In Our Time - The Wealth of Nations

Episode Date: February 19, 2015

Melvyn Bragg and his guests discuss Adam Smith's celebrated economic treatise The Wealth of Nations. Smith was one of Scotland's greatest thinkers, a moral philosopher and pioneer of economic theory whose 1776 masterpiece has come to define classical economics. Based on his careful consideration of the transformation wrought on the British economy by the Industrial Revolution, and how it contrasted with marketplaces elsewhere in the world, the book outlined a theory of wealth and how it is accumulated that has arguably had more influence on economic theory than any other.With:Richard Whatmore Professor of Modern History and Director of the Institute of Intellectual History at the University of St AndrewsDonald Winch Emeritus Professor of Intellectual History at the University of SussexHelen Paul Lecturer in Economics and Economic History at the University of SouthamptonProducer: Thomas Morris.

Thank you for downloading this episode of In Our Time, for more details about In Our Time, and for our terms of use, please go to BBC.co.com.uk slash Radio 4. I hope you enjoy the programme. Hello, at the height of the Enlightenment in the second half of the 18th century, few places in Europe could match the flood of intellectual accomplishment that came from Scotland. The philosophy of David Hume and James Hunt's fundamental discoveries about geology are just two examples, and Edinburgh and Glasgow boasted the two greatest universities in Europe. But the most celebrated figure of the Scottish Enlightenment today is Adam Smith,

the moral philosopher and economic theorist, who in 1776 published a book that's become the foundation of modern economics. Its full title is, An Inquiry into the Nature and Causes of the Wealth of Nations. Smith examines the evolution of human civilization and the ways in which the actions of individuals affect entire societies. The wealth of nations argues passionately against the regulation of markets. With me to discuss Adam Smith and the wealth of nations are

Richard Watmore, Professor of Modern History and Director of the Institute of Intellectual History at the University of St Andrews, Donald Wynch, Emeritus Professor of Intellectual History at the University of Sussex and Helen Paul, lecturer in economics and economic history at the University of Southampton. Richard Whatmore, could you begin by telling us a bit more about Scotland

at the time in the early days of Adam Smith? Yes, well, Smith's born in 1723, and you can say that, the history of Scotland before that time is both fascinating and also desperate. It's desperate for lots and lots of reasons. You've got to remember that the 17th century is characterized by religious and civil wars. So you've got political turmoil. You've got battles between Episcopalians and Presbyterians.

You've got marauding armies. You've got problems with the Highlanders. You've got antagonism between different governments of Scotland and you've got this big question of economic development. Because, as David Hume famously said in his essay of civil liberty, something changed at the end of the 17th century when commerce became a reason of state. And what that meant is that all states had to become commercial

if they wanted to maintain themselves. Now, how they had to do that was by developing commerce. That's a real problem for small states like Scotland. And famously, the Scots in the 1690s attempt to create a commercial empire, the Darien scheme on the Isthmus of Panama. It fails. It's a bit embarrassing. The extent of the failure.

And then we have the great fact about 18th century Scottish history, which is the Union of 1707, when the parliaments of England and Scotland vote to get rid of the Scottish Parliament and to create this new free trade area and that's just such a remarkable experiment and the big question is how successful was it and that really is a framework for understanding what Smith was doing

but to cut to the chase the big answer is that we're very successful the big answer is that the usual when big countries took over small countries they colonised them and then subjugated them In this case, they seem to inject Scotland with immense amount of energy, which became itself extremely successful as a country. There's no question that the Union was a success economically. There's a letter of Smith's where he says that the amount of good that the Union did was simply so extensive.

It couldn't really be, nobody could challenge it. Having said that, at the beginning, you know, the notion of a union that Scotland's been bought and sold for English gold, that it's uncertain what's going to happen. And lots of contemporaries were worried that the pull of London especially is going to mean that the Scottish economy actually declines rather than develops. And we're talking about the Scottish Enlightenment towards the end of the 80s. That's what we're talking about.

