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Adam Smith in His Time and Ours
Counter to the popular impression that Adam Smith was a champion of selfishness and greed, Jerry Muller shows that the Inquiry into the Nature and Causes of the Wealth of Nations maintained that markets served to promote the well-being of the populace and that government must intervene to counteract the negative effects of the pursuit of self-interest. Smith's analysis went beyond economics to embrace a larger "civilizing project" designed to create a more decent society.
263 pages, Paperback
First published November 9, 1992
About the author
Jerry Z. Muller
11 books45 followersJerry Z. Muller is professor of history at the Catholic University of America in Washington, DC.
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Displaying 1 - 6 of 6 reviews
August 9, 2020
This short volume is a great, medium-weight introduction to Adam Smith. After a brief bio, Muller explains the core concepts of both The Theory of Moral Sentiments and The Wealth of Nations, taking pains to articulate the differences in the intended audiences of the titles. The closing chapters review major critiques and reinterpretations (many unintentional) of Smith. Muller's explanations of Smith's motives and beliefs make me admire Smith even more. Very happy to have read this, finally.
October 6, 2024
Jerry Z Muller is, it would seem, a confirmed capitalist, a free market Smithian. “As countries around the world attempt the great leap forward into capitalism, they become aware of the social discipline and work-orientation it demands. The link of self interest to mutual concern expressed by the sales clerk's 'Can i help you?' and 'Have a nice day' is often scorned—except by those who have lived in societies where sales clerks, for lack of institutional incentives, habitually ignore potential customers.”
Miller seems like a very decent, and highly intelligent, individual who is, with Adam Smith in His Time and Ours assisting the rest of us to understand Smith, a very decent and highly intelligent individual.
Smith was baptised in 1723 and died in 1790 so his life coincided with the Enlightenment and the early portion of the Industrial Revolution, a period of extraordinary change and of intense debate, and he lived amongst the intellectual ferment of Edinburgh. His father died before Smith’s birth but had been a prominent Edinburgher, and his mother came from a distinguished local family so, despite his father’s absence, he lived a comfortable life and, with his mother’s encouragement, early became recognised for his scholarship. As was the case for many Scots intellectuals, and there were many of them, Smith was dedicatedly Scots but did not fight against the Act of Union, and made the most of what England offered.
Smith began by studying philosophy and remained interested in the discipline throughout his life. Muller provides an interesting background to the merging of ethics and economics, explaining that, for the Romans, great legal store was placed on protection of property and the accumulation of wealth. Whereas Aristotelean and Christian ideas opposed mercantilism. In the middle ages, as Europe’s economy expanded, a more nuanced approach to profit-making and money-lending developed, supporting the expansion of manufacturing and trade, while also seeking to meet community needs.
However, “It was by no means taken for granted in the 18th century that legislators should seek to improve the lot of common people. That material well-being was morally desirable was disputable; that it ought to extend beyond the elite was almost subversive.” For Christians, abstinence, privation, and humility were desirable, but not luxury. But others argued argued that ascetic self denial contributed nothing to social cooperation, and material prosperity was a prerequisite for civilization.
“Christian tradition had viewed the pursuit of self-interest as a passion and hence part of man's animal nature. For Smith, it was the pursuit of self interest through the exchange of the fruits of labour that set man off from the animals and gave him his specifically human dignity.”
Given the ethical dimension to his work, there has been much conjecture on Adam Smith’s religious posture. He seems not to have had any strong commitment to a church, nor to have been a proselytising unbeliever. Muller states that “His conception of man was not as an intrinsically good creature corrupted by society, nor as an irredeemably evil creature except for the grace of God. His project was to take man as he is and to make him more like what he is capable of becoming, not by exerting government power and not primarily by preaching, but by discovering the institutions that make men tolerably decent and may make them more so.”
So there was a sort of secular humanism to him, I suppose.
One of his major contributions to Economics was probably his insistence that international trade could benefit all, so it should not be inherently competitive, or at least not to a cut-throat degree. He argued that nations should welcome others’ prosperity, thus contributing to international peace, and that tariffs were counter-productive. He thought the opening of trade with Asia should benefit European and Asian consumers, but had in fact only benefited the East India Company which the government was protecting.
