Profile Books, £14.99
Adam Smith revolutionised economics by arguing that wealth depends not on trade or agriculture but on labour. But Smith was preoccupied with labour in practice as well as theory: he may not have been much good as a Christian, but he was a devoted follower of the religion of hard work. He struggled with depression when studying at Oxford in the 1740s, shut up in his rooms at Balliol. But once he started to earn his living—first as a lecturer on English literature in Edinburgh, then as a professor of moral philosophy at Glasgow, next a private tutor in France, and finally commissioner of customs back in Edinburgh—he became a paragon of self-punishing industriousness.
Smith worked all the time—he never had much of a private life—but he never learned to balance his duties to his employers against his vocation as an author. Early in his career he conceived a plan for a comprehensive "history of the liberal sciences and elegant arts"—in effect a philosophical reconstruction of human culture as a whole. Presumably he dreamed of emulating his friend and mentor David Hume, who produced reams of faultless prose without apparent effort and who, thanks to his History of England, became the best paid author Britain had ever known. But Smith must have realised before long that he was no Hume. He could not handle deadlines and he fretted over every sentence he wrote: "I am a slow a very slow workman," he said, "who do and undo everything I write at least half a dozen times before I can be tolerably pleased with it." It was not until he reached his seventies that he began to acknowledge that the great works that had been "upon the anvil" for several decades were never going to be finished. He reproached himself for having "done so little," but he could not bring himself to abandon his perfectionism, or to give up the pointless distractions of his work at the custom house. Shortly before his death in 1790 at the age of 77, he destroyed almost all his papers, appalled at the prospect of burdening posterity with drafts that fell short of perfection. In an age when many casual authors had dozens of books to their name, the hard-working commissioner went to his grave having produced no more than two.
For better or for worse, the books that Smith completed have provided ample employment for later generations: The Theory of Moral Sentiments has been recognised as a masterpiece since its appearance in 1759, and The Wealth of Nations became the founding text of classical economics not long after its publication in 1776. They have also become totems in the field of political ideology, and James Buchan begins his brief and informal biography by recalling a meeting last year at which Alan Greenspan and Gordon Brown vied with each other to celebrate the continuing relevance of Smith. The chairman of the US Federal Reserve praised Smith's insight into the self-stabilising mechanisms of "free-market capitalism." The chancellor countered by hailing Smith as the patron of a reformed Scottish socialism.
As far as Buchan is concerned, these attempts to appropriate Smith for the left or the right only go to show that "economists and politicians… constitute… the least-literate sections of English-speaking society." Adam Smith and the Pursuit of Perfect Liberty is an exercise in popular literary biography designed to remind us that in his daily existence, Smith was no brash 21st-century ideologue, but an ordinary likeable lad, 18th-century style: a bit more bookish and solitary than most, and with a tendency to live in the past, but politically no more than a "cautious, voluminous, virtuous, qualified liberal." Biography, for Buchan, is the queen of the human sciences, and he uses it to demonstrate that Smith's work had "as much to do with the Roman empire as the age of Alan Greenspan and Gordon Brown."
In the 19th century, Smith's two books gave rise to what was called the "Adam Smith problem": how to reconcile the generosity of human nature as portrayed in The Theory of Moral Sentiments with the self-interestedness that seems to be presupposed in The Wealth of Nations. The solution, so far as I can see, involves what Adam Smith regarded as the greatest achievement of modern philosophy—the rejection by Bishop Berkeley, followed by Hume, of any hard and fast distinction between objective reality and human imagination. Building on this foundation, Smith discarded the old idea of timeless moral standards sanctioned by reason or religion, replacing it with the notion of an "impartial spectator." The impartial spectator was a creature of the imagination, a kind of mental monitor built up from our involuntary sympathies with the passions of others; but though imaginary, it was real enough to make us adhere to acceptable standards of conduct most of the time. It secured beneficence, in short, without requiring benevolence. When he turned to economics and tried to account for national wealth, Smith came up with a similar mechanism: he had no need for transcendent principles of productive propriety, since "the haggling and bargaining of the market" would, like the impartial spectator, provide a perfectly adequate discipline for economic activity.
Buchan is not at ease with Smith's affinities to Berkeley and Hume or his doctrine of "inventions of the imagination," and he leaves the problem of benevolence, selfishness and the relation between Smith's moral and economic theories unexplored. "Das Adam Smith Problem," he says, "is best left to German professors": the whole question is "unbiographical," and as far as he is concerned that settles the matter.
When it comes to what might be called the "Karl Marx problem," Buchan's biographical approach is rather more productive. For most of the 20th century, Smith and Marx were treated as the champions of utterly incompatible political systems: Smith was the capitalist fundamentalist who cared for nothing except money and the free market, regardless of social inequality, while Marx was the fanatical communist who cared for nothing but equality and state control, regardless of individual freedom. But Buchan has no difficulty in demonstrating Smith's overriding concern with the "poorest sections of society," or showing that in practice he took the authority of the state very seriously. When he took up his post as a commissioner of customs, for instance, he learned that his wardrobe included many prohibited imports from France, so he made a bonfire of his cravats, stockings, ruffles and pocket handkerchiefs: he was an official of the British state, after all, and he wanted to set an example.
The more you look into Smith's writings, the less plausible he is as a prophet of the free market or a rebel against the encroachments of the state. The Wealth of Nations argues for compulsory education, for example, not only to make people more productive, but to prevent them being "misled into any wanton… opposition to the measures of government." In the same way, the middle and upper classes should be required to study science and philosophy before entering any kind of profession. Smith also proposed that the state should seek to spread cheerfulness among the people by promoting painting, poetry, music, theatre, dance and other "public diversions."
Marx has proved just as intractable, and he could not have begun to write Das Kapital without the ideas he took from The Wealth of Nations. He was indebted to Smith for the general idea of history as a progress through stages based on different forms of labour, and for the notion that markets generate a logic of their own, superseding individual intentions. He also adopted Smith's distinction between "value in use" and "value in exchange." There was no one Marx respected more than Smith, and he acknowledged his debts copiously, if not magnanimously.
Marx certainly deserves more gratitude from the pro-capitalists than he usually gets: he was after all a merciless scourge of moralistic socialism and simple-minded ideas of economic exploitation, and the main effect of his distinction between labour and labour power was to show, as Smith was unable to, that capitalism could thrive even when workers got a fair day's wage for a fair day's work. The late Murray Rothbard, anarcho-capitalist guru of the raving right, had a point when he denounced Adam Smith as a proto-Marxist enemy of the libertarian cause and an architect of the "emergence of socialism."
Those for whom such paradoxes are frivolous will be very satisfied with Buchan's breezy presentation of Smith as a lad who "slept through the only lecture on political economy he is known to have attended" and who did not care very much for theoretical niceties. But Smith laboured rather harder than Buchan implies, and we are not going to get very close to him without putting in a little work of our own.