You're way back at the beginning of the 18th century. Very nicely. We're talking about the Scottish Enlightenment. By then, it was up and running in a big way. What was the economy like in, let's say, I don't know, 76, 75, 70 onwards? Yeah, actually, I think you're wrong, because you have to go back to the early period. And you can say that by the time Smith publishes the wealth of nations, Scotland's thriving. Actually, you've got to remember, think 1745, you know, Smith's in Oxford, but he goes back to Edinburgh.

You've had Jacobites, the Highlanders come down and invade. Now, that is fundamentally important for understanding the wealth of nations. because the fact is that we think of commercial societies as very successful and stable, but in the 18th century people do not think that. They're threatened by wild Republicans, by radical Christians. Are the wars of religion going to start again? Are barbarians going to invade? These are real questions for Smith.

They're real questions for Smith, and I'll say you are the historian. But at the end of the 18th century, Scotland was in a very strong position. full of great intellectuals, great universities, industry going strongly. I'm just trying to make that as a point before we move on. Certainly what is remarkable. I'll settle for certainly. Donald Wynch, would you tell us a bit about Adam Smith's background

in his early life? Well, I mean, if we go right back to the beginning, he's a fatherless child. His father dies before he's born. And so he's got a... His mother is a young widow, difficult circumstances. Some decent provision is made for him, possibly by the deceased father. He's got a board of guardians, which is a pretty decent team of people

who are going to look after his and the mother's future. And so he's a sickly child, but he manages to thrive in the local ground. which is a two-room building in Kokodi on the north bank of the fourth, the furtifolds, a successful small coal-exporting town, does well in that setting, and not unusually enters one of the local universities, the University of Glasgow, rather in Edinburgh in that case, at the age of 14. And he's taken up by a very good thinker

and who becomes his teacher. Yes, you're thinking of Francis Hutchison? I am. Yes, he's a new light thinker, as the lady said. It seems odd now to us, but he was in fact one of the first of lectures to actually lecture in English rather than Latin. And he was a new light.

in all sorts of other respects. Yes, but also Adam Smith clearly acquired quite a grounding in natural philosophy as well as moral philosophy. And it was said that natural philosophy and mathematics were

his main interests at the time. I was given to understand from what I've read about Smith now and previously that he was exceptionally gifted as a scholar. Is that true? Or are we projecting that? Yes, there's very scanty evidence of these things. But, yes, it's every sign that he's a bookish lad. He takes to any opportunity to read books. And it is a good university. I mean, one can compare it in several ways, as he did later. You can compare it with what he was offered in Oxford, which he thought was nothing by comparison. It did have, quite especially for universities in this country, each subject he was taught by a professor. Can we talk, I'm afraid, briefly, because we're on the wealth of nations,

but we can't just walk over the earlier book, The Theory of Moral Sentiments. Can you draw out of that what you think would be significant for the conversation about the wealth of nations? It's a very contested subject because many people who come to Adam Smith via the Welsh of Nations wonder what this book was about. And the big mistake that everybody makes

or many people make is to think of the theory of moral sentiments as some kind of juvenile exercise which was written in when he was about his early 30s and that the Worth of Nations is the mature work and somehow but in fact the life isn't like that

Adam Smith returns to that book at the very end of his life and decides not to carry out any of his unfinished projects which he was dedicated to. It burns all the notes to it but he spends his time trying to make the theory of moral sentiments as good as he can make it before his death.

So it mattered to him at every point in his career from 1750s on to 1780s. Is it possible, if it isn't, we'll just move on to wealth of nations, to encapsulate what he's trying to say in the theory of moral sentiment? If it's too difficult in a short time, we'll move on.

