An optimistic observation by Adam Smith

[George H. Smith]

While reading through Adam Smith's Wealth of Nations for the umpteenth time, I happened across a passage that I had highlighted years ago and used in my four Knowledge Products scripts on this wonderful classic. The relevance of Smith's observation to our current economic woes should be obvious.

A word of explanation. This passage appears in Smith's discussion of the French Physiocrats, early free market advocates with flawed premises. The founder of this school was François Quesnay (1694-1774), physician to Madame de Pompadour and Louis XV. Having gained an international reputation in medicine with the publication of five books, Quesnay (or Quesnai, as Smith spells it) acquired his interest in economic theory late in life, publishing his first articles on the subject in Diderot’s Encyclopedia at age 62. The publication, in 1758, of Quesnay’s Tableau Économique signaled the beginning of the physiocratic movement.

Smith here objects to the idea that a nation with a mixed economy is doomed, and that prosperity is possible only under a condition of perfect liberty. Of course, Smith did not deny that a government can devastate an economy, but he also understood that the motive of self-interest often functions as a strong antidote to interventionist policies, so there is always some cause for optimism.

This is Smith at his commonsensical best.

Some speculative physicians seem to have imagined that the health of the human body could be preserved only by a certain precise regimen of diet and exercise, of which every, the smallest, violation necessarily occasioned some degree of disease or disorder proportioned to the degree of the violation. Experience, however, would seem to show that the human body frequently preserves, to all appearances at least, the most perfect state of health under a vast variety of different regimens; even under some which are generally believed to be very far from being perfectly wholesome. But the healthful state of the human body, it would seem, contains in itself some unknown principle of preservation, capable either of preventing or of correcting, in many respects, the bad effects even of a very faulty regimen. Mr. Quesnai, who was himself a physician, and a very speculative physician, seems to have entertained a notion of the same kind concerning the political body, and to have imagined that it would thrive and prosper only under a certain precise regimen, the exact regimen of perfect liberty and perfect justice. He seems not to have considered that, in the political body, the natural effort which every man is continually making to better his own condition is a principle of preservation capable of preventing and correcting, in many respects, the bad effects of a political œconomy, in some degree, both partial and oppressive. Such a political œconomy, though it no doubt retards more or less, is not always capable of stopping altogether the natural progress of a nation towards wealth and prosperity, and still less of making it go backwards. If a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered. In the political body, however, the wisdom of nature has fortunately made ample provision for remedying many of the bad effects of the folly and injustice of man, in the same manner as it has done in the natural body for remedying those of his sloth and intemperance.

(Wealth of Nations IV.ix.28)

Ghs

[Brant Gaede]

The man was a modern writer for an ancient audience.

--Brant

[George H. Smith]

The man was a modern writer for an ancient audience.

--Brant

Murray Rothbard had a serious bug up his butt about Adam Smith. In his 2-volume history of economic thought, Rothbard claims that Smith "created nothing" and actually set back economic science 100 years.

Smith's technical economic theory is obviously antiquated and mistaken in some respects, but it is not nearly as bad as Murray made it out to be. In any case, the primary value for modern readers lies in other parts of WN. Smith's critique of the "balance of trade" doctrine -- a staple of mercantilism and the traditional rationale for protectionism -- remains unsurpassed to this day.

Ghs

[Mikee]

Excellent quote. It resonates with the optimist. I searched Amazon for Adam Smith and found many editions, some of the Kindle editions are very cheap, some free! Any particular recommendations? Sadly, I have no Adam Smith in my library.

[George H. Smith]

Excellent quote. It resonates with the optimist. I searched Amazon for Adam Smith and found many editions, some of the Kindle editions are very cheap, some free! Any particular recommendations? Sadly, I have no Adam Smith in my library.

The best and must-have edition of WN is the Glasgow University Press edition. The introduction and critical notes are invaluable. This edition has been reprinted in two high quality softcover volumes by Liberty Fund for a super-reasonable $20. See:

http://catalog.liber...&product_id=805

I don't know if this edition can be downloaded for Kindle, but you can access the entire text online at:

http://oll.libertyfu...e=220&Itemid=28

and

http://oll.libertyfu...e=200&Itemid=28

A problem with the online version is that it does not include the lengthy "General Introduction" by Campbell and Skinner. I suspect this omission was due to copyright issues.

