History of Economic Analysis part 22 doc

interest—a conception that recalls Justi’s and was quite out of contact with England’s humor. But this should not weigh with us. In the second place, when one surveys (as the reader should) the five books into which the work is divided—Population, Trade and Industry, Money and Coins, Credit and Debts, and Taxes—one cannot fail to be struck by the number of points that indicate more originality and deeper thought than does the Wealth of Nations; but also by the number of definite mistakes and infelicitous formulations. In the theories of population, prices, money, and taxation Steuart went much below the smooth surface on which A.Smith happily sailed his course. But only in the first of these did he make a significant contribution, which will be discussed below in Chapter 5; in the others it is a hard job to get the wheat out of unpromising chaff or even, in some instances, to be quite sure that there is any wheat at all. [(d) High Level of the Italian Contribution.] But the honors of the field of pre-Smithian system production should go to the eighteenth-century Italians. In intent, scope, and plan their works were in the tradition that has been illustrated by the examples of Carafa and Justi; they were systems of Political Economy in the sense of welfare economics—the old scholastic Public Good and the specifically utilitarian Happiness meeting in their concept of welfare (felicità pubblica). But whereas in zeal for fact-finding and in grasp of practical problems they were not inferior to the Germans, they were superior to most of their Spanish, English, and French contemporaries in analytic power and achievement. Most of them were professors and civil servants and wrote from the standpoint of professors and civil servants. The regionalism of Italian life 10 divides them into groups. But I can discern only two ‘schools’ in the strict sense of the term which implies both personal contact and similarity of doctrine due to mutual influence: the Neapolitan and the Milanese. Genovesi and Palmieri represent the former; 11 other members, particularly its brightest star, Galiani, will be introduced later. 10 This regionalism accounts for the existence of Italian histories of ‘provincial’ economics, a phenomenon for which there is no analogy in any other country except Spain. Two examples may be mentioned: Augusto Graziani’s Le idee economiche degli scrittori Emiliani e Romagnoli sino al 1848 (1893), and T.Fornari’s Delle teorie economiche nelle provincie Napoletane dal secolo XIII al MDCCXXXIV (1882), the complement of which will be cited in the next footnote. 11 Antonio Genovesi (1712–69), professor, first of ethics and moral philosophy, then of economics and commerce, in the University of Naples, was first and last a great teacher whose prodigious success in this capacity even his detractors have been unable to deny. It was I think F.Ferrara who set the example of speaking of Genovesi in derogatory terms, possibly because he never could see any merit in anyone who was not a thoroughgoing free-trader. For a list of prominent economists who were his pupils see G.Tagliacozzo, Economisti Napoletani (p. xxvi n.). The same author, moreover, draws a picture of Genovesi’s scientific personality and background (on these also see A.Cutolo, Antonio Genovesi, 1926) and gives a judicious appraisal of his performance. Genovesi was a prolific writer. We are concerned, however, only with his Lezioni di economia civile (1765; republ. in P.Custodi’s Scrittori classici Italiani di economia politica, 50 vols., 1803–16), which may be described as an unsystematic system of the whole range of his economic thought. These lectures do indeed display the influence of contemporaneous and earlier writers and, what is worse, the argument frequently lacks rigor. But nobody had, when they appeared, published as History of economic analysis 172 comprehensive a presentation of the utilitarian welfare economics that the epoch was evolving. The ‘mercantilist’ elements in Genovesi’s teaching only prove the realism of his vision. Giuseppe Palmieri, Marchese di Martignano (1721–94?), was one of that brilliant band of Neapolitans in which Filangieri (see P.Gentile, L’Opera di Gaetano Filangieri, 1914) was perhaps the most widely known figure. Palmieri (there is a life by B.De Rinaldis, 1850; also see T.Fornari, Delle teorie economiche nelle provincie Napoletane, 1735–1830, 1888) was primarily a practical administrator. But the welfare economics of the eighteenth-century Consultant Administrators can perhaps be best appreciated by reading his Riflessioni sulla pubblica felicità relativamente al regno di Napoli (1787) or his Pensieri economici…(1789) or his Della ricchezza nazionale (1792). The representative figures of the Milanese school are Verri and Beccaria. We take, however, this opportunity to introduce a man who stands quite by himself, Ortes the Venetian. Count Pietro Verri (1728–97), an officer in the Austrian administration of Milan—but not a teacher—would have to be included in any list of the greatest economists. But though it would be easy to survey-his various recommendations as to policy—which for him were the important things; in the preface to his main work, he exclaimed: potessi io dire qualche cosa di utile, potessi io farla (how I wish to say something useful, nay, to do it!)