Friday, November 05, 2010

A Review of Ian Simpson Ross, The Life of Adam Smith, 2010 (2nd edition): Part 2: Early Years





Gavin Kennedy
The preface to the second edition contains this paragraph from Ian Ross:

If Smith is one of the inventors of the modern world, what kind of nightmare did he bring upon us? Alternatively, if he did inquire successfully into the origin of wealth and how it is constituted, why is his message so badly misunderstood and misapplied? Well, the story of his life and books tells us he was very far from being an optimistic promoter of market fundamentalism. He accused himself of having a ‘melancholy and evil boding mind’, and denounced ‘prodigals and projectors’ who sought to enrich themselves at the expense of others, with schemes that mingled folly with knavery. He was suspicious of governments, and equally so of merchants and manufacturers scheming to deceive the public by cornering the market or engagement in other malpractices. He believed that fair and lawful competition in the market would lead to fairness in compensation or producers, as well as fair pricing for consumers, everywhere in the world, not just in domains favoured at the expense of others. It seems to me, also, he would esteem the idea emanating from Ludwig Erhard and others in the post-World War Two era, about nations endorsing the social market based on free and fair competition, going along with responsible provision for a safety net for health care, pensions, and unemployment insurance.

He was outraged by the practice of slavery, especially in Africa, and I think he would be very concerned about the continent’s suffering from sickness, hunger, internecine war, and environmental damage, and how best to overcome this. Perhaps he would recognize in the current debate over international support – represented for example, by Dr Dambisa Moyo’s challenging book, Dead Aid (2009) – some elements of his own thinking, namely, that charity is not the answer to social, economic, and political malfunction, and that large capital inflows to distressed countries seem to correlate with diminished government accountability. Dr Mayo counsels that development funds should be raised on the financial markets through bond issues, with governments accountable to investors and to their citizens, who would pay taxes to clear the interest charges on the bonds. This may be an oversimplification of a very complex situation, however, and Smith would have been interested in alternative ways suggested for promoting development: assistance through ‘peacekeeping, security guarantees, trade privileges, and governance’ (Paul Collier. ‘Review of Dead Aid’, the Independent, 30 January, 2009)”. [Ross, I. S. Preface to the Second Edition, pp xix- xx].”

I open this review with these considered views of Ian Ross from his preface to the second edition, based on his long academic career as a scholar in 18th-century history. For some readers these ideas will be anathema to their own beliefs about what Adam Smith was about in publishing his two books, Moral Sentiments and Wealth Of Nations.

Given that most economists who regularly quote from Wealth Of Nations do not appear to have read it, because they rely on what they heard in their undergraduate classes some decades ago and supplement their vague memories of their tutors’ certainties with well-used quotations from journal articles written by others who also have not read him either, let alone a vast media presence that churns out the same quotations, torn from their original context, or just plain invented by so-called authorities, it is not surprising that ideological myths and other ‘harmless’ nonsense are so prevalent today.

Attend any academic conference, across several disciplines, besides economics, where Adam Smith is cited, or tossed into the discussion, or, indeed, where his Work is the main subject of the gathering, and be prepared to hear or read much that is at variance with what you will find in Ian Ross’s “The Life of Adam Smith”. There is a kaleidoscopic array of ‘Adam Smiths’, who never graced the streets of Kirkcaldy from 1723 to 1737, Glasgow from 1737-1740, Oxford from 1740 to 1746, Kirkcaldy and Edinburgh from 1746 – 1751, Glasgow from 1751-1764, France and Switzerland during 1766, London from 1766-67, Kirkcaldy from 1767-73, London from 1773-76, Kirkcaldy from 1776-78, Edinburgh from 1778-90 (Panmure House) (Smith, Correspondence, 1977, 1987). Among the many notorious examples of other ‘Adam Smiths’ we have the ‘Smith’ who was around MIT (Paul Samuelson, 1948) and later was ‘alive and well’ in Chicago (George Stigler, 1976).

