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in the Wealth of Nations. . . . The more nimble-witted people gave to its trading rivals the fiscal principles (neglected at home) which furthered the expansion of its commerce.' 1

The discovery of the Lectures, which were compiled before ever he set foot in France, took the bottom out of these and similar insinuations. What a man can say in his lectures is enormously less than what he will write in a book, and what a student can take down in notes is also very much less than the whole. Nevertheless, the scheme and leading notions of the lecture course are those of the Wealth of Nations. There are indeed important additions. One of them, the lengthy and famous chapter on Colonies (Book IV. chap. vii.), was inspired by the imminence of the American crisis; for through his friend Benjamin Franklin, to whom, it is said, he read chapters in manuscript, he had intimate access to current opinion and events in the colonies. Other additions are not less clearly due to his contact with France, for example the account of the Agricultural Systems of Political Economy (Book IV. chap. ix.); the distinction between Productive and Unproductive Labour (Book II. chap. iii.), which, even as qualified by Adam Smith, is untenable; and above all the conception of an annual produce and its division into Wages of Labour, Profits of Stock, and Rent of Land-an addition which, though not essential to the scheme of the work, was of fundamental importance to subsequent economics, settling the form of economic treatises for a century at least. (Cf. Wealth of Nations, Editor's Introduction, xxx.) If we pushed back to those who in their turn influenced the French economists of Adam Smith's acquaintance, we should reach among others a compatriot of his, Richard Cantillon, whose essay on the 'Nature of Commerce at Large,' written 1730-4 and first published in 1755, was pronounced by Stanley Jevons to be the first systematic treatise of political economy. Cantillon was a banker in Paris at the time of John Law and paper money, and he found in land a standard of value less mutable than the money which within a short space he had seen cried up and down, inflated, depreciated, privileged and proscribed. The elder Mirabeau possessed himself of Cantillon's manuscript and borrowed from it. It was at Mirabeau's house that Adam Smith listened to the French economists and filled out his conception of an economic system, probably little dreaming that but for his compatriot those gatherings might never have been held. The ultimate problem, however, for the historian is not the interplay of mind on mind, but the impress of events on human thought; the determination of individual priority in opinion is always less

1 J. H. Rose, William Pitt and National Revival (1911), p. 323.

important than the analysis of the soil in which the body of opinion grows. But if priority is being argued, let us not part lightly from the verdict of one who was to Adam Smith what McCulloch was to Ricardo:-' The leading opinions, which the French Economists embodied and systematized, were, in fact, all of British origin.' 1

3. Characteristics of the Book

It is rash to dissect a work of genius. Nevertheless, at the risk of coming miserably short, we shall try to say why the Wealth of Nations has made an appeal so universal and abiding.

First of all, it has an inspiring philosophy. The note of liberty rumbles through the book, and the author keeps at hand a standard thunder for denouncing particular violations of it,— Evident violation of natural liberty and justice.' Now it is the Statute of Apprentices (I. 123) which causes the thunder to be launched, now the English Law of Settlement of the Poor (I. 142). Now it is a regulation so prosaic as the restriction of private note issue (I. 307), and now a high concern of empireTo prohibit a great people, however, from making all that they can of every part of their own produce, or from employing their stock and industry in the way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind' (II. 83). He hates, as heartily as Doctor Johnson, 'the odious visits and examination of the tax-gatherers' (II. 421); and, himself in his closing years a Commissioner of Customs, he has a sly sympathy for the smuggler, a person who, though no doubt highly blameable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been, in every respect, an excellent citizen, had not the laws of his country made that a crime which nature never meant to be so' (II. 381). Adam Smith denounced the impertinent badges of slavery' imposed by the mother country on the American colonies, and would perhaps have applied the moral of the smuggler to that new prohibition which the American people have seen fit to impose upon themselves.

Secondly, his fellow-feeling makes him see both sides. The balance of his sentences, which lingers so in the reader's mind, accords with the superb balance of his thought. No man had stronger views than he; yet few men have been fairer. In his strength he could afford it. Thus the declamation against restraint of private note issue concludes, 'Such regulations may,

1 Dugald Stewart (1753-1828), Life and Writings of Adam Smith, Collected Works, X. 97.

no doubt, be considered as in some respect a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free as well as of the most despotical (I. 307).

The Wealth of Nations opens with a statement of the advantages obtained from the division of labour; and it is only within the last decade that economists and psychologists have joined forces to study its human disadvantages. But they might well take as their text the following passage from Book V.:

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 exert 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. . . . 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 (II. 267). The passage occurs in the chapter on ' Education,' because these results would occur unless by education they were prevented. Therefore he would have schools for the young and old supported by the State.

