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The Authentic Adam Smith: His Life and Ideas (Enterprise)

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This is a most readable and excellent book. From an academic standpoint, it has several merits.

The book's first merit is that it serves as a very good abstract of Adam Smith's lengthy and difficult tomes [Wealth of Nations in 1776 and The Theory of Moral Sentiments, 1759]. By today's standards, these books are unreadable. Buchan has painstakingly studied these books and pass on their information in a fresh, lively, and modern language. It should be required reading for any introduction to economics course.

Its second merit is that it clarifies Adam Smith's economic thoughts. Most everyone, included leading contemporary economists, consider Smith the intellectual father of free-wheeling capitalism, globalization, and free-trade. They lean on Smith to give themselves undisputable arguments. If one's thoughts are aligned with Smith, they become unquestionable. So the logic goes. But, even the majority of economics PhDs have not read Wealth of Nations and close to none have read Moral Sentiments. Over the centuries, the interpretation of Smith's work has veered increasingly to the right and into a libertarian domain. But, the interpretation has become disconnected from the original work for a simple reason: absence of reading the original work. Per Buchan, Smith's thoughts on the "laissez faire" capitalism are far more nuanced than current interpretations suggest. Smith showed a very sophisticated understanding of when markets work and when they don't. When monopolies or government are in better position to deliver certain services than free-market competitors. He also showed much concern for ethics in commerce at both the individual and organizational levels. It is as if he anticipated the potential abuse that the absence of ethics would cause (Drexel Burnham, Enron). So, Buchan rectifies for us what Adam Smith's economics were about. It was not about libertarian capitalism, but more about ethical and optimized capitalism. This is a major distinction.

The book's third merit is to place Adam Smith's mind and life in historical context of the great Scottish Enlightenment. You see Smith interact with many of his contemporaries, particularly David Hume.

Anyone interested in either history or economics will really enjoy this book. As mentioned, the book imparts so much information and clarifies much misinformation on the subject. If you enjoy this book, I also recommend Buchan's "Crowded Genius: The Scottish Enlightenment."

Adam Smith is a towering figure in modern economics and is one of the Titans of those who believe in free markets. We use Smith's term "invisible hand" to describe the way forces of competition and self-interest end up producing (on average) the right amount of goods and services to help the economy grown and meet the needs of the populace. The ideas of Adam Smith, or at least the popular notion of what his ideas are, have become so dominant that even "progressive" politicians, journalists, and economists, have tried to find the source of their world view in Smith's writings.

This interesting book by James Buchan makes the argument that too many people from every political stripe (including his conservative - free market acolytes) quote Smith too carelessly and without proper context. Buchan has spent decades of his life working on The Scottish Enlightenment (18th century Scottish History) and provides us with the development of Smith's ideas in the context of the broader development of Scottish philosophical thought. We learn about Smith's career, his writing of both the "Theory of Moral Sentiments" (and what its ideas were) and "The Wealth of Nations". Buchan shows us Smith's friendships including the importance of David Hume to Smith as well as the competitive jealousies of lesser thinkers.

Buchan is a good source for the material in this book because of the work he did in writing "Crowded with Genius" a few years back. He takes the realities of the biography of his subject and the real history of the times too seriously to allow Smith to be misused into supporting anachronistic ideas. While this is a short work, I found many things in it to be valuable and informative.

And while I can certainly grant Buchan's larger point that Smith was no free market capitalist a la Milton Friedman, I cannot accept the idea that all political persuasions draw on Smith equally or with the same sense of heritage. It is important to note that inspiration can make for a strange genealogy. There are some who follow and develop a tradition more or less directly and faithfully (Mozart of Haydn and C.P.E. Bach), there are those who follow a tradition and then break into new realms (Beethoven of Mozart and Haydn), there are those who reach back to find reasons for what they are doing to explain their own work (Schoenberg of Brahms "The Revolutionary"), and then there are those who use the past to provide legitimacy for something new (say, the Norman monarchy in England using the legends of King Arthur for their right to rule). Are all equally heirs to their claimed forbearers? Are all equally heirs?

Of course, you must arrive at your own conclusions. It is plain to me that there are distinctions and that Milton Friedman and modern free market capitalism is more of an heir to Smith than are nouveau British Socialists trying to cobble together a lineage to Smith for political advantage.

In any case, Smith's great works are more often referred to than read (even by those doing the referring), so at least you can read this very manageable work to get some context of the man, his life, his work, and his world.

