How the Scots Invented the Modern World

by Arthur Herman

  As a philosopher and as a friend, Hume made a huge impact on Adam Smith. Smith read and understood him more thoroughly, perhaps, than any other contemporary. His own writings would be inconceivable without Hume’s peculiar take on the “progress” of civil society, and on what an imperfect, trial-and-error process it really is.

  Hume swept away all that was pretentious and sanctimonious from the Scottish intellectual scene. Even his most telling opponent, Aberdeen’s Thomas Reid, acknowledged him to be one of the great philosophers of the age. Smith himself probably would have endorsed the German philosopher Immanuel Kant’s remark on first reading Hume, that it awakened his mind from its “dogmatic slumbers.” Hume had certainly cleared the air of illusions and made it free from cant. But there was still the question of what to build afterwards, and this is what Smith now undertook.

  III

  His starting point brought him back to where Hutcheson and Hume had first diverged. What makes us good? Is morality inborn, as Hutcheson insisted, a gift from God and nature? Or is it something that has to be imposed from outside, as Hume suggested, a system of punishments and rewards that mold us into creatures fit for society?

  As he shuttled back and forth between Edinburgh and Glasgow in the 1750s, lecturing to students at one end and listening to papers at the Select Society at the other, Smith was thinking of ways to resuscitate Hutcheson’s original notion of an innate moral sense. But if Hutcheson had been right in one sense, that morality is something we carry inside us from birth, he had forgotten about the need for what Smith would call the “awful virtues”: discipline, self-restraint, moral rectitude, and righteous anger at wrongdoers. The virtues of the ancient Stoics and of the Calvinist Kirk were just as necessary to life in society as were civility and compassion, because they policed the sometimes volatile frontiers of our dealings with others. How ironic it must have seemed, that the clergyman Hutcheson should overlook their importance, and that the skeptical agnostic Hume should understand how they contained and channeled our most explosive impulses!

  In fact, Smith was trying to build a notion of an inborn moral sense that was more basic and instinctual, and less abstract, than his former teacher’s notion. He eventually found it in what he called “fellow feeling,” a natural sense of identification with other human beings. When we see someone suffer, we suffer. When we see others happy and celebrating their good fortune, it raises our own spirits. To be a social creature, part of the world of men, is to experience the joy and sorrow, and the pleasure and pain, of others.

  This “fellow feeling” and identification with others leads to our first moral judgments. We use it first to judge others’ actions toward us (what makes me feel happy is good, and what makes me sad is bad), and then our own actions toward others, as we watch their reactions. Then, finally, we use it to judge the motivating passions behind those actions (here Smith accepted Hume’s basic point, that human beings were largely governed by their passions, not reason). Society acts as a mirror to our inner self, by reflecting back to us the reactions of others, and becomes our guide to what is good and evil in the world. “Were it possible,” Smith wrote, “that a human creature could grow up to manhood in a solitary place, without any communication with his own species, he could no more think of his own character . . . than of the beauty or deformity of his own face.”

  Bring him into society, however, Smith stated, “and he is immediately provided with the mirror which he wanted before.” He will see that some of his passions—anger, for example, or lust—trigger other people’s disgust and disapproval, while others—bravery in the face of adversity or love or fame—get the opposite response. We learn to adjust our passions accordingly, we “internalize” that approval and disapproval, and concentrate ourselves on those that make us loved by others—and by ourselves.

  H. L. Mencken once defined conscience as a little voice that says “someone might be watching.” For Smith’s Theory of Moral Sentiments, that someone is myself, my social self. “When I endeavor to examine my own conduct,” he wrote, “I divide myself, as it were, into two persons. . . . The first is the spectator, whose sentiments with regard to my own conduct I endeavor to enter into, by placing myself in his situation, and by considering how it would appear to me, when seen from that particular point of view. The second is the agent, the person whom I properly call myself. . . . The first is the judge; the second the person judged of.” The moral human being is by nature a divided self, united by the voice of conscience, which is the voice of others who watch and listen and judge. Postmodern morality tells us constantly, “Don’t be judgmental”—yet Adam Smith was saying that being judgmental is the essence of what makes us moral beings.

  It is also about being accountable to ourselves as well as to others. “Nature, when she formed man for society,” Smith explained, “endowed him with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favourable, and pain in their unfavourable regard.” But again, the approval of others is not enough by itself. We are not by nature entirely “other-directed” beings. We also need to meet the approval of our own inner judging self, which understands when we really are what we approve in other people: honest, trustworthy, generous, compassionate. It is this capacity for self-judgment that, Smith argued, makes us “really fit” for society.

  So being moral requires an interplay of imagination. It demands that we put ourselves in another person’s place, and put another person (someone making judgments) in our place. It leads us to promote the well-being of others, by making them as happy as ourselves—here Hutcheson’s altruistic instincts come back into play. At the same time we want others to leave our own happiness undisturbed—and here Smith gave a more sympathetic account of Hume’s Golden Rule: I’ll leave you alone, if you leave me alone, so that we can both be happy.

