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Propriety and Prosperity: New Studies on the Philosophy of Adam Smith

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It is unlikely that the Adam Smith “problem” in all its manifestations could be definitively resolved and this is certainly not the line this book is promoting. What’s on offer here is a fresh critical take on the two works looked at from recent developments within philosophy – philosophy of social science, philosophy of mind, social epistemology, moral philosophy – with a view to bringing Smith to a mainstream philosophy audience while simultaneously informing Smith’s traditional constituency (political economy) with philosophically finessed interpretations. The title of the book (due 2014, Palgrave MacMillan) is significant in that “Propriety” connotes Smith’s Theory of Moral Sentiments and “Prosperity” connotes The Wealth of Nations.

The line-up for the volume as follows:

Geoffrey Thomas (Philosophy, Birkbeck College, London)

Joshua Rust (Philosophy, Stetson University)

Gloria Zúñiga y Postigo (Philosophy, University of Texas, Arlington)

Brian Glenney (Philosophy, Gordon College, Wenham)

Byron Kaldis (Philosophy, Hellenic Open University)

Gordon Graham (Philosophy, Princeton Theological Seminary)

Gavin Kennedy (Edinburgh Business School, Heriot-Watt University)

Eugene Heath (Philosophy, State University of New York, New Paltz)

Jonathan Wight (Robins School of Business, University of Richmond)

David Hardwick (Medicine, University of British Columbia)

Leslie Marsh (Medicine, University of British Columbia)

Lauren Hall (Political Science, Rochester Institute of Technology)

Noel Parker (Political Science, University of Copenhagen)

Laurent Dobuzinskis (Political Science, Simon Fraser University)

Spiros Tegos (Philosophy, University of Crete)

Jack Weinstein (Philosophy, University of North Dakota)

Thomas Wells (Philosophy and Economics, Erasmus University)

Roger Frantz (Economics, San Diego State University)

Craig Smith (Social and Political Sciences, Glasgow University)

David Brat (Economics & Business, Randolph Macon College)

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Smith on the death of Hume

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Letter from Adam Smith, LL.D. to William Strachan, Esq.

Kirkaldy, Fifeshire, Nov. 9, 1776.

DEAR SIR,— It is with a real, though a very melancholy pleasure, that I sit down to give some account of the behavior of our late excellent friend, Mr. Hume, during his last illness.

Though, in his own judgment, his disease was mortal and incurable, yet he allowed himself to be prevailed upon, by the entreaty of his friends, to try what might be the effects of a long journey. A few days before he set out, he wrote that account of his own life, which, together with his other papers, he has left to your care. My account, therefore, shall begin where his ends.

He set out for London towards the end of April, and at Morpeth met with Mr. John Home and myself, who had both come down from London on purpose to see him, expecting to have found him at Edinburgh. Mr. Home returned with him, and attended him during the whole of his stay in England, with that care and attention which might be expected from a temper so perfectly friendly and affectionate. As I had written to my mother that she might expect me in Scotland, I was under the necessity of continuing my journey. His disease seemed to yield to exercise and change of air, and when he arrived in London, he was apparently in much better health than when he left Edinburgh. He was advised to go to Bath to drink the waters, which appeared for some time to have so good an effect upon him, that even he himself began to entertain, what he was not apt to do, a better opinion of his own health. His symptoms, however, soon returned with their usual violence, and from that moment he gave up all thoughts of recovery, but submitted with the utmost cheerfulness, and the most perfect complacency and resignation.

