Adam Smith's Economics

Its Place in the Development of Economic Thought

Maurice Brown

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135174941
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The conventional received opinion of Adam Smith as an isolated figure, the founder of 'modern' economics, is thoroughly mistaken and misleading. This is the central premise of this book, first published in 1988, in which the author argues that by placing Smith's work in its historical context, we discover profound continuities between Smith's work and that of his predecessors, and his contemporaries. The effect is to re-orientate our perception of Smith and his achievement. No longer the single-handed champion of free markets and competition whose work revolutionised and completely redirected economics. He appears instead as a brilliant contributor to a deep-rooted contemporary debate, someone who can be placed in a line of thinkers that stretches between Machiavelli and Kant.

1Introduction

DOI: 10.4324/9780203092743-1

The central focus of this book is upon the socio-economic methodology of Adam Smith. The objective is to provide a reinterpretation of the way in which his basic methodological approach is related to the totality of his work, and in so doing to argue for a conclusion which can here be given a preliminary presentation. It is that Smith’s work can plausibly be interpreted as a coherent and well-developed ‘dialectical materialism’ based upon philosophical and anthropological premisses¹ which are considerably different from those underpinning Marx’s work, and thus offering an alternative explanation of socio-historical change.

In the process of justifying this claim, it will be suggested that there has been a tendency on the part of those who have sought the ‘materialist conception of history’ in Smith’s work, to approach the problem from the perspective of seeking ‘anticipations’ of Marx’s treatment of socio-historical change, rather than recognising that Smith’s methodological approach constitutes such a treatment in its own right. Since it will be argued that this ‘misinterpretation’ of Smith stems from an inadequate definition of ‘dialectical materialism’ which uses Marx’s methodology as the paradigm, one of the first tasks will be to seek to generalise the concept, by approaching it from a different perspective. Rather than beginning by asking how dialectical materialism functions, the question here asked will be: ‘What does it seek to explain?’ In order to answer this question, it will be necessary to make some rather unconventional extensions to the contemporary philosophy of science, and this will be the task of Chapter 2.

Whilst it will be necessary on occasion to question some of the existing interpretations of Smith, this is regarded as a secondary objective, the prime aim being to make a modest contribution to an existing body of scholarship on Smith, and to offer an alternative perspective of his work which resolves some of the apparent contradictions in his writing. The model here presented is regarded as a historically based, taxonomic reconstruction of the structure implicit in Smith’s work, and before proceeding it is necessary to say something about the difficulties of such an approach.

W. Von Leyden has suggested that:

The study of any concept or theory of an earlier period, in order to be relevant, is bound to have a peculiar Janus-faced character: it must look towards the present as well as to the past.²

This may well be true, but it can be argued that there has been a marked tendency amongst interpreters of Smith to emphasise those aspects of his work which are analogous to contemporary scientific practice, whilst neglecting other facets of his work which are equally, if not more, important to its overall structure. This is notably true of those historians who take an ‘absolutist’ (as opposed to a ‘relativist’) approach, in that they see the development of economic thought as a progress towards the truth,³ or at least towards more value-free and effective analysis. Such writers frequently discard the bulk of a previous thinker’s work in order to isolate those aspects of it that can be regarded as ‘anticipations’ of contemporary social science.⁴

Whilst not disputing either the validity of such an approach,⁵ or its contribution to an understanding of contemporary science, I would also wish to defend what might be called the opposite approach: that is, to take a thinker’s work as a whole, and analyse it within the context of the perspectives and objectives of his own particular time. The ‘relevance’ to contemporary science is here of a different sort; an understanding of the way in which Smith’s model relates to his implicit philosophical and anthropological assumptions may well illuminate the way in which our own models relate to preconceptions implicit in their own assumptions.

This is the approach I have sought to take in this book and, whilst the tools and methodological perspectives of contemporary social science philosophy will be used in an attempt to penetrate to the core of Smith’s system, this will be done as far as possible in the context of his own ‘problematic. The ‘qualitative residuals’ (Chapter 2) which are implicit in the use of any particular methodology to interpret a writer, cannot be eliminated, but, if he is to be comprehended in his own terms, they must, as far as possible, be made explicit. With this in mind, a central objective of Chapter 3 will be to show that the reconstruction of Smith’s methodology there undertaken is fully consistent with his own explicit discussions of the subject, and not a Procrustean imposition of contemporary concepts upon his work. The philosophical apparatus used is thus intended to identify and label concepts that are at least implicit in Smith’s work, and in turn to enable those concepts to be applied to an elucidation of its meaning. Further, although the perspective developed in Chapter 2 will be maintained throughout the book, its prime function is to indicate an alternative way into the complexities of Smith’s writing and thus to be an aid to, rather than a substitute for, careful textual exegesis.⁶

At this stage a few points need to be made concerning the intended scope of this book:

Firstly, it must be stated that the range of Smith’s work is vast by modern standards, so that any historically-based treatment of his writing must inevitably cut across contemporary subject demarcations. I will write primarily as an economist with for good or ill some training in philosophy; but, in order to follow Smith where he leads will on occasion have to venture (with considerable trepidation) into territory now occupied by other disciplines such as politial science, sociology, moral philosophy, literature and linguistics. It is somewhat ironic that the ‘division of labour’ that Smith so well analysed, should have rendered that analysis much less accessible now, than it was in Smith’s day. The modern social scientist, no matter what his or her specialisation, is doomed to be (at best) an ‘education layman’ in many of the areas dealt with by Smith.

