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In the Shadow of Adam Smith: Founders of Scottish Economics, 1700-1900

Author(s):Rutherford, Donald
Reviewer(s):Paganelli, Maria Pia

Published by EH.Net (July 2013)
Donald Rutherford, In the Shadow of Adam Smith: Founders of Scottish Economics, 1700-1900. New York: Palgrave Macmillan, 2012. vii + 344 pp. $40 (paperback), ISBN: 978-0-230-25210-3.

Reviewed for EH.Net by Maria Pia Paganelli, Department of Economics, Trinity University.

Donald Rutherford?s In the Shadow of Adam Smith presents the intellectual wealth of Scotland which generated a large number of economic thinkers who have often been undeservingly overlooked, because of the towering presence of Adam Smith.? The book is an important contribution to the literature on Smith, on the history of economic thought, on Scotland?s intellectual history, as well as, indirectly, on the evolution of ideas more generally.

Smith is generally such an immense figure that we may be tempted to think of him as the only voice of eighteenth century Scotland as far as economics is concerned. Attempts to moderate Smith?s grandeur remind us that he may have just systematized previous knowledge. Rutherford offers us the context in which Smith?s presence grew and his legacy developed. He offers us insight into the wide economic knowledge that Smith used (or did not use), added to (or not), and of which he is (just a) part.

The scholarship present in the book is remarkable, even more so because the book is organized by topic, rather than by time or by authors. The topics covered are trade (international trade, exchange economy, value); money (functions of money, paper credit, banking); public finance (functions of government, taxation, national debt); condition of the people (population, property rights and rent, profits and wages, poverty); condition of the economy (economic growth, economic development); and economic ideology (natural liberty, socialism). And to this, Rutherford adds an appendix with biographical sketches of the major Scottish writers.

Most of the topics chosen bring to light both the strengths and the weaknesses of vision of Smith, given what was written before, during and after his life. Rutherford brings to life the complexity of the debate in Smith?s time and links the complexity of those debates to today?s debates in the literature. I will give an example of both: the debate on population and the debate on poverty.

Smith?s stature seems to shrink a bit when inserted into the complexity of population growth debates. According to Rutherford, Smith, like Richard Cantillon, thought that changes in population were linked to changes in labor demand: higher labor demand would lead to a growth in population. But Smith?s ideas, like those of the writers before him, were based on not much more than speculation, at least for Scotland. The first Census was legislated in 1800. Yet, Alexander Webster (1707-84) started to count the population of parishes and offered an estimate of the population of Scotland in 1750 (1.265 million). Webster was a friend of Robert Wallace (1697-1771), ?the great precursor of Malthus? (p. 151). Hodges (1703), Hutchinson (1755), Ferguson (1767), Kames (1778), Anderson (1782), and Dunbar (1789) seemed preoccupied with a declining population, such as in (the North of) Scotland because they believed that the strength of a country consists in its people, and that population decline is a symptom of unhappiness caused by problems with both subsistence provision and political arrangements.? The opposite fear, of overpopulation, given the slow growth of means of subsistence, was addressed by Lindsay (1736) and Murray (1758). Wallace and Hume debated whether population had increased (Hume) or decreased (Wallace) since ancient times, focusing on moral reasons (government, wars, debauchery, luxury). William Hazlitt (1807) claimed that Wallace was the main source for Malthus (Malthus adds Smith and Hume to Wallace as his sources). James Steuart added his voice to this debate (1767), which included also William Ogilvie (1781), Alexander Campbell (1796-1870), Dugald Stewart (1840), Chalmers (1832), Craig (1814), Grahame (1816), Samuel Read (1829), Ramsay (1836), Alison (1840), and Burton (1849). The general picture that Rutherford offers is that from Scotland we have sophisticated theories of population which rely less on subsistence and more on social and psychological forces, theories which should be seen under their own light outside Smith?s shadow.

Rutherford also offers some short yet pungent engagements of old debates with current debates on Smith. For example, Rutherford tiptoes around the idea that Smith is not as much in favor of the poor as some may describe him today. Smith?s analysis is claimed to be more psychological and his remedies less explicit than some of his fellow Scots. Rutherford mentions Andrew Fletcher of Saltoun (c.1653-1715) who proposed an ?adopt a poor? plan for the rich which provided the ?adopted? poor with a form of slavery cum legal protection. Francis Hutcheson, Smith?s ?never to be forgotten? teacher, suggested that the state should compel the poor to work and to educate their children.? The problem of the idleness of the poor was addressed by David Black (1705), Lindsay (1736), Sinclair (1790), and Craig (1814): public relief encourages idleness; therefore the poor should be given jobs, even useless jobs, in the government sector or in the private sector and paid by government subsidies. The poor could also be given cheap food (Steuart 1769), some land (Ogilvie 1781, Archibald Alison 1840), a one-way ticket to a foreign place, such as North America (Earl of Selkirk 1805, Archibald Alison 1840, Burton 1841), incentives to save in a saving bank (Henry Duncan 1816), charity (Chalmers 1821), or some English-style-like Poor Laws. Samuel Read (1829) proposed a realistic national scheme and is presented as the real champion of the poor. In this context, Smith?s suggestion of labor mobility to solve the problem of poverty and his contemptuous descriptions of the poor seem, Rutherford appears to imply, to somehow weaken Rothschild?s (1992) claim that Smith was a friend of the poor.

With the exception of a section on the invisible hand Adam Smith remains in the background. The section on the invisible hand, on the other hand, feels underdeveloped mostly because it is only about Adam Smith. The rest of the analysis of Smith?s idea remains mounted among other Scottish thinkers.

My only regret about this book is that Scotland is not put into context. Granted, this may require a completely different project. Yet, at least a hint of where Scotland stood compared to the rest of the world of economics, even if only in terms of the number of economic publications compared to other countries, would have completed the picture. This remark should not take away anything from the strengths of the book. As it provides us with detailed economic debates over these two centuries, this volume is a useful and stimulating tool for eighteenth and nineteenth century scholars and scholars of ideas and of their evolution.

Maria Pia Paganelli is co-editor of the Oxford Handbook of Adam Smith (2013).

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Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):18th Century
19th Century