—it is less easy to convey an idea of his purely scientific achievement; some aspects of it will be mentioned later. Here we need to mention only two of his many publications, the Elementi del commercio (1760), which established him, and the Meditazioni sull’ economia politica (1771; republ. in the Custodi collection; there are French and German translations) into which the former was expanded. Besides presenting a powerful synthesis, these works contain a number of original contributions (among them his constant-outlay demand curve). Among other things, he had a clear if undeveloped conception of economic equilibrium based, in the last instance, upon the ‘calculus of pleasure and pain’ (he anticipated Jevons’ phrase) and was, as far as this goes, rather above than below A.Smith. It is important to emphasize his fact- mindedness. Not only did he do historical research of importance (Memorie storiche, posthumously published) but he was a true econometrician—for example, he was one of the first economists to figure out a balance of payments—that is to say, he knew how to weave fact- finding and theory into a coherent tissue: the methodological problem that agitated later generations of economists he had successfully solved for himself. On the man and his career, see E.Bouvy, Le Comte Pietro Verri (1889), and M.R.Manfra, Pietro Verri …(1932). The best exposition and appraisal of Verri’s work is, however, to be found in Professor Einaudi’s masterly introduction to his new edition of Verri’s Bilanci del commercio dello stato di Milano (1932). Giammaria Ortes’ (1713–90) main title to fame is in his contribution to the ‘Malthusian’ theory of population (see below, ch. 5). His systematic venture (Economia nazionale, 1774; republ. in the Custodi collection) will The consultant administrators 173 always stand out in the history of the theories that look upon consumption as the limiting factor of total output and derive from this set-up their economic diagnosis—this is another link between him and Malthus. In this as in some other respects his performance is certainly original in the sense that it does not lie on the main road of advance. But little else can be said for it. Critics and historians have been, on the one hand, puzzled by it and, on the other hand, reconciled by his attack on the ‘mercantilist confusion’ (see below, ch. 6) of money and wealth and his free-trade views. Thus, a tradition has developed of dealing with him in an attitude of diffident admiration. It is worth while adding that he seems to have learned much from Sir James Steuart. From the Ortes literature it will suffice to mention A.Faure, Giammaria Ortes… (1916), the old book by F.Lampertico, G.Ortes…(1865), and C.de Franchis, G.Ortes, un sistema d’economia matematica…(1930), though I cannot myself find much mathematics in Ortes. Cesare Bonesana, Marchese di Beccaria (1738–94), was a Milanese and the product of Jesuit education. His international fame as a penologist, won at the age of about thirty (the year of his birth is not quite certain), and the place he incidentally acquired in the history of utilitarianism have been mentioned already. Mainly on the strength of this success—he had as yet done little as an economist—the Austrian Government (Prince Kaunitz) appointed him to a chair of economics in Milan founded for the purpose (1768). After only two years of tenure, he exchanged this chair for employment in the Milanese administration, in which he continued to serve until his early death, rising by degrees to the highest rank open to a man not qualifying for governor, taking part in, and in some instances initiating, the reforms of the period, busily writing a great many reports and memoranda—on grain storage, monetary policy, the metric system, population, and what not—and roaming over a wide realm of intellectual interests at the same time. Among other things, he was cofounder of, and a contributor to, Il caffè, a periodical modeled on the example of the English Spectator. In 1770 he published the first and only volume of his aesthetics (on Style). Moreover, he seems to have been a fair mathematician. The