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Adam Smith's Philosophy of Riches*

Published online by Cambridge University Press:  25 February 2009

E. G. West
E. G. West
Affiliation:
University of Kent.
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Extract

In the late nineteenth and early twentieth century the name of Adam Smith was popularly associated with the sort of ‘laissez faire’ policy that is expounded with all the fervour of a religious faith. Smith, so the story ran, in his eagerness to combat the excessive mercantilist government intervention of his day, had resorted to supra-natural claims in his general onslaught against central control and planning by governments. Such intervention was ‘unnatural’ and conflicted with Deistic Design. Only through private actions could mankind reach satisfying and ‘natural’ fulfillment. Action through private self-interest was twice blessed; it. blessed him who profited and his fellows who were ‘profited from’. True there was a kind of central planning that was of supreme importance; but it had a divine origin and it worked not through governments but through individual free trade. Private actions in fact were directed by an Invisible Hand which brought society into a grand and spontaneous Natural Harmony.

Type
Articles
Information
Philosophy , Volume 44 , Issue 168 , April 1969 , pp. 101 - 115
Copyright
Copyright © The Royal Institute of Philosophy 1969

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References

1 Reproduced in Adam Smith 1776–1926 Chicago University 1928.Google Scholar

2 Macfie, , The Individual in Society: Papers on Adam Smith, 1967.Google Scholar

3 Wealth of Nations, Carman edition, sixth edition, Vol. I, p. 325, 1950Google Scholar. All future references in this article will be to this edition and are indicated by W.N.

4 Marx-Engels, Gesamtansgabe. Berlin 1932, p. 130Google Scholar. See also Marx's Economic and Political Manuscripts in Fromm, Eric, Marx's Concept of Man, 1967, pp. 155–158Google Scholar. Marx's interpretation of Smith probably rested on Ch. IV of The Wealth of Nations where Smith observes that after the division of labour is thoroughly established: ‘Every man … lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.’ W.N. p. 24Google Scholar. The words in our italics are, we suggest, most important.

5 Economic and Philosophic Manuscripts, op. cit. in Fromm, E., p. 144.Google Scholar

6 W.N. Vol. II, p. 250.Google Scholar

7 The recent work of Professor Macfie (op. cit.) more than any other has rightly insisted on this distinction. Macfie argues (p. 80) that the suggestions of inconsistency between the Wealth and the Moral Sentiments disappear when it is realized that ‘the same theory of self-love holds for both and that it includes the virtue of economy.’

8 W.N., Vol. 1, pp. 15 and 16.Google Scholar

9 The root cause of Marx's dislike of Smithian economics is his hostility to markets. Marx wished ultimately to abolish them altogether (‘political’ as well as ‘economic’ markets) but was very vague as to what was to be put in their place. See West, E. G., ‘The Political Economy of Alienation: Karl Marx and Adam Smith’, Oxford Economic Papers, 03 1969.CrossRefGoogle Scholar

10 W.N., Vol. I, p. 16.Google Scholar

11 The Theory of Moral Sentiments, Seventh edition, London 1792, p. 49Google Scholar. This edition will be implied in all further references and will be abbreviated as M.S.

12 M.S., p. 61, Vol. II.Google Scholar

13 M.S., Vol. I, p. 194.Google Scholar

14 ibid., p. 47.

15 See Macfie, A. L., op. cit., Chapter I.Google Scholar

16 M.S. Vol. I, p. 284Google Scholar. An interpretation of Smith as a social psychologist rather than a moral philosopher is to be found in Schneider, Louis, The Scottish Moralists (University of Chicago), 1967, p. xxviii.Google Scholar

17 M.S. Vol. I, p. 467.Google Scholar

18 M.S. Vol. I, p. 455.Google Scholar

19 M.S. Vol. I, p. 464.Google Scholar

20 M.S. Vol. I, pp. 120–2.Google Scholar

21 M.S. Vol. II, pp. 107–8.Google Scholar

22 Ibid., p. 109.

23 Ibid., p. 110.

24 M.S. Vol. I, p. 367–8.Google Scholar

25 M.S. Vol. 1, p. 456–9Google Scholar. Smith describes this person as ‘The poor man's son, who in heaven in its anger has visited with ambition…’ Why heaven should do this when normally it is concerned with ‘providential care’ and with implanting constructive instincts in man Smith does not explain.

26 W.N. p. 83.Google Scholar

27 See especially M.S. Part II, Section III, Chap. III.

28 M.S. Vol. I, p. 267–8.Google Scholar

29 Lectures on Justice, Policy, Revenue and Arms edited by Cannan, Edwin 1896, p. 158.Google Scholar

30 ibid., p. 160.

31 Essays on Philosophic Subjects by the late Adam Smith 1795.

32 A detailed comparison of Smith Marx on the subject of alienation is contained in my article: ‘Political Economy and Alienation: Karl Marx and Adam Smith's Oxford Economic Papers, March, 1969.