Upon his return to Edinburgh, though he found himself much weaker, yet his cheerfulness never abated, and he continued to divert himself, as usual, with correcting his own works for a new edition, with reading books of amusement, with the conversation of his friends; and, sometimes in the evening, with a party at his favorite game of whist. His cheerfulness was so great, and his conversation and amusements run so much in their usual strain, that, notwithstanding all bad symptoms, many people could not believe he was dying. “I shall tell your friend, Colonel Edmondstone,” said Doctor Dundas to him one day, “that I left you much better, and in a fair way of recovery.” “Doctor,” said he, “as I believe you would not choose to tell any thing but the truth, you had better tell him, that I am dying as fast as my enemies, if I have any, could wish, and as easily and cheerfully as my best friends could desire.” Colonel Edmondstone soon afterwards came to see him, and take leave of him; and on his way home, he could not forbear writing him a letter bidding him once more an eternal adieu, and applying to him, as to a dying man, the beautiful French verses in which the Abbé Chaulieu, in expectation of his own death, laments his approaching separation from his friend, the Marquis de la Fare.

Mr. Hume’s magnanimity and firmness were such, that his most affectionate friends knew that they hazarded nothing in talking or writing to him as to a dying man, and that so far from being hurt by this frankness, he was rather pleased and flattered by it. I happened to come into his room while he was reading this letter, which he had just received, and which he immediately showed me. I told him, that though I was sensible how very much he was weakened, and that, appearances were in many respects very bad, yet his cheerfulness was still so great, the spirit of life seemed still to be so very strong in him, that I could not help entertaining some faint hopes. He answered, “Your hopes are groundless. An habitual diarrhoea of more than a year’s standing, would be a very bad disease at any age: at my age it is a mortal one. When I lie down in the evening, I feel myself weaker than when I rose in the morning; and when I rise in the morning, weaker than when I lay down in the evening. I am sensible, besides, that some of my vital parts are affected, so that I must soon die.” “Well,” said I, “if it must be so, you have at least the satisfaction of leaving all your friends, your brother’s family in particular, in great prosperity.” He said that he felt that satisfaction so sensibly, that when he was reading, a few days before, Lucian’s Dialogues of the Dead, among all the excuses which are alleged to Charon for not entering readily into his boat, he could not find one that fitted him; he had no house to finish, he had no daughter to provide for, he had no enemies upon whom he wished to revenge himself. “I could not well imagine,” said he, “what excuse I could make to Charon in order to obtain a little delay. I have done every thing of consequence which I ever meant to do; and I could at no time expect to leave my relations and friends in a better situation than that in which I am now likely to leave them. I therefore have all reason to die contented.” He then diverted himself with inventing several jocular excuses, which he supposed he might make to Charon, and with imagining the very surly answers which it might suit the character of Charon to return to them. ” Upon further consideration,” said he, “I thought I might say to him, Good Charon, I have been correcting my works for a new edition. Allow me a little time, that I may see how the public receives the alterations.” But Charon would answer, “When you have seen the effect of these, you will be for making other alterations. There will be no end of such excuses; so, honest friend, please step into the boat.” But I might still urge, “Have a little patience, good Charon; I have been endeavoring to open the eyes of the public. If I live a few years longer, I may have the satisfaction of seeing the downfall of some of the prevailing systems of superstition.” But Charon would then lose all temper and decency. “You loitering rogue, that will not happen these many hundred years. Do you fancy I will grant you a lease for so long a term? Get into the boat this instant, you lazy loitering rogue.”

But, though Mr. Hume always talked of his approaching dissolution with great cheerfulness, he never affected to make any parade of his magnanimity. He never mentioned the subject but when the conversation naturally led to it, and never dwelt longer upon it than the course of the conversation happened to require: it was a subject, indeed, which occurred pretty frequently, in consequence of the inquiries which his friends, who came to see him, naturally made concerning the state of his health. The conversation which I mentioned above, and which passed on Thursday the 8th of August, was the last, except one, that I ever had with him.

He had now become so very weak, that the company of his most intimate friends fatigued him; for his cheerfulness was still so great, his complaisance and social disposition were still so entire, that when any friend was with him, he could not help talking more, and with greater exertion, than suited the weakness of his body. At his own desire, therefore, I agreed to leave Edinburgh, where I was staying partly upon his account, and returned to my mother’s house here, at Kirkaldy, upon condition that he would send for me whenever he wished to see me; the physician who saw him most frequently, Dr. Black, undertaking, in the mean time, to write me occasionally an account of the state of his health.

