Sympathy and Deception
We have seen that commercial society helped (and continues to help) civility by making the exit from political power bearable given that access to wealth serves as a means to status and comfort other than that of the possession of political power. More important still is the view, present in Montesquieu, that moneymaking is more innocent than the search for power. Maynard Keynes captured this point when commenting on his own social philosophy:
There are valuable human activities which require the motive of money-making and the environment of private wealth-ownership for their full fruition. Moreover, dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money-making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandisement. It is better that a man should tyrannise over his bank balance than over his fellow-citizens; and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative.1
Both these points concern the behavior of members of the elite. But much more is involved, as the social theory of Adam Smith so brilliantly reveals.
Smith is poorly understood. Sociologists know almost nothing about his work. Contemporary economists are nearly as bad by failing to realize the extent to which his system rests on premises far removed from their own. Smith was a general theorist of very great rigor. We will turn to the basic model of commercial society first before considering his view of social development; both these areas contain surprises for anyone imagining Smith to be the proponent of capitalism Chicago-style. But the core of the chapter revolves around his view of the way in which an illusion keeps the mechanism of capitalism working. If balance rather than originality characterizes what follows, compensation is to be found by spending time in Smith’s company.2 The mind is boggled when recognizing that perhaps the two greatest forces of the modern world, science and capitalism, were first theorized by two friends, Hume and Smith, living in Edinburgh in the second half of the eighteenth century. They were not always in agreement.
There are two essential presuppositions to Smith’s basic model of commercial society. The first is outlined in the celebrated opening passage of The Wealth of Nations. Ten men working together, Smith tells us, are capable of producing 48,000 pins in a single day; in contrast, each of those men working alone would only have been able to produce about 20 pins a day. Economic success results from the way in which the division of labor enhances productivity. Adoption of this principle explains why modern society has, in comparison with those of the past, attained a level of universal opulence. But the division of labor will do little good, indeed might be dangerous, unless a second principle is adopted. Human beings have a natural disposition to “truck, barter and exchange,” and this must be let loose before the division of labor can bring its benefits to mankind as a whole. It is worth emphasizing that this last expression is carefully chosen. Smith was one of the earliest theorists of comparative advantage, that is, of the theory that all nations can enter a positive sum game by specializing in those products or industries in which they are specially gifted. He saw no reason why the development of poorer nations should enfeeble richer nations in any absolute sense.
On the basis of these two principles, Smith constructs his argument. We can reconstruct his position by spelling out the various steps that stand as intermediaries between and behind the division of labor and the end result of universal opulence. Three steps are of especial importance. First, Smith goes to great lengths to explain exactly why it is that the division of labor so increases productivity. Specialization allows for a division of function, and thus for an increase in dexterity and expertise. In a nutshell, an increase in human capital is the essential ingredient allowing for improvement within commercial society. The last element at work is an increase in machinery, but it is one that should most certainly not be exaggerated. After all, the first steam locomotives were just being invented in the early 1800s. But the economy that Smith is describing is not an industrial one, and it was certainly one without many factories, the pin-making example having misled many at this point. Indeed, the fact that the sources of power did not yet include the regular use of fossil fuel meant that Smith’s hopes for economic growth in all probability had a distinct ceiling fixed to them: he believed that wealth could be achieved but was far from envisaging the endlessly growing cornucopia of goodies that industrial capitalist society has been able to provide with marked effectiveness after 1945.3
The second step of the argument places the market principle before the division of labor. People will only be moved to divide labor—and to undertake the exercise in productivity just noted—if it is worth their while. The larger the market, the more likely that specialization and opulence will follow. This principle makes it relevant to emphasize yet again that Smith wants commercial society to be as extensive as possible. His principles make him a resolute foe of protectionism of any sort, which he saw as a tax on the consumer of the worst sort, as it diminished the general welfare of society in order to look after lazy special interests.
