Market Man
What did Adam Smith really believe?
1776 was a good year for big ideas, a rare thing. It was also a big year for good ideas, an even rarer one. Our own big-deal Declaration was, in its way, the small pugnacious summary of Enlightenment ideas that had reached their apex that winter, in London. In February, Edward Gibbon published the first volume of “The Decline and Fall of the Roman Empire,” which included the hymn to Roman republican virtues and the great chapter explaining the rise of Christianity in terms of men, not miracles. Then, a month later, his friend Adam Smith published his big book, “The Wealth of Nations,” which put an end to any attempted defense of the mercantile system of colonial dependence on a mother country.
Classics of English prose, Gibbon’s and Smith’s books don’t just belong to the history of ideas; they helped establish the ideas of history and economics. Gibbon’s is still a model of the tone with which truly enlightened history is written; Smith’s is still the best account of the foundations of market economics. Why do classical economists believe that free trade is good for everyone? Why does the amount of gold kept in the treasury not make much difference to a country’s wealth? Why don’t better machines for making pins eliminate jobs for good, instead of making more jobs of another kind? Why, for that matter, does it not matter whether we’re productive in farming or manufacturing so long as we’re productive? What does productivity even mean? Complex ideas-the division of labor, the advantages of trade—become lucid to the non-economist for the first, and perhaps last, time.
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