Ghs

[George H. Smith]

Mikee,

I highly recommend the 4 tapes on the Wealth of Nations (around 6 hours total) that I wrote for Knowledge Products c. 1986. These are now available (in two parts and 4 CDs) from Blackstone Audio. They are on sale for $18.00 total. See:

http://www.blackston...alth+of+nations

I worked very hard for months on the scripts, and I ended up with a mini-book of around 180 pages. You will find in this presentation one of the best introductions to Adam Smith and the Wealth of Nations available, if I do say so myself. The first two scripts deal with the Scottish Enlightenment and with some of Smith's noneconomic views. The last two scripts cover the text of the Wealth of Nations specifically.

This is a plug, obviously, but I no longer receive any royalties from this project, so my motives are not economic.

If you are not familiar with the KP format, listen to the samples.

Ghs

[sjw]

Smith's error is that he neglects to recognize that whereas that the natural, normal state of good health of a human body is readily observable in our context (and his), the unintended consequences of interfering with an economy are insidious. For example, the interference of government in medicine has definitely removed decades from many people's lives, and that's just one field. I'm not a big fan of Rothbard, and I haven't read much of Adam Smith, but if Smith brings the same lack of vision of cause and effect in the economic realm to his other writing as to this, then Rothbard is spot on.

Shayne

[George H. Smith]

Smith's error is that he neglects to recognize that whereas that the natural, normal state of good health of a human body is readily observable in our context (and his), the unintended consequences of interfering with an economy are insidious. For example, the interference of government in medicine has definitely removed decades from many people's lives, and that's just one field. I'm not a big fan of Rothbard, and I haven't read much of Adam Smith, but if Smith brings the same lack of vision of cause and effect in the economic realm to his other writing as to this, then Rothbard is spot on.

So you think that Adam Smith "neglects to recognize" that "the unintended consequences of interfering with an economy are insidious"? And you reached this conclusion after reading a single paragraph that has nothing to do with this subject?

Following your lead, I offer the following criticisms of some other people: Jefferson fails to mention the rights of life, liberty, and the pursuit of happiness. Marx fails to mention that capitalism exploits the working class. Gandhi fails to mention nonviolent resistance.

Need I go on, or do you get the point?

Ghs

[George H. Smith]

Mikee,

I highly recommend the 4 tapes on the Wealth of Nations (around 6 hours total) that I wrote for Knowledge Products c. 1986. These are now available (in two parts and 4 CDs) from Blackstone Audio. They are on sale for $18.00 total. See:

http://www.blackston...alth+of+nations

I worked very hard for months on the scripts, and I ended up with a mini-book of around 180 pages. You will find in this presentation one of the best introductions to Adam Smith and the Wealth of Nations available, if I do say so myself. The first two scripts deal with the Scottish Enlightenment and with some of Smith's noneconomic views. The last two scripts cover the text of the Wealth of Nations specifically.

This is a plug, obviously, but I no longer receive any royalties from this project, so my motives are not economic.

If you are not familiar with the KP format, listen to the samples.

Ghs

I just noticed that Blackstone Audio also carries "Learning About Liberty: The Cato University Home Study Course," complete for $60.

I wrote most of the scripts for this series.

See:

http://www.blackston...ook.cfm?id=4574

Most of these CD's are recycled Knowledge Products tapes. Each set originally contained two 90-minutes tapes. Among these I wrote numbers 2-6, and part of #8. These include Thomas Paine, Adam Smith, John Locke, and J.S. Mill.

I also wrote three new sets specifically for this Cato series. These are #1 (The Ideas of Liberty), #10 (Classical Liberalism), and #12 (The Modern Quest for Liberty, which includes a discussion of Ayn Rand, along with Isabel Paterson and Rose Wilder Lane). Jeff Riggenbach narrated these presentations.

I regard "The Ideas of Liberty" as among the best things I have ever written. In a 90 page manuscript, I covered a wide variety of topics, including controversies over the nature of coercion, the nature of history and its importance to libertarian thought, the ideas of spontaneous order and unintended consequences, natural rights versus utilitarianism, and much more.

Ghs

[Brant Gaede]

Smith's error is that he neglects to recognize that whereas that the natural, normal state of good health of a human body is readily observable in our context (and his), the unintended consequences of interfering with an economy are insidious. For example, the interference of government in medicine has definitely removed decades from many people's lives, and that's just one field. I'm not a big fan of Rothbard, and I haven't read much of Adam Smith, but if Smith brings the same lack of vision of cause and effect in the economic realm to his other writing as to this, then Rothbard is spot on.

So you think that Adam Smith "neglects to recognize" that "the unintended consequences of interfering with an economy are insidious"? And you reached this conclusion after reading a single paragraph that has nothing to do with this subject?