Behind the market principle stands, finally, something more basic still: namely, the principle of self-interest. Altruism, love, and benevolence do not, Smith commented, lead us to exchange products with a baker; rather, it is the fact that such exchanges can be mutually satisfying that encourages people to enter the market. At this point, Smith has some resemblance to Bernard Mandeville, whose celebrated poem “The Fable of the Bees” suggested that private vices could lead to public virtues. It is not conscious agency that causes economic development but diffuse and decentered processes. Everyone thinks of their own self-interest, but, almost miraculously, a hidden hand—effectively the laws of supply and demand—ensure that society as a whole benefits. This seems to raise a fundamental problem. If everyone thinks of themselves, how can social cohesion be possible? It can be said immediately that Smith’s social theory deals with this problem, as we will soon see, in the most high-powered manner imaginable.
One fundamental reason why Smith so strongly endorsed the commercial society of his time was that it created wealth. The principal tradition of political thought with which he was faced stressed the need to maintain virtue in order for a society to avoid corruption. The survival of Greece and of republican Rome depended on the virtue and, above all, the physical fitness of citizen soldiers, something that classical authors held was likely to be undermined by luxury. Smith helped effect a revolution in human thought by insisting that wealth was more important than virtue. The principal reason for this was absolutely straightforward: classical society had been based on slavery, and this was offensive to the central members of the Scottish Enlightenment. Just as David Hume felt that every human being had the same sensations, so too did Smith believe that a good society should provide a sufficiency for every person. This implicit egalitarianism—which must not be confused with endorsement of the practices of modern democratic processes—is evident throughout The Wealth of Nations. Early in the book Smith writes glowingly about the social, economic, and demographic progress in North America, where people have a great deal of control over their lives, and contrasts it in this way with the situation in China:
China has been long one of the richest, that is, one of the most fertile, best cultivated, most industrious, and most populous countries in the world. It seems, however, to have been long stationary…. The poverty of the lower ranks of people in China far surpasses that of the most beggarly nations in Europe. In the neighbourhood of Canton many hundred, it is commonly said, many thousand families have no habitation on the land, but live constantly in little fishing boats upon the rivers and canals. The subsistence which they find there is so scanty that they are eager to fish up the nastiest garbage thrown overboard from any European ship. Any carrion, the carcase of a dead dog or cat, for example, though half putrid and stinking, is as welcome to them as the most wholesome food to the people of other countries. Marriage is encouraged in China, not by the profitableness of children, but by the liberty of destroying them. In all great towns several are every night exposed in the street, or drowned like puppies in the water.4
The tones of disgust are unmistakable.
But it is not just the wealth that commercial society produces that leads Smith to endorse it so strongly. He is impressed with the fact that humans living within the market are far less likely to be corrupt than the mainstream political theory of his time allowed. Intelligence and information are necessary if one is to learn of one’s best opportunities. In other words, life in the market encourages independence of mind and judgment. The deference of more traditional societies is seen by Smith to be morally repulsive: it is necessary for an individual to scrape before the powerful as a dog cringes before its master when wanting a bone, hoping that such a display will produce patronage and favor. We shall hear more about the moral improvements brought about by commerce later.
Given the misuse of Smith by academics and politicians, it is worth emphasizing that Smith had, in line with the points already noted, considerable sympathy with labor. In purely economic terms, he favored high wages; this was scarcely surprising given that the engine of commercial society was its human capital. This is not to say that he failed to recognize the fundamental differences between capital and labor: on the contrary, in the bluntest terms he declared that the conflict of interest between them over the social product was inevitable and irremediable. Still, he had many more hostile things to say about merchants, most famously in his declaration that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices.”5 Such a sentiment makes it necessary to inquire into both the emergence and the maintenance of commercial society.
