degree of magnanimity which the soul of his sordid master is scarce capable of conceiving. Fortune never exerted more cruelly her empire over mankind, than when she subjected those nations of heroes to the refuse of the jails of Europe.”
Why, then, is the tercentenary of his birth not a cause of greater rejoicing? Because, just as free marketeers are habitually misrepresented, so is Smith himself. If classical liberalism is to be traduced as a cold, callous creed, of interest only to the rich and their lackeys, it is necessary to distort Smith beyond recognition.
In fact, libertarians stand for almost the opposite of what their detractors claim. They start from the proposition that we should not harm, coerce, or rob other people, and that this general maxim doesn’t cease to be true simply because we call ourselves the government and claim a democratic mandate. They defend the rights of the little guy against big corporations. They elevate the freedom of the individual over the various abstract nouns popular with collectivists.
The infant Adam Smith may have been carried back to Kirkcaldy, but his ideas have been kidnapped ever since. They, too, need to be brought home.