I mean, you can take a lead from several things. The first sentence of the book is a good clue. he says there that however selfish we regard people as being, and here he's gunning for or thinking of major moral philosophical systems of Hobbes, especially to some extent of Mansville, that are constructed exclusively on a view of the selfishness of human nature. Now, what he wants to, so he wants to start there, and then to say, but actually we know that a very fundamental part of human nature is its capacity for sympathy,

and from the capacity for sympathy for exchanging positions with one another, we actually are not engaged in selfish activity, we're engaged in a social activity. Well, that's very strong. That's a good platform for moving on. But Helen Paul, do you want to take that on a bit and then talk about the other major figures influential, Smith's work in his earlier years, by which you mean the first 10 or 20 years of his intellectual maturity. Well, yeah, so Smith is thinking about, I suppose, always has the problem of balancing self-interested behaviour

with altruistic behaviour. And he's thinking about, I suppose he takes ideas from all over the place, not just from other Scottish Enlightenment thinkers, but from earlier political economist thinkers, from a French school, the physiocrats, and he's friends with a lot of people, knows a lot of people in the Scottish world, because it's really a central belt issue

of people going to public lectures and going to clubs and societies, and he's able then to, I suppose, bounce ideas off people or hear from them. And he's very much embedded in that world, friends with people like David Hume and sets up a club with him called the Select Club. And, you know, he's seen,

to be somebody who has the sociability to be able to meet people. When he goes to France at one point he meets key French thinkers of the time including Baltar is? Well he goes all over the

but he seems to be a bit zealig-like in the ability to meet all kinds of people yes so when they met in these societies which rivaled in out Strip London at that time in many ways what if they talked about

economics, which let's assume they did, what were they talking about? What were the schools of thought that were in contention or in the ring as they were discussing it? Well, there were various, I suppose the people who'd be discussing the cutting-edge theories would have been aware that there'd been a lot of arguments against something called mercantilism. But the general public, and maybe some politicians down south, might still have had mechantalist views. and mercantilism is basically a very old-fashioned system of thinking if I can stockpile a lot of gold and silver in my country, block imports and increase outports, exports, I will be better off.

Of course you think in terms of trade is a zero-sum game, you end up with a trade war, you end up with friction between states. And although these ideas had been attacked by various people throughout the 18th century and even before that, they were still quite, widely believed and understood by politicians, this notion of trying to encourage exports, trying to block imports. That was one of the ideas that Smith really didn't like the sound of

and was trying to work out what we would now call free trade arguments. Can I come back to you, Richard Wartmore? He settles down to the wealth of nations, and he's been on a European tour for three years, and as I said, met various people. He's also got a private income of 300. year. He doesn't marry. He lives with his mother. He's devoted to her

through her long life. And he settles the life of a scholar. Full-time scholar, independent scholar, although he's very much part of the university's independent scholar. He's been to Oxford. For seven years, he finds it very dull, teachings poor, not anything like as good as Edinburgh and Glasgow, but he reads a lot.

He uses a chance to read. So there we have him there, and he's going to do the wealth of nations. What sets him off? Why does he... It's a massive enterprise. As you know, more than any of it was. So what sets him off? Why does you want to do that book? Well, I think that coming to this issue of

the Enlightenment, and you have to remember that the Enlightenment really is a battle. It's a battle to work out where are we going, really, in the broadest sense. And again, commercial

society is not necessarily new, there have been lots of commercial societies through history, but saying that commerce is the central goal of human activity, everyday activity, and that governments have to be directly concerned with it, that requires a justification. And you have to remember that there is a,

the literature of Jeremiah, the notion that actually you're on the edge of a precipice, that Europe might be reliving the history of Rome and on the edge of a new dark age, whether it'll be barbarians invading, obviously referred to the Highlanders earlier, but potentially other shepherd societies invading from the East, these are direct concerns.