The bare bones of Smith’s account of the emergence of commercial society are as follows. The collapse of the Roman Empire led to the creation of a militaristic society in which physical power ruled life chances. In these circumstances, it made much more sense to keep one’s property in land rather than in trade:
The man who employs his capital in land, has it more under his view and command, and his fortune is much less liable to accidents than that of the trader, who is obliged frequently to commit it, not only to the winds and the waves, but to the more uncertain elements of human folly and injustice, by giving great credits in distant countries to men, with whose character and situation he can seldom be thoroughly acquainted.6
The lack of security of property diminished the activities of traders in the most obvious way:
In those unfortunate countries, indeed, where men are continually afraid of the violence of their superiors, they frequently bury and conceal a great part of their stock, in order to have it always at hand to carry with them to some place of safety, in case of their being threatened with any of those disasters to which they consider themselves as at all times exposed.7
Still worse, from the point of view of economic improvement, was the fact that feudalism discouraged agricultural development. Smith ruefully tells us that men love to domineer, and that this instinct was well accommodated in the manorial system—with consequent diminution of productive capacity.
If the prevalence of political power was characteristic of nearly all life within the agrarian era, a uniqueness of Europe stood out even during what Smith would certainly have felt to be the Dark Ages. Historical sociology normally shows, in Smith’s opinion, that progress takes place first in the country, with towns taking a very secondary role. Europe differed in Smith’s view, and in that of later scholars, in having towns that were centers of genuine production.8 This economic vitality was encouraged by political autonomy. The kings who ruled Europe after the fall of Rome were exceedingly weak in relation to their leading nobles. In order both to raise revenue and to create a balance against their nobilities, they granted charters of autonomy to the towns. Feudalism was a “power system” in which any excess wealth was most rationally invested in retainers—whose military prowess would then allow robbery and the acquisition of territory. But the productive city provided luxuries upon which the aristocracy came to spend their monies. It is this that both Hume and Smith felt undermined feudalism:
But what all the violence of the feudal institutions could never have effected, the silent and insensible operation of foreign commerce and manufactures gradually brought about. These gradually furnished the great proprietors with something for which they could exchange the whole surplus produce of their lands, and which they could consume themselves without sharing it either with tenants or retainers. All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons. For a pair of diamond buckles, perhaps, or for something as frivolous and useless, they exchanged the maintenance, or what is the same thing, the price of the maintenance of a thousand men for a year, and with it the whole weight and authority which it could give them. The buckles, however, were to be all their own, and no other human creature was to have any share of them; whereas in the more antient method of expence they must have shared with at least a thousand people. With the judges that were to determine the preference, this difference was perfectly decisive; and thus, for the gratification of the most childish, the meanest and the most sordid of all vanities, they gradually bartered their whole power and authority.9
One particular point in this passage needs explication. We have seen that Smith felt that the security of property was a necessary precondition for commercial society. Kings had tried to achieve this, but they had been defeated by the power of their overmighty subjects: what mattered more than conscious plans were the unintended consequences of vanity. Smith’s underlining of the point drips with irony:
A revolution of the greatest importance to the publick happiness, was in this manner brought about by two different orders of people, who had not the least intention to serve the publick. To gratify the most childish vanity was the sole motive of the great proprietors. The merchants and artificers, much less ridiculous, acted merely from a view to their own interest, and in pursuit of their own pedlar principle of turning a penny wherever a penny was to be got. Neither of them had either knowledge or foresight of that great revolution which the folly of the one, and the industry of the other, was gradually bringing about.10
The emergence of commercial society was thus as fortuitous as was the acceptance of toleration, the result of a curious concatenation of circumstances rather than of any sort of historical inevitability, let alone the result of conscious plans by humans.
What is perhaps most striking about Smith’s theory is the extent to which it is not economistic in character. One way in which this is so concerns the nature of the causal pattern that Smith identified. Smith certainly felt that a rather restrained state was necessary for the economy to flourish. But behind that political factor stands an economic factor—namely, that these luxuries, produced in cities, undermined the feudal order. But behind that factor stands another political consideration: the parcelization of sovereignty after the fall of Rome that led to cities gaining autonomy in the first place. Thus, the rise of commercial society is seen as a long interaction of political and economic factors, at once autonomous and intertwined. But another point of still greater importance is beginning to become apparent. Smith’s ultimate values were liberal: he endorsed commerce in the largest part because it went with liberty, that is, a softer and more regular political system which undermined political arbitrariness. Commercial society was but an effective means toward the end of softer political rule.
