Adam Smith Redux

I decided over the holidays to re-read The Wealth of Nations. When I last read it I think I was in the University of the Pacific but one of the real plusses of the book is that many of its insights are independent of when you read it. As I go back through this marvelous book I expect to make some more comments. This first one is about the teacher who was Smith. He is a key part of the Scottish Entitlement who studied and then taught at the University of Glasgow. His university was a place where professors earned their keep by putting out their hat. Indeed, Edward Gibbon (The History of the Decline and Fall of the Roman Empire) joked that the dons in English Universities, who were salaried, were less prepared for real scholarly work because they were not forced as the Scottish professors were to "sing for their supper." Smith would literally stand at the back of the classroom hat in hand and students would pay a tuition to their instructor.

The Scottish Enlightenment philosophers were heavy influencers of the American Revolution. They laid a groundwork on individual rights. But they mixed a good deal of normative thinking into their descriptive narratives. One of the early presidents of the College of New Jersey (now Princeton) John Witherspoon was a strong influence on James Madison. Witherspoon was attracted to Princeton by some somewhat false promises but then built the place quickly. Madison stayed a year longer after his undergraduate because a) he could not decide about what he wanted to do for a living and b) because Witherspoon offered him the opportunity to study. Witherspoon did a series of lectures over the time of his presidency for key students. They were compiled in a dissertation at Claremont Graduate University by a California State Senator named Jack Scott.

Smith wrote the Wealth of Nations about the same time as the American Revolution. His earlier major work was called The Theory of Moral Sentiments. It was an explanation of the motives and nature of morality. Smith was a moral philosopher and some of the loonies on the right who quote Smith approvingly don't seem to understand that his underlying philosophy was based on a clearly defined set of ethics. Some economists quip that the Wealth of Nations is one of the most quoted and least read works in the field.

To understand the book, many argue that one must know something about the Act of Union which brought Scotland into the United Kingdom a decade and a half before Smith was born. In exchange for integration the Scots were able to break down the tariff barriers that the Scots had had to live with up until then. That represented a significant positive for Scotland and in part Smith's argument in the Wealth were based on an understanding of the extension of the benefits of the more open trade area that came from the Act of Union to a broader universe.

A key point of the Wealth of Nations is his inherent assumption that given the opportunity business people will collude to lessen the effects of competition. At some point in this series, I will write about how clear the examples of the efforts by the entertainment industry's efforts to control digital technology is an example of this kind of collusion.