Chapter 13

The Posthumous Adventures of Adam Smith1

Introduction

On the High Street section of the Royal Mile in Edinburgh stands a statue of Adam Smith. Sculpted by Alexander Stoddard and unveiled on July 4, 2008, the only statue of the great man to be erected in the Scottish capital at first seems unexceptional—a worthy memorial to one of the great figures of the Scottish Enlightenment. It is certainly a more impressive work than the travesty of David Hume, also by Stoddard, on the other side of the High Street. Hume appears in classical garb and looking rather slimmer than contemporary memoirs and paintings of the philosopher would leave us to believe. Smith is at least represented in the costume of his age, standing in front of a scythe and sheaf of corn, symbols that rightly reflect the agricultural focus of The Wealth of Nations. Viewed from the back, however, the statue displays the difficulties we still face in coming to terms with Smith and his work.

On the plinth is a plaque containing the names of the subscribers who paid for the statue, the first of which is that of Dr. Eamonn Butler. In one respect this is appropriate, since the organization that he heads, the Adam Smith Institute, commissioned Stoddard to carry out the work, collected the subscriptions that paid for it, and negotiated the site with Edinburgh City Council. But in another respect Dr. Butler’s imprimatur is not appropriate at all; for the Adam Smith Institute is a body whose views bear as much resemblance to those of Smith as the views of the former Soviet Institute of Marxism-Leninism bore to those of Marx and Lenin. In both cases some phrases are brandished—a “hidden hand” here, a “dictatorship of the proletariat” there—to disguise the infidelity of these institutions to their supposed sources of inspiration.

The Adam Smith Institute (henceforth ASI) was established in 1976, the bicentenary of the publication of The Wealth of Nations, by Butler and two fellow-graduates of St. Andrews University, Stuart Butler and Madsen Pirie, as a think tank that would focus on developing policies that could be adopted by sympathetic governments, the type of policies we now think of as characteristic of neoliberalism.2 At one point in 1994 the ASI ran a mock-interview with Smith from beyond the grave in which, speaking through the medium of one Edwin G. West, he called for the abolition in the United States of “minimum wages, tariffs, export subsidies, agricultural marketing boards, taxes on capital, ‘free’ education at government schools and the whole US system of central banking.”3 To be fair—although there is no obvious reason why we should be fair to the people responsible for devising the poll tax—the ASI is obviously aware that it is unable to use Smith as a ventriloquist’s dummy for its own views in every case, so it also includes a cautionary note on its website: “While Adam Smith is our inspiration, we do not pretend that he was right about everything.”4 The issues about which Smith was wrong, one gathers, were those on which he would have disagreed with the ASI.

Jacob Viner once wrote that “an economist must have very peculiar theories indeed who cannot quote from the Wealth of Nations to support his special purposes.”5 There are indeed passages in Smith’s work that can be used to support neoliberal conclusions, if contradictory passages and the context in which they were written are ignored. But if neoliberals are the most egregious offenders in relation to making selective and dehistoricized interpretations of Smith, these are typical of almost all of the interpretations of his work currently on offer. This is, however, not a new development: the battle for Adam Smith began almost as soon as his body was interred in the Canongate churchyard in Edinburgh.

The reputation of a political economist

Smith died on July 17, 1790—a death that, as Emma Rothschild writes, “was the subject of little interest, in England and even in Scotland.”6 The previous year, Thomas Malthus withdrew the 1784 edition of The Wealth of Nations from his college library to find that he was only the third person to have done so.7 As Richard Teichgraeber has pointed out, when Dugald Stewart was appointed as the first professor of political economy at Glasgow in 1793, he “talked of a hope that ‘in due time’ Smith’s example would be followed by other students of political economy. Yet only ten years later, Francis Horner, a former pupil of Stewart and a founder of the Edinburgh Review, spoke of a “superstitious worship” that had come to be attached to Smith’s name.8 What had happened in the intervening period to elevate his reputation from relative obscurity to one surrounded with quasi-religious reverence?

Around the time of Smith’s death, a year into the French Revolution, Nicolas de Condorcet published a 220-page summary of The Wealth of Nations, which he described as one of those books “which does most honor to Great Britain.”9 In his Elements of the Philosophy of the Human Mind (1792) Stewart drew attention to the parallels between Smith’s work and that of his French Enlightenment contemporaries like Condorcet, pointing out also how they had mutually influenced each other. Here and in his other writings of the time, Stewart attempted to maintain a balance between rejecting revolutionary interpretations of Enlightenment doctrine and urging the timely reform of the conditions that made such interpretations attractive to the unwary.10 Arguments of the latter sort, which would have passed unnoticed in enlightened publications fifty years earlier, or even during the American War of Independence, now bore the mark of the Jacobin beast and Stewart was swiftly forced to recant. His retreat had an impact on his theoretical approach to political economy, for Stewart became the person primarily responsible for deradicalizing Smith, above all in his biographical “Account of the Life and Writings of Adam Smith LL.D” published in 1794. As John Saville writes: “It was Adam Smith the conservative theorist whom Stewart presented in his university lectures, and it happened that among the generations of students who listened to him were many who were to become important in British political life. . . . From Stewart they absorbed what was becoming the economic ‘commonsense’ of middle-class Britain.”11

Not all aspects of Smith’s original thought were universally admired in revolutionary France. The Theory of Moral Sentiments had begun to attract attention there during the economic debates in the Assembly of Notables during 1788, mainly from readers of The Wealth of Nations who wanted to explore his ideas further, yet they identified a contradiction. In the former work he claimed that humans act from sympathy with or altruism toward their kind, whereas in the latter he appeared to argue that they act from selfish motives, or at least the pursuit of individual self-interest, although this will have beneficial effects.12 It is usually said that the inconsistency between the anthropological accounts of human nature offered in his two main works—the so-called “Adam Smith Problem”—was first identified by his German interlocutors during the 1840s.13 But in 1793 the industrial capitalist, lawyer, and Jacobin Pierre-Louis Roederer had already undertaken a critique of The Theory of Moral Sentiments in which he identified this alleged inconsistency. Although an admirer of Smith, Roederer was unhappy with the central argument in his first book, precisely because Smith claimed in it that human beings were motivated by impulses that had their origin outside of self-interest. In lectures delivered two months after the execution of Louis XVI, Roederer opposed the idea that, through the exercise of sympathy, men and women could empathize with others and vicariously enjoy or suffer their experiences, on two grounds. First, it was a dangerous doctrine, because it presented false arguments for both social inequality and admiring riches: not sympathy but the desire for emulation was the key, otherwise why should Frenchmen not admire the parasitic nobility who had contributed nothing toward their own wealth and who were now engaged in counterrevolution? Second, it had political implications, for if, as Smith suggested, the principle of sympathy inclined toward monarchy (albeit on the English model established in 1688), then what was to prevent a new or restored dynasty emerging, even if, as in France, the king was executed and monarchy abolished?14

