Dean Welcome Dr Smith! We are always pleased to see our distinguished former staff returning. Indeed, we are so proud of you that we have named one of our buildings the Adam Smith Building…
AS I've seen it. A pity my boyhood friend Dr Robert Adam, of Kirkcaldy, did not build it. He designed the main Quadrangle of the College of Edinburgh.
Dean Yes, well, you know, funding councils, cost limits…. (Brightly, pointing to the display case) But have you seen this? This was the engine that Dr Black asked Mr Watt to repair. Mr Watt found out that the design was faulty; Dr Black applied the theory of latent heat; Mr Watt invented the separate condenser—and the rest is history.
AS Indeed. Dr Black was one of my dearest and most trusted friends. I asked him to destroy all my manuscripts on my death. And Mr Watt was a most ingenious Mechanick. In my History of Astronomy, which was one of the few relics I authoris'd Dr Black and Dr Hutton to publish after my demise, I wrote that all of philosophy follows from wonder, surprise, and admiration. So it is as much with the Theory of Moral Sentiments of which I wrote, as with the Natural Philosophy which Mr Watt practised.
Dean. Yes, such a shame we couldn't enter James Watt in the Research Assessment Exercise (RAE). Trouble is, we hadn't sorted out intellectual property in those days and we let him set up his own spinoff company. Boulton & Watt. It should have been Glasgow University Innovation Ltd. And, of course, strictly speaking he was a lab technician, not a member of the academic staff.
AS But Mr Watt was an ornament of our Scotch system of education. I had much to say of its Superiority to the English. I was six Years in Oxford: to what end? In the university of Oxford, the greater part of the publick professors have, for these many years, given up even the pretence of teaching. In the Scotch universities, the publick professors took a fee from their students. That requires the professors to attend to their duties, and to instruct the young. In Scotland the establishment of the parish schools has taught almost the whole common people to read, and a very great proportion of them to write and account. In England, 'tis not universally so. Mr Watt attended the grammar school at Greenock, as I attended the burgh school in Kirkcaldy….
Dean But as we were speaking of the RAE, forgive me a rather delicate question. You wrote two distinguished books: the Theory of Moral Sentiments and the Wealth of Nations. But why only two? Why did you never publish your theory of jurisprudence?
AS In my private Lectures on Rhetoric and Belles-Lettres, I attempted to lay down the principles of good English style. Like my friend Mr David Hume, I view'd the style of the Scots, before our Union of the Year 1707, as somewhat uncouth, and I advocated a clear and correct English style. My work was slow because it underwent many careful revisions. Indeed I fear it is too subtle for some. In my Moral Sentiments I wrote that the rich are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it to advance the interest of the society. Now, some have held this "invisible hand" to be the epicentre of my system, when 'twas but a passing remark. I expected my readers to understand it as a reference to such Satire as Mr Mandeville's Fable of the Bees. But some of my readers, it seems, are more solemn than I.
Dean But what about the Theory of Jurisprudence?
AS. There I confess to some caution. You recall that in the year 1776, there was a revolt among our American Colonists; which, being mishandled, led to their departure from the Empire. Shortly afterwards followed the events in France, that were proceeding as I rewrote my Moral Sentiments in 1790. Some in Scotland fear'd that a great and riotous Democracy was breaking out in France, which they blamed on the principles of the inoffensive political economist M Turgot (whom I knew) and his followers such as the eminent Marquis de Condorcet and others. Should I be associated with these principles, I might suffer as did my friend Mr Dugald Stewart. Mr Stewart found Lord Craig—one of our Lords of the Court of Session in Scotland—most overbearing. When Mr Muir of Huntershill was transported to Botany Bay for 14 years for espousing the principles of my work, my lord Craig forced the inoffensive Mr Stewart to recant publickly of his approval of the M. de Condorcet, &c. When Mr Stewart read an account of my life to the honourable the Royal Society of Edinburgh, he was at pains to stress my blameless and conventional opinions. From that seed grew all subsequent estimates of me. They misread my Wealth of Nations, failed to read my Moral Sentiments, and knew nothing of my Jurisprudence.