The notion of the restrained state is not as straightforward as it might seem; accordingly, it will need and receive further elucidation in a moment. Before doing so, however, we will now turn our attention to the core of Smith’s contribution. Analytical clarity can be enhanced by asking how Smith expected a society so clearly based on self-interest to hold together. This is what German scholars called “the Adam Smith problem,” the apparent contradiction between the stress on self-interest in The Wealth of Nations and the totally different view of human motivation in his earlier The Theory of Moral Sentiments. Are the two books complementary, or are we dealing here with mere intellectual schizophrenia?
The Theory of Moral Sentiments is a measured and confident book in which Smith was profoundly convinced that the society of his time was bringing about civilization.
That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it…. By the imagination we place ourselves in his situation, we conceive ourselves enduring all the same torments, we enter as it were into his body, and become in some measure the same person with him…. His agonies … begin at last to affect us, and we then tremble and shudder at the thought of what he feels.11
Human beings are seen here largely in naturalistic terms, as subject to passions or drives beyond their conscious control. But the passions in question are genial rather than bestial.
This account of the nature of sympathy lies behind the description of the way in which human beings form moral judgments. Smith is a classical representative of what has usefully been dubbed the emotivist theory of ethics, which claims that we approve of certain types of conduct because they make us feel contented. What this leads to in The Theory of Moral Sentiments is the argument that propriety is valued most highly in social life. It is clear that we do not ourselves like to feel disturbed by excess of any sort on the part of others and we appreciate joy rather than pain, as well as the familiar rather than the novel. Crucially, our empathetic capacities are such that we realize that loud and aggressive behavior on our part would cause our fellow citizens similar discomfort. Accordingly, we judge our own behavior from the point of view of an abstract “universal spectator”: anything that might disturb the peace of mind of this mythical figure is avoided. It is important to stress that Smith’s account goes a little further than this to allow for punishment.12 We feel for the person who has been injured by bad behavior and allow punishment to appease his resentment. Crucially, in this there is an implicit egalitarianism at work here, and one that goes well beyond Hume, whose moral principles are based largely on concerns for public utility. “When a single man is injured, or destroyed, we demand the punishment of the wrong that has been done to him,” Smith argued, “not so much from a concern for the general interest of society, as from a concern for that very individual who has been injured.”13
This account of the psychology of human beings can easily be named. The celebrated American sociologist David Riesman argued in The Lonely Crowd that the American character was changing—and implicitly deteriorating—as the “inner-directed” individualism of the early Puritan founders was being replaced by the “other-directedness” of a consumerist mass society.14 Smith is an exponent of what Riesman so disliked: propriety, order, and good sense distinctively rule over any expressions of radical individualism. This is intellectually remarkable. Many theorists presume that the rise of capitalism was related to the rise of individualism. This was not so for its foremost theorist. The fundamental human motivation for Smith is the desire to be approved and admired. This can be particularly clearly seen in the passages in which he analyzes rank—that is, class. It is natural, he maintains, for humans to admire and to seek to reach the same level as those above them.