This is a relatively short (145 pages of text) introduction to the life and thought of Adam Smith. I found it to be an extremely worthwhile read. I have recently become aware that the trend toward shorter books, far from resulting in "dumbed down" works, has produced some very insightful discussions--Ted White's recent short book on Justice Holmes being one example. This fine effort, by the author of the definitive analysis of Edinburgh during the Scotish Enlightenment, is further proof of this development. The author skillfully melds a biography of Smith's life with a concise examination of some of his major theories and ideas. He principally focuses upon the "Theory of Moral Sentiments" and (of course) "The Wealth of Nations," but he touches upon a number of other Smith writings and theories along the way. Quite a lot of useful information is packed into this brief study, and the notes reflect the author's thorough command of the pertinent material. One of the author's goals is to correct what he considers to be some fundamental misinterpretations of Smith's ideas, the "invisibile hand" being a prime example. There is some very interesting discussion of Smith's close relationship with David Hume, and various other figures from the Scottish Enlightenment also make appearances as well. Compact yet expansive in scope makes this fine book very unique, and a worthy addition to the literature on Smith and the Scottish the Enlightenment.

One idea stands above all others in this brief but revealing biography of the genius who invented modern economics, and that is the need to treat others as you want to be treated.

Unlike modern Bible thumpers, typified by noisy ideologues who denigrate everyone who does not agree with their selfish and narrow visions, Smith was the product of an era when everything was subject to doubt, challenge, questions and new ideas. There was no status in the status quo; this was the time of intellectual ferment and democratic uprisings that eventually produced the American Revolution and the modern concept of personal freedom. Buchan provides a concise summary of Smith's 'Wealth of Nations', which offers an understanding that is quite different from today's sound-bite daffynitions.

It wasn't merely church dogma that was overthrown. Science had shown the Earth was not the center of the universe. In commerce, from antiquity to the Middle Ages, luxury had been condemned as a mortal threat to body and soul which sapped the courage of men and the chastity of women. Suddenly, luxury was respectable and desirable.

Early in his life, Smith had taught moral philosophy to young men studying for the Presbyterian clergy. He told his students that, in Buchan's words, "alone of all animals on this globe, man ascribes values to qualities such as colour, rarity and shape that give no superior advantage in supplying the wants of nature. Bodily needs can be easily satisfied but desires, in Smith's beautiful phrase, 'seem to be altogether endless'."

His teaching wasn't based on old truths, revealed wisdom, ancient Bible verses or modern born-again faith. Instead, as Buchan writes, Smith was not examining the truth or not of any particular scentific discovery, but the sentiments that give rise to it. One of these is humanity's spontaneous love of order.

Smith's belief in humanity's spontaneous love of order prompted him to look for the basics of the brand new economic conditions; in today's terms, he was looking for the "natural laws" which govern mankind. A vast range of ideas was floating about; the genius of Smith was to identify and compile those which would form the basis of a new freer economy.

Although his reputation has been hijacked by opportunists who have not read, understand or sympathize with his ideas; Buchan shows Smith was vastly more humane than the crass and utterly selfish greed of the neocons. Smith was always uneasy about a society that is forever gaping at the rich and fortunate at the expense of the wise and the kind. "Greed is good" is not one of Smith's principles.

Buchan has done much the same in this book; selecting judiciously from the vast range of ideas, opinions and influences that inspired Smith. England and France were intellectual cauldrons for new ideas; but, these two old societies also had powerful incumbent Establishments that crushed many reforms. Only the United States, which didn't yet have an incumbent conservative elite, gave full free reign to the profound revolution in attitudes which created the modern "consumer society".

Smith defined the most profound intellectual revolution in material values, as opposed to spiritual, since the dawn of agriculture. Buchan does a superb job of explaining Smith. Every reader of this book will be reassured that the 'Golden Rule' is not the rule of greed or the rule of gold. There is more to life, and society, than greed.

There is no good substitute for reading Adam Smith's own beautiful prose. But if you don't have the time or the inclination to do so, I would recommend The Authentic Adam Smith. Buchan summarizes Smith's life and ideas. Of special note is his ability to convey Smith's humanity. I have a few minor quibbles about emphasis, but overall the book is accurate, readable and concise. Not many books of this type can make a similar claim.

