Some Auld Acquaintances

Adam Smith, Robbie Burns and Enlightenment
Listener 29 December, 2001.

Keywords History of Ideas, Methodology & Philosophy

Adam Smith (1723-1790) was the first great economist. The political right promenades him as one of their own, but in a recent book Economic Sentiments, Emma Rothschild argues that he was originally a radical. However, shortly after his death censorious decisions in the courts led his followers to reinterpret him in a more conservative manner. (Rothschild dedicates the book to her husband, Nobel prize-winning economist Amartya Sen, who is obviously influenced by her work.)

Such is Smith’s breadth, that one can usually find something in his works to suit one’s politics. The Business Roundtable is want to quote that ‘By pursuing his own interest he frequently promotes that of society more effectually than he really intends to promote it,’ (although on occasions they leave out the ‘frequently’). Those who dont like the Roundtable can quote back ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public,’ (although they might prefer to change ‘seldom’ to ‘always’). Americans like him because he supported American Independence (The Wealth of Nations came out in 1776 the year of their revolution), free traders because he opposed mercantilism, protectionists because he spent much of his life as an excise officer.

Even his much cited ‘invisible hand’ begins with support for domestic over foreign investment. ‘By preferring the support of domestic to that of foreign 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 is not part of his intention.’ Rothschild observes he mentions the invisible hand only three times in all his writings, and suggests he was being ironical. Even so, it led economists to wonder to what extent the market promotes a common good. The theoretical conclusion is that it frequently does not, even using a loose definition of the interests of society. However, frequently the invisible hand of the market is the best way we have of making resource allocation decisions.

Smith was a polymath, in an age in which economists were not confined to proving obscure theorems, also writing on philosophy, history, sociology and jurisprudence. He subscribed to the publishing of the poetry of Robbie Burns (1759-1796). They almost met on one occasion, but Smith’s ill health aborted the event. (Smith was trying to arrange a job for Burns in the Excise Service.) One wonders what would have happened had the contemplative bachelor met the rumbustious drinker, who sired ex-nuptial children.

They were a part of the Scottish enlightenment. (The great philosopher David Hume (1711-1776), who also contributed to economics, was a friend of Smith’s.) The Enlightenment, which began in France, was a key passage in European development. It argued people’s habits of thinking were based on irrationality, polluted by religious dogma, and over-conformed to historical precedent and irrelevant tradition. The way to escape was to seek true knowledge in every sphere of life, to establish the truth and build on it. Its premises were liberal, pro-science, anti-superstition, and that the state was a proper vehicle for the improvement of the human condition.

The Wealth of Nations is a part of this program, but so is Smith’s earlier book, The Theory of Moral Sentiment, in which he constructs a psychology of moral judgement originating in, and working through the emotion of ‘sympathy’, the imaginative capacity to project oneself into another person’s place, and then evaluate their actions both in the light of the situation in which they occurred as well as with respect to their social propriety. Smith would be very perplexed by how his broad humane conception of humankind has been whittled down to the rational economic man which underpins so much of today’s economics.

New Zealand economist, Nancy Devlin, currently working in London, has drawn attention to The Theory of Moral Sentiment influencing some of Burns’ poems. For instance “To a Louse” echoes Smith’s ‘If we saw ourselves in the light in which others see us, or in which they would see us if they knew all, a reformation would generally be unavoidable.’

O wad some Power the giftie gie us
To see oursels as ithers see us!
It wad frae monie a blunder free us
An’ foolish notion
What airs of dress an’ gait would lea’e us
An ev’n devotion!

More speculatively Burns’ poem ‘The Twa Dogs”, one owned by a wealthy man, the other by a poor man, discussing the life of their masters, covers the same theme.

This is not to argue that Burns was enamoured with all of Smith’s economics. But there is a sense in which Burn’s poems (the ribald ones aside) capture the vision of humanity which underpinned Smith’s economics. We might be wiser to read (and sing) Burns, than some of the ideologues who have misrepresented the first great economist. Auld acquaintances should never be forgot.

(I was telling a friend of Scottish descent about planning to use this material for my Christmas column. ‘Och, mon’, he said, ‘y’mean Hogmanay.’)

Letter The Listener 26 January, 2002.

Roger Kerr, executive director of the Business Roundtable, asks about those occasions when his organization leaves out the ‘frequently’ from Adam Smith’s well known sentiment, ‘By pursuing his own interest he frequently promotes that of society more effectually than he really intends to promote it.’ (January 12, 2002) The replacement of Smith’s caution with an uncritical confidence is a common feature of Kerr’s paraphrase of the quote. For example he wrote that ‘Smith’s famous metaphor of the invisible hand, … holds that business people promote the general interest more effectively by pursuing their own interests than by directly trying to “do good”.’ (3 December, 1996) I discussed this example in greater detail in my column of March 15, 1997. Kerr did not object at the time.

Brian Easton.

P.S. Keith Rankin pulled me up on an invisible hand quote, in which left some key phrases out – as do many economists. His correction and my explanatory response are at What Adam Smith really said about the “Invisible Hand, 26 October 1998.