Following your lead, I offer the following criticisms of some other people: Jefferson fails to mention the rights of life, liberty, and the pursuit of happiness. Marx fails to mention that capitalism exploits the working class. Gandhi fails to mention nonviolent resistance.

Need I go on, or do you get the point?

Ghs

Regarding the example of medicine, government has taken decades off the lives of many individual people, not to mention damaging the health and happiness and well being of tens of millions, but in the aggregate the huge advances so far in extending average human lifetime have come about because of sanitation. Some people are genetically predisposed to live into their nineties in relatively good health--I'm one of those--but many don't make it succumbing decades earlier to cardiovascular and other diseases. The trick in medicine is not to get people like me another ten years, but to get most people into their nineties too, and why not as continuing productive members of society? Many blue collar occupations require relatively early retirement from the stress and strain of those jobs and many white collar jobs cause stress too that also shortens lives. Advances in technology and productivity will be taking more stress out of people's lives generally and so extend their lives completely outside of medical advances. Generally the world is getting better and better for its human inhabitants in spite of any current travails and I see no reason why this will stop unless there is a worldwide agricultural disaster thanks to the evil Monsanto corporation in bed with governments or a comet or asteroid strike. I don't think the Yellowstone volcanic caldera blowing up and destroying much of the United States will derail human advancement. That's the boat the human race is on.

--Brant

[Brant Gaede]

dup deleted

[sjw]

Need I go on, or do you get the point?

Ghs

Perhaps not. Perhaps you could explain to me what is accomplished by conveying the idea that mucking around with the economy is just nicks and pricks and not an insidious destruction of human potential.

Brant has no vision. I think that may partly be due to the fact that he is not an engineer, and can't see the true potential of humanity. We are being utterly strangled to death right now. What we have is a kind of feudalism. The serfs evidently won't notice how rotten it is until something magical happens and they are set free. I see Smith's remarks here as furthering serfdom; indeed, note Brant's remarks, which to me appear to be the remarks of a happy slave.

Shayne

[George H. Smith]

Need I go on, or do you get the point? Ghs

Perhaps not. Perhaps you could explain to me what is accomplished by conveying the idea that mucking around with the economy is just nicks and pricks and not an insidious destruction of human potential.

Whoever said this? Certainly not Adam Smith. The harmful and sometimes devastating consequences of government intervention are a dominant and recurring theme in the Wealth of Nations. Smith's theory of unintended consequences had enormous influence; it is one of the themes for which WN is best remembered.

Thus your critique of Smith is based on pure ignorance. You might as well complain that the Bible never mentions God.

Ghs

[sjw]

Thus your critique of Smith is based on pure ignorance. You might as well complain that the Bible never mentions God.

Ghs

I already admitted I hadn't read much of Smith. I was pointing out that this fragment supports Rothbard's position (as if that needed to be said -- I really wonder how you can reliably comprehend piles of books when you can't even follow the logic of a few simple posts here).

Shayne

[Mikee]

Ghs,

Thanks for the recommendations. I ordered part 1 of your wealth of nations audio CD's. Given I commute 35-40 minutes each way a friend at work has been touting books on CD's to make the commute easier, now I'll give it a try. I also downloaded a Kindle unabridged version of WN.

I'm reminded of the tribute to Robert A. Heinlein published in "The Freeman" July 1997:

"I believe in my whole race, he declared. Yellow, white, black, red, brown. In the honesty, courage, intelligence, durability, and goodness of the overwhelming majority of my brothers and sisters everywhere on this planet. I am proud to be a human being. I believe that we have come this far by the skin of our teeth. That we always make it just by the skin of our teeth, but that we will make it. Survive. Endure. I believe this hairless embryo with the aching, oversize brain case and the opposable thumb, this animal barely up from the apes will endure. Will endure longer than his home planet—will spread out to the stars and beyond, carrying with him his honesty and his insatiable curiosity, his unlimited courage and his noble essential decency."

I agree.

[Brant Gaede]

Need I go on, or do you get the point?

Ghs

Perhaps not. Perhaps you could explain to me what is accomplished by conveying the idea that mucking around with the economy is just nicks and pricks and not an insidious destruction of human potential.

Brant has no vision. I think that may partly be due to the fact that he is not an engineer, and can't see the true potential of humanity. We are being utterly strangled to death right now. What we have is a kind of feudalism. The serfs evidently won't notice how rotten it is until something magical happens and they are set free. I see Smith's remarks here as furthering serfdom; indeed, note Brant's remarks, which to me appear to be the remarks of a happy slave.