For Roederer then, the author of The Wealth of Nations was both insufficiently hostile to the nobility and—astonishing as this now seems—insufficiently committed to the market. In Britain, the generation of British Whig thinkers who rose to prominence after 1800, particularly those associated with the Edinburgh Review, and who found some of Smith’s arguments useful, identified the same problem, but adopted a different strategy: rather than drawing attention to the contradiction they simply pretended that it did not exist. As Teichgraeber notes, in economic terms only one of his themes really interested them:

They focused almost entirely on his argument for free trade—especially as it applied to monopolies and the Corn Laws—because this was what they took to be the most interesting and useful aspect of the Wealth of Nations. As a result, when “free trade” emerged in the 1780s as a matter of practical politics, more people of different types gave the book greater attention and respect. This delayed recognition of Smith’s achievement, however, also had a second and unintended result—namely, the reduction of the Wealth of Nations to a book whose single overarching concern was seen to be driving home the doctrine of free trade.15

It is interesting, in the light of later developments discussed below, that those who were busy reducing Smith’s work to a doctrine of free trade were both aware of what they were doing and unwilling to criticize Smith openly. The letter by Horner mentioned above is particularly revealing in this respect:

I should be reluctant to expose S[mith]’s errors before his work had operated its full effect. We owe much at present to the superstitious worship of S[mith]’s name; and we must not impair that feeling, till victory is more complete. . . . Until we can give a correct and precise theory of the origin of wealth, his popular and plausible and loose hypothesis is as good for the vulgar as any others.16

Yet the interpretation of Smith associated with the ideologists of industrial capitalism was not the only one. Radicals were initially more attentive to and supportive of his work than either Whigs or Tories, as is demonstrated by the tribute paid to him by Robert Burns—anonymously—in the September 1790 edition of the Gentleman’s Magazine:

Death and Hermes of late in Elysium did boast,

That each would bring hither what earth valued most:

Smith’s Wealth of Nations Hermes stole from his shelf;

DEATH just won his cause—he took Smith himself.17

The radicals were not opposed to the market. In first part of Rights of Man, published the following year, Thomas Paine invoked the superiority of Smith’s method to that of Edmund Burke, but remained as supportive of competition as his opponent.18 The differences at this stage were over politics rather than economics. As Edward Thompson summarized the radical position: “In political society every man must have equal rights as a citizen: in economic society he must naturally remain employer or employed, and the State should not interfere with the capital of one or the wages of the other. The Rights of Man and the Wealth of Nations should supplement and nourish each other.”19 But the radicals of the 1790s did not necessarily accept all of Smith’s philosophical positions. Smith had written in The Theory of Moral Sentiments: “If we saw in the light in which others see us, or in which they could see us if they knew all, a reformation would generally be unavoidable.”20 It is sometimes claimed that Burns effectively endorses this position in his poem, “To a Louse.”21 In fact, Burns flatly denies the possibility of what Smith suggests and in that sense his is a more pessimistic conception than Smith’s own:

O wad some Pow’r the giftie gie us

To see ourselves as ithers see us!

It was frae monie a blunder free us,

An’ foolish notion:

What airs in dress an’ gait wad lea’e us

An’ ev’n Devotion!22

By the end of the Napoleonic Wars the emergent working-class movement also began to draw theoretical sustenance from The Wealth of Nations, but from markedly different sections of the book than those admired by the bourgeoisie. “As a result,” writes David McNally, “by the 1820s, ‘Smithian’ apologists for industrial capitalism confronted ‘Smithian socialists’ in a vigorous, and often venomous, debate over political economy.”23 An excellent example of this conflict can be found, inevitably, in the Edinburgh Review. “Mr Spence is an acute man; but undoubtedly quite ignorant of the principles of political economy,” began a critique of William Spence’s Agriculture the Source of the Wealth in Britain, a book that was admittedly directed against the Edinburgh Reviewers in general and James Mill in particular. It continued: “If the persons who have bought five editions of Mr Spence’s pamphlet could only be persuaded to look into the Wealth of Nations, they would need fewer cautions of ours; and if Mr Spence would take the trouble of understanding that celebrated work, we have so good an opinion of his sagacity, as to be persuaded, that he would either cease to write upon economical subjects, or write to retract and atone for his first publications.”24

In stark contrast to his successors like David Ricardo and—above all—Malthus, Smith continued to be invoked by working-class radicals until the early days of the Chartist movement at least.25 By the 1850s this was no longer the case. If Smith continued to be read by working-class people it appears to have been in the spirit approved of by their rulers. The government commissioner for the coalfields in Newcastle and Durham, John Leifchild, ventured north of the border mid-decade to comment approvingly on the reading habits of the Scottish miners and the healthy attitudes that this revealed:

Many of them read such books as Adam Smith’s “Wealth of Nations,” and are fond of discussing the subjects he treats of. . . . Such men can be reasoned with about anything belonging to their calling and they know very well why wages cannot at particular times be higher than a certain standard. They see at once, by the price current in this market, what is the fair portion to go to the workman as wages, according to the circumstances of the pit, and the general state of the trade. Such men will have nothing to do with the Union. They scorn to read the penny and two penny publications current in other places. They are ready, after their work, to read and enjoy a chapter of the “Wealth of Nations.”26

The plausibility of the picture conjured here—a compliant workforce sagely conceding the need for lower wages after imbibing the Principles of Political Economy from the pages of The Wealth of Nations—is, to say the least, challenged by the fact that unionization had been increasing in the West of Scotland coalfields since 1850 and, in 1856 when Leifchild’s book appeared, the biggest strike in Scottish mining history down to that year took place, precisely against attempts by the masters to reduce pay.27 The point is not that the type of deferential worker celebrated by Leifchild did not exist, but that Smith was now being used to support such attitudes to the employers, rather than to oppose them.