The history of the social sciences has been one of fragmentation by specialisation and sub-division, so that in contemporary practice only severely restricted aspects of human behaviour are studied by any of the sub-sets of the various disciplines. At the same time, the study of the ethical and moral dimensions of human existence, once regarded as an indispensable feature of any comprehensive ‘science of man’ has moved outside the boundaries of what is regarded as scientific, and is now seen as a purely philosophical matter.⁷ This is not to say that there are not numerous psychological and sociological studies of ‘morality’, but the study of the moral dimension as such, and within its own terms of reference (an integral part of Smith’s perspective), has become a residual category, having been, more or less consciously, purged from the social sciences.⁸ In the eighteenth century, science and philosophy were regarded as being very much the same sort of activity,⁹ whereas they are now seen as discrete categories. This fundamental change of perspective presents problems of interpretation when Smith’s work is being examined, and it has no doubt been responsible for a great deal of emphasis being placed upon those aspects of his work that are analogous to what is now classified as social-scientific practice.

The second point is closely related. Neo-classical economics has been no exception to this process of specialisation, and has come to adopt a perspective that, whilst much deeper in its analysis than anything Smith could have envisaged, is also much narrower in its range of application. Seen from the standpoint of twentieth-century economics, the relevant areas of Smith’s work are mainly to be found in the first two books of the Wealth of Nations where some rudimentary anticipations of contemporary analysis are to be found. Such a view is both legitimate and instructive, but enough has already been said above to make it clear that it is not the perspective that I have taken in this book. I am not concerned with the Neo-classical economists’ Adam Smith and have virtually nothing to say about him.

It should be said also that, other than for the purpose of relating Smith to the context of his time, no systematic attempt will be made to trace the numerous anticipations of aspects of Smith’s work by writers such as Montesquieu, Cantillon, Turgot, Mirabeau and Quesnay, or by the members of the ‘Scottish Historical School’, with whom Smith was closely associated. As Meek has pointed out,¹⁰ Smith’s contribution to the history of thought is not so much to be found in any totally new elements that he produces, as in his overall synthesis. Tracing the anticipations of this synthesis is a most valuable activity and, despite a considerable input of scholarship over the past fifteen years or so, much remains to be done. It is not, however, the concern of the present work.

Finally, a word should be said about the approach taken here concerning the interconnections between the Theory of Moral Sentiments (1759) and the Wealth of Nations (1776), and between these two books and the rest of Smith’s published and reported work. It is a major objective of this book to show that the same basic methodological perspective is to be found in all of Smith’s work, and that ‘The Adam Smith Problem’ is not therefore a problem at all.¹¹ This view will be supported as the work develops, but at this stage it should be noted that subsequent chapters will draw freely across the whole range of Smith’s work in support of the arguments made. The Lectures on Jurisprudence (1762–63 and 1766) and the Lectures on Rhetoric and Belles Lettres (1762–63) are taken as being more or less accurate — if incomplete — records of Smith’s views at the time of their presentation, and these texts are therefore accorded almost the same status as the published works. Biographical evidence, however, whilst used in a supporting role on occasion, is regarded as being of a much lower order, and not, therefore, adequate as a justification of any of the major arguments presented.

Notes

1. What can be called his ‘anthropological ontology’; the term is somewhat unwieldy, but has the advantage over ‘human nature’ of being neutrally applicable to both Smith’s work, and that of Marx. Cf. for a discussion of this issue, I. Meszaros, Marx’s Theory of Alienation (Merlin Press, London, 1970), pp. 162–86.
2. W. Von Leyden, Seventeenth-Century Metaphysics (Duckworth, London, 1968), p. xiii.
3. A good discussion of this issue is in W. Stark, History of Economics in Relation to Social Development (Kegan Paul, London, 1944).
4. The method is well exemplified in F.H. Knight, ‘The Ricardian theory of production and distribution’, Canadian Journal of Economics and Political Science (1935) and also in M. Blaug, Economic Theory in Retrospect (Irwin, Homewood, III., 1962). See too J.A. Schumpeter, History of Economic Analysis (Allen & Unwin, London, 1954) which might also be cited in this connection although the subtlety of Schumpeter’s thought makes his work difficult to categorise, despite his explicitly ‘absolutist’ discussions of methodology.
5. On this topic see D.F. Gordon, ‘The role of the history of economic thought in the understanding of modern economic theory’, American Economic Review (1965).
6. For an excellent discussion of this issue see Q. Skinner, ‘Meaning and understanding in the history of ideas’, History and Theory (1974) and ‘Some problems in the analysis of political thought and action’, Political Theory (1974). For a recent example of Skinner’s approach in action, see Q. Skinner, Machiavelli (Oxford University Press, Oxford, 1974). An alternative view to that of Skinner is to be found in CD. Tarlton, ‘Historicity meaning and revisionism in the study of political thought’, History and Theory (1973).
7. Not, however, in the sense that philosophy attempts, as it did formerly, toestablish values; it now only claims to analyse them. This may indeed be held to be one of the reasons for its apparent aridity. It is interesting that philosophy itself has tended to undergo a process of fragmentation, analogous to that which has taken place in the social sciences. The wide-ranging schematisations o...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Dedication
• Original Title Page
• Original Copyright Page
• Table of Contents
• Author Note
• Acknowledgements
• 1. Introduction
• 2. Methodological Approach
• 3. Smith’s Epistemology: Meaning, Context and the Nature of Science
• 4. Metascientific Perspectives: The Individual and Society
• 5. Specialisation and Social Change: The Division of Labour
• 6. Riot, Debauchery and the Science of a Legislator
• 7. Purposive Action and Unintended Consequences
• 8. Economic Concepts and Historical Dynamics
• 9. Conclusion
• Index