Shayne

I'm not a slave and not happy right now. I'm a fighter and have always been one and always will be one. There's a difference between the struggle with one's present context and knowing long term in a general way that human progress in the aggregate will continue. Technology itself may prevent the establishment of an overt fascist state here, for instance. We're getting serious intimations about that in the Middle East and elsewhere right now.

Please stop gratuitously insulting me by telling people what kind of person you think I am. You just make yourself look bad.

--Brant

[sjw]

Please stop gratuitously insulting me by telling people what kind of person you think I am. You just make yourself look bad.

--Brant

My point is not to insult you. But I think your and George's spin on the Adam Smith quote is consistent with that of a slave mentality. Any systematic interference with individual liberty is a vicious and destructive poison, and I see no reason to focus on any possible upside.

Shayne

[George H. Smith]

Thus your critique of Smith is based on pure ignorance. You might as well complain that the Bible never mentions God. Ghs

I already admitted I hadn't read much of Smith. I was pointing out that this fragment supports Rothbard's position (as if that needed to be said -- I really wonder how you can reliably comprehend piles of books when you can't even follow the logic of a few simple posts here). Shayne

The quote I posted from Smith has absolutely nothing to do with Rothbard's criticism of Smith, which focused on Smith's theory of value. Nor does the quote I posted in any way deny the harmful effects, including the unintentional consequences, of government intervention.

Stop wasting my time.

Ghs

[George H. Smith]

Please stop gratuitously insulting me by telling people what kind of person you think I am. You just make yourself look bad. --Brant

My point is not to insult you. But I think your and George's spin on the Adam Smith quote is consistent with that of a slave mentality. Any systematic interference with individual liberty is a vicious and destructive poison, and I see no reason to focus on any possible upside. Shayne

That is the message you got from Adam Smith's remarks? Maybe Smith's Scottish burr made it impossible for you to understand him.

Ghs

[sjw]

Stop wasting my time.

Ghs

In your long lifetime as an advocate of individual liberty, where along the way did you learn that doling out commands has any kind of worthwhile effect? (I could have framed this more concisely but have decided to refrain from posting crude language).

Shayne

[Brant Gaede]

Please stop gratuitously insulting me by telling people what kind of person you think I am. You just make yourself look bad.

--Brant

My point is not to insult you. But I think your and George's spin on the Adam Smith quote is consistent with that of a slave mentality. Any systematic interference with individual liberty is a vicious and destructive poison, and I see no reason to focus on any possible upside.

Shayne

Now you are being ridiculous. At least Ba'al skips the psychologizing.

--Brant

[Brant Gaede]

(George: I may have every issue of "Libertarian Review" ever published. Do You have any interest? Also, something called "Frontlines.")

--Brant

[Mikee]

Mikee,

I highly recommend the 4 tapes on the Wealth of Nations (around 6 hours total) that I wrote for Knowledge Products c. 1986. These are now available (in two parts and 4 CDs) from Blackstone Audio. They are on sale for $18.00 total. See:

http://www.blackston...alth+of+nations

I worked very hard for months on the scripts, and I ended up with a mini-book of around 180 pages. You will find in this presentation one of the best introductions to Adam Smith and the Wealth of Nations available, if I do say so myself. The first two scripts deal with the Scottish Enlightenment and with some of Smith's noneconomic views. The last two scripts cover the text of the Wealth of Nations specifically.

This is a plug, obviously, but I no longer receive any royalties from this project, so my motives are not economic.

If you are not familiar with the KP format, listen to the samples.

Ghs

I started the first CD "Wealth of Nations" this morning and it is excellent. Listening to these stories, quotes, anecdotes and history lessons along with summaries of Adam Smiths ideas will make reading the original much more enjoyable, and doable. Thanks very much for the recommendation George.

[Mikee]

Damn. Loved the first CD, listened to it twice. Couldn't get the second one to play. Checked it when I got home, the disk is cracked. Really thin, cheap disk. I probably cracked it trying to get it out of the holder with one hand while driving with the other. I'd like to find a podcast of these lectures to load on my mp3 player. I haven't tried ripping these tracks to my audio library, I should have done that first. Excellent, excellent content in the first CD. I really enjoyed it, made me feel good all day after listening to it. Injecting a little rationality into my life evidently agrees with me. Wish the disks weren't so cheap, that's the first time I've ever broken a CD, ever.