Guidebook to the Wealth of Nations. CH 1: Adam Smith and the Scotland of his days

 

 

Chap 1: Adam Smith and the Scotland of his days

Abstract

Adam Smith lived through and was part of the milieu of the Scottish Enlightenment. The Scottish Enlightenment was an intellectual and cultural movement that took place during an economic boom time. Intellectually it was characterized by the study of “the science of man”: the application of the scientific method to the study of humankind.

 

 

Adam Smith was born in Kirkcaldy, Scotland, in June 1723. His father, also Adam Smith, died before little Adam was born. His mother, Margaret Douglas, died in 1788, not much before her son Adam’s death in 1790.

Smith was educated in the parish school and was fluent in Latin and Greek. He went to the University of Glasgow where he studied moral philosophy under the “never to be forgotten” Francis Hutcheson; mathematics under one of the leading scholar on Euclid, Robert Simson; and natural philosophy or experimental philosophy, including astronomy, under Robert Dick, who used the most modern instruments to study Sir Isaac Newton’s new theories. He then won a Snell Scholarship to study at the University of Oxford, at Balliol College. The scholarship was intended for those who would be ordained in the Church of England and serve in the Episcopal Church in Scotland. Smith moved to Oxford where he spent several miserable years, studying mostly on his own, given that there “we pray three times a day, and go to lecture once a week” (FIND REF) as he wrote home. This experience affected his view of education as his criticisms of the endowed universities, such as Oxford, in the Wealth of Nations testified. He asked and managed to obtain an exemption from taking holy orders, and went back to Scotland to live with his mother.

His first job was to offer public lectures on rhetoric in Edinburgh in 1748. They were a great success. He was paid with fees, a system that he will endorse in his analysis of education in the Wealth of Nations. His lectures were so successful that when an opening at the University of Glasgow came up, he was invited to move there. He took the Chair of Logic at the University of Glasgow in 1751 and then in 1752 that of Moral Philosophy. He taught Jurisprudence as well as Moral Philosophy. He continued his career as an administrator, and was in charge of new acquisitions for the library. In his correspondence, he described his days at Glasgow as the happiest and best of his life.

In 1759 he published his first book, which turned out to be a best seller: The Theory of Moral Sentiments. Smith kept working on it throughout his life, with 5 additional editions, the last one of which came out soon before his death in 1790.

His success as a teacher and as a scholar was such that he was hired to be the private tutor of the Duke of Buccleuch, a great landowner in Scotland. This implied, as was then the custom, accompanying the young Duke on the Grand Tour of Europe. Smith and the Duke left for the continent, and spent time in France and Switzerland where they met many of the intellectual and aristocracy elite, including the leading economists of the time: the Physiocrats. But Smith was bored in France. So he started to write the book that eventually became The Wealth of Nations. Since the brother of the young Duke got deadly sick, the Ground Tour had to be cut short, and Smith and his pupil went back to Scotland. Smith received a very generous pension as a compensation for his tutoring services, as well as a life-long friendship with the Duke and his family.

Back in Scotland, Smith moved back in with his beloved mother in Kirkcaldy and continued his writing of the Wealth of Nations. Being a meticulous writer, Smith took his time in finishing the book. So much so that both his publisher and his friends kept putting pressure on him to deliver the manuscript. The first printing of the Wealth of Nations dated March 1776. Given increasing tensions with the North American colonies, which culminated in the declaration of independence in July of that same year, everybody had their eyes on Smith, eager to read his thoughts on the health of the British Empire.

This book was also an immediate best seller. The 3500 copies of the first print run sold out immediately. It went thought five editions during Smith’s life and it has been in print ever since. It was translated into German the very same year as its British publication; into French and Italian within three years; and by the beginning of the new century it was also in print in Portuguese, Spanish, Danish, and Russian. The Wealth of Nations was also cited in British Parliamentary discussions on several occasions—37 times between 1773 and 1800 alone, to be precise. Napoleon allegedly took it with him when he was sent into exile in St Helena. After Smith’s death, it was the book from which everyone learned economics.