By this time Marx had spent over a decade in his prolonged engagement with Smith’s thought and in many respects proved himself to be his forebear’s most faithful reader. Marx valued Smith as “the interpreter of the frankly bourgeois upstart” who “speaks the language of the still revolutionary bourgeoisie, which has not yet subjected to itself society, the State, etc.”28 But Marx was not engaged in attempting to claim one or other aspect of Smith’s thought to be his “real” position, but rather to subject it to a critique that reveals those aspects that are scientific (“esoteric”) and those that are apologetic (“exoteric”). For Marx, the fact that Smith’s thought contains both elements means that it is marked above all by “perpetual contradiction”:

On the one hand he traces the intrinsic connection existing between economic categories or the obscure structure of the bourgeois economic system. On the other, he simultaneously sets forth the connection as it appears in the phenomena of competition and thus as it presents itself to the unscientific observer just as to him who is actually involved and interested in the process of bourgeois production. One of these conceptions fathoms the inner connection, the physiology, so to speak, of the bourgeois system, whereas the other takes the external phenomena of life, as they seem and appear and merely describes, catalogues, recounts and arranges them under formal definitions. With Smith both these methods of approach not only merrily run alongside one another, but also intermingle and constantly contradict one another. With him this is justifiable (with the exception of a few special investigations, [such as] that into money) since his task was indeed a twofold one. On the one hand he attempted to penetrate the inner physiology of bourgeois society but on the other, he partly tried to describe its externally apparent forms of life for the first time, to show its relations as they appear outwardly and partly he had even to find a nomenclature and corresponding mental concepts for these phenomena, i.e., to reproduce them for the first time in the language and [in the] thought process. The one task interests him as much as the other and since both proceed independently of one another, this results in completely contradictory ways of presentation: the one expresses the intrinsic connections more or less correctly, the other, with the same justification—and without any connection to the first method of approach—expresses the apparent connections without any internal relation.29

The area in which these contradictions appear most explicitly is in Smith’s version of the labor theory of value, with its dangerous claim that the socially necessary labor required to produce commodities was also the objective measure of their value—the very position for which Smith was admired by the early labor movement. In the notebooks published as Theories of Surplus Value Marx first notes the advances made by Smith in this field:

Adam Smith rightly points out that only the part of the labor (value) which the workman newly adds to the material resolves itself into wages and profit, that is to say, the newly-created surplus-value in itself has nothing to do with the part of the capital which has been advanced (as materials and instruments). Adam Smith . . . has thus reduced profit to the appropriation of the unpaid labor of others. . . . Here it is only important to stress that Adam Smith very clearly recognises, brings out and expressly emphasises the contradistinction between his view of the origin of profit and [the] apologist view.30

But later Marx identifies parts of Smith’s argument where he retreats from these insights. In discussing what he calls “this peculiar train of thought in Adam Smith’s book” he writes:

First the value of the commodity is examined, and in some passages correctly determined—so correctly determined that he traces out in general form the origin of surplus-value and of its specific forms, hence deriving wages and profit from this value. But then he takes the opposite course, and seeks on the contrary to deduce the value of commodities (from which he has deduced wages and profit) by adding together the natural prices of wages, profit and rent. It is this latter circumstance that is responsible for the fact that he nowhere correctly explains the influence of oscillations of wages, profit, etc., on the price of commodities—since he lacks the basis [for such an explanation].31

But in some respects Marx found Smith to be guilty, not merely of inconsistency or confusion, but of omission. In The Wealth of Nations Smith discussed the “original accumulation” of capital in terms of the capacity of capitalists to save, in passages notable for their uncharacteristic evasiveness and self-delusion. He fails, for example, to acknowledge the necessity of “primitive” accumulation for capital and refers instead to the “previous accumulation of stock,” a position that Marx described as a form of “insipid childishness” that “is everyday preached to us in the defence of property.”32 By contrast, it was the former Jacobite, Sir James Steuart, who presented a frank and unflinching vision of the process as involving the forcing of the peasantry off the land, compelling them into wage labor, and freeing the land for productive investment. For Steuart recognized that the role of force cannot be restricted only to breaking the social and political dominance of the lords—it must also be exercised against those over whom they had previously ruled: “That revolution must then mark the purging of the lands of superfluous mouths, and forcing those to quit their mother earth, in order to retire to towns and villages, where they may usefully swell the numbers of free hands and apply to industry.”33 Marx’s engagement with Steuart was more concentrated and occupied far less space in his collected works than that with Smith, but overall it may have been more wholeheartedly appreciative. In particular, the emphasis Marx places in Capital on the necessity of “primitive accumulation” is drawn directly from Steuart, as he acknowledged in this and similar passages: “He examines the process [of the genesis of capital] particularly in agriculture; and he rightly considers that manufacturing proper only came into being through this process of separation in agriculture. In Adam Smith’s writings the process of separation is assumed to be already complete.”34 Unsurprisingly, modern defenders of Smith tend, or possibly pretend, to see nothing in Steuart’s work other than his mercantilist errors: Iain McLean dismisses one of Smith’s greatest achievements (the law of value) but otherwise elevates him above Steuart, at one point drawing parallels between Smith and Mozart on the one hand and Steuart and Salieri on the other.35 As Michael Perelman has pointed out, some of the historical truths of primitive accumulation revealed by Steuart are still too unwelcome to achieve widespread acceptance.36

From the last third of the nineteenth century in particular, the intellectual defenders of capitalism show far less interest in Smith. Interestingly, this is increasingly because they began to regard as legitimate the claims that the left made on his legacy and this shift represents the second turn in Smith’s posthumous reputation. Key here is the emergence of neoclassical economics, above all the marginalist reaction against both the classical political economy of Smith and the Marxist critique that sought to build on what he had accomplished. In economic theory marginalism represented the final retreat from the kind of scientific inquiry undertaken by Smith, however imperfect, into ideological justification. It was signaled by the abandonment of the law of value. The tenets of marginalism were first set out by Léon Walras in his Elements of Pure Economics (1874) and ultimately codified by Alfred Marshall in his Principles of Economics (1890), although they have a long prehistory dating back at least to the 1830s.37 As Murray Milgate and Shannon Stimson have written: “We might conclude that we live in a future, imagined or real, informed as much, or indeed more, by subsequent nineteenth-century neoclassical economic thought and practise as it is by the thought of Smith . . . and that we understand the conceptual resources of today’s economic and political discourse to flow almost exclusively from the marginalist approach to economics introduced in the last quarter of the nineteenth century.”38 In relation to neoliberalism, the most important neoclassical thinkers have been those of the Austrian school, above all, Carl Menger, Ludwig von Mises, and Friedrich von Hayek. Their attitude to Smith is instructive, if surprising, for it more or less accepts the radical and early labor movement interpretation of his work.

