New Voices on Adam Smith

Published by EH.NET (March 2007)

Leonidas Montes and Eric Schliesser, editors, New Voices on Adam Smith. London: Routledge, 2006. xxi + 364 pp. $145 (cloth), ISBN: 0-415-35696-2.

Reviewed for EH.NET by Jeffrey T. Young, Department of Economics, St. Lawrence University.

George Stigler began his banquet speech at the Glasgow University bicentennial of the publication of the Wealth of Nations with the now frequently quoted salutation, “I bring you greetings from Adam Smith, who is alive and well and living in Chicago.” (quoted in Meek, p. 3) Thirty odd years later the remark remains true, though ironically not in the Economics Department. Of the fourteen young scholars whose work is published in this book, five earned their Ph.D.s at the University of Chicago, none in economics. Indeed of the fifteen only four are economists, despite the book’s placement in Routledge’s Studies in the History of Economics series. This is reflective of the fact that Smith scholarship has largely moved away from seeing WN and its seminal role in the nineteenth century development of economics as a discipline as Smith’s crowning achievement. The focus today is largely on seeing Smith’s system as a whole, of which The Theory of Moral Sentiments is the foundational work. This is even true among economists who now trawl through TMS in search of interesting hypotheses in the new field of behavioral economics (see Ashraf, Camerer, and Lowenstein, 2005). However, it is even more true among philosophers, who now find TMS a rich vein of philosophical insight, whereas previously it was largely unread or misread.

These trends are amply on display in the present volume, as is Smith’s healthy status among a new generation of international academics. Montes and Schliesser are to be commended for assembling a wide-ranging and stimulating set of essays from a talented group of scholars all of whom completed their doctorate since 2000. The book consists of fifteen chapters organized into four parts, which deal respectively with Adam Smith’s sources and influence, moral theory, economics, and theory of knowledge. A book of this sort does not lend itself easily to adequate treatment in a short review. The coverage ranges widely over all aspects of Smith’s work, with particular attention to the relatively neglected essays on the arts, languages, and the history of science.

As an historian of economics, though, I was particularly interested to see what the younger generation is doing with Smith’s economics. The answer is “not much,” although I do not mean this in a negative way at all. The economics section consists of three essays on Smith’s relation to Mandeville, his interpretation and use of Newtonian method in economics, and his analysis of paper money. As the training of professional economists has long since separated itself from mastery of the classics, interest in the analytical material in WN has waned. Leon Montes’s essay on Newtonianism and general equilibrium theory is about the only place where this book touches on topics that have historically been of interest to professional economists. Here he advances the idea that modern general equilibrium theory, by which is meant the axiomatic approach to general equilibrium modeling, has its philosophical roots in French interpretations and adaptations of Newton’s scientific method. Smith, however, absorbed a Scottish Newtonianism that was empirical, inductive, and, in its application to human affairs, historical. Therefore, associating Smith’s invisible hand with the modern theory, say as an early statement of the theorems of welfare economics, reflects a fundamental philosophical misunderstanding of Smith’s application of Newtonian science.

It is not surprising to me that British empiricists and French rationalists would come up with very different readings of Newton. However, I would like to suggest that if we take a broader perspective in terms of what we classify as general equilibrium modeling, there is more under the sun than Walrasian general equilibrium models. Surely Sraffa’s production of commodities qualifies as general equilibrium modeling, as does Marx’s transformation problem. Indeed, there is plenty of general equilibrium reasoning in Smith, which is expressible in simultaneous equations models. The famous beaver and deer case of the early and rude state, which introduces a labor embodied value theory, is surely a general equilibrium model. While I agree wholeheartedly with the thrust of Montes’s paper, that Walrasian general equilibrium falsely sails under a Smithian flag, I do not think we can conclude there is no concept of general equilibrium to be found in Smith. Nor would I preclude the possibility that Smith may have inspired Walrasian modeling in some way, and that modern theories of the automaticity of the market mechanism owe at least some intellectual debt to Smith. After all, one does not need to have a deep understanding of the sources and context of Smith’s book to be stimulated and taught by it. Misunderstanding can lead to insight also.

This book will be of interest primarily to Smith specialists, both economists and non-economists. I believe that essays are perhaps a bit too narrowly focused, and cover a wide range of interesting, but off-beat, topics, that the general historian of economics may not find much of interest here. I must confess, though, that I did not find the essays to be uniformly interesting to me. At times I felt they suffered some from the young scholar’s eagerness to be original and provocative, perhaps stretching a point. It is good to know, however, that Smith is alive and well among a new generation of accomplished scholars. Their depth and breadth of understanding of a quite complex thinker, as well as their passion for Smith’s unique body of work, is very gratifying.

References:

Nava Ashraf, Colin F. Camerer and George Lowenstein, 2005. “Adam Smith, Behavioral Economist,” Journal of Economic Perspectives, 19(3), Summer, pp. 131-146.

Ronald L. Meek, 1977. Smith, Marx and After, London: Chapman and Hall.

Jeffrey T. Young is the A. Barton Hepburn Professor of Economics at St. Lawrence University in Canton, New York. He is the editor of The Elgar Companion to Adam Smith (forthcoming) and his most recent publication is “Adam Smith and New Institutional Theories of Property Rights,” Adam Smith Review 2.