It was at this point that he established principles which later led to his being assumed to be against all government interference. “Smith showed that time and again legislation intended to boost the production or the price of some commodity through government bounties had failed, or had produced the opposite of the intended effect, because its framers had misjudged its impact.” “Smith valued the market most because it promoted the development of cooperative modes of behaviour and because it made men more self-controlled and more likely to subordinate their social passions to the needs of others. In short, it made men more 'respectable' in their behaviour.”
Well, I suppose he could not be expected to anticipate Russian oligarchs or Chinese or American techno-billionaires.
It is a mistake, however, to view him as a blind optimist, beaming benignly through a rose-tinted monocle. (although he does seem to have owned such a monocle: “The market also promotes prudence, discipline in the pursuit of self-interest, and the ability to defer short-term gratification for long-term benefits.”) Then again, “While in commercial society promotion is based on 'merit and abilities,' in aristocratic and court society it is based on flattery and 'the ability to please.”)
“A recurring motif in Smith’s thought is that man is a 'weak and imperfect creature' and that most of us are far from perfection. We can require people to conform to certain standards without admiring them for doing so. And when they go beyond those standards, we ought to esteem them. But to expect such behaviour of most people is to chase a chimera. This notion of two levels of morality—one common and attainable by many, the other admirable but rare—was a stoic theme reiterated with many variations in the 18th century.” “His complaint against earlier philosophers and moralists was that they had devoted too little attention to a third category of affections—the selfish passions, such as the desire for attention and praise. These passions are not intrinsically antisocial, Smith argued. Indeed they can even be admirable when pursued according to the rules of justice so that they do not cause injury to others.”
“Smith called for relatively little direct government control of individual behaviour not because he regarded man as naturally good but because he believed that the passions should be disciplined by a variety of nongovernmental institutions. One of these institutions is the market,“ “Smith disagreed with Hobbes’s idea that “the orderliness of social life depended on government control, a view which made obeying the sovereign’s laws the essence of virtue.” “The challenge for the legislator is to control the merchant for the sake of the public good by eliminating trade restraints which serve particular interests and by channelling the merchant's activities through the competitive market so as to meet the needs of consumers
There was always a strong moralising element to Adam Smith’s ideas so he praised 'those who are contented to walk in the humble paths of private and peaceable life' guided by 'temperance, decency, modesty, and moderation… industry and frugality.'” He saw the family as the major moral educator and opposed boarding schools and private schools’ GAP year, the Grand Tour. He opposed the imbalance of power in marriage, but on that basis opposed easy divorce; he supported only legitimate children inheriting.
I found Muller’s account of Smith’s anti-slavery fascinating: “He describes contemporary slave traders and slave owners as 'the refuse of the jails of Europe,... wretches who possess the virtues neither of the countries which they come from, nor of those which they go to, and whose levity, brutality, and baseness, so justly expose them to the contempt of the vanquished.' His analysis of slavery, whether or not it was economically sound, casts light on his view of less extreme forms of subservient relations. He maintained that slavery, as practised in the British colonies in the West Indies and North America, was actually less economically efficient than the use of free labour. The maintenance of the slave was managed by his master, the maintenance of the free labourer by the labourer himself. The rich slave owner was less likely to develop the habits of frugality than the labourer.” “The institution of slavery had persisted into his own day, Smith reasoned, because 'the pride of man makes him love to dominate... Wherever the law allows it, and the nature of the work can afford it... he will generally prefer the services of slaves to that of freemen.' The reason slavery was most common in enterprises where profits were high was that only under conditions of high profit could proprietors afford so uneconomical a source of labour.”
I must say that I always wonder how it is that slavery, which required the purchase of the asset – the slave – and then required subsistence-upkeep and control of the asset could have been economically more advantageous than employment and payment of a salary. My only plausible explanation has so far come down to the power of domination.