My Jurisprudence sought to establish the first principles of government. My private Opinions were of a more radical cast than those I suffer'd to be publish'd—in matters of religion and of the colonists of America. So I instructed Dr Black and Dr Hutton that my Lectures on Jurisprudence were to be burnt on my demise.
Dean Dr Smith, let me surprise you. They were not destroyed as you thought. Two of your students took copious notes. One set was rediscovered in 1895, and another in 1958. They relate to the course as you gave it in two successive years. By comparing the two, we know that you said the same things, although in a different order, in these two years. I knew all along what your Jurisprudence says. It helps to show that the private Adam Smith indeed differed from the ultra-respectable anti-revolutionary portrayed by Dugald Stewart and by all other biographers until recently.
AS Wonder, surprise, and admiration indeed! Well, I am now beyond the reach of those who attacked my Eulogy of Mr Hume. A single, and as I thought a very harmless Sheet of paper, which I happened to Write concerning the death of our late friend Mr Hume, brought upon me ten times more abuse than the very violent attack I had made upon the whole commercial system of Great Britain. I had but reported that Mr Hume died as noble a death as Socrates, yet that he took comfort not from the ministers of the Kirk but from Lucian's Dialogues of the Dead. Can you then wonder that I was so circumspect in matters of religion and of the foundations of government? In my circumspection I differ'd greatly from Mr Hume; in my principles I differ'd little.
Dean And yet you have good things to say of the presbyterian churches. In the Wealth of Nations you say, "There is scarce perhaps to be found any where in Europe a more learned, decent, independent, and respectable set of men, than the greater part of the presbyterian clergy of Holland, Geneva, Switzerland, and Scotland."
AS Sir, I said "the greater part." I pointed out that the universities of Scotland, a land where the church has but modest revenues, are filled with the most eminent men of letters; those in a land where the church has very great wealth, are not (of course I meant Oxford, but left that to be inferr'd by the subtle Reader). I believe that the Church of Scotland brought great good to the government, if not to the religion, of our country. Mr Andrew Melvill, the author of our Second Book of Discipline, in the year 1596 told King James VI that he was but "God's sillie vassall." In the kingdom of "Chryst Jesus the King, whase subject King James the Saxt is," there were no lords or heads, but only members. The establish'd Kirk in Scotland, and its counterparts in Holland, Geneva, &c, teach that all are equal in the sight of God. We have no Bishops, and His Majesty the King is not the Supreme Governor of our Kirk. The equality of all mankind is a sound basis of Government.
In my Moral Sentiments, I seek a grounding for morality in sympathy. By that I do not mean that all men sympathise with one another: 'tis patent that they do not. I mean that, in order to understand what a moral sentiment is, a man must be capable of understanding the world as it appears to another.
Dean Then you'd love The Curious Incident of the Dog in the Night Time. The author brilliantly sees the world through the eyes of someone who is incapable of seeing the world through the eyes of anyone else.
AS I dare say. In my time, Mr Robt. Burns expressed it in the Vernacular. I never met him, but sought for him a task, as Salt Officer at 30L per annum, to support his literary endeavours. Have you read his poem in the Scottish dialect, "To a Louse"? After insulting the Louse for many lines, he turns of a sudden, and in a chang'd style he says, O wad some Pow'r the giftie gie us / To see oursels as ithers see us! / It wad frae monie a blunder free us / An' foolish notion. Mr Burns had well studied my Moral Sentiments.
Dean But some say that the Moral Sentiments and the Wealth of Nations are incompatible: that the first postulates a world based on sympathy; the second, a world based on self-interest. Our chancellor of the exchequer, Gordon Brown—a Kirkcaldian like yourself, you know—has recently extolled your work in many speeches. He said that surely your two books are compatible, and that those who saw you as an apologist for ruthless capitalism were just mistaken.
AS My work is all of a piece. But what is this "capitalism"?