Despite his pension and royalties from the two books, which alone would have provided for a comfortable life, Smith and his mother moved to Edinburgh in 1777 so he could start working as a Customs Commissioner. He took his job so seriously that he told a friend never to read the actual trade restrictions Scotland had, or he would find himself in violation of most of them. Smith did. To set a good example burnt all that he was not supposed to have: most of his wardrobe!

He lived in Edinburgh until he died on July 17, 1790. He asked his executors, the chemist Joseph Black (1728-1799) and the geologist James Hutton (1726-1797) to burn all of his manuscripts, at least 11 volumes. But since he did not believe they would really do it, he ended up doing it himself a few days before he died. Possibly in those pages there was also a third book, on the theory of jurisprudence, which he promised in the last paragraph of the first edition of The Theory of Moral Sentiments, and which he claimed to be still working on in the Advertisement of the last edition of The Theory of Moral Sentiments. While we were able to have copies of the notes of his lectures on jurisprudence because two sets of students’ notes have been discovered, one in 1890s and one in 1958, there is still no trace of a surviving copy of this third book, which most likely would have been based on those jurisprudence lectures.

The house he owned in Edinburgh, now property of the The Edinburgh Business School and a center for the promotion of Adam Smith’s legacy, was used for his extensive entertaining. Smith hosted dinners for famous visitors to Edinburgh and some of the many clubs he belonged to, as well as a regular Sunday evening dinner for friends.

The Scottish Economy

The clubs and societies Smith belonged to were typical of the time in which he lived. Clubs were groups of intellectuals who met on a regular basis to discuss topics of interests and recent scientific discoveries. France had an equivalent in the form of salons. But differently from France, where ladies attended and sometimes hosted the salons, Scottish clubs were all-male. Participants came from all walks of life: they included business men, chemists, botanists, poets, astronomers, physicians, physicists, clergymen, lawyers, moral philosophers, inventors, geologists, architects, academics, bureaucrats. Almost all intellectuals now associate with the Scottish Enlightenment belonged to some of these clubs.

The intellectual excitement of 18th century Scotland took place in a small developing country growing at a very fast rate. Since the Union with England in 1707 and the formation of Great Britain, Scotland may have lost its political independence but it gained access to large overseas markets, including the English colonies. The colonial trade was now fully available to Scottish merchants and Scottish ports. The total tonnage of oceanic vessels passing through Scotland ports rose from 54,407 in 1759 to 109,895 tons in 1771, and costal vessels from 150,995 to 257,494. Glasgow soon became the largest port for tobacco trade in the world. Scottish linen manufacturing ballooned. Iron manufacturing and coal output increased by more than a factor of 10. Sugar refining, rope and sailcloth manufacturing, tanning, kelp and soap production, and fishery, all experienced very rapid growth. Agricultural production improved too, driven by high demand. In few decades, the price of Highland cattle tripled.

This rapid and significant growth required and was sustained through investment in infrastructure: dikes and fen draining, roads, harbors, bridges, canals, including the construction of the Forth and Clyde Canal connecting the two coasts of Scotland, and the Monklands canal linking Glasgow to the coalfields of Coatbridge. Scotland developed an extremely competitive and sophisticated banking system able to finance all these activities and to provide the financial stability needed during this rapid growth. Scotland went from being a peripheral country to a commercial and intellectual center.

Scottish Politics

The 1707 Union with England opened Scotland to new markets but also caused some tensions, especially in the Highlands of Scotland there was still support for the dethroned Stuart monarchy. This led to armed rebellions aiming at restoring the crown to the Stuarts. The most formidable of these rebellions was in 1745, while Adam Smith was at Oxford. Charles Edward Stuart, nicknamed ‘Bonnie Prince Charlie’, and his Jacobite militia marched without much resistance into England to remove the Hanoverian ‘usurper’ George II. They got as far as Derby—130 miles from London. They then retreated into Scotland followed by the Hanoverian armies. The complete defeat of the Highlanders eventually took place in Culloden on 16 April 1746.

