On Adam Smith's "Wealth of Nations"

On Adam Smith's "Wealth of Nations": A Philosophical Companion

Samuel Fleischacker
Copyright Date: 2004
Pages: 352
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  • Book Info
    On Adam Smith's "Wealth of Nations"
    Book Description:

    Adam Smith was a philosopher before he ever wrote about economics, yet until now there has never been a philosophical commentary on theWealth of Nations. Samuel Fleischacker suggests that Smith's vastly influential treatise on economics can be better understood if placed in the light of his epistemology, philosophy of science, and moral theory. He lays out the relevance of these aspects of Smith's thought to specific themes in theWealth of Nations, arguing, among other things, that Smith regards social science as an extension of common sense rather than as a discipline to be approached mathematically, that he has moral as well as pragmatic reasons for approving of capitalism, and that he has an unusually strong belief in human equality that leads him to anticipate, if not quite endorse, the modern doctrine of distributive justice.

    Fleischacker also places Smith's views in relation to the work of his contemporaries, especially his teacher Francis Hutcheson and friend David Hume, and draws out consequences of Smith's thought for present-day political and philosophical debates. TheCompanionis divided into five general sections, which can be read independently of one another. It contains an index that points to commentary on specific passages inWealth of Nations. Written in an approachable style befitting Smith's own clear yet finely honed rhetoric, it is intended for professional philosophers and political economists as well as those coming to Smith for the first time.

    eISBN: 978-1-4008-2605-6
    Subjects: Philosophy, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
    (pp. xi-xii)
    (pp. xiii-xiv)
    (pp. xv-xviii)

    Adam Smith was a philosopher before he was a social scientist, yet it remains unclear to this day what relationship his philosophical writings bear to his treatise on economics. There is little indication in theInquiry into the Nature and Causes of the Wealth of Nations(WN) that the book was written by a person who had rich views on subjects ranging from scientific method to the foundation of moral judgment, and there is no explicit mention at all of Smith’s earlier published work, the much-acclaimedTheory of Moral Sentiments(TMS). The apparent absence of moral concerns, in particular, from...

  6. PART I Methodology
    • CHAPTER ONE Literary Method
      (pp. 3-26)

      I begin with Smith’s writing style, since I will contend throughout this book that scholars have persistently misread theWealth of Nations(WN), and I’d like to show right off why it is easy to do that. WN tends to appear, in both scholarly and popular literature, by way of striking snippets. One can properly grasp its teachings, however, only by engaging in the painstaking exercise of reading the long, elaborate arguments from which the snippets get snipped. So I begin with some warnings about how not to read Smith and some suggestions about what can be gained by submitting...

    • CHAPTER TWO Epistemology and Philosophy of Science
      (pp. 27-45)

      Smith has surprisingly little to say, directly, about epistemology. Unlike Hume, he wrote practically nothing about the nature of or justification for claims to knowledge, devoting even his “Of the External Senses” primarily to how our senses work rather than to strictly philosophical questions. Similarly, in his essay on “Ancient Logics and Metaphysics,” although he gives us an extensive and largely accurate account of Platonic, Aristotelian, Stoic, and medieval views of universals and essences, he says almost nothing to indicate his own views on these subjects.¹ Nor does he, in these essays or elsewhere, expressly declare any position for or...

    • CHAPTER THREE Moral Philosophy
      (pp. 46-58)

      Smith’s moral philosophy appears in TMS; since this is a book on WN, we need not be concerned with it in detail. But a brief sketch of what goes on in TMS will be helpful—even to the question of why so little moral philosophy appears in WN.

      Smith holds, like Hutcheson and Hume before him, that what makes an act morally good or bad is the sentiment that motivates it rather than the effects it might have, and that the appropriate criterion for judging that sentiment is whether an impartial spectator would approve of it or not. He develops...

  7. PART II Human Nature
    • CHAPTER FOUR Overview
      (pp. 61-83)

      Every political and moral philosopher has some theory of human nature. Often that theory gets elaborated in considerable depth—think of the discussion of the tripartite soul in Plato’sRepublic, or Kant’s long discussions of our “human” versus our “rational” nature.¹ For one philosopher, human beings are essentially rational, for another they are essentially emotional; for one philosopher, they are much like, for another they are radically different from, other animals; for one philosopher, they seek union with God, for another pleasure, for a third freedom. The theory of human nature, for each philosopher, sets limits to moral expectations—one...