On the 22d of August, the Doctor wrote me the following letter:

“Since my last, Mr. Hume has passed his time pretty easily, but is much weaker. He sits up, goes down stairs once a day, and amuses himself with reading, but seldom sees anybody. He finds that even the conversation of his most intimate friends fatigues and oppresses him; and it is happy that he does not need it, for he is quite free from anxiety, impatience, or low spirits, and passes his time very well with the assistance of amusing books.”

I received the day after a letter from Mr. Hume himself, of which the following is an extract.

Edinburgh, 23d August, 1776.

MY DEAREST FRIEND,—I am obliged to make use of my nephew’s hand in writing to you, as I do not rise today.

“I go very fast to decline, and last night had a small fever, which I hoped might put a quicker period to this tedious illness, but unluckily it has, in a great measure, gone off. I cannot submit to your coming over here on my account, as it is possible for me to see you so small a part of the day, but Doctor Black can better inform you concerning the degree of strength which may from time to time remain with me. Adieus” etc.

Three days after I received the following letter from Doctor Black.

Edinburgh, Monday, 26th August, 1776.

“DEAR SIR,—Yesterday, about four o’clock, afternoon, Mr. Hume expired. The near approach of his death became evident in the night between Thursday and Friday, when his disease became excessive, and soon weakened him so much that he could no longer rise out of his bed. He continued to the last perfectly sensible, and free from much pain or feelings of distress. He never dropped the smallest expression of impatience; but when he had occasion to speak to the people about him, always did it with affection and tenderness. I thought it improper to write to bring you over, especially as I heard that he had dictated a letter to you desiring you not to come. When he became very weak, it cost him an effort to speak, and he died in such a happy composure of mind, that nothing could exceed it.”

Thus died our most excellent and never to be forgotten friend; concerning whose philosophical opinions men will, no doubt, judge variously, every one approving or condemning them, according as they happen to coincide or disagree with his own; but concerning whose character and conduct there can scarce be a difference of opinion. His temper, indeed, seemed to be more happily balanced, if I may be allowed such an expression, than that perhaps of any other man I have ever known. Even in the lowest state of his fortune, his great and necessary frugality never hindered him from exercising, upon proper occasions, acts both of charity and generosity. It was a frugality founded, not upon avarice, but upon the love of independency. The extreme gentleness of his nature never weakened either the firmness of his mind or he steadiness of his resolutions. His constant pleasantry was the genuine effusion of good nature and good humour, tempered with delicacy and modesty, and without even the slightest tincture of malignity, so frequently the disagreeable source of what is called wit in other men. It never was the meaning of his raillery to mortify; and, therefore, far from offending, it seldom failed to please and delight, even those who were the objects of it. To his friends, who were frequently the objects of it, there was not perhaps any one of all his great and amiable qualities, which contributed more to endear his conversation. And that gaiety of temper, so agreeable in society, but which is so often accompanied with frivolous and superficial qualities, was in him certainly attended with the most severe application, the most extensive learning, the greatest depth of thought, and a capacity in every respect the most comprehensive. Upon the whole, I have always considered him, both in his lifetime and since his death, as approaching as nearly to the idea of a perfectly wise and virtuous man, as perhaps the nature of human frailty will permit.

I ever am, dear Sir,
Most affectionately yours,
ADAM SMITH

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Stigmergy 3.0: From Ants to Economies

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Marge and my intro now available as an uncorrected proof. Stay tuned for the rest of the papers comprising this special issue.