Now, somebody needed to justify commercial society and to deal with this issue of, is it a justification of what was called the selfish system, as Donald referred to? Is commerce something that creates effeminacy? It destroys martial virtue? Or is it something that can be justified and associated with something?

certain forms of politeness, sociability and morality. He thought that commerce was the system now, didn't it? That was what had happened. That was a change that happened. Towards the end, 17th beginning of the 18th century. And he wanted nations to be aware of that. And he wanted to examine why it was so, what would happen to him, what his future was. That's right. I think that the key is that historically you've had lots of forms of commerce, you know,

going back to Athens, the Italian city republics. But throughout history, they've not lasted. Carthage, obviously another famous example. They've tended to be defeated by more agrarian societies, Rome against Carthage, or marauding shepherds. Now, the fact about Europe is that commerce has lasted. The Roman Empire Falls, you've got feudalism established, but commerce has lasted. and the question is, why is Europe in this peculiar condition of leading the way as far as commercial societies go? And how does he answer that, broadly, Donald Wynch? Well, I think it is right to say that the worth of nations is addressed to this latest, most modern form of economic organisation called a commercial society.

You need a history of it Because in fact it's imperfectly realised Even in the countries like England Not Scotland at the time England that have made most progress towards being in a commercial society It is the most advanced in one important respect For example Agriculture is commercial

England in the 18th century no longer has a peasantry Scotland and Ireland still do and most of Europe has a peasantry and now one way of discussing that is to say well that is they've retained an aspect of the thing that preceded commercial society let's call it feudalism

and so that this and the tension between feudal relics as they were now called and the requirements of commercial society is one of the points on Smith's agenda of this. But he's, I mean, he, as he said, he's going to give you an account of the nature of wealth. I mean, what do we mean by it? Because we might have, as Helen has said, and we might have these notions of associating wealth with money. And the listeners might want to know what you think commercial society means at this stage?

Well, you can't do much better than just quote the master. Well, the way you go then. The definition of the master is to say commercial society. is a society in which every man becomes in some measure a merchant. Now, what he means by that, he doesn't mean that we're all in business, or we own small shops, he's just saying that

it's the kind of society in which you are just not self-sufficient. Most of your needs have to be met by other people, and that engages you in a whole series of transactions of truck and barter and then elaborate

use of markets to meet your needs. In that sense, every man is a merchant. Excellent. Helen Paul, now let's go through these books. There are five books in the World of Nations. Book 1 is concerned with labour and book 2 with capital. Can we start with labour? We can.

He's famously given us the idea of the division of labour with his famous example, the PIN factory. So he discusses how if we can get people to divide labour up between them, then they can specialise. and then when you specialise, you get better at the job you're doing, you start finding new ways of doing it and improving. Can you just detail the pin? The pin, well, the pin apparently takes about 18 different things to put together.

So if you want to make a pin, you've got to get someone to cut the wire and someone else to twist it, someone make the head of the pin, and add the head of the pin to the base, and even someone to put it in the paper when you finished it. And Smith says if you just got one person to do all of that, they'd be lucky to make a pin a day, you know. But if you had a team of people, each of whom took on one job, you'd now, you'd then end up with teen pins,

you'd end up with huge manufacturing of pins. And he said, well, that's an outlier example. But wherever you can subdivide, if you can, you should do so, and then you can specialize. He said, well, because agricultural labour doesn't subdivide quite as neatly, it doesn't improve at the pace of manufacturers. And you're starting to see, you know, you're going into the Industrial Revolution period

with the factory system appearing. So what he's saying, if you like, draws from, but also influences some of the ideas of how to actually rearrange the world of work. And then he moves, sorry. No, no, see, David. Just simply on that point, it seems important to say that,

first of all, the pin example, is pinched. It comes from the French encyclopedia. It makes no bones. He doesn't actually tell you that but everybody noticed it. It's a well-known example and he even says it's a trifling manufacture. He's not saying this is

world-shattering and it's I think that he wants to make it a metaphor for something else. What's happening in that PIN workshop is simply in a nutshell what is going to happen throughout this commercial society. The

occupational subdivision and the multiplication of professions and sub-professions and trades and skills and so on. As I say, I think that the pin thing is striking, and it gives you this kind of, it rivets the mind on it, but for him it does have this extra kind of property of suggesting what's happening in society at large. And which actually drives through society for the next 200 years really, all still. What are we talking about? Can we talk about Capital now, book two? Well, Smith knew that the physiocrats that he admired them and their systematic way of thinking. They were the French thinkers who thought in terms of a basic economy model.

