Great thinker who talked to himself about ‘invisible hands’
WHA’S LIKE US? This week:
ADAM Smith was a Scottish economist, moral philosopher and light entertainer. For a communist country like Scotland to have produced “the father of capitalism” remains a cause for shame, though he wasn’t really a bad lad and was just trying to do his best.
To free marketers he’s a god, while to others his championing of “rational” selfinterest places him firmly in the Satanic school of economics.
Smith wrote two classic works: The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations, both of which I have read. Even you might have heard of the latter, when abbreviated to The Wealth of Nations. This, his magnum opus (big opus), is considered the first modern work of economics. Aye, thanks for that.
In this lecture or homily, I propose to spend relatively little time analysing Smith’s economic theories, as I am a bit busy at the moment. As for his moral philosophy, what’s the good of that?
And to clarify an earlier point about his books, when I said “both of which I have read”, I meant in the sense of “seen in the shops”.
It’s not clear why but Adam Smith came from Kirkcaldy, Fife. His exact date of birth is unknown, but he was baptised in June 1723. His father, confusingly also called Adam Smith, was a top lawyer and comptroller of customs in Kirkcaldy. He was a bit of a comptrol freak.
Adam’s mother, Margaret Douglas, was the daughter of a landed toff from Strathendry. Two months before Adam was born, his father died, meaning the boy was bound to become famous (just a fact: if both your parents survive your childhood you’ll amount to nothing).
No lost cause
SMITH’S biographer, John Rae, claimed the boy was abducted by a Romani woman at the age of three but subsequently rescued. He probably wished he hadn’t been as he then had to attend the Burgh School of Kirkcaldy, learning Latin, maths, history and writing. Such a lot of nonsense.
He went to study social philosophy at Glasgow Yoonie aged 14, the swotty little prat, then was awarded a scholarship to
Oxford, which he considered inferior to
Glasgow, as it remains today. It’s thought he particularly missed charismatic lecturer “the never to be forgotten Frances Hutcheson”. Of course, no-one remembers him now. Unhappy at Oxford, Adam predictably started suffering shaking fits. Only one place for folk in that state: Edinburgh, where Smith started delivering lectures in 1748. His topics included rhetoric and writings about campanology, or belles-lettres as it’s known. In 1751, he returned to civilisation and a professorship at Glasgow teaching logic, which made sense, right enough. The following year, he became head of moral philosophy. Sounds all right.
The word is out
HIS Theory of Moral Sentiments was published in 1759. Its key concern was sympathy and, mysteriously, it sold like hot cakes, prompting wealthy foreign students to drop what they were doing and enrol at Glasgow to study under him, which sounds a bit radge.
Around this time, he started yarning more about economics, expounding his view that wealth was increased by labour and not by the nation’s stock of gold or silver.
The latter view was associated with mercantilism, the predominant economic theory at that time. Well, there was more money in it.
In 1764, Smith told Glasgow Yoonie to shove it as he was going to tutor the young Chooky Buccleuch noo. This entailed touring Europe, and he stayed for a year in France. You might think he was at it, but he found Toulouse so boring that, with nothing to lose, he began writing a book. Boredom is the motor of all literature (in journalism, it’s money).
In Paris, Smith encountered the Physiocrats. Do not be alarmed. Physiocrats were opposed to mercantilism and operated under the motto “Laissez faire et laissez passer, le monde va de lui même!” (Not sure, something like “If you do sod all, the world continues to turn.”)
In 1766, Smith returned to Kirkcaldy and, with nothing else to do, spent much of the next decade writing An Inquiry Into The Thingummyjig.
The book was published in 1776 and was the Harry Potter of its day, selling out in months.
So, what was it about? Well, like something out of Potter, it told of an “invisible hand” that guided the economy.
Don’t laugh, but Smith believed that self-interest and competition lead to economic prosperity. Capitalists pursuing personal gain unknowingly benefit the public interest. They provide “universal opulence”, which benefits
Karl Marx read his works – or at least saw them down the shops – but drew different conclusions to the effect that free markets created an accumulation of wealth, with the rich getting richer and the poor getting poorer
even the “lowest ranks” of society. This sounds like today’s “trickle-down” economics, which in the last 20 years has been shown to be mince.
Smith also had complicated views about supply and demand – way above your heid, I’m afraid – and also created the idea of domestic product. Ugh, gross.
Twee markets
YOU have to remember that Smith was writing before the full impact of the Industrial Revolution had been felt, and the profiteers he considers are butchers, brewers and bakers, rather than Apple, Goldman Sachs and the Co-op.
Undoubtedly, were he alive today, he’d be standing outside Lidl on Kirkcaldy Esplanade selling Socialist Worker.
Karl Marx read his works – or at least saw them down the shops – but drew different conclusions to the effect that free markets created an accumulation of wealth, with the rich getting richer and the poor getting poorer.
Sounds familiar.
Rich or poor, death comes for us all, and the Grim Reaper shimmied into Adam’s home at Panmure House in Edinburgh on July 17, 1790. He was buried in nearby Canongate Kirkyard. He never married, which is not as far as we know a euphemism, but maintained a close relationship with his mother, which never ends well.
He was famously absent-minded, and talked to himself while smiling at invisible companions. Once, he walked 15 miles in his nightgown. To recap: one of Scotland’s greatest thinkers.
There’s a big statue of Adam near St Giles’ kirk in Embra, standing in his buckled shoes with poop permanently dripping doon his heid. It’s how he would wish to be remembered.