This leads him to distance himself further from the principle of utility at the core of Hume’s thought. The way in which he does so is—given the interest we know the later The Wealth of Nations shows in opulence—positively startling. Smith asks himself if there is any real basis to the widespread belief that the possession of an increasing number of goods actually increases happiness. His answer is a resounding negative:
In the languor of disease and the weariness of old age, the pleasures of the vain and empty distinctions of greatness disappear…. Power and riches appear then to be, what they are, enormous and operose machines contrived to produce a few trifling conveniences to the body, consisting of springs the most nice and delicate, which must be kept in order with the most anxious attention, and which in spite of all our care are ready every moment to burst into pieces, and to crush in their ruins their unfortunate possessor. They are immense fabrics, which it requires the labour of a life to raise, which threaten every moment to overwhelm the person that dwells in them, and which while they stand, though they may save him from some smaller inconveniences, can protect him from none of the severer inclemencies of the season. They keep off the summer shower, not the winter storm, but leave him always as much, and sometimes more exposed than before, to anxiety, to fear, and to sorrow; to diseases, to danger, and to death.15
This might seem a conclusive argument against all kinds of economic striving. But it was not for Smith. The fact that the human imagination is wrong in believing that riches bring happiness is profoundly to be welcomed:
It is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe, have turned the rude forests of nature into agreeable and fertile plains, and made the trackless and barren ocean a new fund of subsistence, and the great high road of communication to the different nations of the earth.16
One oddity of this naturalistic account of human nature, to be discussed in a moment, is that some seem to have escaped subjection to nature’s laws: wise philosophers can see through deceptions, even if they regard their workings as eminently beneficial. At this point, however, it is important to spell out the complete workings—social, psychological, and economic—of commercial society. Smith is very far from holding a simple and singular view of deception. He was well aware, to adopt modern terms, that goods themselves benefit their possessor most of all in terms of status. From this derives Smith’s image of the workings of commercial society. It is that of an endlessly moving escalator in which people chase those above them, so as to increase the respect of their fellows, only to find that those above them have moved on—or that there is another step on the escalator waiting to be mounted. A key assumption of this model is that of deference: it is part of human nature to seek to imitate those above one rather than to pull them back by socialist legislation of one sort or another. It is this that is the larger use of deception. Constantly running after a disappearing target is scarcely a recipe for human happiness, but it is, in Smith’s view, one that will ensure both economic growth and, most important, social cohesion. The prospect of death will be diminished by the distractions involved in seeking distinction. How very great is the gap between civility and romanticism! Social peace follows competitive emulation.
So there is no “Adam Smith problem.” The assumptions of his social psychology underlie the more limited concern with self-interest in The Wealth of Nations. The reason why self-interest is so strong is that the acquisition of wealth is the only way in which one can impress one’s fellows. Keeping up with the Joneses makes commercial society tick. This broad judgment should not, however, hide both differences of emphasis or even changes between the two treatises, and two of these can usefully be mentioned. First, the savage irony that Smith directs at the masters of mankind has its origin in a distinctive view of morality—again, a prescriptive view of morality held somewhat awkwardly given that The Theory of Moral Sentiments is supposed to be a naturalistic account, a social psychology rather than an ethics.17 What is particularly striking is that Smith values benevolence and altruism, and in part approves of capitalism, since increasing wealth will allow one to exercise charity. In all this, he is a long way from Mandeville: the workings of commercial society might be blind rather than planned, but the purpose of the whole was to civilize human beings—and certainly not to encourage their vices. Second, The Theory of Moral Sentiments makes much, almost in consequence, of the virtue of prudence, which is set very clearly against vanity. At this point one can detect a certain change in Smith’s view of the social classes of his own day. Prudence is seen in the earlier book as residing among merchants and traders, who are, accordingly, best seen as the means by which commercial society will be established and maintained. The Wealth of Nations has a very different view. So, finally, we must turn to Smith’s view of the state and to his account of theory and practice to show how he felt that the beneficial workings of commercial society could be maintained.
Dugald Stewart reported that Smith believed that a combination of “peace, easy taxes and a tolerable administration of justice” would allow commercial society to flourish.18 Does this mean that Smith should be seen simply as the prophet of laissez-faire, believing, as did later neoclassical economists and their opponent Karl Marx, that the state should wither away? Many recent accounts of Smith, particularly by radical neoliberals, have made this claim. There is something to the claim, but a proper appreciation shows that Smith’s desire for a state restrained in some ways is counterbalanced by his desire for one that is rather active in other matters. That a “tolerable” administration of justice is no small thing can be demonstrated without more ado by considering the functions of the state.
Most obviously, Smith had absolutely no illusions that a commercial society could survive without defense, nor did he think that the spread of commerce would itself guarantee peace. Smith seems equally traditional, and properly the favorite of the radical Right, in specifying the key internal function of the state.
Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.19
Against this sentiment must be set both his sympathy for labor and his dislike of the rich. This can be seen particularly clearly in his insistence that the state should provide public works necessary for society as a whole and for commerce in particular. One interesting passage even suggests that higher taxes at turnpikes should be levied on the ostentatiously rich: Smith’s admiration was limited to the sober and intelligent members of the commercial aristocracy of his time, and his dislike of the vanity of mere wastrels was strong. More important, Smith envisaged a rather large role, in spite of some of his later defenders, for the state in the public provision of infrastructure and education. Crucially, basic education should be generally available, and indeed demanded: both economy and society would benefit from a trained and active people. Education enlarged horizons that might well be cramped by the division of labor. In a famous passage, Smith suggested that endless specialization might result in a sort of “mental mutilation” that would make men less vigorous because so thoroughly cramped. Education was one answer to that problem. But there was another answer, and it is one that brings him close to the tradition of civic virtue to which he was generally opposed.20 The state should insist on service in a militia. Even if not militarily necessary, active service would encourage fitness and so ensure that mental horizons were not too limited. There is a final function of the state. In an extremely interesting discussion of religion, he took issue with Hume’s theory, best expressed in his The Natural History of Religion, that the way to combat dangerous enthusiasm was to allow an established church to stay in place, from which position it would become more and more inoffensive as more and more corrupt. Smith disliked monopolies, including that of the Anglican establishment, and proposed instead controlling enthusiasm by means of pluralism. He allowed—almost advocated—radical, enthusiastic, and intolerant sects, but merely wished that there be many of them: multiplication would lead to a balance of power, and balance to the removal of any threat to society. But not everything could be left to this mechanism. Most obvious, the state needed to provide frequent public entertainment:
The state, by encouraging, that is by giving entire liberty to all those who for their own interest would attempt, without scandal or indecency, to amuse and divert the people by painting, poetry, musick, dancing; by all sorts of dramatic representations and exhibitions, would easily dissipate, in the greater part of them, that melancholy and gloomy humour which is almost always the nurse of popular superstition and enthusiasm. Publick diversions have always been the objects of dread and hatred, to all the fanatical promoters of those popular frenzies.21
And a final antidote to enthusiasm remains the traditional one: that of the study of science and philosophy.
These considerations return us to the occasions when we have found Smith allowing for the importance of wisdom and reason, even though commercial society is seen to work essentially as a mechanical system. This is not an occasional inconsistency. The Wealth of Nations is advertised as “a handbook for the legislator,” and book 4 of that treatise makes it particularly clear why this is necessary. Merchants and traders were, as noted, no true friends to the market principle: they sought to gain special privileges from the state that would give them rents sufficient to avoid adjusting to the laws of supply and demand. These demands found their larger expression in the policy of mercantilism. This seemed to ensure security but in fact did no such thing: its restraints on trade diminished the general good. The public suffered as the few benefited. These comments show once again Smith’s criticism of what the propertied might do. Hence, an absolutely key presupposition of his whole system is that the state remains in the hands of the wise and disinterested. If both rich and poor are to be served, the state must never be the mere instrument of the bourgeoisie. It must remain autonomous, free from special interests and thereby capable of thinking in the long term rather than the short. It is for these people that Smith wrote. This political class was the mechanism by which Smith felt his vision could be realized.
The power and sophistication of Smith’s thought seem ever more impressive. To this appreciation must be added the continuing relevance of much of his analysis of capitalism. Smith was right to insist that the secret of capitalist society was productivity. Equally, his idea that cohesion within capitalism is achieved by means of chasing the person higher up on a never-ending escalator remains a meaningful image to this day. “Keeping up with the Joneses” remains central to modern society. Smith’s general viewpoint has received striking confirmation from modern sociology. Most of us do not conduct our lives or lay political claims on the basis of abstract justice; rather, we compare ourselves with, and seek to catch, those to whom we are closest.22 Finally, there is everything to be said for his concern with wealth. This is not merely a matter of providing decent sufficiencies. Recent research has shown that periods of economic growth do not just conceal the cracks of social conflict but rather bring in their train increased tolerance of all sorts.23 So capitalism can have varied beneficial effects. But one must issue a warning at this point: the character of this social order can vary between generosity and meanness. It is also well to remember that Smith envisaged a version in which those at the bottom would have both negative resisting power and considerable skill—a world, in other words, based on a good deal of social inclusion.