Ian Ross, The Life of Adam Smith, is the timeless antidote to the multifarious ‘Adam Smiths’ invented (this not too strong a word for it) by some senior and otherwise distinguished modern economists in North America in the last half of the 20th century.

Ross opens with an account of the background to Smith’s family in Aberdeenshire and Kirkcaldy. This takes us into the major issue in Scotland at the turn of the 17th-18th centuries – the conflicts over dynastic-succession, with the side-issue of religious strife between Catholics and Protestants, between the ‘Jacobites’ supporting the Stuart kings versus the Hanoverian line of kings that replaced them (William and the Georges I to III), which rumbled on in Scotland to the bloody defeat of the mainly Highland armies at Culloden in April 1746 (and its disgusting, violent and merciless aftermath).

The religious causes of strife were the ever-present background to the controversial Union of the parliaments of Scotland and England in 1707, and its dire consequences in Scottish civil society while Smith grew from sickly child to university student and professor, in the home of his beloved and widowed mother, Margaret Douglas Smith. His father, also called Adam Smith died in January 1723 (he wrote his will in November 1722 and probably knew he was dying, perhaps also that his wife was pregnant). Baby Adam was born on or about 6 June (when the records show he was baptised).

Ian Ross, quite rightly, uses the dates as they ware recorded on all documents under the old calendar, which I find re-assuring because it rejects implicitly an unwelcome fashion that has appeared recently in some quarters to 'modernise' all dates before the great calendar change of 1751 by 11 days, which is a source of avoidable confusion. The dates in the extant documents should be left as those given by those wrote them. It is better in my view to jump ahead in 1751 by 11 days, supported by a single footnote, rather than pretend to rewrite all the thousands of dates on the hundreds of thousands of original documents, with confusing 11-day variances in everything recorded before 1751.

Ross trawls widely around Adam Smith’s early years at school and university to give an authoritative account of the milieu in which young Adam grew up and the early influences on him and his thinking. Several of his early influences in personnel continued to have strong relationships with him as kin, or mentors, and as fellow members of what is now known as the Scottish Enlightenment. He grew up and was educated in what was a scholarly fraternity upon which the Enlightenment took root across Scottish, English and French society from the 1750s. Reading Smith’s famous books without knowledge of this context is a rather barren feast, but Ross provides a bounteous remedy .

The growing ‘improvement’ in local farming – Smith’s relatives on his mother’s side were noted landowners – and a small but active commercial presence, supported by the small harbour in Kirkcaldy, provided evidence of the nascent changes taking place in the local, and, by extension, in the Scottish economy. Interestingly, Smith visited a near-by ‘naillery’, which may be the one to feature in his discussion of the division of labour in Wealth Of Nations and earlier in his Lectures On Jurisprudence.

Two other influences on young Adam were school and religion. School was the ‘sturdy, two-room building of the burgh school’ built in 1723, the year he was born. His teacher was David Miller, from whom he learned to read Latin and the rudiments of Greek, and elements of good English. These subjects had a distinctive and lasting influence on Smith. Ross reports on his mother’s religious influence (she was by all accounts a very religious person), and saw to his introduction to Calvinist theology of the Moderate Presbyterian strain.

Both school and home provided him with traits that were to last a lifetime. He ‘was well prepared intellectually for his student years and [for] finding a vocation as a moral philosopher and man of letters during the stimulating ere of his country’s history, marked by a determined drive for improved performance in agriculture and other economic sectors. Most important of all, his form of Presbyterian inheritance, together with the rudiments of training in the Latin classics, apparently instilled in him the values of a frugal lifestyle, self discipline of a stoic cast, diligence in his calling, and strict justice towards others tempered with benevolence which characterised his actions and his teaching. At the same times, it should be acknowledged that there were elements in the religious culture Smith encountered that could be oppressive in Kirkcaldy and restrictive…’ (p 37).

How these influences panned out is clearly identified by Ross in what follows.

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