Smith undoubtedly presented a problem for the neoclassical school: Walras saw his work as being tainted by “unscientific” social and moral considerations; Menger regarded it as flawed because of Smith’s insistence that national economy was not simply an abstraction—a view incompatible with the “atomism” or methodological individualism of the marginalists.39 Menger was only exaggerating slightly when he wrote in 1891: “Smith placed himself in all cases of conflict of interest between the strong and the weak, without exception on the side of the latter.” Indeed, in 1883 he had explicitly criticized Smith for his “one-sided rationalistic liberalism” and his “effort to do away with what exists,” which Menger claimed “inexorably leads to socialism.”40 Nevertheless, the marginalists needed, for reasons of ideological continuity, to claim Smith as a forerunner whose work they had completed, above all in relation to his advocacy of the market, which they removed from any historical context. “It was only the ‘marginal revolution’ of the 1870s,” wrote Hayek, “that produced a satisfactory explanation of the market processes that Adam Smith had long before described with his metaphor of the ‘hidden hand.’”41 Indeed, starting with Menger in his Investigations into the Methods of the Social Sciences (1888), if there is one idea that the marginalists did derive from Smith, then it is the metaphor of the hidden hand—one that was not original to Smith and that had not previously received any attention until its usefulness in reinforcing the notion of a spontaneous economic order became apparent.42

As we have seen, in 1803 Francis Horner had proposed that criticisms of Smith should be withheld until “victory is more complete”; by the latter decades of the nineteenth century these criticisms were now being made—not because of the completeness of the capitalist victory, but because it was under threat from “the vulgar,” or more precisely a growing labor movement whose socialist objectives the neoclassical economists feared could be supported by Smith’s arguments. There was some truth in this: as late as the 1920s some workers still found it possible to treat Smith and Marx (and Darwin) as complementary thinkers:

One might assume that Adam Smith and Charles Darwin gave aid and comfort to unbridled capitalism, but they were also read enthusiastically (and very differently) by the partisans of the Plebs League and the NCLC [National Council of Labor Colleges]. Smith, Darwin, and Marx all offered materialist theories of evolution based on struggle and exploitation. They all suggested that the existing social order was not ordained, but had progressed according to certain scientific laws. Once those laws were understood, society could be reconstructed along different lines. For Dunfermline housepainter James Clunie (b. 1889) Das Kapital and The Wealth of Nations both demonstrated that industrialism inevitably increased economic inequality, the exploitation of labor, and class conflict.43

The advent of the postwar boom and attendant triumph of Keynesianism in the economics discipline seemed to signal the final reduction of Smith to purely historical figure, and one confined to the history of economics rather than of sociology or moral philosophy at that. The prevailing attitude to Smith’s work has been admirably summed up by James Buchan: “His books now, were long and Scotch and close-printed. They were no more use to the modern economist and politician than sixpenny tracts of eighteenth-century medicine to a General Practitioner or MD.”44 Yet from the mid-1970s on Smith’s reputation began to experience an extraordinary revival. More extraordinary still was that the people responsible for this third reputational shift were largely the intellectual descendants of—and in the case of Hayek, actual members of—the very neoclassical school that had previously shown no great enthusiasm for his work.

Will the real Adam Smith please stand up?

In 1976, at the moment of formation of the AIS, Milton Friedman gave a speech at Saint Andrews University that included the following claims: “Adam Smith was a radical and revolutionary in his time—just as those of us who today preach laissez faire are in our time. He was no apologist for merchants and manufacturers, or more generally other special interests, but regarded them as the great obstacles to laissez faire—just as we do today.” There was one respect, however, in which Friedman believed contemporary free-marketeers would have to extend their categories, broadening “the ‘tribes’ of ‘monopolists’ to include not only enterprises protected from competition but also trade unions, school teachers, welfare recipients, and so on and on.”45 In a particularly audacious move, the neoliberals attempted to resolve the Adam Smith Problem by presenting the difference between The Theory of Moral Sentiments and The Wealth of Nations not as a contradiction but a problem that could only be resolved by adhering to the prescriptions contained in the latter work. During the same conference at which Friedman gave the speech quoted above, Ronald Coase argued that the existence of benevolence and other feelings not driven by self-interest were an obstacle to the market order if they extended much beyond immediate family, friends, and possibly close work colleagues. Any wider application would simply lead to politicians and bureaucrats acting on behalf of supporters or client groups and thus jeopardizing the blind working of the market, the unintended outcomes of which were the only guarantee of beneficial effects.46 The sheer perversity of this reading—the exact opposite of Smith’s clearly stated meaning—is so audacious as to produce a degree of admiration; it is certainly a match for attempts by Stalinist ideologues to “explain” that, for example, when Lenin talked about the abolition of the state he really meant strengthening it to an unprecedented degree.

In a sense these interpretations involved a return to the original distortions of Smith that arose immediately after his death, but now in the context of the crisis of Keynesianism and state capitalism, and a resurgence of ideas about “free” markets as the alternative. Unsurprisingly, the neoliberal attitude to Smith is well expressed by one of its political leaders, AIS heroine Margaret Thatcher, who noted with bemusement in her autobiography the failure of her “revolution” to win hearts and minds in Scotland, “home of the very same Scottish Enlightenment which produced Adam Smith, the greatest exponent of free enterprise economics till Hayek and Friedman.”47 Thatcher’s concern may be unwarranted: in Smith’s homeland the more openly promarket figures in the Scottish National Party, like Michael Russell, have similar reasons for admiring Smith: “Adam Smith was the father of modern capitalism and it is high time that his own people rediscovered his genius, particularly as, in his own land, that genius is currently tarnished by the half-baked economic models espoused by most of our political parties.”48 As two of Smith’s more acute recent interpreters have written: “It is no longer thought necessary to examine how and why Smith argued in favour of the market, nor indeed how he qualified his case.”49