bulk of his economic writings consisted of those government reports. The only piece of economic reasoning that he published himself (in Il caffè, 1764) was an essay on smuggling, which presents two features of interest, first, the algebraic treatment of the problem and, second, the analytic device embodied in the question he made basic to his pure theory of smuggling: given the proportion of the goods smuggled that will on the average be seized by the authorities, what is the total quantity that smugglers must move in order to be left without either gain or loss? This spells the discovery of the idea that underlies modern indifference-variety analysis. Beccaria’s argument was developed by G.Silio, 1792 (see Augusto Montanari’s La matematica applicata all ’economia politica, 1892). Here, we are concerned with Beccaria’s lectures (written 1769–70). History of economic analysis 174 These he did not publish himself: he left them in his files for nearly a quarter of a century. They were first published in Custodi’s collection, under the title: Elementi di economia pubblica (1804). The sweeping success of his Dei delitti e delle pene, An Essay on Crimes and Punishments (1st ed. 1764; English trans. 1767) has in a way obliterated the greatness of the man: ever since he has been considered primarily as a penologist. The Beccaria literature deals with little else and is therefore only peripherically interesting for us. Reference should be made, however, to P.Custodi’s life (Cesare Beccaria, 1811) and to P.Villari’s edition of his works (Opere, 1854). For the moment, we concentrate upon Beccaria, the Italian A.Smith. The similarity between the two men and their performances is indeed striking. There is even some similarity in their social backgrounds and locations. There is similarity in their lives—and in those attitudes that are conditioned by one’s pursuits—though Beccaria was much more of a public servant than A.Smith, who only held a subordinate position without creative possibilities, and A.Smith was much more of a professor than Beccaria, who taught for only two years. Both were sovereign lords of a vast intellectual realm that extended far beyond what, even then, was possible for ordinary mortals to embrace. Beccaria presumably knew more mathematics than A.Smith, but A.Smith seems to have known more astronomy and physics than Beccaria. Neither was merely an economist: A.Smith’s life work contains no match for Dei delitti e delle pene, but his Moral Sentiments are more than a match for Beccaria’s aesthetics. Both swam joyfully in the river of their time, but with a difference: whereas Beccaria not only accepted all utilitarianism stands for but also was a leading force in shaping it, A.Smith quite clearly showed some critical coolness toward it; and whereas A.Smith not only accepted (almost) all that free trade and laissez-faire stand for but also was a leading force in their victory (so far as economic literature is concerned), Beccaria clearly showed some critical coolness toward them. Splendid figures both of them. But, at least after 1770, Beccaria, almost certainly more richly endowed by nature, gave to the public service of the Milanese ‘state’ what A.Smith reserved for mankind. Beccaria’s Elementi, after defining the subject of economics in the same normative way as did A.Smith in the introduction to the Fourth Book of the Wealth of Nations, starts with considerations about the evolution of technology, division of labor, and population (the increase of which he made a function of the increase in the means of subsistence). As the principle of economic action, we know already, he embraced without qualification the utilitarian doctrine of hedonist egotism, which he himself had done much to develop, and which later on proved so embarrassing an ally to economics. The second and third parts of the lectures deal with agriculture and manufactures, and the fourth, on commerce, is made the repository of the theory of value and price: barter, money, competition, interest, foreign exchanges, banks, credit, and public credit follow each other in a sequence that is as suggestive of nineteenth-century textbook practice as is the framework as a whole. In detail, Beccaria’s argument—particularly as to the theories of cost and of capital—is not always faultless or logically rigorous. But all the essential problems are seen, and seen in co-ordination. Some points will be mentioned in subsequent chapters. There are several contributions, however—such as the indeterminateness of isolated barter, the transition The consultant administrators 175 from this case to that of a determinate competitive market and thence to the case of indirect exchange—which we are in the habit of associating with much