A review of “The Classical Economists” (audiobook)

“The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”

– Adam Smith’s “The Wealth of Nations” (1776), Book IV, Chapter II

A review of “The Wealth of Nations: Adam Smith” (audiobook)

“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. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.”

– Adam Smith’s “The Wealth of Nations” (1776), Book I, Chapter II

So I recently re-listened to an audiobook called “The Wealth of Nations: Adam Smith.” It is a modern discussion of this famous work, which is some five hours long. They do not attempt to give their listeners the entire text of “The Wealth of Nations,” since this would take far longer than five hours to do. But they do give a good summary of this famous work, and give the reader a good introduction to the book that created the new “economic science.”

David Hume and “The Wealth of Nations”

"Commerce and manufactures gradually introduced order and good government, and with them the liberty and security of individuals, among the inhabitants of the country, who had before lived almost in a continual state of war with their neighbors, and of servile dependency upon their superiors. This, though it has been the least observed, is by far the most important of all their effects. Mr. Hume is the only writer who, so far as I know, has hitherto taken notice of it."

- Adam Smith's "The Wealth of Nations," Book III, Chapter IV

Most people today have never heard of the Scottish philosopher David Hume, a great figure of the Scottish Enlightenment. But many people today have heard of the man who was probably his best friend - a man who was greatly influenced by his philosophy (political, economic, and otherwise), and influenced him in his turn. That man was his fellow Scotsman Adam Smith.

Statues of David Hume and Adam Smith

This is not to say that Mr. Hume's accomplishments were just in economics, or that Adam Smith was the only person that he influenced - he influenced many people, in the natural sciences and elsewhere. However, I shall focus this post on economics, and his influence on Adam Smith; and leave the coverage of his empiricism - and his other contributions to the philosophy of science - to others.

Adam Smith

Adam Smith and slavery

Liberals love to give scathing denunciations of plantation slavery (denunciations I agree with), as well as declare their support of socialism and communism (which I don't agree with). But therein lies an interesting contradiction: Socialism and communism are both organized assaults on economic freedom, which is a feature that they share with plantation slavery.

Adam Smith and the Pin Factory

"The greatest improvements in the productive powers of labour, and the greater part of the skill, dexterity, and judgment, with which it is anywhere directed, or applied, seem to have been the effects of the division of labour. The effects of the division of labour, in the general business of society, will be more easily understood, by considering in what manner it operates in some particular manufactures."

- Opening lines of Adam Smith's "The Wealth of Nations" (Book I, Chapter I)

If your parents have ever divided household chores among you and your siblings, then you know what the division of labor is. So-and-so mops the floor, so-and-so does the vacuuming, and so-and-so cleans the toilets. (Lucky for them, huh?) The labor gets divided among multiple people, with each person getting a certain kind of task.

The concept is not a new one, and labor has been divided among several people for centuries. But it was not until comparatively recently that its advantages were systematically explained. The Scottish economist Adam Smith explained it well more than 200 years ago, and his words about its importance still have relevance today. There are advantages to dividing the labor, and these advantages have great importance for society. So with that in mind, I will now turn to what he said about this concept.

Adam Smith

Why Adam Smith is still relevant today

" ... every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it."

- Adam Smith's "The Wealth of Nations," Book IV, Chapter II

People still talk about Adam Smith's "The Wealth of Nations" to this day

People still talk to this day about an economics book that was published in 1776. And though the year I'm talking about is rightfully associated with America, this book was actually published by someone in the mother country that we were then at war with. Adam Smith (the author of this book) was a Scotsman, which meant that he was also British.

John Trumbull's Declaration of Independence

Historical note: Adam Smith sympathized with the American Revolution

But his views about the American Revolution were actually fairly sympathetic to the Patriot side. He favored giving the American colonies either representation in Parliament, or independence from the mother country. (For evidence of this, see this blog post.) Because I discussed this subject at length in my other blog post referenced above, I will not go into it further here. Instead, I will now launch into my discussion of his political and economic ideas, and how they apply to our world today.

Adam Smith

Adam Smith and the American Revolution

"The rebellious war now levied is become more general, and is manifestly carried on for the purpose of establishing an independent empire. I need not dwell upon the fatal effects of the success of such a plan. The object is too important, the spirit of the British nation too high, the resources with which God hath blessed her too numerous, to give up so many colonies which she has planted with great industry, nursed with great tenderness, encouraged with many commercial advantages, and protected and defended at much expence of blood and treasure."

"It is now become the part of wisdom, and (in its effects) of clemency, to put a speedy end to these disorders by the most decisive exertions. For this purpose, I have increased my naval establishment, and greatly augmented my land forces ... "

- King George III's Address to Parliament, 27 October 1775

"The Wealth of Nations" was published in 1776, a year usually associated with America

Adam Smith was the first modern economist. Thus, his publishing of "The Wealth of Nations" in the year 1776 is often seen as symbolic. Like the American war of independence, "The Wealth of Nations" was a revolution - although not in politics or war, but in economic thinking. It is the first modern work on economics, and is rightly respected today for its influence ... and brilliance.

But Adam Smith was a Scotsman, and was thus British

But because the symbolism of the year is associated with America, it's easy to assume that Adam Smith was an American. Actually, he was a Scotsman, and was thus British - a citizen of the very mother country we were at war against. Because of this, you might think that he was unsympathetic to our war of independence. But as someone who has studied "The Wealth of Nations," I can tell you that this is not the case. He actually was sympathetic with the American Revolution, and I can prove this with some quotes from the book.