THR Web Features   /   April 7, 2021

Reading Wealth of Nations and Meeting Adam Smith

A Dispatch from the Man on the Street

Richard Hughes Gibson

( Illustration of Adam Smith by Roseed Abbas/Shutterstock, Inc.)

Like many readers, I began in early adulthood to keep a mental list of big books that I meant to tackle someday. Thanks to the passage of time and my dilatory nature, that list now includes some entries that I haven’t gotten around to for many years—in a few cases, a decade or more. One such book is Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776), which I decided to read back in graduate school after taking a course that featured Smith’s earlier achievement, The Theory of Moral Sentiments (1759). At the time, though, the book seemed just a bit too long, and every time I’ve picked it up since I’ve always been able to manufacture reasons for further delay.

Having just read a biography of Smith and reread Theory of Moral Sentiments in January, I decided that it was truly now or never. And while I recognized that Wealth of Nations would be no War and Peace, I wondered if any pleasures might await in a book that Smith’s contemporaries immediately proclaimed a masterpiece.

At first, I was charmed by several turns of phrase (such as the “necessaries and conveniencies [sic] of life” of the first sentence) and by Smith’s apparent delight in compiling lists of trades. “How many different trades are employed in each branch of the linen and woollen manufactures,” he writes in the first chapter of Book 1, “from the growers of the flax and the wool, to the bleachers and smoothers of the linen, or to the dyers and dressers of the cloth!” 

Yet by the fourth chapter, I found my enthusiasm flagging. I began to wonder whether reading for pleasure was really reading against the grain in this case. (Smith admits at one point later on that his pursuit of clarity may try the reader’s patience: “I am always willing to run some hazard of being tedious, in order to be sure that I am perspicuous.”) I would finish the tome, I resolved, and I would surely learn much from it, but this probably wasn’t going to be much fun.

In the very next chapter, though, I unexpectedly encountered two of the Homeric heroes, and my perspective on the book immediately changed. Discussing the development of money, Smith points out that in the “rude ages of society, cattle are said to have been the common instrument of commerce” (to which he adds, “though they must have been a most inconvenient one”). As evidence, he recalls the famous scene in Book 6 of the Iliad where the Greek Diomedes and the Trojan ally Glaucus realize that their grandfathers were friendly and decide then and there to seal their own pact of friendship by exchanging armor. Diomedes gets the better end of the deal, as his armor “cost only nine oxen,” Smith writes, whereas Glaucus’s “cost a hundred.” Smith then rattles off other arrangements that he’s read or heard about where commodities function as the medium of exchange: 

Salt is said to be the common instrument of commerce and exchanges in Abyssinia; a species of shells in some parts of the coast of India; dried cod at Newfoundland; tobacco in Virginia; sugar in some of our West India colonies; hides or dressed leather in some other countries; and there is at this day a village in Scotland, where it is not uncommon, I am told, for a workman to carry nails instead of money to the baker’s shop or the ale-house.

As I read these words, I had one of those epiphanies whereby an almost laughably obvious quality of a work comes into focus: namely, that when Smith wrote this book, he didn’t have the benefit of all of the data that people influenced by his book—viz., modern economists—would collect and, just as importantly, publish in ever greater abundance in ensuing centuries. Numbers of the sort that we rely on now for understanding economic trends were in relatively short supply, and what numbers one could find often had clear political calculations. (“I have no great faith in political arithmetic,” Smith writes of certain pamphlets, “and I mean not to warrant the exactness of either of these computations.”)

Wealth of Nations contains more than just arguments for the division of labor, free markets, and the like. It is also the record of an eighteenth-century philosophy professor’s search for the materials to make his case. It is a book built out of the facts and figures he could find in his library—like the classics, particularly histories of Rome—as well as scattered government and corporate reports. He repeatedly cites comments he’s heard from his day’s business travelers. One of the pleasures of reading a very long book is working out the terms of its construction, and as I read, I learned Smith’s principles but I also encountered Smith in a variety of guises: Smith the reader foraging through his books, Smith the conversationalist trading anecdotes, and even Smith the man on the street overhearing some useful tidbit of news from abroad.

Many of the most famous phrases from Wealth of Nations are composed in a deliberately impersonal style. The first sentence of the introduction is a case in point: “The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.” That’s forty-eight words, and not one is a personal pronoun. Yet once I had my minor epiphany, I began to notice how frequently Smith comes forward as “I,” presumably to lend credibility to his observations. Indeed, I realized that he’d already been doing so in the previous chapters, as in the often-cited examination of pin-factories in his preliminary discussion of the division of labor: “I have seen a small manufactory of this kind, where ten men only were employed, and where some of them consequently performed two or three distinct operations.”