Dean Herr Dr Karl Marx, of Trier, believed that capitalism was evil, because owners of capital stole all the value created by labour beyond the minimum needed to keep the labourer alive; and that the effect of repetitive manual work—such as the pin factory you describe in the Wealth of Nations—deadened the imagination. He called that alienation. But he believed that in time those labourers would unite to overthrow capitalism in favour of socialism…
AS Socialism—pray, what is that?
Dean For Marx, it was a world in which to each according to his needs, from each according to his ability. Marx had quite a high regard for your work, by the way. He believed that his work on the labour theory of value built on your foundations.
AS Ah, that was the most uncertain part of my book. I fear I express'd myself unclearly. But I spoke very clearly of this alienation tho' I did not use that word. 'Twas I who said that the hands in the pin factory, tho' they be richer than their grandfathers who made everything they needed at home, might find their minds stunted by the monotony of their work. So it is right that they should be taught in publick Schools, not only to read and account, but also to a broader Understanding. And as to the masters stealing from their men, I observ'd, that when the magistrates make orders for the regulation of Wages, or the settlement of the poor, their instructors are always the masters and never the men. But, pray, how did Herr Dr Marx say that needs were to be assessed; and how would he discipline such as failed to deliver according to their ability? The publick professors of Oxford are no doubt able men.
Dean Not my field I'm afraid. We used to have professors of Marxist economics who could have answered that for you. Marxist economics were very popular in the 1930s, when we had massive unemployment here on Clydeside. Then along came John Maynard Keynes with another answer. He argued that the government should stimulate the economy during a depression by spending on public works….
AS Publick works! A road to let the people of Glasgow reach Edinburgh with expedition would be fine, but persons of Quality sometimes prefer the Ornamentall to the Usefull. I observ'd in my book, that many great works are done for the Ostentation and Pride of them that pay for them: which is well if they pay out of their own pockets, but not if they pay out of others'. The late Duke of Marlborough was rewarded for his Victories, by the grant to him of Blenheim-Palace near Oxford. I hear it has a great Bridge which goes from nowhere to nowhere; if paid for by his Grace, well and good, but I fear it was funded from the Taxes and Imposts of Great Britain. I wonder how Mr Keynes would ascertain, whether publick Works were truly for the Publick, or for those who ordered them at the expence of the Publick?
Dean But surely you approve of some public works—for instance, supporting the infrastructure of the poorest communities—such as the Highlands of Scotland or tropical Africa. The prominent economist Jeffrey Sachs has pointed out that India, which has recently started to grow rapidly, has a legacy of good railways and acceptable roads from the days when it was ruled by the British, but most of Africa has not. He wants aid donors to choose six well-governed countries in Africa, and focus infrastructural aid on those countries.
AS Misplac'd Benevolence, tho' it do not harm, may do no good either. A young man, Mr Wilberforce, who is very warm in opposition to the detestable, and inefficient, practice of Slavery in our Colonies, requested my support for a Scheme to relieve the destitution of the Highlands by a Society to promote the Fisheries there. I told him that the scheme would likely result in the total loss of the Promoters' money; but at least it was their own money, not drawn from the publick Coffers.
Dean Well, the governments of the world used to support big dams and airports in Africa, but now they go on about much more intangible things like "good government." It all makes me a bit uneasy. Some people call it the "Washington consensus." I would rather they just forgave all the unrepayable debts of African governments.
AS But good government is the foundation of opulence. Bad government is, as I said in my book, a conspiracy of shopkeepers against their customers. I should be loath to relieve the debts of bad governments, lest they incur more, unless we could bind them with promises of amendment. And as to the debts of private parties, it is not for the Magistrate to meddle. The rules of prudence caution each (as Mr Hume said) to suppose that each other is a knave in his private business.
Dean Do you mean that we should turn our backs on the poor of Africa? Especially when some people say that it is free trade that has caused their poverty?