Yet many on the left accept neoliberal nostrums at face value and merely reverse their value judgments. For the German Marxist Elmar Altvater: “Some of the most striking ingredients of neoliberal intellectual approaches can be traced back to the origins of liberal thinking in the early 18th century,” among whose proponents he of course includes Smith.50 On the occasion of Smith’s appearance on the £20 banknote in 2007, one Scottish historian, the late James Young, claimed in the pages of the Herald that “Adam Smith was a pioneer of the vicious anti-humanist economics of capitalism” and linked him, somewhat implausibly, “with all the other advocates of anti-gay entrepreneurship; aggressive immoral and naked capitalism; and post-modernism.”51 As Young’s ravings suggest, the socialist left often ascribe extreme positions to Smith that are even less plausible than those of the neoliberal right. Some have gone so far as to accuse him of deliberately and dishonestly ignoring actual economic developments in his own work because these undermined his argument. Perelman, for example, finds the absence of any discussion of the Carron Iron Works in The Wealth of Nations to be deeply suspicious since, as he rightly says, the Carron Company was in the vanguard of the Industrial Revolution in Britain and was situated relatively near to Kirkaldy, where Smith was writing his great work; but Perelman has an explanation for Smith’s omission:

Smith’s reluctance to discuss the Carron works makes sense in terms of his enthusiasm for individualism . . . the Industrial Revolution is absent in Smith’s writings. By now, the reason for this is obvious. Although Smith’s liberalism seemed liberating, from a different perspective it must have been disempowering to people who were toiling in the Carron works. Presenting such people as isolated individuals would have accurately conveyed their powerlessness.52

There are, however, two respects in which Smith has exercised an influence on the radical left.53 One is through his argument that the expansion of trade is the prime mover in generating capitalist development or, as he saw it, the dominance of commercial society. Hence, Robert Brenner might therefore have a case for describing those thinkers who agree with Smith on this question—notably Paul Sweezy, Andre Gunder Frank, and Immanuel Wallerstein—as “neo-Smithian” Marxists.54 At least one of them, Wallerstein, specifically denies being a Smithian, on the grounds that Smith believed capitalism was an integral part of human nature and he does not, and that Smith understood capitalism to be based on the operation of a free market and he understands it to be based on proletarianization of labor and the commercialization of land.55 Neither of these arguments deals with the importance or otherwise of trade in generating proletarianization and commercialization, but this is not the main difficulty. “The division of labor,” wrote Smith, “is the necessary, though very slow and gradual, consequence of a certain propensity in human nature . . . to truck, barter, and exchange one thing for another.”56 This famous passage is frequently cited to “prove” that Smith believed capitalism was intrinsic to human nature.57 Now, as David Graeber has shown, Smith was wrong to claim that humans have always engaged in barter.58 Nevertheless, identifying a propensity to do so is very far from claiming that this inevitably leads to the type of capitalist society that currently exists. As I will discuss in more detail below, Smith was not an advocate of capitalism but of “commercial society.” The latter term was not a synonym—the former was not in use in Smith’s day—but describes a different system entirely.59 Smith distinguishes between “those original principles of human nature” (“of which no further account can be given”) and “the necessary consequence of the faculties of reason and speech” and claims it is “more probable” that the propensity to barter belongs to the latter set of properties.60 As Dogan Göçmen has written, Smith’s refusal to place it alongside such “original principles” as “compassion and sympathy” means that he “formulates a hierarchical order” between these two conceptions of human nature in which the propensity to barter is situated lower down as a product of history, of our social being rather than what Marx called our species being.61

If we turn to Smith’s other influence on the radical left then we find a much greater acceptance of the distinction between commercial society and capitalism. Indeed, his arguments for commercial society are used as a means of criticizing contemporary neoliberal globalization. Some of the writers involved in making this critique overlap with the “neo-Smithian Marxists”: the late Giovanni Arrighi, for example, claimed that that the market system envisaged by Smith can be distinguished from capitalism and that the former exists now in China, or perhaps East Asia more generally, where a “market-based growth” distinct from “capitalist growth” is supposedly embedded.62 But attempts to discern in Smith’s work a model of a “real free market” that has been violated by “the global corporate system” extend far beyond these adherents of World Systems Theory. John McMurty writes, “every one of Smith’s classical principles of the free market has been turned into its effective opposite.”63 David Korten sets out what these principles were:

Thus [Adam Smith’s] vision of an efficient market was one composed of small owner-managed enterprises, located in the communities where the owners resided. Such owners would share in the community’s values and have a personal stake in its future. It is a market that has little in common with a globalised economy directed by massive corporations without local or national allegiance, managed by professionals who are removed from real owners by layers of investment institutions and holding companies.64

This is an attractively counterintuitive idea that challenges the neoliberals on their own terms and also has the advantage of being true: Smith’s vision of what he called “commercial society” was quite different from contemporary neoliberal globalization. There are however major difficulties with it, not least over the geographical and temporal location of this alternative. If, for Arrighi, it can be found in post-Maoist China, for Korten it existed in the economic, social, and political arrangements characteristic of the postwar boom, where he claims that, in the West at least, a proper balance was maintained between the total state dominance exercised in the Stalinist East—which he misidentifies as “Marxism”—and the supposedly unconstrained market of the current neoliberal era:

Thus, the neoclassical economists left out Smith’s considerations of the destructive role of power and class, and the neo-Marxists left out the beneficial functions of the market. Both advanced social experiments on a massive scale that embodies a partial vision of society, with disastrous results. . . . Contrary to the boastful claims of corporate libertarians, the West did not prosper in the post–World War II period by rejecting the state for the market. Rather it prospered by rejecting extremist ideologies of both Right and Left in favour of democratic pluralism: a system of governance based on a programmatic institutional balance among the forces of government, market and society.65

From our present situation it is understandable why the late Eric Hobsbawm could describe the period between 1948 and 1973 as “the Golden Age.”66 But whatever else might be said for it, the structure of Western capitalism during these years did not resemble anything described by Smith either in The Wealth of Nations or in his other writings. Furthermore, contrary to the claims made by both neoliberals and many of their critics, they were not years in which capitalism was in any sense constrained, but that instead saw the greatest sustained growth in the history of the system.67 In any event, the unique conditions that made the postwar boom possible are unlikely to ever be repeated.