These days, Adam Smith is often cited as the paragon of laissez-faire liberalism. But, Muller suggests, he argued “against government involvement less as a matter of principle than a matter of strategy, and he was willing to depart from that strategy when there were compelling reasons for government regulation, as in the case of banking, currency, and even interest rates.” He favoured progressive taxation, placing the burden on those with more property; user tolls for roads and bridges; and he argued that low paid, repetitive work makes the workers dull, and the government should rectify this. It was essential for government in a commercial society to provide for the common defence, for a legal system to protect person and property, and for the infrastructure necessary for commerce.
I came away from this introduction with great respect for a profound thinker who sought pragmatic rather than ideological solutions to society. I struggled to think of many who could match him today. This is an excellent book.
Miller seems like a very decent, and highly intelligent, individual who is, with Adam Smith in His Time and Ours assisting the rest of us to understand Smith, a very decent and highly intelligent individual.
Smith was baptised in 1723 and died in 1790 so his life coincided with the Enlightenment and the early portion of the Industrial Revolution, a period of extraordinary change and of intense debate, and he lived amongst the intellectual ferment of Edinburgh. His father died before Smith’s birth but had been a prominent Edinburgher, and his mother came from a distinguished local family so, despite his father’s absence, he lived a comfortable life and, with his mother’s encouragement, early became recognised for his scholarship. As was the case for many Scots intellectuals, and there were many of them, Smith was dedicatedly Scots but did not fight against the Act of Union, and made the most of what England offered.
Smith began by studying philosophy and remained interested in the discipline throughout his life. Muller provides an interesting background to the merging of ethics and economics, explaining that, for the Romans, great legal store was placed on protection of property and the accumulation of wealth. Whereas Aristotelean and Christian ideas opposed mercantilism. In the middle ages, as Europe’s economy expanded, a more nuanced approach to profit-making and money-lending developed, supporting the expansion of manufacturing and trade, while also seeking to meet community needs.
However, “It was by no means taken for granted in the 18th century that legislators should seek to improve the lot of common people. That material well-being was morally desirable was disputable; that it ought to extend beyond the elite was almost subversive.” For Christians, abstinence, privation, and humility were desirable, but not luxury. But others argued argued that ascetic self denial contributed nothing to social cooperation, and material prosperity was a prerequisite for civilization.
“Christian tradition had viewed the pursuit of self-interest as a passion and hence part of man's animal nature. For Smith, it was the pursuit of self interest through the exchange of the fruits of labour that set man off from the animals and gave him his specifically human dignity.”
Given the ethical dimension to his work, there has been much conjecture on Adam Smith’s religious posture. He seems not to have had any strong commitment to a church, nor to have been a proselytising unbeliever. Muller states that “His conception of man was not as an intrinsically good creature corrupted by society, nor as an irredeemably evil creature except for the grace of God. His project was to take man as he is and to make him more like what he is capable of becoming, not by exerting government power and not primarily by preaching, but by discovering the institutions that make men tolerably decent and may make them more so.”
So there was a sort of secular humanism to him, I suppose.
One of his major contributions to Economics was probably his insistence that international trade could benefit all, so it should not be inherently competitive, or at least not to a cut-throat degree. He argued that nations should welcome others’ prosperity, thus contributing to international peace, and that tariffs were counter-productive. He thought the opening of trade with Asia should benefit European and Asian consumers, but had in fact only benefited the East India Company which the government was protecting.
It was at this point that he established principles which later led to his being assumed to be against all government interference. “Smith showed that time and again legislation intended to boost the production or the price of some commodity through government bounties had failed, or had produced the opposite of the intended effect, because its framers had misjudged its impact.” “Smith valued the market most because it promoted the development of cooperative modes of behaviour and because it made men more self-controlled and more likely to subordinate their social passions to the needs of others. In short, it made men more 'respectable' in their behaviour.”
Well, I suppose he could not be expected to anticipate Russian oligarchs or Chinese or American techno-billionaires.
