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Adam Smith in His Time and Ours: Designing the Decent Society
by jerry z. muller
free press, 272 pages, $22.95

A good work of intellectual history should exemplify two qualities above all: an imagination that allows the author to “pass over” into the horizon of his subject in order to see the world as the subject sees it; and a sympathy that enables him to gain a feel for the world of the subject, and for the subject’s own internal struggles and aspirations. Like Adam Smith, his subject, intellectual historian Jerry Z. Muller exemplifies these traits to an exceptional degree.

Further, the ideal intellectual history is judged not only by the accuracy of its hold on its subject, but also by the judiciousness and wisdom with which it places that subject in history. Muller’s skill in this respect is especially impressive, since in the past Smith’s work, while having been supremely important to practical men and women of affairs and, of course, economists, has been much less carefully studied by philosophers and moralists.

For Adam Smith, Muller reminds us, “natural man is social man.” Man is naturally endowed with the two dispositions mentioned above, imagination and sympathy. “ Imagination allows him to put himself in the position of others and to judge his own conduct accordingly,” Professor Muller writes. “ Sympathy allows him to share the emotions of others and to control his own behavior in accordance with shared social standards.” Of these two faculties, Adam Smith himself wrote: “These were set up within us to be the supreme arbiters of all our actions, to superintend all our senses, passion, and appetites, and to judge how far each of them was either to be indulged or restrained.”

Smith eschews the classical Aristotelian language of “reason”; nevertheless, he does not stray far from some of Aristotle’s observations toward the end of the Nichomachean Ethics on the subject of how children learn to feel pleasure and pain about the right objects. In place of the language of “reason,” which by this time means something rather different from what Aristotle meant, Smith prefers the language of settled sentiments, imagination, and sympathy, all the while importing into these terms acts of discrimination and judgment.

For example, to be a person of moral worth, for Smith, is to make one’s conduct conform to a standard oriented beyond the immediate, natural passions of the self. The wise man studies the example of others of his time and earlier times, observing and reflecting upon his own actions and the actions of others, in order to discern what makes a good man, and to hold himself to that standard with as much impartiality as he can muster. The wise man “almost identifies himself with, he almost becomes, that impartial spectator, and scarce even feels but as that great arbiter of his conduct directs him to feel.” The wise man “endeavors as well as he can to assimilate his own character to this archetype of perfection” and “to fashion his own character and conduct” according to the model of the “impartial spectator.” The very term seems to stretch “imagination” and “sympathy” beyond themselves.

But Adam Smith’s greatest lifetime achievement lay less in his acuity as a moral philosopher, although that was his calling, than as a social philosopher. For his lifetime quest was to try to imagine, before they yet fully existed, the sorts of social institutions that would make the occurrence of acts of imagination and sympathy—guided by the impartial spectator—frequent, regular, and relatively easy for free citizens. He tried to imagine what the basic social institutions of a decent society would look like. In this light, he was a severe critic of the institutions of his own time and place, a practical visionary, and (as we can now see) one of the most realistic revolutionaries of all time.

Thus it is not very surprising that a great revival of Smith studies is under way. One recalls the very good study by Patricia H. Werhane of Loyola University in Chicago, Adam Smith and His Legacy for Modern Capitalism (Oxford, 1991); the truly magisterial essays collected by Istvan Hont and Michael Ignatieff in Wealth and Virtue (Cambridge, 1983); and splendid essays by Jacob Viner, Irving Kristol, and Gertrude Himmelfarb, among many others. Of all these, I am now prepared to say, this brief volume by Jerry Z. Muller has become my favorite. For one thing, his twenty-one-page appendix, “Guide to Further Reading,” a succinct but meaty commentary, is alone worth the price of the book. His footnotes, too, are penetrating and to the point. But the main factor is that his spare 205 pages of text are quite brilliantly organized to bring out the essential outlines of Smith’s humanistic design for the free and decent society and the unfolding logic that led Smith to it.

Adam Smith was born on the east coast of Scotland, in tiny Kirkaldy, in 1723, at a time when Scotland was poor, very largely rural, and (as we would say today) conspicuously underdeveloped. This was in an era in which “property” meant mainly large landholders, and in which patronage, education, and government service—and not market-oriented businesses—were the key paths to advancement. Indeed, it is probable that more people in Britain and especially Scotland labored on the great estates of the aristocrats than were employed in the relatively small industries of the time.

Muller’s first three chapters sketch Adam Smith’s historical and intellectual background, a time of “gentlemen, consumers, and the fiscal-military state.” Young Adam Smith was a “cosmopolitan provincial,” whose early desire to study for the Christian ministry won him an education at Oxford that prepared him for a university position in ethics. He early became preoccupied with the “phenomenology” (to employ a modern term loosely) of “self-love and self-command,” as these worked themselves out in social contexts. In the daily battle between self-love and self-command, Muller points out, lies “the intellectual origin of Smith’s civilizing project.” 

Aristotle had imagined ethics as a department of politics, but in 1687 Newton demonstrated the law of universal gravitation, thus exemplifying the power of science, understood in a new way, to formulate universal laws of remarkable explanatory power; and like others, Smith now wondered if analogous laws might be discovered at work in human society. He conceived of such science as a part of “natural theology,” a more humble inquiry than the theology that took as its data the givens of revelation. As he wrote in The Theory of the Moral Sentiments (1759):

The administration of the great system of the universe . . . the care of the universal happiness of all rational and sensible beings, is the business of God and not of man. To man is allotted a much humbler department, but one much more suitable to the weakness of his powers, and to the narrowness of his comprehension; the care of his own happiness, of that of his family, his friends, his country. The most sublime speculation of the contemplative philosopher can scarce compensate the neglect of the smallest active duty.