The subtitle says it all. "The Authentic Adam Smith" is a short biography that includes a brief treatment of his ideas. Buchan does a pretty good job of introducing readers who know Adam Smith solely as the author of "The Wealth of Nations" (WN) to his other magnum opus - "The Theory of Moral Sentiments" (TMS). Moreover, Buchan points out many things that can be easily found in WN, but that are almost forgotten because economists - people through whom most of the public gets to know about Adam Smith - rarely if ever read WN. These include Smith's emphasis on the negative effects of the division of labour and the need for compulsory public education to counteract it, his support for progressive taxation and his nuanced views on trade. Buchan also describes all three instances in which Smith uses the phrase "invisible hand" and all three cases are not quite what economists describe. Besides TMS and WN, Smith's lesser works and unfulfilled ambitions are discussed, too.

The more descriptive parts that deal with biographic facts are also very interesting. Among other things, the book covers Smith's encounters with the French Physiocrats (Quesnay, Turgot) and Voltaire, his close relationships with his mother and David Hume, his poor Oxford experience, his devotion to education, and his ironic appointment as a Commissioner of Customs. The reader gets a good glimpse of the context in which Smith's ideas originated.

All in all, this is a pretty good book. Its main weakness (which is also a strength of sorts) is length. Although brevity makes it easier for the narrative to remain fresh, depth is sacrificed. Smith's views on finance are a case in point: Buchan mentions Smith favored certain restrictions but a more conclusive elaboration (especially with regard to speculation) would have been so much better. The same applies to trade: the author mentions that Smith "was no doctrinaire free trader". There is an argument out there that Smith supported the "infant industry" exception. However, Buchan does not provide a conclusive enough discussion. This is important precisely because these details dispel the most popular misconceptions about Adam Smith.

Regardless, "The Authentic Adam Smith" is a great read. If you are looking for a fairly nuanced and interesting though brief treatment of Adam Smith, this is probably as good as it gets.

Buchan's book reveals Smith as the greatest conservative thinker and moral philosopher of the last 250 years.Clearly,Buchan is one of the very few economists who has in fact read all of Smith's Wealth of Nations(WN-Modern Library-Cannan edition)and Theory of Moral Sentiments(TMS).The best lesson of this book is Buchan's overwhelming demonstration that Smith completely rejected the libertarian and utilitarian approachs to economics and politics of L von Mises,Milton Friedman,Murray Rothbard,and Ayn Rand.TMS demonstrates Smith's complete and total rejection of both utilitarianism libertarianism on moral grounds alone.Smith emphasized the neeed for moral and ethical norms as prerequisites in a capitalist society.This is called virtue ethics.The economics establishment is built a priori on Benthamite Utilitarianism .

This review will consider only one policy area where this is demonstrated-education.

Smith ,on pp.716-768,provides a brilliant historical study of the importance of universal general education and religious instruction for ALL citizens while simultaneously covering how past societies had provided for ,or not provided for, the education of its citizens.His conclusion ,on p. 768 ,is that "When the institutions or public works which are beneficial to the whole society,either cannot be maintained altogether,or are not maintained altogether by the contribution of such particular members of the society as are most immediately benefited by them,the deficiency must in most cases be made up by the general contribution of the whole society.The general revenue of the society...must make up for the deficiency of many particular branches of revenue.".A better discussion of public goods and positive externalities/spillover effects,which need to be subsidized by the state, does not exist.Smith was well aware of the problem of free market failure,externalities and public goods. Of course,one of the major sources of general revenue that would be used to finance education as a public good turns out to be the imposition of revenue tariffs combined with an overall progressive tax system.Murray Rothbard was so angered by the conservative Adam Smith that he wrote a two volume study of the history of economic thought in which he attempted to link Smith to Marx.
He failed.

Novelist and critic James Buchan employs his considerable writing skills to sketch out a concise yet intellectually comprehensive profile of one of the leading figures of the Scottish Enlightenment. The person of Adam Smith has long been used as an icon by political conservatives and free marketeers to propagandize their laissez-faire ideology, an anti-Marx effigy paraded before the masses to ward off the evil spirits of social empathy. Doctrinaire stalwarts such as Alan Greenspan --with whom Buchan starts off the book, benignly neglecting the more glaring but superannuated standard-bearers, Margaret Thatcher and Ronald Reagan-- relentlessly enshrine Adam Smith as the prophet of liberty, a liberty largely defined by --and mostly confined to-- private business interests. Unstated but ever present is the doctrinaire's message that here is the apostle of absolute truth, for somehow, we are supposed to believe, Adam Smith was obviously infallible.