This episode was embarrassing for some Scots, including Adam Smith, who was made fun of because of his Scottish origins by his English classmates at Oxford. Scotland was considered a backward country far from the more developed and “superior” England, inhabited with, in Hume’s own words, “bare-arsed Highlanders”. But this rebellion was also a warning that a few thousand of those “naked unarmed Highlanders” (in Smith’s words this time) could arrived basically unscarred at the door of the capital of the largest empire in the world.

To prevent further insurrection, in part under the pretext of or simply in conjunction with agricultural reforms, the clan system in the Highland was outlawed and many forced to leave their land, either to the lowlands or to the colonies: the so-called Highland Clearance. The feudal power of life and death of Highland chiefs was abolished in 1746, weapons were forbidden and the tartan outlawed. The chiefs could no longer have private armies, thus finding it more profitable to use their land for sheep.

There were two Scotlands until after Culloden: the prosperous, Anglophone ‘Lowland’ corridor from Glasgow to Edinburgh, Whig in politics and Protestant in religion; and the tribal, Gaelic-speaking ‘Highlands’ far from government and the rule of law, a ‘no-go’ area for peaceable Lowlanders likely to be robbed and murdered; Tory in politics and either Catholic or Episcopalian in religion; which the Enlightened Scots wanted to “improve”.

The Highlands and the Stages of Development

The relationship between Scotland and its Highlands remained ambiguous. On the one hand, the Highlands represented a backward part of the country, especially compared to the booming Lowlands. On the other hand, it represented a set of admirable values to contrast against the corruptions that this fast economic growth was bringing.

All this trade Scotland was experiencing was transforming Lowland Scotland into a commercial society. A commercial society differed from other kinds of societies: hunter-gatherer, pastoral, and agricultural. The common belief was that each kind of society had its own set of values, its material conditions and material incentives, its legal, political, social, and moral characteristics. Hunter-gatherers were “savages”, with little property and little government. Women were subjected to men, there was slavery, and age and physical strength were marks of distinction. Shepherds were “barbarians” who began to recognize property, but only in a limited way. Tribal chiefs ruled with personal power and justice was generally arbitrary. Property in land developed with agricultural societies and with it chivalry too. These were “civilized” societies. Civilized means organized in urban communities—from the Latin civis, city. Commercial societies were the apex of “refinement” and “politeness.” Here we see fully developed courts and legal systems, and evolved forms of government which rely on impersonal rule of law. Opulence was therefore linked with good governance, the presence of the rule of law and of a good administration of justice. The Scottish thinkers generally believed that commerce and thus commercial societies brought about the “two greatest blessings that man can possess” – “opulence and freedom” (LJ p.185)—not just for a few but for all.

Note that the language used here, may sound inappropriate to today’s readers, was not meant to be offensive at the time. These are all specific terms of art to indicate specific characteristics of different kinds of societies. Civil is in contrast to rude, as opposed to, say, the contemporary Swiss philosopher Jean-Jacque Rousseau who would contrast civil with natural. The rudeness of the savage hunter-gatherer and barbaric nomadic shepherd is contrasted to the civilized agricultural and refined commercial society in a way that is mostly descriptive way rather than judgmental.

Associated with these different stages of development, the Scots observed and appreciated different virtues. Agricultural societies valued stability and “masculine” virtues. The enlargement of society which commerce brought about implied increasing interactions with others, and with the other sex as well, which induced people to be more sociable and more likely to develop sociable virtues. Historical development was perceived as a process of civilization and “feminization”. Societies developed from rude savagery and barbarism, from masculine stages, where aggression, strength, and courage are valued, to more civil and feminine stages, where sociability, kindness, and desire to emulate are valued—to a world of conversation and commerce.

Feminization could easily slip into “effeminacy” though. While feminization is generally a positive thing, effeminacy is not. This was a derogatory term. Effeminacy was dangerous and reproachable. Commercial societies, with their wealth and luxuries, more than any other kinds of society, may lead to effeminacy, potentially distracting individuals from the public sphere and weakening the traditional masculine virtues. Andrew Fletcher of Saltoun (1655 – 1716), Adam Ferguson (1723-1816) and Robert Wallace (1697–1771) in particular, saw that the cost of the increased sociability is a decrease in martial spirit which could become a problem if the country needed to be defended. This was an issue that Adam Smith also understood, though he developed his own response to it.