later, especially with post-Smithian, times. Physiocrat influence is in evidence but does not go very deep. Was the Scottish Beccaria the greater economist of the two? If we judge by their works as they lie before us, he certainly was. But to do so would not be fair to the men. It is not only that we must take into account priority and also that the years between 1770 and 1776 were very significant ones in the march of economic ideas; much more important is it that the Wealth of Nations was the mature result of a life’s work whereas the Elementi are lecture notes and, moreover, lecture notes which the author refused to publish. So far as subjective performance is concerned, they should not be matched with the Wealth of Nations but rather with the economic part of A.Smith’s Glasgow lectures—where Beccaria would win hands down—or else the Wealth of Nations should be compared with what we might conceive Beccaria would have done with his lectures if he had emigrated to Kirkcaldy and spent another six years on them instead of immersing himself in the problems of the Milanese state. That the main cause of the difference we perceive consists in the amounts of labor invested is, in any case, an important clue to the secret of A.Smith’s success. [(e) Adam Smith and the Wealth of Nations.] 12 So often have we mentioned Adam Smith, so often shall we have to mention him again, that the reader might well wonder whether there is need for a comprehensive survey of his performance in any one place. For our purpose, the references to it that are scattered all over this history are in fact more important than what will be said in this section. Nevertheless, it seems proper to stay for a moment in order to look at the figure of the most famous of all economists—to form an idea of what stuff he was made—and at the most successful not only of all books on economics but, with the possible exception of Darwin’s Origin of Species, of all scientific books that have appeared to this day. Moreover, it will again be useful to present a brief Reader’s Guide. Few facts and no details are needed about the man and his sheltered and uneventful life (1723–90). 13 It will suffice to note: first, that he was a Scotsman to the core, pure and 12 [There is no indication as to where this sketch of Adam Smith followed by a Reader’s Guide to the Wealth of Nations belongs, but it seems appropriate to place it here at the end of the discussion of ‘The Systems, 1600–1776.’ This section was originally written for the History but was withdrawn by J.A.S., possibly at a time when he was attempting to reduce the length of the book or possibly because he felt that there was too much duplication in view of ‘the references…that are scattered all over this History.’ It is a first draft that was not even typed. Since, however, similar biographical sketches of other famous economists are presented throughout the book, it seemed appropriate to restore this account of Adam Smith and the Wealth. A reference to the Reader’s Guide will be found below in ch. 6, sec. 3d (Codification of Value and Price Theory in the Wealth of Nations).] 13 Of the many lives of Adam Smith the interested reader is referred to the one by John Rae (1895). Of all the books containing supplementary material on and interpretations of Smith the man, by far the most important is Professor W.R. Scott’s Adam Smith as Student and Professor (1937), which will be referred to in the text and from which the reader will derive much instruction and, perhaps, some amusement. The minimum of references concerning the Wealth will be given later. History of economic analysis 176 unadulterated; second, that his immediate family background was the Scottish civil service—in order to understand his outlook on social life and economic activity (very different from what has been often imputed to him), it is important never to forget the gentility, the intellectuality, the critical attitude to business activity, the modest yet adequate means that characterized the environment which produced him; third, that he was a professor born and bred, not only while he lectured at Edinburgh (1748–51) and Glasgow (1751–63) but always and by virtue of character indelebilis; fourth—a fact which I cannot help considering relevant, not for his pure economics of course, but all the more for his understanding of human nature—that no woman, excepting his mother, ever played a role in his existence: in this as in other respects the glamours and passions of life were just literature to him. In 1764–6 he traveled in France, acting as ‘tutor’ to the young Duke of Buccleuch, to whom economics owes the subsequent leisure and independence that produced the Wealth of Nations. His appointment to a quasi-sinecure (1778) added