It is a mistake, however, to view him as a blind optimist, beaming benignly through a rose-tinted monocle. (although he does seem to have owned such a monocle: “The market also promotes prudence, discipline in the pursuit of self-interest, and the ability to defer short-term gratification for long-term benefits.”) Then again, “While in commercial society promotion is based on 'merit and abilities,' in aristocratic and court society it is based on flattery and 'the ability to please.”)
“A recurring motif in Smith’s thought is that man is a 'weak and imperfect creature' and that most of us are far from perfection. We can require people to conform to certain standards without admiring them for doing so. And when they go beyond those standards, we ought to esteem them. But to expect such behaviour of most people is to chase a chimera. This notion of two levels of morality—one common and attainable by many, the other admirable but rare—was a stoic theme reiterated with many variations in the 18th century.” “His complaint against earlier philosophers and moralists was that they had devoted too little attention to a third category of affections—the selfish passions, such as the desire for attention and praise. These passions are not intrinsically antisocial, Smith argued. Indeed they can even be admirable when pursued according to the rules of justice so that they do not cause injury to others.”
“Smith called for relatively little direct government control of individual behaviour not because he regarded man as naturally good but because he believed that the passions should be disciplined by a variety of nongovernmental institutions. One of these institutions is the market,“ “Smith disagreed with Hobbes’s idea that “the orderliness of social life depended on government control, a view which made obeying the sovereign’s laws the essence of virtue.” “The challenge for the legislator is to control the merchant for the sake of the public good by eliminating trade restraints which serve particular interests and by channelling the merchant's activities through the competitive market so as to meet the needs of consumers
There was always a strong moralising element to Adam Smith’s ideas so he praised 'those who are contented to walk in the humble paths of private and peaceable life' guided by 'temperance, decency, modesty, and moderation… industry and frugality.'” He saw the family as the major moral educator and opposed boarding schools and private schools’ GAP year, the Grand Tour. He opposed the imbalance of power in marriage, but on that basis opposed easy divorce; he supported only legitimate children inheriting.
I found Muller’s account of Smith’s anti-slavery fascinating: “He describes contemporary slave traders and slave owners as 'the refuse of the jails of Europe,... wretches who possess the virtues neither of the countries which they come from, nor of those which they go to, and whose levity, brutality, and baseness, so justly expose them to the contempt of the vanquished.' His analysis of slavery, whether or not it was economically sound, casts light on his view of less extreme forms of subservient relations. He maintained that slavery, as practised in the British colonies in the West Indies and North America, was actually less economically efficient than the use of free labour. The maintenance of the slave was managed by his master, the maintenance of the free labourer by the labourer himself. The rich slave owner was less likely to develop the habits of frugality than the labourer.” “The institution of slavery had persisted into his own day, Smith reasoned, because 'the pride of man makes him love to dominate... Wherever the law allows it, and the nature of the work can afford it... he will generally prefer the services of slaves to that of freemen.' The reason slavery was most common in enterprises where profits were high was that only under conditions of high profit could proprietors afford so uneconomical a source of labour.”
I must say that I always wonder how it is that slavery, which required the purchase of the asset – the slave – and then required subsistence-upkeep and control of the asset could have been economically more advantageous than employment and payment of a salary. My only plausible explanation has so far come down to the power of domination.
These days, Adam Smith is often cited as the paragon of laissez-faire liberalism. But, Muller suggests, he argued “against government involvement less as a matter of principle than a matter of strategy, and he was willing to depart from that strategy when there were compelling reasons for government regulation, as in the case of banking, currency, and even interest rates.” He favoured progressive taxation, placing the burden on those with more property; user tolls for roads and bridges; and he argued that low paid, repetitive work makes the workers dull, and the government should rectify this. It was essential for government in a commercial society to provide for the common defence, for a legal system to protect person and property, and for the infrastructure necessary for commerce.
I came away from this introduction with great respect for a profound thinker who sought pragmatic rather than ideological solutions to society. I struggled to think of many who could match him today. This is an excellent book.
February 2, 2023
For anyone interested in modern (late-stage) capitalism and how it interacts with government and societal institutions, this book is a real gem. Muller decries the blanket association of laissez-faire capitalism with Adam Smith's name utilizing a wealth of both primary and secondary sources, and through the historical lens of Smith's life and work.