    • CHAPTER FIVE Self-Interest
      (pp. 84-103)

      “TheWealth of Nationsis a stupendous palace erected upon the granite of self-interest.”¹ Thus George Stigler, and thus, with minor qualifications here and there, two centuries of misinterpretation of Adam Smith, especially by economists. To claim that Smith endorses the notion that self-interest governs all human relationships is severely to misread WN, especially in its relationship to other theories of human motivation at the time. The claim fits Hobbes and Mandeville, not Smith; Smith devoted considerable energy in TMS torefutingthis aspect of Hobbes and Mandeville. Nor does anything in WN suggest that he changed his mind on...

    • CHAPTER SIX Vanity
      (pp. 104-120)

      Charles Griswold maintains that the economy, for Smith, is fueled by selfdeception, by “a large-scale mistake in our understanding of happiness” (AVE 224, 222). In truth, wealth is irrelevant to happiness and pursuing it requires us to plunge into “unceasing work” and constant “dissatisfaction.” Nonetheless, according to Griswold, “Smith explicitly argues that the fact that most individuals arenotperfectly happy contributes to the ‘happiness of mankind, as well as of all rational beings’ ” (AVE 225).

      Smith does not argue this, I believe, either explicitly or implicitly. In the first place, the internal quotation in the second citation from...

  8. PART III Foundations of Economics
    • CHAPTER SEVEN Foundations of Economics
      (pp. 123-142)

      This is a philosophical companion to WN rather than an economic one. I want to stay away from the quarrels economists have over what is useful and what is wrong-headed in WN’s claims about money, rent, capital, and the like.¹ But some of Smith’s foundational terms and principles raise philosophical problems, and I will touch briefly on these.

      Smith sets up two dichotomies of price, in WN Book I, chapters v and vii. Both have been criticized by later economists for seeming to hold out a notion of absolute value that, it is maintained, have no place in a properly...

  9. PART IV Justice
    • CHAPTER EIGHT A Theory of Justice?
      (pp. 145-173)

      Smith’s theory of justice has been identified by many recent commentators as both his most important contribution to political thought and the central link between his moral philosophy and his political economy.¹ I think it is neither as central nor as successful as that. Nevertheless, the emphasis given to justice in recent interpretations has been a helpful corrective to earlier tendencies to view Smith as a utilitarian.² He certainly was not a utilitarian, saying in theWealth of Nationsthat one should never sacrifice justice to utility except in cases of the “most urgent necessity” (WN 539; cf. also 188),...

    • CHAPTER NINE Property Rights
      (pp. 174-202)

      We have seen that Smith succeeds in justifying absolute principles about the form of any legal system, and in gesturing toward a vaguely defined realm of liberty and security from harm that every legal system ought to protect, but that this is compatible with systems of justice that have very different content, systems that protect different sorts of marital, contractual, and property arrangements. It is the last of these issues that I want to stress now. Even someone unpersuaded that justice in general has an ineliminably conventional component for Smith will have to grant that Smith allows systems of property...

    • CHAPTER TEN Distributive Justice
      (pp. 203-226)

      “Distributive justice” in its modern sense calls on the state to guarantee that property is distributed throughout society so that everyone is supplied with a certain level of material means. In its Aristotelian sense, “distributive justice” referred to the principles ensuring that deserving people are rewarded in accordance with their merits. So the ancient principle had to do with distribution according to merits, while the modern principle demands a distribution independent of merit.Everyoneis supposed to deserve certain goods regardless of merit, on the modern view; merit-making is not supposed to begin until everyone has such goods as housing,...

  10. PART V Politics
    • CHAPTER ELEVEN Politics
      (pp. 229-258)

      The truth in the libertarian reading of Smith comes from his cynical, dismissive view of politics. Many libertarians justify their opposition to government intervention in individual affairs by the belief that it is unjust to tell people how to act, except in those cases where their actions would inflict violence or fraud on others. We saw in part IV of this book that Smith does not believe it is always wrong to interfere with what individuals do, even aside from cases in which they engage in violence or fraud. He does not admire self-interest, like Ayn Rand, nor think that...

  11. Epilogue
    • CHAPTER TWELVE Learning from Smith Today
      (pp. 261-282)

      Three years after Smith died, in 1793, Henry Dundas rose in Parliament to defend the rechartering of the East India Company. Dundas was a Scot who had known Smith well. In 1787, he had invited Smith to stay with him in his Wimbledon villa. He had also solicited Smith’s advice about free trade with Ireland in 1779, and a year later had helped Smith become a Commissioner of Customs. By 1793, moreover, WN had become very famous. In 1791 it had received a fulsome eulogy from William Pitt himself, the Prime Minister under whom Dundas served.¹

      Now the disapproval with...

  12. NOTES
    (pp. 283-312)
    (pp. 313-320)
    (pp. 321-329)