ample comfort for the rest of his life. He was conscientious, painstaking to a degree, methodical, well-poised, honorable. He acknowledged obligation where honor required it, but not generously. He never uncovered the footprints of predecessors with Darwinian frankness. In criticism he was narrow and ungenerous. He had the courage and energy that exactly fit the scholar’s task and go well with a good deal of circumspection. The day of polyhistoric knowledge was not yet over: a man could then roam over the whole of science and art and even do work in widely distant fields without meeting disaster. Not less than Beccaria or Turgot, A.Smith held sway over a wide domain of which economics was only a part. We have already had the opportunity to notice his Theory of Moral Sentiments (1759), to which was appended (3rd ed. 1767) A Dissertation on the Origin of Languages—his first great success, which matured, from beginnings in the material of the Edinburgh lectures, during the first half of his tenure of the Glasgow chair, and should be recalled to make the reader immune to the silly criticism that A.Smith gave inadequate attention to the importance of ethical forces. Moreover, Smith’s philosophy of riches and of economic activity is there and not in the Wealth of Nations. To this and to his work in natural law, ‘natural theology,’ and belles lettres must, however, be added six essays, 14 some of which are the crystallized fragments of the grandiose plan of a’history of the liberal sciences and elegant arts’ which he abandoned ‘as far too extensive.’ The pearl of the collection is the first essay on the ‘Principles which lead and direct Philosophical Enquiries; illustrated by the History of Astronomy.’ Nobody, I venture to say, can have an adequate idea of Smith’s intellectual stature who does not know these essays. I also venture to say that, were it not for the undeniable fact, nobody would credit the author of the Wealth of Nations with the power to write them. 14 Essays on Philosophical Subjects by the late Adam Smith…ed. by his executors, Black and Hutton, to which was prefixed an Account of the Life and Writings of the Author by Dugald Stewart…(1st ed. 1795). Stewart, by the way, who held the Edinburgh chair of moral philosophy, 1785–1810, though he can hardly be said to have made any mark by his published writings, was so strong a personality and so effective a teacher that a more complete history of our subject could not pass him by as we must. The consultant administrators 177 We know already that the skeleton of Smith’s analysis hails from the scholastics and the natural-law philosophers: besides lying ready at hand in the works of Grotius and Pufendorf, it was taught to him by his teacher Hutche-son. 15 It is true that neither the scholastics nor the natural-law philosophers ever evolved a completely articulate scheme of distribution, still less the misleading idea, which was to play so great a role in the theory of the nineteenth century, of a social product or National Dividend distributed among the agents that take part in its production. But they had worked out all the elements of such a scheme, and Smith was no doubt equal to the task of co-ordinating them without further help from anyone. According to Cannan, the Glasgow Lectures— which show no great advance beyond Hutcheson in any direction—contain ‘no trace whatever…of the scheme of distribution which the Wealth of Nations sets forth.’ It is not necessary to infer from this, however, that Smith was under heavy (and largely unacknowledged) obligation to the physiocrats, whom he met (1764–6) and presumably read before he settled down to work at Kirkcaldy. The Draft discovered by Professor Scott proves that this may go too far: the Draft clearly 15 On Francis Hutcheson, see above, ch. 2, sec. 7b. Also see W.R.Scott, Francis Hutcheson (1900). The lineage of Smith’s economics has been, as we might expect, the subject of much research. A great event was the discovery and subsequent publication by E.Cannan of the Lectures on Justice, Police, Revenue and Arms, delivered in the University of Glasgow by Adam Smith, reported by a student in 1763 (1896), to which I shall refer as Glasgow Lectures; another was the discovery, and publication in Scott’s book mentioned above, of what may be called an early draft of the Wealth of Nations, which, according to Professor Scott, antedates by but little Smith’s departure for France and thus presumably reflects the general state of Smith’s work before he came into personal contact with the French economists. It will be referred to as Draft. To Professor Cannan we owe by far the best of the many editions of the Wealth of Nations (1904; republished many times, 6th ed. 1950) which contains a