They had something called the tableau economic, but they believed that value was created only from the land, the land sector, and therefore, and that was quite a common idea that was all value comes from land, and that's why society should be based on the landed elite. And he's now moving away from that idea to thinking about an interrelated system with land, labour and capital as the various factors of production. But here's where he makes some of the most striking remarks which people have taken up

and said Wupiabon carried banners for that selfishness is good, that people should make themselves rich because people admire rich people and so and so forth. Can you just flesh that out of it? Yes, I mean it sounds awfully like Bernard Manderville's Fable of the V's, Private Vices, Public Virtues, but it's, if you like, a more sanitised version of that, because Smith is saying... But you did say things like that. Can we develop the idea that selfishness is good, getting a lot of money is good, that richer to be admired, and the poor really do admire the rich when it comes to it. He says those things, so what can you tell me a bit more about that?

The idea being that there is what we'd call a positive externality from that. In other words, if you have this individual behaving in a self-interested way, then they are maybe doing things for their own good, but they have some effect on the economy as a whole, it's social welfare for everybody else. I suppose the idea being that he often thinks that systems appear through the interaction between these self-interested individuals, developing new things or innovations of various sorts,

and also... Richard, what more? Well, just to say that this notion of self-interest and it's connected to the idea of sympathy that Donald mentioned before because Smith and the person that he was closest

to in philosophical terms, which is David Hume, Hume really creates the environment which Smith then takes forward, answering lots of the questions that Hume left unanswered and Hume was famous for arguing that justice is an artificial virtue. Now, the question is, if justice is an artificial virtue,

you're getting close to Mandeville because you live in a world without morality where there's just delusions, a world of delusion and imagination. So where does justice come from? And Smith thinks that Hume hasn't done a good enough job in terms of explaining the nature of justice, because he thinks that people are saying, selfish but in your selfishness at the same time, and it is selfishness in the sense that you want to increase your own wealth.

And the remarkable thing is if you focus on that, you're going to generate more wealth for everybody else. That is the remarkable fact about commercial society. It's one of the most wonderful things. And the second are equally wonderful is the fact that he thinks a commercial society creates liberty, enables liberty in a way that nothing else does. That's fundamentally important because there's a debate at the time about really whether you need politics first and then commerce follows or whether commerce comes first and then you get civil liberty. Now for Smith and for Hume, the wonderful thing about commercial society is it generates civil liberty.

And that is a criticism of lots of wigs, defenders of 68, 68, 69, the glorious revolution who thought that there was. something about the mixed constitution that was somehow generating forms of political and civil liberty. Actually Smith and Hume are saying you can find it in lots of places, you can find it in absolute monarchies. Can I go back to the question about greed? Yes. Greed is good if you like. I didn't want to use that phrase. No I know. And I didn't. And Smith didn't either. What he says in that book to the World of Nations, which is devoted to capital accumulation and is absolutely essential because you can't have the division of labour unless some capital has been accumulated in order to

employ 18 people to make a bit. That's right and in fact build and pay for the machinery is part of the whole process and so on. So they do go together. But what he says about greed or it's not really, it's not that it's greed, it is that he relies on one of those 18th century sort of assumptions about dominant passions. And he says, one passion we have is, of course,

just to improve our situation. Make wealth? Well, no, no, to improve our situation. So why does you talk about being rich then? It doesn't mean making wealth. No, he means that people will given the opportunities, and for much of human history,

the opportunities have not existed to do this, but people will in fact choose to consume less than they produce. And they do, why do they consume less than they produce? Because they want to put something aside to acquire something better at some future stage. And he relies on that propensity, so to speak, in book two, because it's got to be, it's going to be overcome, he thinks,