In some countries of the New World the conflict of economic interests between town and country is the leading political issue, and the peasants of Russia within recent years have shown the passive but deadly revenge which the grower of produce can take on the townsman who does him violence. Adam Smith did justice to both. He saw that while agriculture was always the most essential industry, yet commerce had been, as a matter of history, the stimulus to agricultural improvement. It is thus that through the greater part of Europe the commerce and manufactures of cities, instead of being the effect, have been the cause and occasion of the improvement and cultivation of the country (I. 390). Admiring the country gentleman and farmer, ' to their great honour, of all people the least subject to the wretched spirit of monopoly' (I. 426), he nevertheless found in the merchant. turned farmer the best of all improvers' (I. 382); and he reminded both that landlords, like all other men, love to reap where they never sowed' (I. 51).

In Adam Smith's day the struggle between capital and labour was young. To combination he was naturally averse, as abridging the scope for individual initiative, and at a later date he would

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probably have shared with Francis Place, the Westminster tailor, the hope that with education and the removal of persecution the desire of the working classes for combination would disappear. But he was as tolerant as Nassau Senior 65 years later was savage: We believe that if the manufacturer is to employ his capital only under the dictation of his short-sighted and rapacious workmen, we shall not retain the industry, the skill, or the capital on which our manufacturing superiority, and with that superiority our power and almost our existence, depends.' 1 So wrote Senior and his colleagues concerning the feeble combinations of starving weavers. Contrast with this the language of the Wealth of Nations:

We rarely hear, it has been said, of the combinations of masters; though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate (I. 68).

Both men love liberty, but one is neutral and the other is partisan. Writing twenty-four years before the prohibiting Act of 1800, Adam Smith supplied in advance the most telling argument for its repeal its inevitable one-sidedness. Writing sixteen years after the enfranchising legislation of 1824-5, Nassau Senior had. learnt nothing, and had not even remembered his Adam Smith. 'They are desperate, and act with the folly and extravagance of desperate men' (I. 69).

Thirdly, he blends history and theory with delicate skill. In what may be considered the artistic climax of the whole work, namely the famous set-piece attack on the Mercantile System, history is his most powerful weapon. Book IV is an historical bombardment, a history of tariffs and bounties and monopolies, concentrated for the delivery of a smashing blow at the economic policy behind which they were entrenched. Two ways of attack were open to him: he might attack mercantilism either as a doctrine or as a policy, and in the end he did both. The first was the more illuminating from the standpoint of theory, because it allowed him to set forth the function of money in the commerce of nations:

To attempt to increase the wealth of any country, either by introducing or by detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families by obliging them to keep an unnecessary number of kitchen utensils (I. 406).

1 Final Report of the Handloom Weavers Commission, 1841, p. 117.

But the second line of attack was more fundamental. For when he wrote, few people of any account could have believed that wealth consisted in money and money alone; and in earlier times, when ready money was scarce, there was a very real justification for the desire to procure the precious metals, as the Jews in many countries of Europe proved to their profit. And Adam Smith seems to have felt this; for in the Conclusion of the Mercantile System,' which first appears in the third edition, he does not revert to the doctrine of the trade balance, but concentrates upon a critical examination of the fiscal devices which, with the ostensible object of enriching the country, had sacrificed the interests of the consumer to those of the manufacturer and merchant.

Essentially fertile, he always gave to his criticism a constructive turn. He set out the case for free trade with a moderation which strengthened the chances of its adoption. Tariff retaliation might be good policy, as policy was understood by that insidious and crafty animal, vulgarly called a statesman or politician' (I. 432), but it seems a bad method of compensating the injury done to certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all the other classes of them ' (I. 433). It might be desirable to introduce freedom of trade only by slow gradations, and with a good deal of reserve and circumspection' (I. 433), but—for reasons which he gives in detail -the disorders occasioned by its sudden introduction would probably be less than was commonly imagined. But Adam Smith's vision reached beyond the coast line of Great Britain. There were things more important than national opulence, and one of these was the settlement of the trouble with America. He pleaded with passion for an imperial union and representation of the colonies in the British parliament: That this union could be easily effectuated, or that difficulties and great difficulties might not occur in the execution, I do not pretend. I have yet heard of none, however, which appear insurmountable' (II. 124). In the closing words of the last book, after he has discoursed on religious instruction and the education of youth and has examined with a technique that is startlingly modern the theoretical incidence of actual taxes, he recurs again to the imperial burden: ' either carry it worthily or drop it is the substance of his charge. And if an England that was accustomed to dream of fortunes beyond imagination in the South Seas and to celebrate victories almost every month in the year, could by no other means be stung into doing the right thing, surely she would pause before the bleak alternative, which was to accommodate her future views and designs to the real mediocrity of her circumstances

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