Scores of such “I have” statements turn up across the book: 

I have seen several boys, under twenty years of age, who had never exercised any other trade but that of making nails, and who, when they exerted themselves, could make, each of them, upwards of two thousand three hundred nails in a day…

The profits of trade, I have been assured by British merchants who had traded in both countries, are higher in France than in England…

At Lerwick, the small capital of the Shetland islands, tenpence a-day, I have been assured, is a common price of common labour…

In some parts of Lancashire, it is pretended, I have been told, that bread of oatmeal is a heartier food for labouring people than wheaten bread, and I have frequently heard the same doctrine held in Scotland…

In some provinces of Spain, I have been assured, the sheep is frequently killed merely for the sake of the fleece and the tallow…

I must likewise observe, that the accounts I have received of the prices of former times, have been by no means quite uniform and consistent, and an old man of great accuracy and experience has assured me, that, more than fifty years ago, a guinea was the usual price of a barrel of good merchantable herrings.

In these moments, we catch glimpses of Smith the observer, particularly in taking of stock of artisans plying trades. The “dexterity” (a favorite phrase of his) that workers developed by applying themselves to specific tasks caught his attention, as did the astonishing productivity that resulted from the application of such skilled hands. We catch, too, traces of Smith’s interviews with merchants and travelers, wherein he took copious mental notes on not only prices and commodities but also the variations among communities’ ways of life.

The observant Smith is on full display when in the tome’s fifth and final book the author at last defines the “necessaries” of life mentioned in the opening sentence. They include “not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.” His examples are linen shirts and leather shoes. “The Greeks and Romans lived, I suppose, very comfortably, though they had no linen,” he notes, but in modern Europe “a creditable day-labourer would be ashamed to appear in public without a linen shirt.” In the same way, he explains, it would be shameful for anyone in England to be seen without leather shoes, while the lowest ranks of the French go about “sometimes in wooden shoes, and sometimes barefooted.” The economist, on Smith’s telling, can’t be content simply to watch wages rise and fall; a true picture of wealth and prosperity entails a close study of how people live. To measure the wealth of nations, you had to inspect the shirts on people’s backs and the shoes on their feet.

I have said that the chief issue that I confronted at the outset was the question of whether this behemoth offered any pleasures along with its formidable intellectual challenge. Watching Smith construct his argument out of his reading, observations, and interviews fulfilled that hope. All of this also gave me a new angle by which to consider what’s come to be known as “Das Adam Smith Problem.” It’s so-called because it arose among scholars in late nineteenth-century Germany who wrestled with the apparent tension between the programs of Theory of Moral Sentiments and Wealth of Nations. The earlier book the Germans identified, approvingly, as a study of how our nature as social beings affects our moral sentiments, the work including a famous examination of the nature and causes of sympathy. To their chagrin, the latter book appeared to whittle our moral natures down to one supreme concern: self-interest. So for these scholars, there wasn’t really one Adam Smith but two, and they didn’t seem to be on speaking terms.

During the following century and a half, Smith’s admirers in the English-speaking world have argued that there really is no such problem, proposing that the outlooks of the two books are more consistent than the Germans claimed or that the author really had different spheres of modern life in view when he wrote the two studies. As I watched Smith the observer and interviewer in action, I wondered if I had happened on another link between the Smith of the first book and the Smith of the second. For while enlightened self-interest is of course the steady theme of Wealth of Nations, the author’s manner of building his case hinges on sociable traits: his range of reference, his ability of maintain an array of connections, his recollections of scores of anecdotes. Indeed, the credibility of much of Smith’s evidence hinges on our willingness to trust him and his acquaintances.

In The Life of Samuel Johnson (1791), James Boswell reports that shortly after Wealth of Nations appeared, he raised the question to his friend whether Smith, who’d never been in the trades, could write a book on the subject. Johnson replied: “A merchant seldom thinks but of his own particular trade. To write a good book upon it, a man must have extensive views. It is not necessary to have practised, to write well upon a subject.”

My reading suggests that Johnson was right that the philosopher Smith could indeed write a “good book”—one that can inform and, after its own fashion, delight—on the division of labor, markets, and national wealth. Yet perhaps we need to credit Smith less for his “extensive views” than his extensive viewing. Wealth of Nations is the product of Smith’s incessant reading and noticing and listening and collating, producing passages like the one that changed my mind about the book in which somehow Homer’s oxen jostle with Ethiopian salt, Indian shells, Canadian cod, and Scottish nails. As to whether Smith wrote well, you’ll have to decide that for yourself, once you exhaust your supply of excuses and start reading.