the public prodigality that is present in government. Lots of nods coming from you. you, Richard. Yes, I think that's absolutely right, and obviously it leads us to the third book, which is where you have Smith, in some ways, it is most distinctive because he is profound, from our perspective today, especially thinking about the nature of economics, etc., he is a profoundly historical writer. He thinks that actually, in order to be an economist, you have to be a historian and the problems that you face in the present, the problems of commercial society, the problems of capital accumulation, the problems of creating a society where you have sufficient

frugality to generate the capital that you need to invest and create a successful commercial society, you have to look at why are we in a state where that can happen as it is beginning to happen in England and in Scotland. And consequently, you have to explain it. by reconstructing the history of law and government right across Europe from the fall of the Roman Empire and after. Which is his very great project which he never finishes, and he actually destroys all the notes, which is a shame for this discussion.

We could have had three programmes, but still, Donald Wins, in book for, to take up what Richard said about the historical perspective, if he goes in for comparisons in a massive way, now, can you again, I seem to ask you, the really difficult ones. Can you extract some marrow from that

that we can take before we move on? From book four. Yeah. Well, I mean one simple description of it is he very rarely reflected and gave us clues as to what he was about, you know, but he does say in a very important letter later on, he said, you know what, that my

it is a very violent attack on the commercial policy of Great Britain and that's where the nub of the attack takes place. He hunts the mercantile system. The regulatory system. Right, high and low, over every manifestation of it.

That's the rival system, and if you like, it's the inverse of his own, what he calls the system of natural liberty and perfect liberty and justice. So just for to keep it clear, by the mercantile system, he's talking about a very regulated system and so on, a closed system. Helen was referring to it earlier. That's right.

Building up your own building. He's talking about the ruling system, throughout Europe. And of course, in that book, it contains the one chapter, which is the most concerned with current events. It's the longest chapter in book four, it's the longest chapter in the whole work. It's the chapter on colonies. And why is it there? It contains a large historical element about European colonisation, but there's also something rather important going on in the background before 1776, and it is the revolt of the American colony. and Smith delayed for three years and spent them in London,

which meant that he was away from Kokodi, where he preferred to be, in order to be fully informed about developments on the American Front. That's all disguised by the fact being such a cool character. All he says in the text is the present disturbances. It's massive disturbances, and it's absolutely vital for his attack on the mercantile system that he can show you that what's a... happening in the American case absolutely proves all

the points he wants to make. An empire based on mercantile principles is no good for anybody. I like his idea of solving the American problem by sending the British Parliament to sit in Philadelphia. There you go. We haven't got time for that. Helen, can we talk about

the idea of the invisible hand that he brings in? It's an intriguing idea. He sort of brushes it in, but it seems to have a great significance. Well, it's very popular now with economists, and it's a classic phrase now, but what it really means, I suppose, is that you have, the market can decide without having some kind of government planner.

So it's really the opposite of a command economy, a planned economy. You can let people find ways of trading, and then they'll get a good outcome. I suppose this is before our understanding of how supply and demand, lead to a market price, but it's heading towards that idea, and away from the notion of highly regulated government knows best our models. So what precisely, is there a precision about this invisible hand, Richard? Well, he only uses the term once, and in the wealth of nations, and he's used it in the theory of moral sentiments,

obviously to describe the way that the rich are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, have the earth been divided into equal proportions. Now, that's obviously a way of reminding everybody that you should avoid these utopian schemes for societal reconstruction, political or economic utopias. Smith is a moderate, he's a pragmatist, he hates enthusiasm,

he hates speculators and projectors. Obviously he includes the physiocrats, he thinks they're dangerous, he thinks these advocates of mercantile empire, as Donald has said, are dangerous in consequence. And the invisible hand reminds you that there's a natural progress of opulence, which is the term for the first chapter in book three. The natural progress of opulence, the way history would have developed

if we really adhered or to the natural passions and they haven't been interfered with, I suppose, by these projectors and speculators through history. Helen, can you give us some idea of the suggestion Smith makes about economic policy? Yes, he certainly doesn't like all the blocks on, say, the movement of corn through the domestic economy

He gets very upset about the idea that people have various rules to include or export bounties on the corn trade. He says that some of these attempts to interfere in the corn trade, for instance, exacerbate earth. When you have a country that has a small problem, it just becomes a large problem when you get these very bad government interventions. I mean, is he putting forth suggestions that economic policy should not be like that? It should be like this. Oh, I see what you mean. Yes, you should have far more of a, well, I suppose we would call it a free trade system, rather than this landed elite system where things focus on the needs of a special interest group.

