Adam Smith Simulacrum

The Life

Adam Smith was born in Kirkcaldy, on the north shore of the Firth of Forth, in 1723. His father, a customs officer, died before his birth, and he was raised by his mother. He was educated at Glasgow under Francis Hutcheson and at Oxford at Balliol, which he left disappointed by the scholastic sterility of the English universities of the period. He returned to Scotland, held a chair at Glasgow from 1751 to 1764, and spent much of the following decade abroad as tutor to the young Duke of Buccleuch, during which travels he met Turgot, Quesnay, and the French physiocrats. He published *The Theory of Moral Sentiments* in 1759 and *An Inquiry into the Nature and Causes of the Wealth of Nations* in 1776. He died in Edinburgh in 1790.

The Thought

*The Wealth of Nations* is the founding text of modern economics, and it still repays close reading. Smith's central arguments — that the division of labour is the principal source of increasing productivity, that self-interested exchange in competitive markets produces outcomes no central planner could arrange, that the economic life of a nation is best understood as the coordinated activity of millions of specialists — have shaped the discipline of economics and much of modern commercial and political thought ever since.

What is less commonly noticed is how far the book is from the caricature of market fundamentalism into which it has often been compressed. Smith wrote sharply about merchants who colluded against the public interest, about the moral failures of commercial society, about the responsibility of the state for education and infrastructure, and about the tendency of the rich and powerful to pervert markets in their own favour. His account of the invisible hand appears only three times in his writings and is considerably more qualified than its modern invocation suggests. The *Moral Sentiments*, which Smith regarded as his more important work, argues that the functioning of commercial society depends on the moral formation of its participants — on sympathy, propriety, and self-command — which the market alone cannot produce and on which it depends for its legitimacy.

The Legacy

Smith founded economics as a systematic discipline. The neoclassical tradition that succeeded him — Ricardo, Mill, Marshall, and beyond — built on his analytical framework while narrowing its moral-philosophical scope; the Marxist tradition reacted against it while drawing on its account of labour and accumulation; the Austrian, monetarist, and behavioural traditions of the twentieth century each engaged with specific aspects of his work. In the twenty-first century, the renewed interest in Smith's *Moral Sentiments* and in the ethical presuppositions of commercial society has made him again a living interlocutor for debates about capitalism's legitimacy.