AS How free trade can cause poverty, I know not. If trade be free, then no trader has any motive to trade, save that he thinks the trade will make him better off. In a free trade, an effectual combination cannot be established but by the unanimous consent of every single trader, and it cannot last longer than every single trader continues of the same mind. But trade with Africa, the Indies, &c, was no wise free in my day. The whole commercial system of Great Britain depended on the license given to the East India Company to hold a monopoly of trade to our Colonies, both tropical and temperate. That enriched the monopolists, and impoverished all other parties. Do the people of Africa yet suffer from monopolists?
Dean Gordon Brown is one of those who say that they do. The rich countries of the world subsidise their agriculture so heavily that the market is rigged against Africa. The US spends more in subsidising its own cotton producers than on aid to Africa; Japan subsidises home rice production; Europe subsidises a wide range of farm produce.
AS Are they produced cheaper and better there than in Africa? If so, they need no subsidy; if not, then subsidy is waste. By means of glasses, hotbeds and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about 30 times the expence for which at least equally good can be bought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland? Or cotton in the American Colonies, or rice in Japan?
Dean But when you say that the government should not meddle in private affairs, isn't that an endorsement of ruthless capitalism, whether of companies trading abroad or at home?
AS But what is this "government"? It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. Likewise, we should not rely on the benevolence of the government for our dinner. Government, in Great Britain, is but the private interest of landowners, and of corporations of merchants. People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices.
Dean You sound so 20th century. This is the theory of rent-seeking, no less, although that phrase was not invented till 1974. You are saying that markets should allocate most goods, because they do so more efficiently and fairly than governments, but that government should intervene when the market fails…
AS Yes, I do not say that government should not enter the lives of the people. The first necessity, is to provide for the Defence of the people. The second, is for publick Works, and publick Institutions. However, it does not seem necessary that the expence of those publick works should be defrayed from the publick revenue. The greater part of them, as a highway, a bridge, or a navigable canal, may easily be managed, so as to afford a particular revenue sufficient for defraying their own expence, without bringing any burden upon the general revenue of the society.
Dean The more we talk, the more you sound like our New Labour government—especially Gordon Brown! You are speaking now of what we call the provision of public goods in the face of market failure—but of public provision by means of a private finance initiative. Brown endorsed this, with sidelong references to you, when he lectured to the Social Market Foundation a couple of years ago.
AS The Social Market Foundation—I like that name. It respects both the theory of moral sentiments and the origins of the wealth of nations.
Dean I'm coming to think that we have gone 200 years without understanding what you wrote. The age of laissez-faire…
AS I never used that phrase, but I heard it in Toulouse—coined by one of the Associates of M Turgot.
Dean Well, you have always been hailed as its apostle—for free trade and limited government. That world ended in 1914, and seemed dead until Mrs Thatcher tried to revive it in 1979.
AS Did she study my Work?
Dean She once said "the Scots invented Thatcherism." I think she meant you, not David Hume. But I don't think she read your Moral Sentiments. She also once said "there is no such thing as society." Her allies founded the Adam Smith Institute to promote your ideas. Let me show you their website—I will explain later how our modern Mr Watts have made such a thing. They quote you as saying: "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things."
AS But that was in the Year 1755, before I first wrought my three books. "All the rest" is much too strong, as you may see from my remarks on government in my Jurisprudence and Wealth of Nations. And "easy taxes" does not mean the same as "low taxes." I set out some maxims of taxation….
Dean I know. Gordon Brown said he had them before him as he prepared his 2002 budget.
AS … which say that taxes must be easy to collect and not arbitrary. They also say that the subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. As the protection of the state is equally available to all, and the rich enjoy more revenue than the poor, it follows that the rich must pay more tax than the poor. Especially should those who receive ground rent pay, as that receipt owes nothing to either their Ability or their Industry, and everything to the protection of the state.
Dean I had no idea that you favoured "progressive" taxation, where the rich, or some of them, should pay a higher proportion of their income in tax than the poor. That puts you on what we now call the political "left," not the "right" of Mrs Thatcher and the Adam Smith Institute.
AS So the Opposition was truer to my Ideas, than the Ministry of Mrs Thatcher?