Those on the social-democratic or center-left have essentially accepted the neoliberal economic order.68 They still, however, wish to maintain some distance from what I call vanguard neoliberalism by insisting on the need for policies with which to ameliorate the consequences of privatization, deregulation, and the rest while leaving them in place. The ideological uses of Smith are indispensible in this context. In 2002 the then–Chancellor of the Exchequer Gordon Brown gave a lecture in which he asked “whether Adam Smith would feel more at home in the right-of-centre Adam Smith Institute or in the left-of-centre (John) Smith Institute, named after my good friend John Smith, the leader of the Labour Party.” Unsurprisingly, Brown opined that the latter would have proved the more congenial to his fellow native of Kirkcaldy.69 In a work intended to support and elaborate Brown’s position, Iain McLean argues that to describe Smith as “a man of the Left” would be anachronistic as the terms left and right did not acquire their political meanings until the French Revolution.70 This seems unnecessarily concerned with labels rather than attitudes, since “left” is a relative concept that can be retrospectively discerned in most historical situations.71 We can identify what would later be left-wing positions prior to 1789, for example in the English Civil War. What is genuinely inapt is to ascribe, as McLean does to Smith, positions associated with social democracy—a much more historically specific term from an even later date than “left”: “It favours government intervention to counter market failure; redistributive taxation; and trade liberalisation for the benefit of all including the poor of the world. It does not favour producer groups; public ownership of trading enterprises (where there are no market failure issues); or protection, either in rich or poor countries.”72

The central claim here is not that Smith’s position in The Wealth of Nations is wrong, merely incomplete. As Brown writes, “I have come to understand that his Wealth of Nations was underpinned by his Theory of Moral Sentiments, his invisible hand dependent on the existence of a helping hand.”73 Once again, however, there is disagreement over how exactly these two works relate to each other. Early in 2008 the Chinese premier Wen Jiabao gave an interview with Fareed Zakaria for CNN, in which he invoked the authority of Smith to justify the combination of market capitalism and state direction characteristic of China’s development since 1978: “The Wealth of Nations, said Wen, highlights the need for the invisible hand of the market, while The Theory of Moral Sentiments shows the need for the visible hand of government, in the interests of social equity and harmonious development.”74

What the Scottish and Chinese politicians were both trying to do was bypass the “Adam Smith Problem.” In many respects they simply reverse the neoliberal argument about relationship between Smith’s two books. It is however equally self-serving to argue that they are simply constitutive parts of a greater whole, the one unintelligible without the other. Roederer was right in 1793: there is a contradiction between them. Here again Göçmen’s discussion is invaluable, for the contradiction is not between altruism on the one hand and individualism on the other, but between “an anthropological conception of human beings, which regards human beings as social individuals” and “a critical account of the situation of human beings in commercial society, which describes them as egoistic beings.” The resulting contradiction, however, “cannot be ascribed to Smith”: “it is a real historical contradiction prevailing in commercial society, which Smith criticizes implicitly and explicitly in different contexts.”75

From commercial society to capitalism

Neoconservative and neoliberal writers have a habit of ascribing visionary powers to Smith. For P. J. O’Rourke: “Smith was fostering free enterprise, and he was also nurturing—just in time—resistance to socialism.”76 Resistance to socialism—in 1776. O’Rourke is a humorist and here he is, as they say, having a laugh. But the ahistorical stupidity of these remarks indicates a more widespread misconception summed up by this comment on the Bank of England website: “Adam Smith’s explanations of the society he observed in the 18th century are as relevant today as they were then.”77 The essential error is repeated even by those who disagree as to the nature of his relevance, as in this “social-democratic” perspective by Ryan Hanley: “Insofar as the conditions of contemporary capitalism are in many respects similar to those debated by commercial society’s founding fathers, those engaged in the project to ameliorate those conditions stand to gain much from the effort to develop our answers to today’s problems in light of their efforts.”78 My objection to this kind of argument is simply this: Adam Smith is not “relevant” to our contemporary problems—and such relevance as his work does possess is precisely the extent to which it demonstrates the vast difference between his vision and our reality. Anachronistic misconceptions concerning his work could of course be corrected by the radical expedient of actually reading The Wealth of Nations and The Theory of Moral Sentiments, preferably after situating them in their historical context, namely Scotland’s emergence from feudalism.

One of his objections to feudalism was precisely that it had delayed the emergence of commercial society and was consequently “unnatural.” “According to the natural course of things,” he wrote, “the greater part of the capital of every growing society is, first, directed to agriculture, afterwards to manufactures, and, last of all, to foreign commerce. . . . But though this natural order of things must have taken place in some degree in every such society, it has, in all the modern states of Europe, been in many respects entirely inverted.”79 When Smith attacked unproductive labor, he was not making some timeless critique of state employees, but thinking quite specifically about Highland clan retainers. When Smith opposed monopolies, he was not issuing a prophetic warning against the nationalization of industries in the twentieth century, but criticizing those companies that relied for their market position on the possession of exclusive royal charters in the eighteenth. Above all, unlike his modern epigones, he did not see the market as a quasi-mystical institution that should be made to penetrate every aspect of social life; but rather as a limited mechanism for liberating humanity’s economic potential from feudal and absolutist stagnation.

But were impersonal market forces themselves capable of overthrowing feudalism? It should come as no surprise by now to find that Smith appears to express contradictory views at different stages of his career, or at least emphasize very different aspects of the process. In The Wealth of Nations he seems to suggest that they can, writing that “what all the violence of the feudal institutions could never have effected, the silent and insensible operation of foreign commerce and manufactures gradually brought about.” In particular this was due to the unintended consequence of actions taken by two social groups, “who had not the least intention to serve the public,” feudal landowners and those we would now call capitalists: “To gratify the most childish vanity was the sole motive of the great proprietors. The merchants and artificers, much less ridiculous, acted merely from a view to their own interest, and in pursuit of their own pedlar principle of turning a penny wherever a penny was to be got. Neither of them had either great knowledge or foresight of that great revolution which the folly of one, and the industry of the other, was gradually bringing about.”80 Yet in his lectures at the University of Glasgow during the previous decade Smith argued that the self-transformation of the noble proprietors could not be relied upon, and that the violent suppression of their feudal power was essential for the rise of commercial society: “The power of the nobles has always been brought to ruin before a system of liberty has been established, and this indeed must always be the case. For the nobility are the greatest opposers and oppressors of liberty that we can imagine. They hurt the liberty of the people even more than an absolute monarch.” Absolute monarchy at least protected the people from the “petty lords” of their domains: “The people therefore never can have security in person or estate until the nobility have been greatly crushed.”81 These are not necessarily incompatible positions—in Marxist terms the former corresponds to the socioeconomic transition to capitalism and the latter to the sociopolitical bourgeois revolution necessary to consolidate it at the level of the state—but Smith himself does not attempt to reconcile them. Nevertheless, his attitude was clear, so that in 1818 Henri de Saint-Simon could legitimately describe the “immortal Smith” as being responsible for “the most vigorous, most direct, and most complete critique ever made of the feudal regime.”82