most valuable introduction, which sheds much light on some questions of lineage. Publication of A Catalogue of the Library of Adam Smith (1st ed. 1894; 2nd ed. 1932) with introduction was one of the many services rendered to ‘Smithology’ by James Bonar. Space forbids our dealing with matters of editions, translations, summaries, paraphrases of, and excerpts from the Wealth of Nations, a fact that I regret the more because the Vanderblue Memorial Collection of Smithiana in the Kress Library (see pamphlet published by the Kress Library, containing a special catalogue of this collection by Homer B.Vanderblue, prefaced with an essay by Charles J.Bullock, 1939) gave me an excellent opportunity for investigating them. Nor is it possible to do justice to the extensive literature that deals with the Wealth of Nations. The most valuable comments, expository and critical, are scattered all over the economic treatises and papers of the nineteenth century: it is they that make up the true monument to Smith, the scientific economist. Those economists and non-economists who wrote on Smith and ‘Smithianism’ per se, particularly the Germans, were usually not, or not primarily, interested in his analytic performance, but rather in his views on practical issues, his philosophical backgrounds, his social sympathies. Neglecting the comments that are, of course, to be found in all general histories of economic thought, we must however notice the analyses of Smith’s work by Marx, in the Theorien über den Mehrwert, and by Cannan, in the History of the Theories of Production and Distribution. In addition we may mention: J.F.Baert, Adam Smith, en zijn Onderzoek naar den Rijkdom der Volken (1858); A.Delatour, Adam Smith (1886); W.Hasbach, Untersuchungen über Adam Smith (1891); S.Feilbogen, Smith und Turgot (1892); G.R.Morrow, The Ethical and Economic Theories of Adam Smith (1923); W. Bagehot, Adam Smith and Our Modern Economy (Works, ed. by Mrs. Russell Barrington, vol. 7); Edwin Cannan, ‘Adam Smith as an Economist,’ Economica, June 1926; and the sesquicentennial Chicago Lectures (1928). History of economic analysis 178 foreshadows the scheme of the Wealth. On the other hand, however, it must not be forgotten that the heritage of the natural-law philosophers and the achievements of A.Smith’s French contemporaries were not all he had to work with. There was the other of the two streams that meet in the Wealth of Nations, represented by the Consultant Administrators and the Pamphleteers. Smith knew Petty and Locke; he presumably made acquaintance with Cantillon, at least through Postlethwayt’s Dictionary, at an early stage of his work; he laid Harris and Decker under contribution; his friend Hume’s writings and Massie’s must have been familiar to him; and in the long list of writers whom he affected to despise because of their ‘mercantilist errors,’ there are some who might have taught him a lot, for example, Child, Davenant, Pollexfen, not to insist on such ‘anti- mercantilists’ as Barbon and North. 16 But no matter what he actually learned or failed to learn from predecessors, the fact is that the Wealth of Nations does not contain a single analytic idea, principle, or method that was entirely new in 1776. Those who extolled A.Smith’s work as an epoch-making, original achievement were, of course, thinking primarily of the policies he advocated—free trade, laissez-faire, colonial policy, and so on. But, as should be clear by now and as will become still clearer as we go along, this aspect would not lead to a different conclusion even if it were relevant to our subject. Smith himself, according to Dugald Stewart, indeed laid claim (in a paper drawn up in 1755) to priority concerning the principle of Natural Liberty on the ground that he had taught it as early as 1749. By this principle he meant both a canon of policy—the removal of all restraints except those imposed by ‘justice’—and the analytic proposition that free interaction of individuals produces not chaos but an orderly pattern that is logically determined: he never distinguished the two quite clearly. Taken in either sense, however, the principle had been quite clearly enunciated before, for example, by Grotius and Pufendorf. It is precisely for this reason that no charge of plagiarism can be made either against Smith or on his behalf against others. This does not exclude the 16 Two authors should be mentioned, if only because they are mentioned so frequently. Adam Ferguson (1723–1816), professor first of ‘natural’ then of ‘moral’ philosophy in Edinburgh, was primarily a historical sociologist. His Essay on the History of Civil Society (1st ed. 1767), the only one of his works that need be noticed, hails from Montesquieu (to whom also Smith was indebted) and