David Warsh: Why we still read Adam Smith, economist and humanist

Adam Smith.

SOMERVILLE, Mass.

Jesse Norman, 56, is a rising star in British politics. Member of Parliament since 2010 for Hereford and South Herefordshire, a county seat 135 miles west of London, today Norman is Minister for Roads, Local Transport and Devolution in the Conservative government of Theresa May and a potential future Tory leader.  What is he doing as the author of a readable and thoughtful book, Adam Smith: Founder of Economics (Basic Books, 2018)?

Part of the answer is that he’s thinking through his politics in an unusually thorough fashion. His previous book, equally salient, was Edmund Burke, The First Conservative (Basic Books, 2013).  Mainly, though, I expect he is looking for approbation.  I aim to give him some.

Long has there been considered, at least in some quarters, to be a problem with Smith, because he was author of not one but two great books, The Theory of  Moral Sentiments (1759), and An Inquiry Into the Nature and Causes of the Wealth of Nations (1776).  In the first, the sympathy that humans feel for one another, and specifically desire for acceptance and approval, is the motive force at the heart of human nature.  In the second, the force examined is “self-love,” better rendered today as self-regard or self-interest.  How could the same man have written both books?

The Germans call this the Umschwung aspect of Smith’s work, meaning the reversal they perceive, known since the ancient Greek playwrights: that moment in a narrative when one’s attention is suddenly called away to an unexpected change of direction in the plot.  Sometimes the shift in emphasis is ascribed to a conversion that Smith experienced when he visited France and met Quesnay and the French physiocrats. At that point, as Norman describes the German argument.  “the soft-hearted young moral philosopher must have yielded to the flinty older economist.”

Following most British students of Smith, Norman thinks this is nonsense, that there  exists no such discontinuity between the books.  He writes,  “Smith saw his great works as self-sufficient but deeply complementary [systems]… built on the single idea of continuous and evolving mutual exchange: communicative exchange in language, exchange of esteem in moral and social psychology, market exchange in political economy.”

I’m inclined to disagree. What happened between the one book and the other, I think, is that Smith made a discovery, that he espied what today we call the self-equilibrating price system, and set out what he called “the system of natural liberty” in such a way as to attract a community of adherents who founded a social science they called political economy. He puzzled over the relationship of the one book to the other for the rest of his life, adding the concept of “the impartial spectator” to explain the nature of conscience and the origin of sense of duty, with a whole new Part VI appended shortly before he died.

This much is a matter for experts. Smith was the founder of economics, there is not much doubt about that. But  The Theory of Moral Sentiments has brought forth no such progeny – at least not yet. If not economics, what is it?  Norman at one point describes it as a work of “moral psychology, or sociology.”  Eventually, I expect, today’s evolutional psychologists will claim it as their own. The real problem with Adam Smith is that he wasn’t able to read Charles Darwin (though Darwin read Smith), and tucked away at the end of On the Origin of Species is Darwin’s surmise that psychology would one day be based on evolutionary theory.  For an introduction, already well out-of-date, see The Moral Animal: Why We Are the Way We Are, The New Science of Evolutionary Psychology (Vintage, 1995), by Robert Wright.

For now, however,  The Theory of Moral Sentiments is best classed under the heading of a work in the humanities.  What, you may ask, are the humanities?  Everything that’s not considered social science: classics, literature, history, religious studies, philosophy, music, theater, even linguistics, at least for now. In Cents and Sensibility: What Economics Can Learn from the Humanities (Princeton, 2017) Gary Saul Morsonand Morton Schapiro write that “Stories are a mainstay of the humanities, but not of economics.”  Certainly The Theory of Moral Sentiments is full of stories. Here is one of my favorite passages.  (I was reminded of it reading Escape from Democracy:  The Role of Experts and the Public in Economic Policy, by David Levy and Sandra Peart, Cambridge, 2017.  This is why we still read Adam Smith. Consider this quote from The Theory of Moral Sentiments:

"A very young child has no self-command; but, whatever are its emotions, whether fear, or grief, or anger, it endeavours always, by the violence of its outcries, to alarm, as much as it can, the attention of its nurse, or of its parents. While it remains under the custody of such partial protectors, its anger is the first, and, perhaps, the only passion which it is taught to moderate. By noise and threatening they are, for their own ease, often obliged to frighten it into good temper; and the passion which incites it to attack, is restrained by that which teaches it to attend to its own safety. When it is old enough to go to school, or to mix with its equals, it soon finds that they have no such indulgent partiality. It naturally wishes to gain their favour, and to avoid their hatred or contempt. Regard even to its own safety teaches it to do so; and it soon finds that it can do so in no other way than by moderating, not only its anger, but all its other passions, to the degree which its play-fellows and companions are likely to be pleased with. It thus enters into the great school of self-command; it studies to be more and more master of itself; and begins to exercise over its own feelings a discipline which the practice of the longest life is very seldom sufficient to bring to complete perfection.''

This is why we still read Adam Smith.  I leave it to the reader to decide whether The Theory of  Moral Sentiments is economics or something else. Morson, professor of Slavic Language and Literature at Northwestern University, and Schapiro, the president there and also professor of economics, want to shoe-horn it into economics under a program of “de-hedgehogization” of Adam Smith, recalling Isaiah Berlin’s old distinction between the hedgehog (who knows one big thing) and the fox (who knows many different truths.) On the way they make a strong case for “narrativeness” in the service of the explanation of culture.

Jesse Norman has done his homework.  The British people are fortunate to have him.  May his next book be about the way his nation goes forward from Brexit.  Whatever future lies ahead for the United Kingdom depends on a debate no less extraordinary than the one that brought Burke, Smith, David Hume, Edward Gibbon, and Samuel Johnson to the fore, two hundred and fifty years ago

David Warsh, a long-time economics and political columnist, and an economic historian, is proprietor of  Somerville-based economicprincipals.com, where this first ran.   

Marker in Kirkcaldy, Scotland.