Journaltalk - Adam Smith and Conservative Economics

Adam Smith and Conservative Economics

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  • Emma Rothschild
Volume Number 45
Issue Number 1
Pages 74-96
Publication year 1992

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About The Economic History Review

Publisher Blackwell Publishing
Grouping social sciences
Categories Economics, Economic History

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  1. Here Emma Rothschild examines the various schools of interpretation of Adam Smith’s works that emerged shortly after his death. Specifically, she looks at three incidents where Smith’s ideas were used to support a particular policy or school of thought. Starting with the idea that Smith was, at least in a way, an indirect supporter of the French Revolution movement, she then discusses how an early biographer attempted to fundamentally redefine Smith’s understanding of freedom, Her final example shows how certain philosophers and statesmen in England attempted to confirm their own policies and positions by making reference to Smith and saying that his writings were in line with their policies.

    At this point an individual could justifiably ask what all the fuss is about. Does it really matter if Smith would have been a supporter of the French revolution, labor laws, or any other piece of trivia a historian is trying to suggest is important? They might continue and say that Smith opened up the door to modern economics and it is really not important to immerse oneself into the squabbles of the late 18th century. I answer, however, that it does matter and that Rothschild’s piece allows readers today to better understand the state of the world we now find ourselves in. Generally, when Adam Smith’s name is thrown around it is used to talk about the early development of the free market system and economics. If the average individual, and I daresay the average economist, is pressed to provide more details about who Adam Smith was and what his contributions were, they might make vague references to The Wealth of Nations and then completely skip over the career of Smith or even his earlier work on moral sentiments. The general lack of knowledge about Smith’s corpus or about even the general orientation of his work can lead to contradictory interpretations and is in the end what Rothschild’s essay points to.

    Economists, like individuals in many other fields, operate with many assumptions about how individuals operate. The modern turn has brought in primarily utility or Paretian ideas of maximization. While this move is justifiable at least from the perspective of making problems more tractable it fails to make a strong connection to the ideas of the individual that Smith would have assumed. Smith spilled much ink in the Theory of Moral Sentiments on the motivations and dispositions of the individual. Today there are, just like Rothschild’s examples, different schools of thought within the academy on how to correctly interpret Smith and apply his principles to current problems. The fact that these differences exist must be pointed out and once identified a real discussion must take place to understand what Smith is really saying, whether what Smith has said fits with our current knowledge, and only then can we really come to an understand of what liberty is and how it should be enshrined in our civilization. Rothschild’s essay provides a good first step in that direction.

    posted 07 Oct 2010 by Steve Kunath

  2. I’m struck by a sense of deja vu in the treatment of Adam Smith by political philosophers after his death – indeed, it is much the same treatment a consistent modern friend of liberty might expect from orthodox conservatism and progressivism. The right wing of US politics invokes Smith and other classical liberal economists to defend private property and attack the idea of government intervention in the economy on behalf of the poor, but the cannier among them (such as Burke, among the early 18th-century crop of conservatives) know that true friends of individual liberty are no true friends of their favorite projects – wars and mass expenditures in the name of national greatness and tradition.

    As Rothschild’s article documents, Smith considered government interference in markets ‘a combination of the rich to oppress the poor,’ far from Burke’s conception of it as the agent of the deity on Earth. Of course, when Smith refers to ‘the rich,’ he usually seems to have in mind not capitalists involved in production in a free market but aristocrats wealthy from hereditary privilege and merchants wealthy from government-granted privilege. Smith takes the elites to task, though, not for simply having accumulated large amounts of wealth, or benefiting from a naturally unjust system of property, but for their lack of classical virtues. Smith saw the profligate, frivolous, aristocratic elite that used their influence to tip regulation in their favor as not measuring up to the humble masses engaged in honest toil in many virtues (his primary system of virtues in TMS emphasized prudence, temperance, courage, justice, and love). While falling short in most virtues is blameworthy yet not worthy of punishment, violating commutative justice was definitely considered by Smith as worthy of punishment, and he regrets that any aristocrat should be so powerful and wealthy as to be above the law in TMS.

    Smith should not be read as advocating liberty as simply an instrument to prosperity, to be easily abandoned in such cases in which we believe we can achieve greater prosperity with a clever regulation. Not only is liberty an intrinsic good, for those who have it and for their society, but it positively encourages virtue in general as much as it promotes prosperity. This is why we would never see the shade of Smith siding with the French revolutionaries or the radical left, who want to abrogate liberty and commutative justice in pursuit of a new system of property and a society subordinated to the will of the state. Smith may have had great sympathy for the poor, but it didn’t extend to his advocating the expropriation of the wealthy. Indeed, this might explain why Smith became somehow painted as an arch-conservative apologist for the wealthy despite what he actually wrote: while in Smith’s philosophy, some wars are justified, many customary, traditional and religious rules are laudable, and it makes sense to feel some measure of pride in the greatness and good fortunes of one’s country, it is always contrary to all morality and propriety to rob one’s neighbor, no matter his wealth and no matter your need. Smith can rail against utopian schemers with righteous indignation but would never do the same against God, king and country. Sometimes the distinction between a classical liberal and a conservative appears very fine, and even adherents of either philosophy may confuse or conflate the two, hence the conservative advantage in the race to claim Smith.

    It’s sobering to think that the controversy over Smith’s allegiances has been waged without interruption for over two hundred years and counting, now, and in many respects, the arguments have not much changed. Considering the obfuscation and self-censorship Smith had to practice in his writings and the incentives for political groups to claim him as one of their own, I would not be surprised if we all fought over Smith for another two centuries.

    posted 19 Oct 2010 by Brian Bedient

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