“Smith did believe free markets could better the world. He once said, in a paper delivered to a learned society, that progress required “little else…but peace, easy taxes, and tolerable administration of justice.” But those three things were then – and are now – the three hardest things in the world to find. Smith preached against the gravitational load of power and privilege that always will, if it can, fall upon our livelihood. The Wealth of Nations is a sturdy bulwark of a homily on liberty and honest enterprise. It does go on and on. But sermons must last a long time for the same reason that walls must. The wall isn’t trying to change the roof’s mind about crushing us.”
– P.J. O’Rourke, On the Wealth of Nations.
O’Rourke’s book – a New York Times best seller, according to the dust jacket – is a terrifically well-written, concise look at Smith, who wrote not just WoN but also on moral philosophy, jurisprudence and many other things. What O’Rourke does is tease out some of the contradictions as well as the great insights of Scotland’s most famous thinker apart from David Hume (the men were both great friends). What is particularly good is that although Smith was considered – not always accurately – to be the great-grandaddy of laissez-faire economics (he did not invent that term), he was much more than that. He was no ardent minimal statist although he would certainly have been horrified by the extent of state power in our own time. He supported state-backed funding of education for the poor, for example. He was not particularly fond of businessmen and some of his comments on the latter’s tendencies to collude smacked almost of that fear of big business that later spawned the madness known as anti-trust legislation in the US and elsewhere. He supported a version of the labour theory of value that was ultimately taken to its absurd conclusion by Marx; but Smith being Smith, he was the sort of man who also kind of understood that the value of something is what people will pay for it, nothing else. I suspect – although I cannot prove this – that Smith had the open kind of mind to accept the marginal-utility approach to understanding prices that eventually pounded the labour theory into dust (although not quickly enough to prevent the horrors of Communist economics). O’Rourke does not spend a lot of time on the personal life of Adam Smith; there is not much material to go on. As O’Rourke points out, the 18th Century did not suffer, if that is the right word, from the obsession with knowing every facet of a person’s private life. Of course, some writers in that period told a lot about the personal lives, like Rousseau did although as we know from writers such as Paul Johnson, Rousseau was an incorrigible liar as well as a deeply unattractive individual. In the main, though, what counted was a man’s character. And Smith comes across as an agreeable professorial type: famously absent-minded, talkative, capable of great friendship and devoted to his students (and no, that is not code for his being gay).
I was impressed that O’Rourke chose to write this book in the first place. He’s shifted his tempo since the early, raucous years of hilarious books like The Bachelor Home Companion and essays hailing the joys of driving a car with a half-naked woman in the passenger seat. As he has got older, O’Rourke has tackled politics and economics in great style and it is funny how his one-liners are as much of the lexicon of political vocabulary as H.L. Mencken’s were 50 years ago (he is probably the nearest thing in journalism to Mencken today, give or take some nuances). O’Rourke still cracks great gags, but most of his one-liners have a serious point and are not just showing off. Here’s an example (page 148):
“In the eighteenth century the poor had not yet been elevated to their present status as a valuable souce of fads, fashions and illegal drugs.”
Or another one (page 98):
“Never complain that the people in power are stupid. It is their best trait.”
James Buchan has done more to write about Smith the man, and his book is pretty good, overall. Buchan paints a highly sympathetic portrait of Smith. It is marred slightly by Buchan’s strenuous effort to play down the extent to which Smith can be seen as a great advocate of capitalism. True, as I have said above, Smith was no rigid minimal statist, let alone an anarcho-capitalist like Murray Rothbard, but it would frankly be a bit disingenuous to claim that Smith was anything other than a champion of the open market, limited, small, government, low taxes and free trade. Buchan comes dangerously close to fudging the broadly classical liberal thrust of Smith. Yes, Smith did accept a customs and excise job and yes, it is possible to parse the sentences of his great books, take a sentence out of context, and try and dragoon Smith into the arms of say, Gordon Brown. But students of economics writing are not fooled. Buchan’s book is certainly a good read; his account of Smith’s travels around France in his role of tutor is good. He also writes touchingly on Smith’s final years (he died in 1790 just before the full horror of the French Revolution kicked into gear).
It is in fact interesting that some on the left feel the need to try and claim Smith for their side (I write this with the obvious admission that the word “left” is problematical). Socialists can only try to claim Smith by picking on his occasional jibes at businessmen, building up his support for some kinds of public works and so forth; but they then have to skim over his large criticisms of the dangers of overweening state power and his admiration for the wonders of the open marketplace and the division of labour. But was Smith a “radical” and an “egalitarian”? He was radical, true, in the sense of trying to get to the root of things in explaining how an economy worked but he was not a narrow system-builder in the manner of the French Physiocrats. It is hard to spot any of the truculent, levelling tendencies we see from Tom Paine, William Cobbett or other 19th Century radicals. Smith felt that the landed aristocracy, for all its faults, provided many of the wisest legislators; he was on good terms with Whig politicians like Edmund Burke, who of course later denounced the French Revolution. Smith was certainly no democrat in terms of crude majoritarianism and as far as my reading is concerned, he had a horror of socialist levelling. It is true that he recognised the large inequalities of wealth that existed in his time and which were intertwined with the institution of private property but there is no sign that I can see that he favoured challenging property rights, and indeed he felt the ability of people to sell their labour and services for whatever price they could command was a “sacred” right.
Why are some leftists trying to claim the Glasgow lecturer for their side? This may, in part, be the ultimate form of flattery. Quite what this remarkable man would have made of Gordon Brown as he spends billions of taxpayer’s money on a collapsed bank is alas, something we can only guess at. I strongly suspect he would have damned it.
As an end-note, I strongly recommend Arthur Herman’s book, The Scottish Enlightenment, for an overview of Smith and his intellectual companions, as well as for a look at what happened later on.