met, on a reduced scale, with the same kind of success as did the Esprit des lois. In Germany, partly under the influence of Marx, it enjoyed considerable—and, as it seems to me, unmerited— reputation in the nineteenth century. There is hardly any reason to believe, as did Marx, that Smith owed any considerable debt to it or, as others have held, that Ferguson owed much to Smith’s lectures or conversation: the parallelisms that are adduced in support of either view concern ideas— on division of labor and taxation—which were common currency at that time and could have been drawn from a number of older authors. Bernard de Mandeville published a didactic poem entitled The Grumbling Hive (1705; better known under the later title, The Fable of the Bees: or, Private Vices, Publick Benefits, 1714), in which he endeavored to show that the individual motives that produce socially desirable actions are not unlikely to be morally objectionable. Adam Smith, like other virtuous people, was hard on this piece of work. It contained indeed a eulogy on spending and an indictment of saving, as well as certain ‘mercantilist errors’ that must have displeased him. But there was more than that to his hostility. Smith cannot have failed to perceive that Mandeville’s argument was an argument for Smith’s own pure Natural Liberty couched in a particular form. The reader will have no difficulty in realizing how this fact must have shocked the respectable professor—particularly if it should be the case that he learned something from the offending pamphlet. The consultant administrators 179 possibility of course that, in stating it with greater force and fullness than anyone before him, Smith experienced subjectively all the thrill of discovery or even that, some time before 1749, he actually made the ‘discovery’ himself. But though the Wealth of Nations contained no really novel ideas and though it cannot rank with Newton’s Principia or Darwin’s Origin as an intellectual achievement, it is a great performance all the same and fully deserved its success. The nature of the one and the causes of the other are not hard to see. The time had come for precisely that kind of co-ordination. And this task A.Smith performed extremely well. He was fitted for it by nature: no one but a methodical professor could have accomplished it. He gave his best: the Wealth is the product of labor ungrudgingly bestowed during more than twenty-five years, exclusively concentrated upon it during about ten. His mental stature was up to mastering the unwieldy material that flowed from many sources and to subjecting it, with a strong hand, to the rule of a small number of coherent principles: the builder who built solidly, regardless of cost, was also a great architect. His very limitations made for success. Had he been more brilliant, he would not have been taken so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used difficult and ingenious methods, he would not have been understood. But he had no such ambitions; in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along. While the professional of his time found enough to command his intellectual respect, the ‘educated reader’ was able to assure himself that, yes, this was so, he too had always thought so; while Smith taxed the reader’s patience with his masses of historical and statistical material, he did not tax his reasoning power. He was effective not only by virtue of what he gave but also by virtue of what he failed to give. Last but not least, argument and material were enlivened by advocacy which is after all what attracts a wider public: everywhere, the professor turned his chair into a seat of judgment and bestowed praise and blame. And it was Adam Smith’s good fortune that he was thoroughly in sympathy with the humors of his time. He advocated the things that were in the offing, and he made his analysis serve them. Needless to insist on what this meant both for performance and success: where would the Wealth of Nations be without free trade and laissez-faire? Also, the ‘unfeeling’ or ‘slothful’ landlords who reap where they have not sown, the employers whose every meeting issues in conspiracy, the merchants who enjoy themselves and let their clerks and accountants do the work, and the poor laborers who support the rest of society in luxury—these are all important parts of the show. It has been held that A.Smith, far ahead of his time, braved unpopularity by giving expression to his social sympathies. This is not so. His sincerity I do not for a moment call into question. But those views were not unpopular. They were in fashion. A judiciously diluted Rousseauism is also evident in the equalitarian tendency of his economic sociology. Human beings seemed to him to be