Agriculture and agricultural values were seen as counter to this commercial laxity. Home gardening was promoted and became fashionable at this time: a small piece of land to cultivate in an urban or semi-urban environment was a way to mitigate the effeminacy tendencies of commerce and to keep alive the more masculine virtues of agricultural societies.

James Macpherson (1736-1796) claimed to have collected oral Gaelic stories of ancient origins and then translated them for publication. Many doubted the authenticity of Macpherson’s account, attributing the entirety of the poems to him. Nevertheless his “translation” of Ossian’s poetry between 1760 and 1763 solidified the ideals of traditional agricultural values of sobriety, as opposed to commercial laxity, and martial spirit of the Highlanders.

The Caledonians, the local Gaelic speaking Celtic tribes of the Highlands, became an idealized type that was able to combine the politeness and civility of a commercial society, in which there is no slavery and women are treated with respect and gallantry, with agricultural values of martial masculinity.

The reception of this image of Scotland was not always successful, especially among its southern neighbors, but it became influential in Europe, especially Germany, sowing the seeds of what would become the Romantic movement.

Improvements and Enlightenment

The booming economic growth and the booming intellectual life were linked with an “ideology of improvement” and experimentation. A large variety of experiments were tried with a large variance in their success rates, especially in agriculture. For example, spade husbandry and potato cultivation were introduced and were immediate successes. There were attempts to introduce different kinds of sheep to develop sheep farming, the success of which was evident after 1790s. There were also attempts to improve the climate by planting palm trees throughout Scotland. Palm trees after all grew with good weather. So if palm trees were brought to Scotland, the theory went, then they would have brought good weather with them! It did not take long to learn the direction of causation…

Studies and improvements in botany brought medical, commercial, and aesthetic improvements, as well as political conflicts. In the 18th century, botanical gardens grew in number, size, and importance. There were attempts to domestically cultivate products to be offered as alternatives to produce made with slave labor: Silesian milkweed was to replace cotton, sugar beets to substitute for sugar cane. Tobacco was successfully produced in Scotland to cut imports from Virginia, but it was successfully stopped by the powerful lobby of tobacco merchants, as Adam Smith will tells us. Sir Alexander Dick (1703-1785), president of the Royal College of Physicians of Edinburgh, grew rhubarb, from seeds brought from St. Petersburg, in the attempt to break into the Russian monopoly. Rhubarb was thought to be a remedy for indigestion, itself a side-effect of luxury. He succeeded but eventually the production was moved to the possessions of the East India Company, a British monopoly. To limit China’s dominance in the tea market, John Hope (1725-1786), also president of the Royal College of Physicians of Edinburgh and Regius Keeper of the Royal Botanic Garden Edinburgh and King's Botanist, as well as Professor of Botany and Materia Medica at the University of Edinburgh, tried, and failed, to produce Chinese tea in the Highlands of Scotland. Joseph Banks (1743-1820), a naturalist and botanist as well as an explorer not only made the Royal Botanic Gardens of Kew in England the world's leading botanical gardens, but also introduced Chinese tea cultivation in India, with better results than in Scotland.

The experimentation that brought both failures and improvements in all fields was a result of the systematic application of a new method of enquiry—the experimental method. In Scotland, the experimental method was practiced both inside and outside the universities. Men of ability with expansive views and innovative ideas were to be found inside or around universities, and their ideas spread among the intellectual elites through the different clubs.

Edinburgh University was the first to teach Newtonianism, even before Cambridge, where Newton was a professor. Newton's Principia was published in 1687 and it was in Edinburgh's library as early as 1690. In Glasgow it appeared in 1695 and a bit later in Aberdeen and St Andrews. The University of Glasgow had Adam Smith, Joseph Black, James Hutton, James Watt; the University of Aberdeen had Colin Maclaurin who wrote the textbook on Newton’s Principia used in Scotland and at Cambridge, John Gregory, Alexander Gerard; the University of Edinburgh had William Cullen, John Hope, and John Sinclair. David Hume, though, did not have an academic position.