According to Andy Clark “[M]uch of what goes on in the complex world of humans, may thus, somewhat surprisingly, be understood in terms of so-called stigmergic algorithms” (Clark, 1996, p. 279; 1997, p. 186). Pierre-Paul Grassé, the brilliant mind who first conceptualized the notion probably wouldn’t disagree (Grassé, 1959). Grassé was as much a zoologist as he was an entomologist. Under his editorship the monumental (17-volume) Traité de Zoologie, Anatomie, Systématique, Biologie was guided.

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Morals and markets

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Sandel plugging his latest. The journalist’s quote below has much resonance to me.

Even to a toddler’s mind, the logic of the transaction was evidently clear – if he had to be bribed, then the potty couldn’t be a good idea – and within a week he had grown so suspicious and upset that we had to abandon the whole enterprise.

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Science, the Market and Iterative Knowledge

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Reblogged from manwithoutqualities:

The second paper co-authored with Dave Hardwick has now been published in Studies in Emergent Order:

Abstract: In a recent paper (Hardwick & Marsh, in press) we examine the recent tensions between the two broadly successful spontaneous orders, namely the Market and Science. We argued for an epistemic pluralism, the view that freedom and liberty (indeed the very concept of liberalism and civil society) exists at the nexus of a manifold of spontaneous forces, and that no single epistemic system should dominate.

Read more… 208 more words

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Of the External Senses

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This essay is well worth a read. H/T to Brian Glenney for bringing it to my attention (I hang my head in shame for not having read it before).

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Science, the Market and Iterative Knowledge

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The second paper co-authored with Dave Hardwick has now been published in Studies in Emergent Order:

Abstract: In a recent paper (Hardwick & Marsh, in press) we examine the recent tensions between the two broadly successful spontaneous orders, namely the Market and Science. We argued for an epistemic pluralism, the view that freedom and liberty (indeed the very concept of liberalism and civil society) exists at the nexus of a manifold of spontaneous forces, and that no single epistemic system should dominate. We also briefly introduced the concept of “iterative” knowledge to characterize the essentially dynamic nature of scientific knowledge. Herein lies a tension. The Market (and perhaps the prevailing culture at large) sees scientific knowledge in cumulative terms, that is, progressing to a conclusion in a linear fashion. This relatively static understanding of medical science as it relates to pharmaceutical studies can have a corrosive effect on the practice of medicine and ultimately, we believe, on the proper functioning of the market itself. In this paper we examine this tension in much closer detail by focusing upon the demands of the market, specifically the pharmaceutical industry, and the science upon which it is based. In other words, we expound upon a clash of epistemic value – one (science) that sees knowledge as essentially iterative (dynamic yet tentative) and the other (the Market) that harvests conclusive scientific knowledge (ostensibly as a fixed and firm commodity) functional to its own interests. Clinical Trials that are sharply focused with precisely determined deliverables often manifest this tension in the sharpest of relief. As a means of recovering drug development and testing costs, conclusive assessment is required to avoid creating serious financial problems for the companies themselves not to mention issues in the public interest.

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Reclaiming Adam Smith

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I came across the FT article by Sen (see below). In this vein see also Sen’s Adam Smith and the Contemporary World:

This paper argues that many of Adam Smith’s insights, particularly those in his Theory of moral sentiments, have a relevance to contemporary thought about economics and ethics that is currently underappreciated. In economics, for example, Smith was concerned not only with the sufficiency of self-interest at the moment of exchange but also with the wider moral motivations and institutions required to support economic activity in general. In ethics, Smith’s concept of an impartial spectator who is able to view our situation from a critical distance has much to contribute to a fuller understanding of the requirements of justice, particularly through an understanding of impartiality as going beyond the interests and concerns of a local contracting group. Smith’s open, realization-focussed and comparative approach to evaluation contrasts with what I call the “transcendental institutionalism” popular in contemporary political philosophy and associated particularly with the work of John Rawls.

and his New Statesman article. For a rejoinder, see Dan Klein.

