- Economic Sentiments: Adam Smith, Condorcet and the Enlightenment by Emma Rothschild
Harvard, 366 pp, £30.95, June 2001, ISBN 0 674 00489 2
Among the intellectual figures who have shaped the modern world Adam Smith stands out as someone who doesn’t frighten the laity, might be positively welcomed indeed by middle England. Should the neighbours catch a glimpse of the Wealth of Nations sitting on the bookshelf alongside Thatcher’s memoirs or the latest Delia Smith, there’s no risk of ostracism. Adam Smith’s endorsement of the market economy almost guarantees his ideological soundness: businessmen and politicians of the Right assume, with an understandable complacency, that the 18th-century founder of political economy was ‘one of us’. Yet Smith’s writings provide no warrant for Conservative orthodoxy. The ideological capaciousness of the scriptures of laissez-faire capitalism bears comparison with that of the Bible itself. Take Smith’s enlistment in the cause of the poll tax. Readers of Revising the Rating System (1985), published by the right-wing Adam Smith Institute, were immediately – and reassuringly, one presumes – confronted with a text drawn from the Wealth of Nations: ‘Capitation taxes are levied at very little expense, and, where they are rigorously exacted, afford a very sure revenue to the state.’ Who would guess that Smith disliked capitation taxes, that his very next sentence linked poll taxes with countries ‘where the ease, comfort and security of the inferior ranks of people are little attended to’?
The temptation to gloat should be resisted, however. Until recently, Smith was scarcely better understood within the academy. The canonical status of the Wealth of Nations as the founding text of an independent body of knowledge known as economics long presented a major obstacle to appreciating him on his own terms. In economics departments, he was understood merely as the father of the subject, his hinterland an underexplored irrelevance. All disciplines have tended to write their own histories along narrow, teleological lines, however, and economists should not be singled out in this regard, especially when, over the past thirty years or so, they have begun to show a greater awareness of Smith’s historical context and of his wider career.
Smith’s oeuvre was for long notoriously associated with the Adam Smith Problem, the supposed irreconcilability of the Theory of Moral Sentiments (1759) with the Wealth of Nations (1776). In the Theory of Moral Sentiments our capacity for ‘sympathy’, an ability to imagine ourselves in the ethical situation of another, forms the basis of moral judgment; the Wealth of Nations, on the other hand, portrays us as beings motivated largely by self-interest. To generations of scholars this sharp contrast between the sympathetic and the selfish conjured up a hermeneutic abyss. Various strategies were employed to bridge it. Had Smith’s readers confounded prescription with description, a humanistic discussion of how man ought to be with a scientific presentation of actual economic behaviour? Or had Smith himself shirked the challenge of dealing with human nature in the round, possibly changing his mind altogether as he addressed its different aspects in separate books? Modern scholarship finds the Adam Smith Problem seriously misconceived, resting as it does on the identification of sympathy as a motive for action, rather than, as Smith intended, a basis of judgment. The dissolution of the Problem has led to his ethics being reintegrated with his economics. Even the most one-sided of Smith’s late 20th-century readers came to recognise that his economic theory rested on robust ethical foundations. The infamous Thatcherite reading list which Keith Joseph circulated to his senior civil servants when he took over at the Department of Trade and Industry in 1979 included the Theory of Moral Sentiments as well as the Wealth of Nations.