The Magazine

Smith's Law

The companion to The Wealth of Nations.

Jul 17, 2006, Vol. 11, No. 41 • By P.J. O'ROURKE
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The Theory of Moral Sentiments

by Adam Smith

Cambridge, 446 pp., $70

As usual, free enterprise is under attack. Assaults on laissez-faire are being made by petro-commie Hugo Chávez, by the E.U.'s dirigisme regime, by Vladimir Putin's reassertion of nationalism and socialism--call it National Socialism?--in Russia. Congress thought Dubai had bought Newark and was going to move it to the Persian Gulf. The Treasury Department is having a neo-mercantilist fit over the current acc ount deficit with China. And President Bush, in his last State of the Union address, made the shameful statement that "America is addicted to oil."

But Americans don't get sick and shaky when they're deprived of oil; they get sick and shaky when they pay for it. And the price they pay is artificially inflated by our government's taxes, acquiescence to a monopoly cartel, and restrictions on exploration, drilling, and refinery construction.

The world's political leaders need to be frog-marched back to The Wealth of Nations for a refresher course. The principles therein are straightforward enough. Even politicians should be able to grasp them. Economic growth depends on division of labor. Division of labor depends on freedom of trade. Freedom of trade depends on, in the words of Adam Smith, "the obvious and simple system of natural liberty."

What politicians are incapable of comprehending is the moral underpinning of free enterprise, that "system of natural liberty." Even many of free enterprise's advocates see market freedoms solely in terms of practical economics. The government of China comes to mind. But Adam Smith was not an economist. The discipline hadn't been invented. Adam Smith was a moral philosopher.

The Wealth of Nations was part of a larger enterprise in moral philosophy. The first installment of Adam Smith's great undertaking was The Theory of Moral Sentiments, published 17 years before Wealth. Smith finished an extensive revision of Moral Sentiments the year before he died. He considered it his most important work. The book is not much read or referred to nowadays, but his theories in The Wealth of Nations cannot be understood without The Theory of Moral Sentiments.

Smith devoted most of his career to the project of bettering human existence. A modern person--or a modern person who doesn't wear Birkenstocks--is tempted to laugh. It is a hilariously big job. But most of us have undertaken hilariously big jobs such as raising children. We were lured into the enterprise by the, so to speak, pleasures of conception. New beginnings are always fun. And the prospect of making wholesale improvements in ordinary life was as novel and fascinating in the 18th century as the prospect of making life simpler and less stressful and blocking e-mail spam are today.

Smith set out to discern how people achieve systems of morality, economics, and government and how, by analyzing the way these work, people could better their ethical, material, and political conditions. It was a splendid opportunity to be a blowhard. Consider a recent thinker--a Herbert Marcuse, a Newt Gingrich, an Al Franken--launching into the subject. Fortunately, Smith had a knack for posing deep thoughts without making us cringe. His secret was to be an idealist without taking that impertinent and annoying next step of being a visionary. Smith didn't presume to have a "blueprint for society" and did presume that the ignorant and incompetent builders of society--he and the rest of us--couldn't follow one.

For example, in Wealth Smith denounced the Corn Laws, the British prohibitions on export of grain, as the crass inequity they were (and would prove to be when they starved my family out of Roscommon 70 years later). Then Smith didn't proceed with the rant that we now expect from people who feel themselves to be, a little too obviously, in the right. Instead Smith--keeping the inevitable follies of politics in mind--came to a humble conclusion: "We may perhaps say of it what was said of the laws of Solon, that, though not the best in itself, it is the best which the interests, prejudices, and temper of the times would admit of."

Without this humility, reading in Adam Smith's philosophical project would be as grim as living in Kim Jong Il's philosophical project, North Korea. Smith's humble attitude extended beyond the ideal to ideas themselves, to his amour propre. In an early essay, "The History of Astronomy," Smith wrote that he was "endeavoring to represent all philosophical systems as mere inventions of the imagination, to connect together the otherwise disjointed and discordant phenomena of nature." He went on to chastise himself for agreeing too much with Sir Isaac Newton's physics, making "use of language expressing [their] connecting principles as if they were the real chains which Nature makes use of to bind together her several operations."