At the end of the day, Smith was no more a laissez-faire capitalist than he was a socialist. But his words have been co-opted by far too many proponents of big-business believing him to have declared that all government interference in markets is decidedly "uncapitalist." On the contrary, Smith believed that government and social institutions should design their structures based on what's best for the public good. In fact, he believed basically everything we do as humans, businesses, and societies should be structured toward the public good, and he spent his life working to figure out what that looked like and how it would work. At the time, that may have meant relaxing restrictions on imports and letting the market "do its thing," but he would likely be rolling over in his grave if he heard his name being used to defend lax government policy that benefits large corporations at the expense of the people.
To truly apply Smith's social and economic genius to our modern systems, we'd be designing policy that works to strengthen communities and social ties, and brings more wealth to more people--even to the detriment of large businesses. And were Smith alive today, I believe he'd been leading the charge to do just that: to reign in the corporate greed and control at the expense of our communities that has defined late-stage capitalism writ large.
At the end of the day, Smith was no more a laissez-faire capitalist than he was a socialist. But his words have been co-opted by far too many proponents of big-business believing him to have declared that all government interference in markets is decidedly "uncapitalist." On the contrary, Smith believed that government and social institutions should design their structures based on what's best for the public good. In fact, he believed basically everything we do as humans, businesses, and societies should be structured toward the public good, and he spent his life working to figure out what that looked like and how it would work. At the time, that may have meant relaxing restrictions on imports and letting the market "do its thing," but he would likely be rolling over in his grave if he heard his name being used to defend lax government policy that benefits large corporations at the expense of the people.
To truly apply Smith's social and economic genius to our modern systems, we'd be designing policy that works to strengthen communities and social ties, and brings more wealth to more people--even to the detriment of large businesses. And were Smith alive today, I believe he'd been leading the charge to do just that: to reign in the corporate greed and control at the expense of our communities that has defined late-stage capitalism writ large.
June 6, 2022
Jerry Z. Muller provides a thorough and balanced look at the thought of Adam Smith in his accessible "Adam Smith in His Time and Ours." Smith, like George Orwell, is a thinker who has been appropriated and misappropriated over the years by a variety of writers and politicians. Muller's book provides a well-argued corrective.
Employing both original and secondary sources, Muller lays out the Neostoic origins of Smith's thought and places it within the context of the Scottish Enlightenment. The resulting synthesis demonstrates that Smith was not a single-minded ideologue, but a man concerned with the forces necessary for the sustenance of a decent society.
Smith believed that self-interest was a passion that could be channeled for the benefit of all if legislators knew their proper role and designed institutions to better society as a whole. Muller addresses Smith's consideration of the coordinating function of markets, the unintended consequences that often result from legislation, the role of family and religion in society, and the limits of government regulation.
In today's environment, this study is a must read.
Employing both original and secondary sources, Muller lays out the Neostoic origins of Smith's thought and places it within the context of the Scottish Enlightenment. The resulting synthesis demonstrates that Smith was not a single-minded ideologue, but a man concerned with the forces necessary for the sustenance of a decent society.
Smith believed that self-interest was a passion that could be channeled for the benefit of all if legislators knew their proper role and designed institutions to better society as a whole. Muller addresses Smith's consideration of the coordinating function of markets, the unintended consequences that often result from legislation, the role of family and religion in society, and the limits of government regulation.
In today's environment, this study is a must read.
July 28, 2012
For a while I've been looking for a good intro to Adam Smith, and in this book I've found it. It sweeps aside the mythical and ideological images we have of Smith and gives an excellent summary of what he actually wrote and thought in the context of his own times as a moral philosopher and a student of political economy. It closes by offering a credible account of what Smith, or a faithful "Smithian," would have to say about social and economic issues facing the world today.
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September 23, 2010Adam Smith in His Time and Ours by Jerry Z. Muller (1995)
Displaying 1 - 6 of 6 reviews