While for Smith a nation‘s economic state helps define its social and political structures, he categorically stated that the moral character of a people is the ultimate measure of their humanity. Smith offers models for how people should treat themselves and others. A blue-print of a just society was also offered by him in which the society concerns itself with its least well-off members, not just those with economic success. He had great belief in free market, yet in this system he did not want to see human beings merely as homo economicus
In 1776, at a time when Thomas Jefferson was writing the declaration of Independence and the American colonists were striking out for political freedom, a frail, absentminded former professor of moral philosophy was setting down the broad principles for an “economic declaration of independence” by urging kings and governments to break away from the prevailing mercantilist ideas which stated that a nation’s stock of gold and silver was the only measure of its wealth. Instead, in his work entitled ‘An Inquiry into the Nature’ and ‘Causes of the Wealth of Nations’, the product of many years of study, research and meditation, he clearly indicated that the true wealth of a nation was the labour of its people “which originally supplies it with all the necessaries and conveniences of life which it annually consumes.”
In order to use this labour most effectively, it was therefore essential, argued the professor, to remove the great mass of rules and regulations then in force, so that the rising merchants and business leaders could operate in freedom for the benefit of all. This policy of non-intervention by the government in the economic affairs of the individual has come to be known as economic liberalism or laissez faire. The father of this laissez faire (“to leave alone”) economics is Adam Smith (1723-1790) whose tercentenary is being celebrated this year through a remembrance, analysis and understanding of his treasured legacy in the field of economics and social sciences.
Hailed globally as the founder of modern economics, Smith, a key figure in Scottish enlightenment, was the first to realise that economics should not only be concerned with the production of wealth but the distribution of it too. In large part because of his ideas, England overturned the Corn Laws and went on to become the dominant economic power in Europe during the Industrial Revolution. Smith’s most prominent ideas ~ the “invisible hand” and the “division of labour” ~ are now foundational economic theories and his landmark treatise
The Wealth of Nations is relevant today not only because it makes a still pertinent and compelling case for free trade, low taxes and the invisible hand of the marketplace. It also resonates by calling out, with acumen and eloquence, the “folly and presumption” of any person or group who believe themselves fit to direct the affairs of other people. Adam Smith’s most wellknown works are his two masterpieces namely ‘The Wealth of Nations’ and ‘The Theory of Moral Sentiments’. But his fame as the father of modern economics often eclipsed his classic book on moral philosophy which displayed a deep understanding of “fellow feeling” or “empathy.” Many economists and scholars are of the opinion that the key principles discussed in these treatises can be harnessed in tandem to help create a new social contract for the 21st century where “reason, empirical evidence and civic engagement to prevent conflict and advance human flourishing” can combine to reliably act as a counterweight to mounting populism and tribalism all across the globe.
Although Smith’s Wealth of the Nations (1776) is one of the most influential books ever written, his principle of “self-interest” could not avoid criticism on moral grounds. But we should not forget the fact that he was a moral philosopher long before he was an economist and “fellow feeling” was at the heart of his other masterpiece ‘The Theory of Moral Sentiments’. And while, for Smith, a nation’s economic state helps define its social and political structures, he categorically stated that the moral character of a people is the ultimate measure of their humanity.
Smith offers models for how people should treat themselves and others. A blue-print of a just society was also offered by him in which the society concerns itself with its least well-off members, not just those with economic success. He had great belief in the free market, yet in this system he did not want to see human beings merely as homo economicus. Smith sincerely opted for a market that is itself a mechanism of morality and social support. Adam Smith revealed his gifted mind even in his youth, as evidenced by the fact that in 1737, at the age of fourteen, he was able to enter Glasgow University to study moral philosophy.
This is all the more remarkable when we note that his father had died before his birth (he was baptised on 5 June 1723). However, Adam’s mother did everything possible to raise him in comfortable circumstances and encourage him throughout his life. At Glasgow, he had the good fortune to have as a teacher Francis Hutcheson who was then developing his lectures on economic subjects.
From Glasgow, Smith came to Balliol College, Oxford where he steeped himself in philosophy, Greek and Latin classics, in addition to French and Italian works. In 1748, he began a series of public lectures at Edinburgh on English literature, rhetoric and political economy.
This, in turn, led to his appointment as Professor of Logic at Glasgow University where, one year later, he moved to the chair of Moral Philosophy which included the divisions of natural theology, ethics, jurisprudence and politics. By using his lectures in these fields as a forum to sharpen and round out his ideas, he was able to publish ‘The Theory of Moral Sentiments’ in 1759 which immediately earned him reputation as an able thinker. In this book he attempted to explain human behaviour as a relationship between men in which sympathy is the most important and leading moral principle.
An action is to be considered moral, said Smith, when an unbiased and disinterested observer approves of it. Even though this expression of approval is really a subjective psychological sympathy, the moral worth of any action depends on its objective effect or, in other words, on whether it is socially useful or acceptable. A similar work today would classify the author as a social psychologist.
Despite the fact that in his academic life Smith was far removed from the strife and struggles of the world of business and politics, his keen intellect and powers of observation enabled him to view events objectively and to penetrate below the surface of things, and so to find and formulate fundamental principles related to these fields.
It is little wonder then, that his works were widely read and translated into many languages; he was the first Scotsman to appear on an English banknote in 2007 and an asteroid was also named after him. Even during his lifetime, small plaster busts of him appeared for sale in the town shops. A leading English statesman Charles Townshend was so impressed by Smith’s lectures and ideas that he offered Smith a job as a travelling tutor to his stepson, the Duke of Buccleuch.
For this service, Smith received a pension of £300 a year for life. It was customary at that time for young noblemen to be educated by travelling extensively abroad in place of a more formal university education. So, for the next two years (1764-1766), Smith and the Duke visited Toulouse, Geneva and Paris.
During these visits, Smith was able to meet Voltaire, Turgot, Quesnay and many others all of whom exerted some influence on his thinking. In fact, Smith began writing Wealth of Nations during the time he lived in Toulouse. Returning to Scotland to live with his mother, and thanks to his pension, he devoted himself exclusively to writing his magnum opus. He also accepted an appointment as Commissioner of Customs for Scotland at Edinburgh, a position similar to the one previously held by his father.
A short time before his death, Glasgow University paid special homage to its most illustrious student and teacher by appointing him Lord Rector in 1787. But till death Smith retained a great sense of humility in spite of many distinctions bestowed upon him during his lifetime. Smith died in Edinburgh in 1790, but just one week before his death he ordered that most of his unpublished manuscripts, numbering some sixteen volumes, be destroyed
(The writer, a Ph D in English, teaches the language at the Government-sponsored Sailendra Sircar Vidyalaya, Shyambazar, Kolkata)