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Adam Smith’s market never stood alone

Financial Times (London, England) - Wednesday, March 11, 2009
Author: Amartya Sen

Exactly 90 years ago, in March 1919, faced with another economic crisis, Vladimir Lenin discussed the dire straits of contemporary capitalism. He was, however, unwilling to write an epitaph: “To believe that there is no way out of the present crisis for capitalism is an error.” That particular expectation of Lenin’s, unlike some he held, proved to be correct enough. Even though American and European markets got into further problems in the 1920s, followed by the Great Depression of the 1930s, in the long haul after the end of the second world war, the market economy has been exceptionally dynamic, generating unprecedented expansion of the global economy over the past 60 years. Not any more, at least not right now. The global economic crisis began suddenly in the American autumn and is gathering speed at a frightening rate, and government attempts to stop it have had very little success despite unprecedented commitments of public funds.The question that arises most forcefully now is not so much about the end of capitalism as about the nature of capitalism and the need for change. The invoking of old and new capitalism played an energising part in the animated discussions that took place in the symposium on “New World, New Capitalism” led by Nicolas Sarkozy, the French president, Tony Blair, the former British prime minister, and Angela Merkel, the German chancellor, in January in Paris.The crisis, no matter how unbeatable it looks today, will eventually pass, but questions about future economic systems will remain. Do we really need a “new capitalism”, carrying, in some significant way, the capitalist banner, rather than a non-monolithic economic system that draws on a variety of institutions chosen pragmatically and values that we can defend with reason? Should we search for a new capitalism or for a “new world” – to use the other term on offer at the Paris meeting – that need not take a specialised capitalist form? This is not only the question we face today, but I would argue it is also the question that the founder of modern economics, Adam Smith, in effect asked in the 18th century, even as he presented his pioneering analysis of the working of the market economy.Smith never used the term capitalism (at least, so far as I have been able to trace), and it would also be hard to carve out from his works any theory of the sufficiency of the market economy, or of the need to accept the dominance of capital. He talked about the important role of broader values for the choice of behaviour, as well as the importance of institutions, in The Wealth of Nations; but it was in his first book, The Theory of Moral Sentiments, published exactly 250 years ago, that he extensively investigated the powerful role of non-profit values. While stating that “prudence” was “of all virtues that which is most helpful to the individual”, Smith went on to argue that “humanity, justice, generosity, and public spirit, are the qualities most useful to others”.*What exactly is capitalism? The standard definition seems to take reliance on markets for economic transactions as a necessary qualification for an economy to be seen as capitalist. In a similar way, dependence on the profit motive, and on individual entitlements based on private ownership, are seen as archetypal features of capitalism. However, if these are necessary requirements, are the economic systems we currently have, for example, in Europe and America, genuinely capitalist? All the affluent countries in the world – those in Europe, as well as the US, Canada, Japan, Singapore, South Korea, Taiwan, Australia and others – have depended for some time on transactions that occur largely outside the markets , such as unemployment benefits, public pensions and other features of social security, and the public provision of school education and healthcare. The creditable performance of the allegedly capitalist systems in the days when there were real achievements drew on a combination of institutions that went much beyond relying only on a profit-maximising market economy.

It is often overlooked that Smith did not take the pure market mechanism to be a free-standing performer of excellence, nor did he take the profit motive to be all that is needed. Perhaps the biggest mistake lies in interpreting Smith’s limited discussion of why people seek trade as an exhaustive analysisof all the behavioural norms and institutions that he thought necessary for a market economy to work well. People seek trade because of self-interest – nothing more is needed, as Smith discussed in a statement that has been quoted again and againexplaining why bakers, brewers, butchers and consumers seek trade. However an economy needs other values and commitments such as mutual trust and confidence to work efficiently. For example, Smith argued: “When the people of any particular country has such confidence in the fortune, probity, and prudence of a particular banker, as to believe he is always ready to pay upon demand such of his promissory notes as are likely to be at any time presented to him; those notes come to have the same currency as gold and silver money, from the confidence that such money can at any time be had for them.”