The main idea of the Scottish Enlightenment was that humankind was part of nature just like the plants and the planets in the sky. A method similar to the one used to study rocks or the sky could be used to study the rest of nature – humankind included. Humankind was now a proper object of study by natural sciences. And the empirical and scientific investigation of humans looked for deeper understanding of human nature, institutions, politics, religion, law, and the economy. David Hume called it the “science of man.”

When the experimental method was used, history was made into the source of observations. The more observations, the better off the formulation of laws concerning human nature would be. In 18th century Scotland, the study of history became a way of extending the powers of observation. Adam Smith’s writing blooms with historical examples. In his library we can count a large collection of history books. Not surprisingly, the number and popularity of histories published multiplied: David Hume’s History of England, and William Robertson’s The History of Scotland, The History of the Reign of Charles V, The History of America were all best-sellers. And history for the Scots was not just the history of a country or of a people over time. It was also the comparison of different populations across different places in the same, and in different, times. Travel diaries also bloomed as a genre contributing to history and therefore to the “science of man” by describing the newly encountered societies of the new world.

Yet, some differences among humans raised questions as to whether there was more than one nature of man present in nature. In his 1758-59 edition of Sistema Naturae (1735), the Swedish naturalist Carl Linneaus, while placing and classifying man in the natural system together with flora and fauna, divided man into homo sapiens and troglodytes (coining the terms), placing man in the class of mammal and in the order of primates. Humankind was classified in four varieties, depending on his physical and moral characteristics: American, European, Asiatic, and African. These classifications opened the door to two ways of classifying the human species: one in which every human group may derive from a single original stock; the other in which human differences developed from different progenitors. Montesquieu, Adam Smith, John Millar, Thomas Reid, James Beattie, and the Wise Club of Aberdeen, are usually associated with the first group, while David Hume, Lord Kames, and William Robertson with the second, though this is controversial among experts on the thought of the time.

Regardless of how many kinds of human natures there are, for most of the Scottish intellectuals an individual’s character was formed through the “mirror of society”. Character was a product of society, thus the appropriateness of its characteristics changed with different social environments. But the fact that character may change, did not imply that human nature itself was thought to change. With the idea of developing a science of man, or science of human nature, most of the intellectuals associated with the Scottish Enlightenment imply that the fixed human nature had laws, similar to the laws we found in physical nature, which can be discovered through observation. The challenge was to understand what is “constant” and what is “accidental” to use two ideas Adam Smith used in his History of Metaphysics, an essay which survived the flames.

It was thanks to this method, to discover what is fixed and what changes, that the thinkers usually associated with the Scottish Enlightenment studied and discovered natural laws. It is through this method of discovering what was constant and what was accidental that wealth formation can be studied in a scientific way, understanding its nature and its causes. It is in this context that An Inquiry into the Nature and Causes of the Wealth of Nations was generated.

 

 

For further readings see:

Berry, Christopher J. 1997. Social Theory of the Scottish Enlightenment. Edinburgh: Edinburgh Univ. Press.

Broadie, Alexander. [2007] 2011. Scottish Enlightenment. Edinburgh: Birlinn Limited.

Jonsson, Fredrik Albritton. 2013. Enlightenment's Frontier: The Scottish Highlands and the Origins of Environmentalism. New Haven and London: Yale University Press.

Paganelli, Maria Pia. 2015. "Recent Engagements with Adam Smith and the Scottish Enlightenment." History of Political Economy. 43 (3): 363-394. (On which this chapter is based).

Ross, Ian. 1995. Life of Adam Smith. Oxford: Oxford University Press.

Sebastiani, Silvia. 2013. The Scottish Enlightenment: Race, Gender, and the Limits of Progress. New York: Palgrave Macmillar.