much alike by nature, all reacting in the same simple ways to very simple stimuli, differences being due mainly to different training and different environments. This is very important considering A.Smith’s influence upon nineteenth-century economics. His work was the channel through which eighteenth-century ideas about human nature reached economists. Now for the Reader’s Guide: An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, LL.D. and F.R.S., formerly Professor of Moral Philosophy in History of economic analysis 180 the University of Glasgow, in two volumes, London 1776, defines scientific economics quite well by its title and hardly less felicitously, though less concisely, in the last paragraph of the Introduction. But in the introduction to Book IV we read that Political Economy ‘proposes to enrich both the people and the sovereign,’ and it is this definition which expresses both what Smith wanted above everything and what interested his readers more than anything else. It makes economics a collection of recipes for the ‘statesman.’ All the more important is it to remember that the viewpoint of analysis is not absent and that we, whatever A.Smith himself may have thought, can separate the analysis from the recipes without doing any violence to his text. There are five Books. The fifth and longest—taking 28.6 per cent of total space—is a nearly self-contained treatise on Public Finance and was to become and to remain the basis of all the nineteenth-century treatises on the subject until, mainly in Germany, the ‘social’ viewpoint—taxation as an instrument of reform—asserted itself. The length of the book is due to the masses of material it contains: its treatment of public expenditure, revenue, and debts is primarily historical. The theory is inadequate, and does not reach much below the surface. But what there is of it is admirably worked in with the reports on general developments as well as on individual facts. Further facts have been amassed and theoretical technique has been improved but nobody has to this day succeeded in welding the two—plus a little political sociology—together as did A.Smith. The fourth Book, nearly as long, 17 contains the famous indictment of the ‘commercial or mercantile system’—the patronizingly benevolent criticism of physiocrat doctrine in the ninth and last chapter does not call for comment—from the ashes of which rises, phoenix-like, Smith’s own political system. Again: the reader beholds masses of facts painstakingly marshalled, very little of very simple theory (no advance whatever in this over even distant ‘predecessors’), which is, however, most successfully used in lightening up the mosaic of details, in heating the facts till they glow. The facts overflow and stumble over one another: two monographs are inserted by way of digressions (on Banks of Deposit and on the Corn Trade) where they do not belong. The great and justly famous chapter ‘Of Colonies’ (which should be compared with the last pages of the work) falls out of line, but nothing matters: we have a masterpiece before us, a masterpiece not only of pleading but also of analysis. Book III, which occupies less than 4.5 per cent of total space, may be described as a prelude to Book IV, filling in general considerations of a primarily historical nature on the ‘natural progress of opulence,’ the rise and the commerce of towns as distorted—hampered or propelled—by the policies sponsored by various interests. This third Book did not attract the attention it seems to merit. In its somewhat dry and uninspired wisdom, it might have made an excellent starting point of a historical sociology of economic life that was never written. Books I and II—respectively about 25 and 14 per cent of the whole—also overflowing with illustrative fact, present the essentials of A.Smith’s analytic schema. They can indeed be perused by themselves. But the reader who, more interested in theory than in ‘application,’ refuses to go beyond them will miss much that is indispensable for a full understanding of the theory itself. 17 The fourth and fifth Books account for nearly 57 per cent of the total space. The consultant administrators 181 . Nature and Causes of the Wealth of Nations by Adam Smith, LL.D. and F.R.S., formerly Professor of Moral Philosophy in History of economic analysis 180 the University of Glasgow, in two volumes,. volume of his aesthetics (on Style). Moreover, he seems to have been a fair mathematician. The bulk of his economic writings consisted of those government reports. The only piece of economic. Fourth Book of the Wealth of Nations, starts with considerations about the evolution of technology, division of labor, and population (the increase of which he made a function of the increase