Smith explained why this kind of trust does not always exist. Even though the champions of the baker-brewer-butcher reading of Smith enshrined in many economics books may be at a loss to understand the present crisis (people still have very good reason to seek more trade, only less opportunity), the far-reaching consequences of mistrust and lack of confidence in others, which have contributed to generating this crisis and are making a recovery so very difficult, would not have puzzled him.

There were, in fact, very good reasons for mistrust and the breakdown of assurance that contributed to the crisis today. The obligations and responsibilities associated with transactions have in recent years become much harder to trace thanks to the rapid development of secondary markets involving derivatives and other financial instruments. This occurred at a time when the plentiful availability of credit, partly driven by the huge trading surpluses of some economies, most prominently China, magnified the scale of brash operations. A subprime lender who misled a borrower into taking unwise risks could pass off the financial instruments to other parties remote from the original transaction. The need for supervision and regulation has become much stronger over recent years. And yet the supervisory role of the government in the US in particular has been, over the same period, sharply curtailed, fed by an increasing belief in the self-regulatory nature of the market economy. Precisely as the need for state surveillance has grown, the provision of the needed supervision has shrunk.

This institutional vulnerability has implications not only for sharp practices, but also for a tendency towards over-speculation that, as Smith argued, tends to grip many human beings in their breathless search for profits. Smith called these promoters of excessive risk in search of profits “prodigals and projectors” – which, by the way, is quite a good description of the entrepreneurs of subprime mortgages over the recent past. The implicit faith in the wisdom of the stand- alone market economy, which is largely responsible for the removal of the established regulations in the US, tended to assume away the activities of prodigals and projectors in a way that would have shocked the pioneering exponent of the rationale of the market economy.

Despite all Smith did to explain and defend the constructive role of the market, he was deeply concerned about the incidence of poverty, illiteracy and relative deprivation that might remain despite a well-functioning market economy. He wanted institutional diversity and motivational variety, not monolithic markets and singular dominance of the profit motive. Smith was not only a defender of the role of the state in doing things that the market might fail to do, such as universal education and poverty relief (he also wanted greater freedom for the state-supported indigent than the Poor Laws of his day provided); he argued, in general, for institutional choices to fit the problems that arise rather than anchoring institutions to some fixed formula, such as leaving things to the market .

The economic difficulties of today do not, I would argue, call for some “new capitalism”, but they do demand an open-minded understanding of older ideas about the reach and limits of the market economy. What is needed above all is a clear-headed appreciation of how different institutions work, along with an understanding of how a variety of organisations – from the market to the institutions of state – can together contribute to producing a more decent economic world.

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Adam Smith: An Enlightened Life

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Here are reviews of Nicholas Phillipson’s book:

New Statesman

The Guardian

The Economist

The Telegraph (reviewed by none other than Noel Malcolm who is contributing a chapter on Hobbes to our Oakeshott Companion).

Beneficence (I paste in an advance copy I’ve been very kindly sent by Lenore Ealy, Executive Director of The Philanthropic Entrerprise).

Who was Adam Smith?

James R. Otteson Joint Professor of Philosophy and Economics, Yeshiva University

A review of Nicholas Phillipson, Adam Smith: An Enlightened Life New Haven: Yale University Press, 2010.