Even so, Smith’s advocacy for commercial society was very conditional indeed. Long before industrialization began in earnest he intuited that it would lead to massive deterioration in the condition of laborers and their reduction to mere “hands.” Understood in the context of the Scottish Enlightenment conception of human potential, the description of pin manufacture at the beginning of The Wealth of Nations, reproduced from 2007 on £20 banknotes, not only celebrates the efficiency of the division of labor, but also shows the soul-destroying repetition that awaited the new class of wage laborers.83 Smith himself provided the context for his discussion of pin-making in his Glasgow University lectures from the early 1760s, once again providing a fuller, more complex, and more radical perspective than that which appears in The Wealth of Nations:

The labor and time of the poor is in civilized countries sacrificed to the maintaining the rich in ease and luxury. The landlord is maintained in idleness and luxury by the labor of his tenants, who cultivate the land for him as well as for themselves. The monied man is supported by his exactions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full enjoyment of the fruits of his own labors; there are there no landlords, no usurers, no tax gatherers. We should expect therefore that the savage should be much better provided than the dependent poor man who labors both for himself and for others. But the case is far otherwise. The indigence of a savage is far greater than that of the meanest citizen of anything that deserves the name of a civilized nation. There is another consideration which increases the difficulty in accounting for this. If we should suppose that labor was equally proportioned to each, the difficulty would cease. That is, if we should suppose that of the 10,000 whose labor is necessary to the support of one individual, each was maintained by the labor of the rest, there would here be the reciprocal proportion of the labor of 1 to 10,000 and 10,000 to 1, so that everyone would have the labor of one bestowed upon him. But in no civilized state this is the case. Of 10,000 families which are supported by each other, 100 perhaps labor not at all and do nothing to the common support. The others have them to maintain besides themselves, and besides [those] who labor have a far less share of ease, convenience, and abundance than those who work not at all. The rich and opulent merchant who does nothing but give a few directions, lives in far greater state and luxury and ease and plenty of all the conveniencies and delicacies of life than his clerks, who do all the business. They too, excepting their confinement, are in a state of ease and plenty far superior to that of the artisan by whose labor these commodities were furnished. The labor of this man too is pretty tolerable; he works under cover protected from the inclemency in the weather, and has his livelihood in no uncomfortable way if we compare him with the poor laborer. He has all the inconveniencies of the soil and the season to struggle with, is continually exposed to the inclemency of the weather and the most severe labor at the same time. Thus he who as it were supports the whole frame of society and furnishes the means of the convenience and ease of all the rest is himself possessed of a very small share and is buried in obscurity. He bears on his shoulders the whole of mankind, and unable to sustain the load is buried by the weight of it and thrust down into the lowest parts of the earth, from whence he supports all the rest. In what manner then shall we account for the great share he and the lowest of the people have of the conveniencies of life? The division of labor amongst different hands can alone account for this. Let us consider the effects this will have on one particular branch of business, and from thence we may judge on the effect and from the effects it will have on the whole. We shall take for this purpose an instance frivolous indeed, but which will sufficiently illustrate it; this is pin-making.84

This is the point at which The Wealth of Nations begins, but even in Book V of that work, in contrast to the more frequently cited Book I, Smith explicitly considered the way in which the division of labor, while increasing the productivity of the laborers, did so by narrowing their intellectual horizons:

The man whose whole life is spent in performing a few simple operations, of which the effects, too, are perhaps always the same, or very nearly the same, has no occasion to assert his understanding, or to exercise his invention, in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. . . . His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the laboring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.85

Smith contrasts this unhappy state of affairs with that existing under earlier modes of subsistence—modes that, remember, he was committed to transcending:

It is otherwise in the barbarous societies, as they are commonly called, of hunters, of shepherds, and even of husbandmen in that rude state of husbandry that precedes the improvement of manufactures, and the extension of foreign commerce. In such societies, the varied occupations of every man oblige every man to exert his capacity, and to invent expedients for removing difficulties which are continually occurring. Invention is kept alive, and the mind is not suffered to fall into that drowsy stupidity, which, in a civilized society, seems to benumb the understanding of almost all the inferior ranks of people. . . . Every man, too, is in some measure a statesman, and can form judgments concerning the interest of the society, and the conduct of those who govern it.86

It was uneasy anticipations such as these, which Smith shared with James Steuart and Adam Ferguson, that later informed Hegel’s conception of alienation and, through him, that of Marx.87 In response he calls for the state to intervene to raise the educational level of the common people to that fitting of a “civilized and commercial society”: “For a very small expense, the public can facilitate, can encourage, and can even impose upon almost the whole body of the people, the necessity of acquiring those most essential parts of education.” Here he has before him the example of his own country, in one of the few occasions it features positively in The Wealth of Nations: “In Scotland, the establishment of such parish schools has taught almost the whole common people to read, and a very great proportion of them to write and account.”88 And this was only one of the areas in which he was prepared to see state intervention or direction.89

It was therefore possible for Smith to approve of commercial society while disapproving of the activities of actual capitalists. Indeed, in a passage that does prefigure Marxist analysis, he specifically denies that they represent society as a whole: “the clamour and sophistry of merchants and manufacturers easily persuade [the public] that the private interest of a part, and of a subordinate part of the society, is the general interest of the whole.”90 It is this, entirely realistic, attitude that allows him to make his most famous comment: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”91 Smith’s view of the central function of the state was also clear-sighted: “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” The worst form of civil government would therefore be one actually run by the rich themselves, above all by a certain type of capitalist, as in these reflections on the East India Company: “The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatsoever.”92