  This, then, becomes the mission of good government. “The wisdom of every state or commonwealth endeavors, as well as it can, to employ the force of the society to restrain those who are subject to its authority, from hurting or disturbing the happiness of one another. The rules which it establishes for this purpose, constitute the civil and criminal law of each state . . . [and] a sacred and religious regard not to hurt or disturb in any respect the happiness of our neighbor . . . constitutes the character of the perfectly innocent and just man.” Hutcheson and Hume, at last, find common ground.

  For Adam Smith, our moral life, as well as our cultural life, is a matter of imagination. The richer the inventory of objects for its diversion, and the deeper our own fellow feeling, the happier we become, but also the more we can perceive happiness in others.

  Our imagination, which in pain and sorrow seems to be confined and cooped up within our own persons, in times of ease and prosperity expands itself to every thing around us. We are charmed then with the beauty of that accommodation which reigns in the palaces and oeconomy of the great; and admire how every thing is adapted to promote their ease, to prevent their wants [and] to gratify their wishes. . . . We naturally confound [this ease and beauty] in our imagination with the order, the regular and harmonious movement of the system, the machine or oeconomy by means of which it is produced.

  So already, in the fourth book of the Theory of Moral Sentiments, we meet that crucial term economy, at first in its narrow meaning, referring to the households of the rich and mighty, and how “the pleasures of wealth and greatness . . . strike the imagination as something grand and beautiful and noble, of which the attainment is well worth the toil and anxiety which we are so apt to bestow upon it.” But Smith also employs it in the more modern sense, as the “machine or oeconomy” by which that wealth is produced—in other words, commercial society.

  And here imagination turns out to be the driving wheel of that system as well. Our imagination, the inner picture of ourselves being as rich and comfortable as a Duke of Argyll or a Bill Gates, spurs on our efforts, focusing and directing our energies toward a single purpose. “It
is this deception,” Smith adds (with my emphasis),

  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.

  The rich man is the man with the most fertile imagination, in other words; his eyes really are bigger than his stomach. By devoting all his efforts and those of his employees and tenants to his land or his warehouse or factory, he ends up producing far more than he can consume himself:

  The rich consume little more than the poor [after all, you can drive only one Rolls-Royce at a time] and in spite of their natural selfishness and rapacity, though they mean only their own conveniency [and] their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand [my emphasis] to make the same distribution of the necessarities of life, which would have been made, had the earth been divided into equal portions among all its inhabitants. . . . Thus, without intending it, without knowing it, [the rich] advance the interest of the society, and afford means to the multiplication of the species.

  The Theory of Moral Sentiments made Smith famous. To his dying day, he thought of it as a better book than The Wealth of Nations —and in fact, as we can see, it contains all the seeds of that later work. It won the warm approval of Hume (although he did not change his mind about his own theories). The book also won great praise for its “solidity” and “truth” from Edmund Burke, then a rising member of parliament and author of The Theory of the Sublime, who wrote to Smith that “a theory like yours founded on the Nature of man, which is always the same, will last.” German intellectuals read it with fascination, particularly Immanuel Kant, who asked plaintively, “Where in Germany is the man who can write so well about the moral character?” Voltaire summed up the feelings of many French philosophes when he exclaimed, “We have nothing to compare with him, and I am embarrassed for my dear compatriots.”

  Admiration for the book did not necessarily extend to approval of every idea in it. Some reviewers wanted to know if Smith was saying that we have no higher standard of morality than the one society imposes on us. What if society demands of us actions that are actually evil? Are we condemned to be social conformists forever? Smith replied no, “we soon learn . . . to set up in our minds a judge between ourselves and those we live with,” who weighs our actions according to an impartial standard, so that “real magnamity and conscious virtue can support itself under the disapprobation of all mankind.” But the conformity problem would not go away, and it would haunt every Enlightenment figure who treated morality as essentially a matter of social utility. Instead, it would take a renegade French musician, Jean-Jacques Rousseau, and a former Army chaplain from the Highlands, Adam Ferguson, to break that issue wide open and explore the new ethical horizons that it opened up. The result would be the birth of the Romantic movement,which proposed a different relationship between the inner self and society—one born of conflict rather than cooperation, in which our happiness seems possible only at the expense of others, and vice versa.

  All this seemed a long way off, though, particularly to Smith. His most important work still lay ahead. It was the indirect result of his friendship with the eighteen-year-old Duke of Buccleuch, one of Scotland’s wealthiest aristocrats. The English politician and future Chancellor of the Exchequer Charles Townshend had suggested that Buccleuch take Smith as his tutor for his Grand Tour of Europe (Smith and Hume had given Townshend a copy of the Theory of Moral Sentiments). The Grand Tour was the rite of passage of wealthy adolescent Britons in the eighteenth century. It involved visiting western European cities such as Paris, Amsterdam, Venice, and Rome to taste the artistic, social, and often sexual fruits of the culture of the Continent. It often could last a year or more. Smith, worn out by his teaching and administrative chores at Glasgow (he had become Dean of the Faculty in 1760), happily accepted the invitation, and set out with his young pupil for the Continent in February 1766.