Adam Smith is one of the most beloved, most hated, most cited, and least read figures in the pantheon of great Western thinkers. His ideas have helped transform political and economic policy throughout much of the world, and they are credited by many for the unprecedented growth in wealth and prosperity the West has seen in the over two centuries since his death. They are also blamed by many for inequalities in wealth that have arisen since Smith’s time. But consider that since 1800 the world’s population has increased six-fold, and yet, despite this enormous increase, real income per person has increased approximately sixteen-fold.1 That is a truly amazing achievement. Yet that increased prosperity would seem due principally to the complex of institutions we now call “capitalism.” For the only thing that changed between 200 years ago and the previous hundred thousand years of human history was the introduction and embrace of “capitalist” institutions—political, economic, and cultural. And Adam Smith stands as one of the founders of these institutions. Smith is thus a vitally important figure in human history. So who, then, is this Adam Smith? What were his momentous ideas? How could a socially awkward eighteenth-century Scottish philosopher have wrought such tremendous effect on the world? Nicholas Phillipson’s Adam Smith is an excellent place to start in answering these questions. Indeed, Phillipson’s engaging, even compelling, story manages to do what some might have thought impossible: telling an interesting story about an economist. Yet Adam Smith was much more than what we today think of as an economist. He was a “moral philosopher” who spent his scholarly life trying to understand the principles that animate all human behavior, including both human morality in his 1759 Theory of Moral Sentiments and economic in his 1776 An Inquiry into the Nature and Causes of the Wealth of Nations. Smith came to articulate a conception of human social institutions that was grounded on observation and on a plausible picture of human psychology, and in so doing he also delineated a methodology for research about human society that would set the agenda for new and future disciplines of the “social sciences.” Phillipson reconstructs Smith’s achievement by locating the key principles of human behavior and social science that Smith discovered in all his extant writings, including of course his two great books, and also by explaining both what Smith takes and how he departs from other important figures like Francis Hutcheson and David Hume. Phillipson’s Smith emerges as an empirically-oriented social scientist, a brilliant mind trying to understand what the institutions are that lead to human happiness and prosperity, who yet also has the generosity of soul to be sincerely committed to using his discoveries to help remove obstacles to the wellbeing of the common man. Smith’s development of a spontaneous-order conception of human social institutions derived from a method of investigation that came to be known as the Scottish Historical School, which involved taking human beings as they are and the world as it is, not as they might be in a fictionalized state, and looking for observable patterns in their behavior. Once these patterns have been observed, the moral philosopher can make rational recommendations about how to enhance the possibilities of prosperous life. That is, or should be, the goal of social science, and we can see from Phillipson that Smith is one of its great founding fathers. Phillipson’s book is therefore quite welcome. Yet perhaps one might raise a handful of gentle criticisms. One relates to the thorny issue of the so-called is/ought problem. That problem concerns the logical fallacy of deriving normative (“ought”) statements from descriptive (“is”) statements. It was Smith’s friend David Hume who articulated this common fallacy in his Treatise of Human Nature, remarking that he noticed the frequency with which moralists would go from describing this or that state of affairs in the world to immediately concluding that this or that ought to be done about it. Hume pointed out that such a transition constitutes a logical fallacy because no set of factual statements (even if true) by itself implies any moral injunction. One can describe all the factual details of a murder, for example, without thereby determining any specific moral conclusions to draw from it. Smith seems to have a foot in both the normative and the descriptive camps in both of his books. For example, in Phillipson’s account, Smith offers in The Theory of Moral Sentiments the “impartial spectator” both as a heuristic device that people in fact employ to help them guide and regulate their behavior, and as a representative of true morality that people ought to follow. This raises a question of how we should understand Smith’s project in The Theory of Moral Sentiments. Is he a moral psychologist describing his empirical findings about the phenomenon of human moral judgment making, or a moralist making recommendations about how people ought to behave? It seems he is arguably both: how, then, do the two go together? Similarly, in The Wealth of Nations, when Smith declares that “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 interest,” that sounds like a descriptive statement (and, some have said, a rather cynical one at that)—to which one might retort, “Perhaps that is how we often do behave, but we should not!” One more example: Smith discovers