Buchan does a great service to the contemporary affluent masses by presenting the real Adam Smith shorn of all mythical overtones. What emerges is an even more admirable personage. One of the first myths to go is that of the Promethean economist. Smith was but one among many thinkers in Europe to study the problem of commerce in the mercantilist societies of the preindustrial age. Smith's renowned work, «An Inquiry into the Nature and Causes of the Wealth of Nations», was not the first to broach the subject although it "more or less defined the field of inquiry known as political economy until the late nineteenth century." Indeed, Buchan points out that Smith borrowed the denominative term from James Steuart's «An Inquiry into the Principles of Political Oeconomy», published nine years before «The Wealth of Nations». Which was the natural thing to do, I might add, since Steuart's choice was the apposite name.

Smith's most celebrated term, the notorious "invisible hand," receives due attention right from the start. "The phrase 'invisible hand' occurs three times in the million-odd words of Adam Smith's that have come down to us, and on not one of those occasions does it have anything to do with free-market capitalism or awesome international transactions." Golly gee whiz, read and learn. The initial occurrence is found in "The History of Astronomy," Smith's first philosophical essay which nevertheless was published posthumously. "In this its first avatar," explains Buchan, "the invisible hand is not a commercial mechanism, but a circumlocution for God." The second appearance comes in «The Theory of Moral Sentiments», considered Smith's magnum opus until "the rise of political economy amid the battles and factory smoke of the Victorian age." Buchan argues that "The Invisible Hand here is like the Great Superintendant, or Superintendant of the Universe, or Great Conductor or Benevolent Nature and all the other deistic codewords that litter the «Theory»." God by this time has become the more distant and impersonal Providence. The Hand's third apparition is the only one to show up in the «Wealth». Discussing how a merchant would rather invest at home than abroad in order to keep an eye on his capital, thus rendering the greatest possible revenue to his own society, Smith states that "he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." A fitting observation, yes, but not exactly a passionate defense of raw, unfettered capitalism. Buchan gives us a glimpse of what Smith really thought of these merchants: " 'The proposal of any new law or regulation of commerce' that arises from the merchant class, therefore, 'ought always to be listened to with great precaution.' " In all likelihood, Smith would have included their modern ideological apologists in the warning as well. Later on in the book the Hand just disappears, substituted by the more rational if less poetic (and rhetorically worthless) "private interests and passions of individuals."

As with the name for the field of economics and even with the title of his first masterwork (due to his knowledge of L.J. Levesque de Pouilly's «Théorie des sentiments agréables»), Smith was in some debt to yet another thinker for the basic notion of the invisible hand: Bernard de Mandeville, author of the controversial «The Grumbling Hive», expanded and republished as «The Fable of the Bees: or, Private Vices, Publick Virtues», which stirred up in England a veritable hornets' nest. Mandeville's point was "that all public benefits arose from vices," vices being, in essence, self-interest. But "Mandeville wrote like a pimp," Buchan assures us, "and his blend of moral anarchy and gutter utilitarianism" did not go down well in proper English circles. The brazen satirist had it coming, and Smith dutifully joined in to denounce Mandeville in the «Theory», though he did well absorb a clever point or two. This second clever Mandevillean point was none other than the «Wealth's» fundamental concept of the division of labor, yet another instance of strategic Smithian borrowing.

Still, Smith was no plagiarist. Ideas do not arise in a vacuum but are always the product of the times, and Smith did develop and refine those ideas legitimately. It was his good fortune that his times were rich in world-class thinkers, beginning with his best friend, David Hume, a giant of modern philosophy who is always at hand in the narrative. (Incidentally, Hume also had already discussed the "partition of employments" in «A Treatise of Human Nature», in accordance with the spirit of the times -- which in this particular regard stretch all the way back to Plato.) This I found to be marvelous of this book, that Buchan takes the reader on a grand tour of the thinkers and doers of the period in their historical context. All presented in a most elegant literary prose. What more can one ask for? A detailed index? It's there, one of the best to be consulted. «The Authentic Adam Smith» is a pleasure to read. I would suggest you savor the feast at your earliest convenience.