Dean I'm afraid not, or not till recently. You see, everybody believed Dugald Stewart's picture of you: that you were a friend of the established authorities, and just asked for business to be let alone.
AS That is wondrous indeed: did they not understand my sarcastick comments about a government influenced by shopkeepers?
Dean Unfortunately, your remarks have been garbled by inaccurate repetition—and most people think Napoleon Bonaparte said it, not you. The Opposition to Mrs Thatcher was the Labour party. They are now in government.
AS I hope they understood that I am a warmer friend of the Artisan than of the Merchant or of the Landowner.
Dean Unfortunately, no. They believed in extensive government ownership of industry, and in a planned economy—that is what they sometimes called "socialism" and sometimes "Keynesianism." These ideas came partly from your selective admirer Dr Marx, but more from the observed failure of capitalism in the 1930s, when unemployment soared.
AS Because of a contrivance to raise prices or a conspiracy against the public?
Dean In a way, yes. The stock market crashed in 1929 but the real damage came later, when governments in all the industrial countries tried to protect their domestic industry from the slump by excluding imports. That made the slump much worse. Governments are still at it—the French government is doing it right now. It is protecting vital national industries such as gas, aeroplanes and yoghurt.
AS Ah, the policy of M Colbert, so roundly denounced by M Turgot. Is M Turgot as little honoured in his land as I in mine?
Dean Perhaps. When one side cries "protection" and the other cries "socialism," neither is paying much attention to you.
AS The Labour Party of which you speak—are they still for this "socialism"?
Dean The prime minister, Tony Blair, never speaks of it. Brown quite often does. When they were in opposition, Blair agreed to give Brown a free hand over the economy. Some say he promised to hand over to Brown within ten years. His friends deny that. But he has promised to resign before the next election.
AS But if 'tis common knowledge that he will go, assuredly he must be as powerless as my Lord North after the loss of the American Colonies, when power trickled down to my friend Mr Wedderburn, whom I advised.
Dean Maybe, but Mr Brown has many enemies in his own party. He has done much that they all like. He has given independence to the Bank of England…
AS But banks can be wondrous imprudent, as the Ayr Bank, of whose collapse in 1772 I wrote at length…
Dean …I am sure that Gordon "Prudence" Brown knows that. So far, his bank regulation, and his prudent fiscal rules, have worked very well.
AS Why then do his own partisans mislike him?
Dean Some hark back to "tax and spend" socialism and complain about his niggardly attitude to benefits, and his refusal to recreate the nationalised industries of the past.
AS But, as I wrote, publick Works and Institutions should be in the hands of those with a motive to provide 'em efficiently.
Dean Mr Brown agrees with that, but his followers in the trade unions—the "combinations" of your day—don't like it. Also, some say that he has forgotten his Adam Smith.
AS How so?
Dean He has fallen out with Lord Turner, who suggested a national savings scheme to finance future pensions—that is, provision for the aged poor. Lord Turner believes in raising universal benefits. Mr Brown says that is expensive and unaffordable, and prefers to support the poor by targeted benefits.
AS But if the poor know that they will be paid whether they save or no, they will not save. The professors of Oxford, who were paid whether they taught or no, did not teach. The professors of Glasgow, who were paid only if they taught, taught well.
Dean That is Lord Turner's objection. He may be truer to you than Mr Brown. But I assure you, you would get on very well with Mr Brown. He comes from your town and he agrees with you about plain clothes. Do you know, he refuses to dress up for the Lord Mayor's banquet?
AS Kirkcaldy is a plain place, where luxury may benefit the artisan, but confers no grandeur on the wearer. Mr Burns, the Exciseman from Dumfries, was a warmer enthusiast than I for the late events in France. But I think well of his poem, with its fine tune. What though on hamely fare we dine…
Dean Wear hoddin grey, an' a' that…
Both Gie fools their silks, and knaves their wine / A man's a man for a' that.
They go out arm in arm, singing Burns's poem. Some prosperous alumni look at them in bemusement over their half-empty glasses of wine.