and describes the mechanisms of a spontaneous-order model for understanding human social institutions, but he also seems to positively recommend the decentralized, spontaneously created orders as against centrally planned and designed orders. A discussion from Phillipson of how Smith got from the descriptive to the normative in cases like these would thus have been instructive. One might also wish Phillipson had given more than merely cursory attention to the question of how to reconcile Smith’s arguments for free trade—indeed, his, in Smith’s own words, “very violent attack” on “the whole commercial system of Great Britain” (247)— with Smith’s vigorous, exacting, and even punctilious fulfillment of his duties as the Commissioner of Customs for the last decade of his life. How can one square the fact that Smith argued for the abolition of tariffs, quotas, and other impediments to trade on the empirical grounds that doing so would increase human prosperity, with the fact that, when given the opportunity, he applied and exacted them with great enthusiasm? One also wonders how we should understand Smith’s endorsement of free trade and limited government, and indeed his, in Phillipson’s words, “pervasive” “doubts about the competence of modern governments” (232) in light of the rather long list of duties that Smith in various places suggested were the sovereign’s—including some public education and even entertaining “publick diversions” (234). In The Wealth of Nations Smith articulated three duties of government: protecting citizens from foreign invasion, protecting citizens from invasion from other citizens, and “certain publick works” (WN IV.9.51). These public works were those “which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expence to any individual or small number of individuals, though it may frequently do much more than repay it to a great society” (ibid.). How long a list is that, exactly? Smith suggests that it might include roads, canals, and the above-mentioned public grammar schools and “publick diversions,” but his criteria for selecting suitable public works might open the door far wider. If Phillipson is correct, however (as he surely is), that Smith has fundamental doubts about the competency of government, why would Smith allow even these few public works? Why would he not indeed have come to the opposite conclusion—that, because they are so important to the public, they must therefore not be left to the tender mercies of incompetent government? Phillipson rightly argues that Smith was not a utopian theorist, but was instead a realist who looked to history (even if sometimes “conjectural history”), to observation, and to what Smith somewhat fancifully called “experiment” to inform his positions. Phillipson claims that “Smith left utopian theorizing to the final pages” of The Wealth of Nations (235), where Smith described the problems associated with public debt, especially as Britain’s was increasing due to expenses associated with its attempt to maintain its empire in America. But what exactly is “utopian” about Smith’s concerns here? If anything, it would seem that, especially given the problems Western governments (American included) are facing with their huge and growing public debts right now, Smith’s discussion could not be more timely or germane to actual, on-the-ground reality. Let me close with an important and even enlightening lesson from Phillipson’s treatment. He writes near the end of his book that The Wealth of Nations “is the greatest and most enduring monument to the intellectual culture of the Scottish Enlightenment” (237). Phillipson shows that the story of the Scottish Enlightenment parallels and reflects the story of Smith himself; indeed, the story of the Scottish Enlightenment is, in a deep sense, the story of Smith. Given how profoundly our own world has, in turn, been shaped by ideas that came out of the Scottish Enlightenment, we can say that Smith’s story is also the story of us. Phillipson’s book provides a coherent picture of the complex life of Smith and his integration into the astonishing period of learning and advancement of human knowledge that marked the Scottish Enlightenment. But it is not only for the advancement of knowledge that we have to thank Smith and the Scottish Enlightenment. The tremendous increases in material well-being that Smithian institutions have enabled—and, one might add, the vast increase in philanthropic capacity and opportunity created by this increasing prosperity—has blessed millions of human beings with relief from the nasty, poor, brutish, and short status quo ante of human history. By reminding us of this important history and of Smith’s central place in it, Phillipson’s book not only provides us an illuminating and surprisingly timely window onto our own place in the world today but also an inspiration to protect and extend the fragile but precious Smithian institutions that have played no small role in the development of modern civilization.

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The New Theories of Moral Sentiments

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Here is an article in the WSJ on Deirdre McCloskey. I had the honour and pleasure to meet Deirdre some 18 months ago at a conference on behavioral economics in San Diego. She was absolutely delightful. Everything you wanted to know about Deirdre but were afraid to ask . . . can be found here.

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