Smith therefore explored the psychology of the active person. Moreover, he became poignantly aware from his travels and his studies of the differences impressed on human psychology by historically changing social, political, cultural, and economic institutions. To capture this Smithian focus, Muller coins the admittedly clumsy term “psychological institutionalism” to indicate the bridge Smith tried to build between classical humanistic ethics and the new, fledgling social science (of which he was one of the first practitioners).

The problem Smith deeply felt arose from the visible failure of reason to withstand both the onrush of passion and the power of social institutions and customs. He sought (to borrow Madison’s later term) “auxiliary precautions” by which societies might arrange their institutions so as not to leave men stripped of everything but solitary reason. He learned here a great deal from theological controversies of the time about human weakness, sin, and social pressure.

Futhermore, Smith was uncommonly concerned with the fate of common people, such as his beloved mother back in Kirkaldy (his father had died when he was an infant). He wanted to move Scotland (and the world) toward an economy that produced “opulence” for the common people. And he outlined a system that would, he predicted, in fact produce universal opulence.

Smith held that a passion for the public interest could only be excited if legislators, voters, and the young came to understand political economy as a “system.”

You will be more likely to persuade, if you describe the great system of public policy which procures these advantages, if you explain the connections and dependencies of its several parts, their mutual subordination to one another, and their general subserviency to the happiness of the society; if you show how this system might be introduced into his own country, what it is that hinders it from taking place there at the present, how these obstructions might be removed, and all the several wheels of government be made to move with more harmony and smoothness, without grating upon one another, or mutually retarding one another’s motions. It is scarce possible that a man should listen to a discourse of this kind, and not feel himself animated to some degree of public spirit.

Here in 1759 lay the germinal idea for the project to be addressed in Smith’s masterpiece of 1776, An Inquiry into the Nature and Causes of the Wealth of Nations .

Smith’s long labors of these seventeen years uncovered the necessary elements of the decent society, which are detailed by Muller, one by one, in each of the ten chapters that constitute Part II of his book. (These were also years pregnant with meaning for the Republic waiting to be born on this side of the Atlantic. Thomas Jefferson would later call Adam Smith “the master of those who write about political economy.”)

Muller begins with a chapter on the market as the social institution best suited to produce “universal opulence” (a term best understood as “steadily rising real wages and steadily declining real costs for basic goods.” Now, when Smith was writing, markets were mostly local, heavily regulated by the state for the purposes of the crown, restricted, and relatively closed. But the market contained features that, in Smith’s eyes, would call into being a more alert, active, freer, and more moral citizenry than the regime then in place and mainly benefitting landowning aristocrats.

This chapter is followed with one on legislators and merchants; and another on social science as “the anticipation of the unanticipated,” in recognition of the law of unintended consequences. These Muller follows with four chapters on the ethical heart of Smith’s civilizing project, the ideal of commercial humanism; on the “impartial spectator”; on the historical and institutional foundations of the commercial society; and on the moral balance sheet of the commercial society, not least as compared with historically prior societies and then-existing alternatives.

He next uncovers a part of Smith’s thought that my own teachers, years ago, and many books since have studiously and unaccountably neglected: that is, the many highly visible roles that Smith assigned to the political part of political economy, “The Visible Hand of the State.” Next are chapters on Smith’s sociology of religion and on moral and political leadership in commercial society. Smith emphasizes the higher virtues and noble ideals essential to the health of the decent commercial society to be assiduously cultivated especially in the “small party” of moral and intellectual elites.

In the remaining three chapters of Part III, Muller first describes the light shed since Smith’s death by his critics, friendly and unfriendly. There is hardly a writer in English, save perhaps Smith’s ally and friend Edmund Burke, who more frequently crafted memorable and quotable lines; but some of these lines, by their sharp and gleaming elegance, have diverted attention from their surrounding connections and modifications. So Muller adds a chapter on the unintended consequences of some of Smith’s own formulations. Finally, Muller attempts to ferret out what is timeless in Smith from what was important merely for the time in which Smith lived.

I have by no means done justice to Muller’s masterful and complex argument, elegantly and briefly stated as it is. Particularly gratifying is Muller’s sensitivity to rather subtle themes in the Christian theological discussions of the period, as well as his grasp of the complex ancient and modern sources of Smith’s distinctions and turns of argument.

One could wish that more had been made of Smith’s indebtedness to the School of Salamanca and, in general, to the careful records the Spaniards compiled of their economic experiments in the New World, from which Smith drew some of the concrete data that grounds the empirical observations of Wealth of Nations . The beauty of this book, however, is its comprehensive brevity. Muller outlines Smith’s main moral argument better than anyone before him. Harvard’s David Landes writes for the jacket that “Jerry Muller is one of the finest intellectual historians alive today,” and on the strength of the balance and perspective exhibited here I am inclined to accept that as a fair portent of what this young author will now be condemned to live up to.

Michael Novak, a member of the Editorial Board of First Things, is author, most recently, of The Catholic Ethic and the Spirit of Capitalism.

Image by Kim Traynor via Creative Commons. Image cropped.