Reading Smith in the 21st Century - Essay Example

Reading Smith in the 21st century Adam Smith is popularly known as the father of economics. The ongoing recession in the world economy with the fear of a coming depression makes it worthwhile to go back to Smith and see how economics as a branch of study began. Evensky (2001) in his article "Adam Smith's Lost Legacy" has made an interesting point. He has said that the importance of going back to Smith is to understand the study of economics as simply another way of understanding the human condition in society and more importantly to be able to know how to better it. Smith saw himself as a philosopher first and last and as we shall see in An Inquiry Into the Nature and Causes of the Wealth of Nations (1776) he believed that the modern commercial society, nascent though in his time, had certain advantages for society. Adam Smith was born in 1723 in a village called Kirkcaldy in Scotland. His family was influential; his father the elder Adam Smith held several important positions at the time of his death in 1723. At the age of fourteen Smith entered Glasgow College where his teachers included among other famous men, the great Frances Hutcheson. Smith was to discover and foster his talents and abilities in this college. John Rae (1895) in his biography of Smith titled The Life of Adam Smith stated that it was Hutcheson and later Hume who seem to have had the most influence on Smith. Hutcheson was an engaging and powerful speaker who animated Smith's mind. Hutcheson was one of a new breed of philosophers who were perceived to be radical in their thoughts and beliefs by the theological conservatives. In fact Rae credited Hutcheson with the development of Smith's ideas on natural liberty, the value of labor as the source of wealth etc. Soon after on a Snell scholarship Smith left for Oxford in 1740. In a strong contrast to Glasgow, the atmosphere at Oxford was lax and lackadaisical. Smith found that Oxford, being wealthy through endowments had become inept as a result. Lecturers had no incentive to perform and the students were pretty much left to themselves to learn on their own. However in the six years he spent there he kept himself busy mainly by reading the ancient Greek and Latin classics. After graduating, Smith went back to Scotland. In 1750 he was appointed Professor of Logic at Glasgow College and a short while later shifted to the Chair of Moral Philosophy. It was while he was Professor of Moral Philosophy at Glasgow College that he wrote The Theory of Moral Sentiments in 1759, the book that he himself considered to be his finest accomplishment. The Theory of Moral Sentiments grounds sympathy as the basis of social relationships and in the larger sense of society itself. The book is believed to share Smith's own belief in Stoicism as well as the influence of Hutcheson. The Theory of Moral Sentiments demonstrates that Stoicism was an important part of the mental make-up of Smith. Smith basically combined the stoic precept of self command with the Christian idea of benevolence. Much like the Stoics, Smith too prefigured the social bond among humans in terms of "sympathy" while the Stoic idea of world citizenship and self-command portend the role of Smith's impartial spectator (p.10). The Theory of Moral Sentiments tries to understand the function of moral behavior in society. Smith departed from Hutcheson and other philosophers in that tradition like Shaftesbury and Hume by defining motive as an essential element of moral behavior. Hutcheson had rejected that motive had anything to do with morality and instead claimed that man possessed a certain innate sense that propelled him to be moral. Smith makes motive an integral part of moral behavior arguing that people often look to the motives of a benefactor before bestowing their approval of a beneficent action. An act of kindness performed unknowingly without the motive to do good to anyone does not bring the same admiration and esteem that result when it is deemed that the action was performed with the knowledge that it would bring good to someone. Smith instead forwards the notion that man is moral because he has the capacity to be an impartial spectator. Man is guided to do the right thing not only because of the utility of his action, as Hume believed, but also because he has the capacity to perceive the effects of his action on others. This is the role of sympathy. Sympathy with others not only makes men feel as spectators what a fellow being is feeling but conversely allows the agent to feel the effect of his emotions on others. Smith says that the impartial spectator is a sure guide to how people judge of the propriety or impropriety of an emotion. People are able to sympathize only when others emotions are similar to what they believe they would themselves feel if they were in a similar situation. What The Theory of Moral Sentiments seems to propound is that man is a social species and the norms of morality thereby are valid because they are social. However Smith also stresses on the need for external forms of authority, like the government, albeit in a limited role. Smith focuses on the need to accommodate one's interests to the interests of the state which seeks to safeguard the interests of all. Smith says that the sub groups and sects of affiliation in society need to recognize the primacy of the government. He says that: All those different orders and societies are dependent upon the state to which they owe their security and protection. That they