  The reader who expects the trip to have been a fiasco, with the young Buccleuch turning out to be a holy terror, a kind of aristocratic Tom Jones, is going to be disappointed. In fact, Buccleuch seems to have been a sweet, rather shy boy, not overburdened with intellect but serious enough for Smith to give him Hume’s History of England to read on the way. A strong bond of affection and trust developed between them, strong enough that when they returned, Buccleuch offered Smith enough money to quit teaching and to write his next big book—a sort of eighteenth-century “genius grant.” The book Smith completed in 1775 was, of course, his Inquiry into the Nature and Causes of the Wealth of Nations, which appeared in print that following spring.

  It was the logical follow-up to Smith’s earlier lectures on civil and natural law, but also to the themes of his moral theory: How and why do human beings learn to cooperate, and what makes for a constructive, useful life as opposed to a destructive one? Its strictly “economic” chapters, especially in Books One and Two, touched on subjects that certain French thinkers, the so-called Physiocrats, had taken up in their writings. Smith knew their work, and met several of them during his stay in Paris with Buccleuch. However, he does not seem to have taken much of what they said to heart, and he came back from his Paris visit very unimpressed (judging from their letters about Smith, the feeling was mutual). The real inspiration for his subject was his fellow Scots and the work they had done over the past three decades on the history of civil society, of how “commerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals.” Lurking in the background of the Wealth of Nations are Kames, Hume, Robertson, and even Hutcheson. It is not only Adam Smith’s masterpiece. It is also the Summa of the Scottish Enlightenment, a summation of its exploration of the nature of human progress—and its salute to the triumph of the modern.

  Starting with chapter 1, Smith explains how the business of civilization gets done, by isolating the basic principle that explains all social improvement: the division of labor. This is Smith’s term. The idea itself probably originated with David Hume, who called it “the partition of employments.” We use another, perhaps better, word for it: specialization.

  The notion itself is simple. When we concentrate our energy on one task rather than several, we increase our productivity. Instead of herding and fishing and farming for our living, as primitive man or the Highland clansman did, we just farm. The result is we grow more than enough to feed ourselves, enough in fact to sell to others. Later, instead of dividing our time between growing and then bartering or selling our produce, we decide to leave the farming to someone else and concentrate on just buying and selling. We become merchants, and soon discover we can earn far more than the farmers and peasants who sell us the fruit of their labors.

  And so on, at each stage of civil society’s progress. The division of labor, Smith believed, was the inevitable rule everywhere; it occurred at every stage and in every human activity. But its role becomes particularly pronounced in commercial society. As we continue to specialize and become increasingly more productive, the fruits of our labor are no longer things we consume ourselves. They become “commodities,” literally the things that make our lives comfortable, which we buy and sell in exchange for other goods. We start to think about our labor in a new way. We look for ways to improve what we make and save time in making it, in order to sell it at market to get the things we really want. Capitalism is born, the system of economic production behind commercial society, a system whose productivity and inventiveness put all the rest in the shade.

  The reason is that capitalism brings an intellectual as wel
l as an economic change. It alters the way we think about ourselves and about others: we become buyers and sellers, customers and suppliers, who strive to improve the quality and quantity of our output, in order to gratify our needs. Eventually, Smith states, the division of labor produces people who do nothing but think about improvements: engineers such as his friends James Watt and Alexander Wilson, scientists such as Joseph Black, and those “whose trade it is not to do anything, but to observe everything”—philosophers, teachers, and professional managers of every sort.

  The division of labor, in short, applies not just to physical labor, such as growing carrots or selling tobacco or making nails, but to intellectual labor as well. “Each individual becomes more expert in his own particular branch,” Smith explains, “more work is done upon the whole, and the quantity of science is considerably increased by it.” It lays the necessary foundation for technological innovation, as well as the gift of cultural refinement. Society finds space for its white-collar professionals, people who have time to do nothing but write, paint, teach, compose music, count numbers, or plead cases in court, all for the gratification of the rest of our fellow citizens.

  Smith had finally defined the link between commerce and cultural progress, which the rest of the Scottish Enlightenment had written about and celebrated, but not really proved. But he also opened up a broader point, and gestured toward another, often overlooked advantage to living in a modern commercial society. As the fourth stage of human progress, it produces more, in greater quantities, than any of its predecessors. It is so productive, in fact, that it can supply the wants and needs not only of those who work, but of those who don’t. In the early drafts of Wealth of Nations, Smith strongly emphasized this (unfortunately, most of it did not make it to the final published version). He conceded that capitalism generates a great inequality of wealth, with a very few commanding the great bulk of commodities and a great part of the rest sharing what is left. But even so, Smith wanted to know, “in what manner shall we account for the superior affluence and abundance commonly possessed by even the lowest and most despised member of Civilized Society, compared with what the most respected and active savage can attain to.”