But what would become of the arguments for commercial society if these excrescences turned out to be instead the essence of the new system? His argument in The Wealth of Nations can be seen, in McNally’s words, as a defense of “agrarian-based capitalist development in a landed commonwealth ruled by prosperous and public-spirited country gentlemen” against the emergent “industrial and commercial capitalists” whose amorality Smith distrusted. In relation to his native Scotland, McNally notes: “Smith hoped that commercial forces could be used to hurry the development of an agrarian-based capitalism guarded by a state run by a natural aristocracy of landed gentlemen.”93 This was not what took place. Even before the process of agrarian improvement imposed on the Scottish Lowlands after 1746 was completed—and it was far advanced even by the time The Wealth of Nations was published—it was clear that the class of tenant farmers required to underpin such a system was in terminal decline, leaving occupation of the land divided between the great landowners and large capitalist farmers on the one hand and landless laborers on the other: consolidation and concentration, not a competitive but stable multiplicity of small producers, was the order of the day.94

“How realistic was Smith’s vision?” Perelman asks this question then answers it with a hypothetical example: “In a small, isolated village in which industry only consisted of artisans producing on a small scale, a market society might have worked the way Smith suggested.” In historical terms, however, he concludes: “Such an economy has probably never existed.”95 There is however one society in which it is claimed that such an economy did exist: the thirteen North American colonies of the British Empire, which Smith discussed in the most glowing terms, and whose demands he supported, albeit in a typically moderate style.96 Michael Merrill argues that this was where Smith’s views had genuine traction:

Free trade, for these men opportunistic of the doctrine, meant the ability to make as much money as possible; it did not mean, as it did for Smith, the abolition of all those restrictions on property and trade that disadvantaged the rich at the expense of the poor. Not surprisingly, Smith’s own views found a more congenial home among the coalition of small farmers, artisans, merchants, and lawyers in North America, where the widespread distribution of property gave rise to an economic order that most clearly resembled Smith’s ideal type, and whose democratic revolution had swept an aristocratic ruling class from power.97

In 1772 Benjamin Franklin compared the situation of the rural population in Scotland (and Ireland) with that in his own country: “I thought of the Happiness of New England, where every man is a Freeholder, has plenty of good Food and Fuel, with whole Clothes from Head to Foot, the Manufactory perhaps of his own Family. Long may they continue in this situation!”98 Franklin was one of the sources for Smith’s information on the American colonies and his somewhat idealized view may well reflect Franklin’s influence.99 His picture did not go unchallenged. Thomas Pownall, a former governor of Massachusetts, wrote to Smith following the publication of The Wealth of Nations pointing out that his arguments were based on logical deduction rather than empirical evidence: “You advance upon the ground of probable reasons for believing only, you prove by probable suppositions only; yet most people who read your book, will think you mean to set up an absolute proof, and your conclusion is drawn as though you had.” As Nicholas Phillipson, who quotes this passage, points out: “It was a response of a critic who understood Smith’s method better than most and was in a good position to question the way in which he had used America as the illustration on which the credibility of a vast system had come to depend.”100 Yet, over and above any errors of fact that Smith may have committed, and leaving the precise nature of the slave colonies of the South to one side, the northern colonies did indeed come closest to Smith’s ideal of commercial society; but they were not capitalist societies. We need not accept Charles Post’s notion of independent household production as the definition of relations of production (“social property relations,” in his terms) in farming communities, but he is undoubtedly right that these are far removed from capitalist ones.101

Conclusion

Albert Hirschman once argued that the first supporters of commercial society believed it would tame the disastrous warlike passions inherent in feudalism, but not because they held to an imbecilic faith in the ability of markets to resolve all human difficulties:

The passions that needed bridling belong to the powerful, who are in a position to do harm on a huge scale and who were believed to be particularly well endowed with passions in comparison with the lesser orders. As a result the most interesting applications of the theory show how the willfulness, the disastrous lust for glory, and, in general, the passionate excesses of the powerful are curbed by the interests—their own and those of their subjects.102

For Hirschman, it is Smith who first breaks this line of reasoning, upheld in Scotland by Steuart and John Millar: “The main impact of The Wealth of Nations was to establish a powerful economic justification for the untrammelled pursuit of individual self-interest, whereas in the earlier literature . . . the stress was on the political effects of this pursuit.”103 As we have seen, this was not the case. As John Dwyer has shown, the attempt to distinguish Smith from his contemporaries, “thereby transforming Smith into a much more revolutionary thinker than he really was,” is by far the weakest part of Hirschman’s argument. As Dwyer writes, Hirschman “reinforces the commonplace image of Smith as the prophet of individualism who makes the ‘ordinary mortal’ rather than the statesman or aristocrat, the model of social analysis.” But this is to misunderstand his subject: “Smithian analysis cannot be applied to our notion of the average man. Instead, it referred to landed society, particularly the gentry and yeomanry, and included those middle-class men who served the public in a wide variety of bureaucratic functions. Most interestingly, it typically disparaged those individuals who lived by the profits of commerce and manufacturing, and whose unbridled self-interest could destroy national stability.104

Smith based his support for commercial society on a hypothesis concerning its likely positive effects compared to those associated with feudal absolutism. As Joseph Cropsey wrote long ago, “Smith advocated capitalism because it makes freedom possible—not because it is freedom.”105 Now that the consequences of “actually existing capitalism” have been experienced for more than two hundred years, and it is clear that, for the majority of humanity, the dehumanizing effects of the division of labor already identified by Smith were not an unfortunate by-product but actually constitutive of the system, there is less excuse for such misrecognition. Political economy was the central discipline of the Enlightenment, the greatest intellectual achievement of the bourgeois revolutions. The expectations that Smith had of capitalism have been disappointed; the predictions he made for it have been falsified; to defend capitalism now, to further claim him in support of such a defense while ignoring the discrepancy between his model and our reality, is to attack Enlightenment values quite as comprehensively as did the feudal obscurantists to whom Smith was opposed.

It took until the early twenty-first century, but at last we have a fine statue of Adam Smith, author of The Theory of Moral Sentiments and The Wealth of Nations, on Edinburgh High Street; but these works, which should forever be read, need to be read for what they tell us about his century, not ours.