The Breadth Of Adam Smith Economic Book

The Breadth Of Adam Smith, Adam Smith Book

Adam Smith was typical of early economic writers in that he was not exclusively an economist. He was an academic, and this allowed him a degree of detachment and objectivity that was lacking in the mercantilist writers, who were generally businessmen. As a professor in Glasgow giving a series of courses that encom­passed what we now call the social sciences and humanities, he was basically interested in moral philosophy, which colored a good part of his economics. He had read extensively in the previous literature of the social sciences and humani­ties and was able to synthesize it into a single work.

Smith was not a narrowly technical theoretician but a careful scholar with a grand vision of the interrelatedness of the society. Although we pay particular attention to his vision of the interrelatedness of the economy, Smith dealt with the important connections across many areas of society—things that today are studied by economists, political scientists, sociologists, and philosophers—particularly issues of ethics. He saw, for example, important connections between economic and political freedom, between private property rights and a just state, and between individuals motivated partly by self-interest and partly by concern for the consequences of their actions on others.

Smith was influenced by hi3 teacher, Francis Hutcheson (1694-1746), and by David Hume (1711-1776). Smith shared Hutcheson's strong disapproval of the ideas of Bernard Mandeville (c- 1670-1733), whose satirical style had given his presentation of the mercantilist position wide currency. Mandeville and Smith started with the same assumption regarding the egoistical nature of humans but reached opposite conclusions. Mandeville maintained that the pursuit of indi­vidual self-interest would generate many undesirable social and economic con­sequences, and therefore he built a case for goverment intervention in the economy.

Many of the attitudes toward knowledge and learning during Smith's time differed sharply from those of today. First, no clear delineation between various areas of inquiry existed: philosophy, science,, social science, and ethics were all treated as facets of a single body of truth, not ass separate disciplines—and certainly not, as is sometimes the case today, opposites. A proper education for the intellectual elite who engaged in such inquiry, moreover, required the acquisition of the broadest possible range of human knowledge rather than specialization in an area such as economics or science. Writers often contributed to what we would consider divergent areas of inquiry—Smith wrote a paper on astronomy, and Isaac Newton one on economics. Smith himself belonged to various clubs or societies in Glasgow, Edinburgh, and London whose members discussed papers on subjects that today would involve nearly every curriculum area appearing in the catalogue of a liberal artss college.

One of the consequences of this interdisciplinary approach was that those like Adam Smith who were primarily pursuing knowledge in what we would now term the social sciences and ethics believed that the scientific rigor that Newton had been able to establish in physics could also be attained in their primary fields of endeavor. Clearly, Smith and his contemporaries readily intermingled what today would be called positive and normative issues.

Adam Smith and his times provide interesting perspectives on several ques­tions that are still being examined in the twenty-first century: (1) Should one construct an analysis of society within an interdisciplinary framework, as did Smith, or abstract out certain a ctivities (e.g., the economic or political) to be studied in isolation? (2) Are there discipliness in the social sciences that are incapable of achieving the intellectuel rigorof the hard sciences, e.g., economics versus physics? (3) Is it possible build analytical structures in the modern social sciences that are free of value judgments, or are normative elements essential to grasping certain aspects of society? For Smith and most of his contemporaries, these were not issues. They believed that just as Newton, through rigorous analysis, had found order and harmony in the physical world, so might they discover the natural laws governing society. This preconception of Smith's enabled him, when he endeavored to examine the economy, to see not chaos but individual self-interest interacting in competitive markets to produce harmony, a profoundly significant insight.

Smith has often been called the father of economics. Although each of the precursors of classical economics saw bits and pieces of the puzzle, none had been able to integrate into a single volume an overall vision of the forces determining the wealth of nations, the appropriate policies to foster economic growth and development, and the way in which millions of economic decisions are effectively coordinated by market forces.

Smith's major book is titled An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Two other important sources of his ideas are his earlier book, The Theory of Moral Sentiments (1759), and the lectures he gave at the University of Glasgow. Unfortunately, Smith's own copies of his lectures were destroyed, and it was not until 1895 that a manuscript was discovered containing a copy of notes taken in 1763 by one of his students. These have been published as Lectures on Justice, Police, Revenue, and Arms?

Smith's conception of the scope of economics followed that of the English mercantilists. He was interested in explaining the nature and causes of the wealth of nations. Modern economists would describe Smith as a macro theorist interested in the forces determining economic growth. But the forces that Smith examined were broader than those studied in modern economics, and he filled in his economic model with political, sociological, and historical material. He gave some attention to the determination of relative prices—included today in microeconomic theory—but his main interest was in economic development and policies to promote economic growth.

However, because Smith concluded that an economy would always employ its resources fully in production, he left untouched an important problem of macroeconomics: given the productive capacity of an economy, what forces determine the levels of income and employment?
Smith's methodology, which combined deductive theory with historical de­scription, is also worth noting. His theoretical models lack elegance and rigor, but his description of the interrelationships within and the workings of the economy, and his ability to weave historical examples into his analysis, are unparalleled. A modern mathematical economist could condense the fundamen­tal propositions contained in the nine hundred pages of Wealth of Nations into a short pamphlet. In fact, Ricardo, who possessed some theoretical skill but did not use mathematical notation, was able to cover more theoretical ground in a book less than half the length of Smith's.