James Buchan. The authentic Adam Smith: his life and ideas. First American edition. NY: Norton. 2006. ISBNs: 0393061213 978-0393061215

This American title matches the book's content better than "Adam Smith and the Pursuit of Perfect Liberty", the title of its original publication in Great Britain. The "pursuit of perfect liberty" echoes the often-heard canonization of Smith as patron saint of free markets. Smith's intellectual output did not even center on freedom. Therefore, I doubt Mr. Buchan chose that off-center title (his editors probably did for marketing reasons). In fact, Buchan throws cold water on the manipulation of Smith at the outset. Smith supported free trade and the free workings of markets, BUT ONLY UP TO A POINT. He understood that extravagant appetites have to be curbed by regulation; otherwise, uncurbed economic power corrupts both politics and markets. Here are a few quotes from Buchan on this matter (the single quotation marks indicate Smith's original words from "The wealth of nations"):

" `The proposal of any new law or regulation of commerce' that arises from the merchant class, therefore, `ought to be listened to with great precaution'." P. 103.

The precursors of today's lobbies that tilt government to protect the moneyed class are mentioned here again as " `an overgrown standing army' ever poised to intimidate the legislature." P. 109.

" `Civil government,' Smith declares, `so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.'" Pp. 112-3.

Smith advocated that workers be free to choose their employment (no forced labor), that they have a safe workplace, that children be educated (especially the poor), that there be public education, that taxation be progressive (a modern paraphrase; details in p. 115).

Reading Smith is tedious: his treatises are long and the style is unwieldy. Long, ponderous sentences were more tolerated then. Add words that will be a bit off to an American [e.g., undertaker in lieu of entrepreneur]). It's therefore tempting to cherry-pick sentences to make a point on the cheap. Ironically, my preceding quotes were also cherry-picked from Buchan's book, but only for the humble purpose of slowing down monoliths who try to propagandize a monolithic Smith. Smith stressed the benefits from the division of labor, the freedom of entrepreneurs to run their businesses without unjustified regulations, and the great wealth that would accrue--provided counter-balancing restrictions (regulations) ensure fairness in order for the system to keep humming.

The biography is about 70-80% on Smith's intellectual life. There were not many intimate details on his personal life. We go fast through his fatherless childhood in Scotland and his student years in Oxford. But Buchan took the time to illuminate the social context, the influential persons and ideas. Smith returned to Scotland to teach moral philosophy. He did not marry. He was a sober man who spent his life trying to attain a systematic understanding of the world. He wrote on logic, physics, astronomy, jurisprudence, languages, morality and economics. But he thought a large part of his work was not good enough yet by the end of his life; so he ordered it burned just before his death. He "only" published two treatises. Between the "Theory of moral sentiments" (1759) and "An inquiry into the nature and causes of the wealth of nations" (1776), Smith stayed in France for about 3 years. Because he always aimed at systematizing his own understanding, the systematic methodology of the French economists impressed him and influenced the "Wealth of Nations"--although he departed from some of their points.

Buchan tries to present the main points of those two treatises in chapters 3 and 5, which means a fast--but competently guided--tour of Smith. Buchan recommends reading books III and IV of the WN before books I and II. Why? "In a fashion that is both perverse and also quintessentially eighteenth century, deductions from a hypothetical law of nature precede an investigation of actual historical facts." P. 108. But there was more than TMS and WN. Other surviving works, letters, discussions, and stories fill up the other chapters.

Buchan was a perceptive, competent, and temperate guide. He seems to have put Smith in his genuine historical setting after a tedious tracking of references. Personal letters and third-party accounts were key for historical authenticity and for getting closer to Smith the person. Most people who knew Smith liked him, probably for his sobriety and honesty that gave his progressive ideas a cachet of integrity.

One peeve. It's OK that the old quoted Scottish English is often hard to understand (quotes from David Hume read better than the others). But it looks like Buchan steeped so much in his characters that his own style got heavier, too. I hit too many strange, long sentences for my taste. Not that they are all over (in fact, there are sharp, pristine sentences in there), but enough of them to slow me down in a first reading.

Nevertheless, this is a rich book, with many points worth marking for return readings.

If you are going to cite Adam Smith for anything, you should, first, read The Wealth of Nations, and, second, read about him. Philosophy never sits comfortably in the abstract; one should know about the man to judge his words. This book is a short and accessible pathway to that end. A similar example is found in references to, for example, JRR Tolkien. Behind his wonderful stories, there is strong and enlightening evidence that the Professor actually believed in the independent existence of the creatures he was, as he put it, "discovering." For an exploration of this, see 'MIRKWOOD: A Novel About JRR Tolkien" (available through Amazon in May, 2010).