Adam Smith: The Morality of Nations and the Making of America
Tom Elliott introduces the first edition of Smith’s magnum opus, The Wealth of Nations.
Before Adam Smith was the father of economics, he was known in the 18th century as the author of a philosophical treatise called the Theory of Moral Sentiments (1759), a study which examined why people become interested in the affairs and struggles of others. It described how a man might develop his sense of morality by trying to put himself in another man’s shoes, by trying to “enter, as it were, into his body and become in some measure the same person with him.” Seemingly a long way from the Smith of self-interest that is usually associated with the Wealth of Nations (1776), the Theory of Moral Sentiments stressed the importance of sympathy for others.
Nevertheless, the seeds of the Wealth of Nations are visible in Moral Sentiments. Towards the end of the earlier work, Smith considers the economic implications of man’s ability to imagine the lives of other people. He describes what happens when a “poor man’s son… begins to look around him” and “admires the condition of the rich.” Inspired to acquire more wealth, the poor man approaches the rich man in search of work. By employing the poor man, the rich man finds that he can produce more than he needs to survive. As a result, Smith argues, the rich man will feel “obliged to distribute among those who prepare, in the nicest manner, that little which he himself makes use of.” This supposedly natural moral sentiment brings Smith to his most famous economic idea: that the rich “are led by an invisible hand” to distribute wealth equally among their workers. Not just an ideal of laissez-faire economics, in other words, the “invisible hand” originally described man’s natural obligation to give as much as he gains.
The first, second, and third editions of the Wealth of Nations.
What links the nascent economic theory of Moral Sentiments with the more fully developed version in the Wealth of Nations is precisely this emphasis on the “naturalness” of economic activity. In the opening pages of the later work, Smith famously argues that his object of study, the division of labour in society, is the result of a “certain propensity in human nature”: “the propensity to truck, barter, and exchange one thing for another.” This emphasis informs Smith’s account of man’s “natural liberty” to improve himself. He describes how man’s “study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society.”
Perhaps this explains the influence that the Wealth of Nations had on the ideals of early America. Smith’s depiction of the American colonies in the Wealth of Nations is hardly favourable. He calls them “countries which contribute neither revenue nor military force towards the support of the empire,” dismissing them as a “sort of splendid and showy equipage.” But if he insists on this, then it is only to disabuse Britain of its imperial fantasy. “The rulers of Great Britain,” Smith argues, have “amused the people with the imagination that they possessed a great empire on the west side of the Atlantic.” That fantasy, Smith felt, was groundless. It had merely obstructed the natural liberty of Americans to enter the free market of economic exchange.
Given Smith’s critique of empire, it is especially fitting that the above first edition of the Wealth of Nations was purchased within a few weeks of publication by Dr Thomas Moffatt, a Scottish customs officer on his way from London to America. This potentially places Smith’s text on American shores on the eve of revolution, during the political maelstrom of the Second Continental Congress in Philadelphia and the drafting of the Declaration of Independence. While this founding document of American nationhood borrows from John Locke’s philosophy in its insistence on the “inalienable rights” of “life” and “liberty,” it is arguably Smith’s economics that gives it its most American of dreams: “the pursuit of happiness,” the poor man’s longing to become rich.
America’s ensuing struggle for independence shows just how easily “man’s study of his own advantage” can lead to war as much as to peace, to disharmony between former brethren rather than to the sympathy that Smith originally wrote about when he conceived of the “invisible hand.” The journey of the Wealth of Nations to America at the outbreak of war ironically marked the moment when a Briton could no longer imagine what it was like to be an American in the colonies, when he could no longer “enter, as it were, into his body and become in some measure the same person with him.”
The Wealth of Nations making its way across the Atlantic in time to witness the founding of America is indicative of its rapid circulation across continents. A second, corrected edition in English was published in 1778; a third followed in 1784. In the ensuing decades, the Wealth of Nations circulated in multiple translations, coinciding with the emergence of the modern nation states and signalling the arrival of a new age of global economics.
Translations of the Wealth of Nations in German, French, Italian, Swedish, and Portuguese.