are all subordinate to that state, and established only in subserviency to its prosperity and preservation, is a truth acknowledged by the most partial member of every one of them. It may often, however, be hard to convince him that the prosperity and preservation of the state require any diminution of the powers, privileges, and immunities of his own particular order or society. This partiality, though it may sometimes be unjust, may not, upon that account, be useless. It checks the spirit of innovation. It tends to preserve whatever is the established balance among the different orders and societies into which the state is divided; and while it sometimes appears to obstruct some alterations of government which may be fashionable and popular at the time, it contributes in reality to the stability and permanency of the whole system. (p. 169) Evensky (2001) stated that Smith believed the standards of moral behavior were set by a system of social exchange. From this it is only a short jump to the author of The Wealth of Nations who believed that the human need for social exchange had fueled a mode of production which relied on that same need for exchange. Many critics have found it hard to believe that the same author could have written two such diverse books which appear to have nothing in common between them. Such criticism has been debunked by Evensky and Danford (1980). Evensky stated that there was a natural progression from The Theory of Moral Sentiments to The Wealth of Nations. The following excerpt is the most quoted from The Wealth of Nations: 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. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages. (p. 72) Danford (1980) stated that behind Smith's evocation of a free-market economy or in other words his system of natural liberty lay a principle of equality that stressed the innate equality of all humans. Smith wrote in The Wealth of Nations: The difference between the most dissimilar characters, between a philosopher common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education. (p. 73) Smith believed that circumstances play a greater role in human affairs than estimated. It is logical then to assume that if circumstances were to be more or less equal for the greater part of humanity then there would be less disparity in the material circumstances. Smith expounded that of all the stages of human evolution such as the hunting-gathering stage to the pastoral and thereafter the agricultural stage; it is the present commercial stage of human evolution which had the capacity to deliver equality and prosperity for all. Danford (1980) has stated that Smith propounds the equality of all men in at least their aspirations. No one desires to be poor when they can be rich. The rich are admired also because they are responsible for the creation of resources. By implication it can be said that the quest for material prosperity as long as it does not harm the fabric of society is sought to be encouraged by Smith. Since modern commercial society needed social exchange to thrive Smith saw that it would enable a spread of opulence and a refinement of life that placed emphasis on peace and order. The point that is stressed by Danford is that Smith championed modern commerce based society simply because it was the system that at its best worked for all. Such a society needed a relaxed form of government and politics which emphasized not power and glory but a need for everybody to get along as well as they could. As Danford has pointed out, earlier stages in human evolution required "contempt of hardship and stoical self-control" to survive, a commercial society was more humane and productive for the development of art and culture (p. 686) He was also a keen observer of the fact that it was the different forms of production in each stage of human development that had really built a corresponding set of values and morals for its sustenance. This is perhaps the most innovative and radical suggestion in Smith that finds resonance with a modern reader. The point to be remembered about Smith is that he was one in a long line of philosophers who made humanity their object of study. Smith's theory of political economy as it was called in his time was simply what Smith believed was the best course for humanity. Human evolution was a study in progress and so Smith believed that a commercial society was simply the next step in the ladder of progress. Philosophers in earlier times had similarly expounded other forms of society and Smith was aware of that. Adam Smith died in 1790, having achieved popularity and esteem for his works in his lifetime and after. As economic problems beset the twenty-first century it is worthwhile to look again at the work of Smith and perhaps achieve a better understanding of the purpose of modern economic and fiscal systems. References Danford, J. W. (1980). Adam Smith, Equality and the Wealth of Sympathy. American Journal of Political Science, 24. Retrieved November 10, 2008, from http://www.jstor.org/stable/2110953 Evensky, J. (2001). Adam Smith's Lost Legacy. Southern Economic Journal, 67. Retrieved November 10, 2008, from http://www.jstor.org/stable/101449 Rae, J. Life of Adam Smith. Retrieved from http://www.gutenberg.org/1/7/1/9/17196 Smith, A. (1757). The Theory of Moral Sentiments. Retrieved from http://oll.libertyfund.org/EBooks/Smith 0141.01.pdf Smith, A. (1776). An Inquiry Into the Nature and Causes of the Wealth of Nations. Retrieved from http://oll.libertyfund.org/title/220 Read More