Donald, do you want to take that on? Well, I think that he is warning constantly about the spirit of, what he calls the spirit of corporation. and there are these famous remarks that he makes about businessmen and never meet together without they're engaged in some conspiracy to defraud the public and simply by curtailing competitions, raising prices and, I mean, he has a very low view of corporate conspiracy. On the other hand, what he says about business,

and that must be music to the ears of many businesses. this person's, validates them in philosophy. Well, it depends who they're being compared with. Yes, they're performing a very useful social function. There's no doubt about that. But beware of them when they get together,

and it's a particular problem in the English system because they've got a parliament which is easily subject to special interest pressure. and so he describes that as an overgrown standing army of special interests and he wants to issue a very firm warning that that is something you should watch out. Never listen to them.

Richard, what more, can you tell us about the influence of the book, saying that 20 years after it was published and then we'll start with that? Yes. Smith was never somebody who expected ideas, especially ideas about reform, to be welcomed. And he famously says, and it's really an attack on the physiocrats and utopian schemes like theirs, to abolish, to create liberty overnight by legal despotism. He thinks that this corrupt world that we live in, and he does think it's a corrupt world,

he thinks it's actually generated an enormous amount of wealth, but at the same time he really wants to attack the mercantile system. But at the same time, he's obsessed with unintended consequences. You can't expect, well, you can always expect the unexpected. Now, that's absolutely the history of the reception of the wealth of nations, because the attack on the mercantile system is taken up by people who think that Smith is the, arch opponent of aristocracy

and this attack on primogeniture and entail, for example, in the World of Nations... Right up the street of Tom Payne, for instance. Thomas Payne loved. Again, book three, book four, they provide ballast and they interpret Smith as a radical who's justifying their schemes for, again, abolishing aristocracy, which is the basic idea of the French Revolution. On the other hand, the great conservative think Burke approved him mightily as well.

Well, again, they knew each other, which is obviously the case. So they say. And Burke, again, claimed that Smith, for example, was on his side in the condemnation of Warren Hastings and, again, part of the attack Mercantile Empire. He took it or took up the idea. So the idea is going down two tracks at that stage, on the ones. The radicals, pains taking it up, and Burke at other states. Can we develop how the influence went into policy?

Is that possible? Well, I mean, we mentioned, I mean, certainly that if you like, all the things that went into the 19th century free trade movement and made England the first free trading nation, in a sense, they were congratulating themselves on the centenary, the wealth of nations, about having achieved something that he, being a bit of a pessimist, thought would never be established because of the power of special interests.

but so there's that whole range of economic reform in a way of removing the restrictions and monopolies and privileges and those kinds of things across a wide front but I mean I think that if we're interested in other areas of policy some of the things that are a bit surprising I mean if let me at random disestablish the Church of England not popular subject and hasn't happened.

Require militia training for all members of the society. Men. Yeah, men, all right. Anybody who occupies a professional position in a middle class, I think, should be subject to a public examination. Again, why? Because, in fact, it is against a world which is dominated by patronage. A patronage by which, of course, Smith himself had had to live.

but instead of patronage we should do it by merit. Again, something that took a long time. And you think it's arrived? It's a hope. But if you have, it wasn't as a 90th century, you had actually entrance into the civil service by examination. But you imagine in the 18th century saying of every lawyer, every doctor, and every person that you literally had to go through a public examination,

not a popular idea. what are the things? Well, that'll do for the moment because we're near at the end of the programme. Alan, a shorthand of many people for Smith is that he was the archic of the modern free market economics. Would you say that's... Would you go along with that? Not quite.

