The author of what is widely considered to be “the Bible of capitalism,” Adam Smith (1723–1790) was a Scottish philosopher and economist who pioneered modern economic theory. A contemporary of such figures as David Hume and Benjamin Franklin, Smith’s influence would extend down to nearly every major philosopher and economist of the next two centuries. His writings continue to shape economic thought around the world today.
Gavin Kennedy is Emeritus Professor at Edinburgh Business School, Herio-Watt University where he taught from 1985 to 2005. His publications include Everything Is Negotiable, (Random House) 1982 (5 editions); Pocket Negotiator, (The Economist), 1984 (5 editions); New Negotiating Edge, A Behavioural Approach (Brierley)1998. Since retiring in 2005 he has authored Adam Smith’s Lost Legacy (Palgrave) 2005; Adam Smith: a Moral Philosopher and a Political Economist. (Palgrave) 2008, 2nd ed. 2010.
Q: You are a highly-respected analyst of Adam Smith’s writing, and renowned for portraying the scale, scope, and detail of his work. What would economic theory and practice be like if Smith had not written The Wealth of Nations?
A: Smith wrote The Wealth of Nations (WN) from years of prior research by several others, as well as his own labors (20 years), going back to early classical times. If he had not done so, others eventually would have replaced him and WN. Ideas about political economy became a small flood in the 19th century—today it's a raging tsunami of competing ideas and explanations, much of them non-scientific, often twisted for ideological purity; much of what the tsunami of daily drivel sweeps up as representative of Smith’s ideas is quite false. Hence, the title of my first book: Adam Smith’s Lost Legacy (2005).
WN was the second volume of an intended trilogy, covering Moral Philosophy; Political Economy, and Jurisprudence. Smith never finished his third book on Jurisprudence, though he had worked on it for decades since he joined Glasgow University as a professor (also parts of WN featured in his Jurisprudence lectures as early/late as 1763). The unfinished manuscript was burned along with other volumes of his papers on his direct deathbed instructions to his Literary Executors, Joseph Black (chemistry) and James Hutton (geology). However, we have a set of rough student accounts of his Lectures on Jurisprudence (1762-3), enabling us to gain rough ideas of his views on jurisprudence and the roles of government legislation integrated with moral and economic matters. This still leaves his considered views incomplete. Unfortunately, Smith ordered his unfinished manuscript to be destroyed. I have my own views as to why this work was not concluded.
If we supposed instead that Smith had not completed WN in 1776, would it have affected the progress of economic theory, given the course of other people's’ published economic ideas in Europe? Clearly, the details of the history of economics would have been different, but by how much we don’t know. I do not think it would have mattered that much because by Smith’s time, and for many decades after him, there was a wide, even occasionally deep, knowledge of political economy in print in northern Europe. Much of this material took the form of thousands of short printed essays, which have been collected by Yale University and are now available to researchers. A few major volumes on political economy were published before and contemporary with Smith; however, many of them did not have the longer-term impact of WN or The Theory of Moral Sentiments (TMS ). One such major work was Sir James Steuart’s An Inquiry into the Principles of Political Economy, published in 1767, which disappeared without trace, so to speak; Smith said he had replied to all its errors in WN “without mentioning its author’s name.” He also responded to other papers, such as Jeremy Bentham’s on interest rates and the French Physiocrats’ on the predominance of agriculture. I also refer you to Samuel Pufendorf, the German scholar whose writings on political economy were widely read in European universities (including Glasgow) before Smith. In fact, many of Pufendorf’s ideas were contained in WN.
The above facts lead me to conclude that in the absence of WN the substance of political economy would have been similar, though, its detailed influence on the UK (and the early US) state politics and practices may have been different. It should also be noted that Smith’s actual influence on UK political economy (in the sense of changing it), was slow to be adopted, and there was much resistance to his recommendations from legislators and powerful political interests who did not accept Smith’s ideas on economic policy—tariffs, prohibitions, and natural liberty. The State Establishment did not suddenly cave in to Smith’s ideas and has not done so since! His ideas remain controversial and, uniquely, have been transformed in many cases into mere shadows of his actual ideas, where they are not outright contradictory.