1 J. M. Keynes, The General Theory of Employment, Interest and Money ([1936] London: Macmillan for the Royal Economic Society, 1973), 374.
2 The scholarship on Smith is now exceptionally high-powered. I have relied on D. Winch, Adam Smith’s Politics (Cambridge: Cambridge University Press, 1978) and Riches and Poverty: An Intellectual History of Political Economy in Britain, 1750–1834 (Cambridge: Cambridge University Press, 1996); C. Griswold, Adam Smith and the Virtues of Enlightenment (Cambridge: Cambridge University Press, 1999); N. Phillipson, Adam Smith: An Enlightened Life (New Haven, CT: Yale University Press, 2010); M. L. Frazer, The Enlightenment of Sympathy: Justice and Moral Sentiments in the Eighteenth Century and Today (Oxford: Oxford University Press, 2010); R. P. Hanley, Adam Smith and the Character of Virtue (Cambridge: Cambridge University Press, 2009); and F. Forman-Barzilai, Adam Smith and the Circles of Sympathy: Cosmopolitanism and Moral Theory (Cambridge: Cambridge University Press, 2010).
3 E. A. Wrigley, People, Cities and Wealth: The Transformation of Traditional Society (Oxford: Oxford University Press, 1987) and Continuity, Chance and Change: The Character of the Industrial Revolution (Cambridge: Cambridge University Press, 1990).
4 A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations ([1776] Oxford: Clarendon Press, 1976), book 1, chapter 8, 89–90.
5 Ibid., book 1, chapter 10, 145.
6 Ibid., book 3, chapter 1, 377–78.
7 Ibid., book 2, chapter 1, 285.
8 M. Finley, “The Ancient City: From Fustel de Coulanges to Max Weber and Beyond,” Comparative Studies in Society and History 19 (1977).
9 Smith, Wealth of Nations, book 3, chapter 4, 418–19.
10 Ibid., book 3, chapter 4, 422.
11 Smith, The Theory of Moral Sentiments ([1759] Oxford: Oxford University Press, 1982), part 1, section 1, chapter 1, 9.
12 Frazer, Enlightenment of Sympathy, chapter 6.
13 Smith, Theory of Moral Sentiments, part 2, section 2, chapter 3, 90.
14 D. Riesman, with N. Glazer and R. Denney, The Lonely Crowd: A Study of the Changing American Character (New Haven: Yale University Press, 1950).
15 Smith, Theory of Moral Sentiments, part 4, chapter 1, 182–83.
16 Ibid., book 4, chapter 1, 183–84.
17 Smith does allow for the possibility that sentiments can be corrected, but his main prescriptive point concerns the role of the statesman who “contents himself with moderating what he cannot annihilate without great violence” (Theory of Moral Sentiments, part 6, chapter 2, 232–33).
18 D. Stewart, “Account of the Life and Writings of Adam Smith, LL.D.,” in A. Smith, Essays on Philosophical Subjects ([1793] Oxford: Clarendon Press, 1980), 322.
19 Smith, Wealth of Nations, book 5, chapter 1, 715.
20 Hanley and Forman-Barzilai have emphasized Smith’s move toward the tradition of civic virtue in his later years as he became increasingly anxious about social cohesion, with the sentiments involved being visible in the final additions to the 1790 edition of The Theory of Moral Sentiments.
21 Smith, Wealth of Nations, book 5, chapter 1, 796.
22 W. G. Runciman, Relative Deprivation and Social Justice: A Study of Attitudes to Social Inequality in Twentieth-Century Britain (London: Routledge and Kegan Paul, 1966).
23 B. Friedman, The Moral Consequences of Economic Growth (New York: Alfred A. Knopf, 2005).