I think people see him, they can see what they want in him. That's one of the issues. But I suppose his notion of a system, an interrelated system, that is not subject to weird regulations. that is something that he popularised. And so in shorthand he's viewed as this free trade thinker. But I think if you, you know, there were limits to it. I mean, he, for instance, wanted the shipping industry to be protected

because of defence reasons. He wasn't completely, you know, one of these people at the extreme end of the free trade scale. Richard Wartman. Just to say that the other thing that we need to remember is that he writes so much. beautifully. There's lots of jokes in the wealth of nations. He doesn't do

the things that you expect him to do. But also we have to remember that he burned those papers. He didn't finish the big project. And the theory of moral sentiments and the wealth of nations are both part of this philosophical history of law and government, which was the aim was to make

laws rule, not men. And that great aspiration of Hume and of Smith it didn't, he didn't manage it. Well, thank you very much for taking on so much in the time allotted. Thank you to Helen Paul, Richard Wartmore, and Donald Wynch. And next week we'll be talking about the history of Unix.

Thank you for listening. And the In Our Time podcast gets some extra time now with a few minutes of bonus material from Melvin and his guests. Do you want to say what you'd like to have said? No, I'm just simply that, along with... He's looking for solutions to a problem that he has diagnosed and that he shares with many other people. In a society in which the division of labour is very fine, everybody might be defined by a very narrow range of tasks.

And since we are what we do, there's a danger that, in fact, we become stunted human beings. So he's looking for remedies for that, and obviously education and the militia. But the other thing is you need the arts and you need public financial arts. and he's thinking of this in a Scottish context. All those doer, religious sects, and their miserable, their miserable sort of outlook for life, they need to have a bit of satire directed against them.

They need, and music and dancing, and if it's necessary, the public ought to support those activities. Yes. Why didn't we get that in the programme? No time. Yes, I mean, that's the, you know, that it's, he's so rich. and so many, I mean, the attack on the Oxford professors who are so slovenly...

Well, I'd love to have that in. Because, again, he thinks that because they have a salary... I mean, I think the Oxford professor at the moment are absolutely wonderful and superb. Okay, that's fine, but... Of course. But in those days, and Smith, partly because he was at Bailey Hill and it was accused of being high church

and Jacobite as well. So, and anti... Very much against the kind of person. anti-Scott. So he has a tough time. They find him the claim, no deals of its truths. They find him reading Hume's treaties on human understanding, which again is anti-religious, of course. But he says that because they're salaried,

it means that they really are idle the professors in Oxford because there's no incentive to do a really good job for your students. complete contrast in Glasgow where you are paid by your students. They're going to turn up to your lectures and they'll pay for them. Take care of this line of argument. It goes with the business about conspiracy among

Brisbane. It's not businessmen. There's no special thing about businessmen. Oxford Donns show very clearly the spirit of corporation. If the corporation employs you and regardless of what you do, then, of course, you'll... I think it's the nature of corporations. Yes, exactly.

Any corporation. And that's why he says, again, that governments shouldn't listen to organized merchants, because that's... You're not going to come out with sensible policies for the public good. And that is obviously the aspiration.

I mean, again, there's a lovely... idea of you have to follow what he calls the wisdom of Solon, which is you can't make... Absolutely, but you can't make perfect laws for a perfect world, so you make laws for the second best.

And that again is what you need to aspire to. And obviously the sense of it not being a perfect world, and therefore you have to address that issue directly. That's why again, I mean, reading, reading

and it's worth reading so much of Smith. I mean, it's difficult for us, but it's wonderful stuff. And here's Tom, who's going to bring us some wonderful cups of tea? Thank you. Thank you. Thank you. Thank you. There are many more Radio 4 arts and discussion programmes to download for free.

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