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The idea of civil and religious liberty, of resistance to arbitrary
government and unequal laws, of confidence in individual
reason and private judgment as opposed to the dictates of
external authority, had begun even in the seventeenth century
to spread from the world of religion and politics to the daily
business of life. At the beginning of the second half of the
eighteenth century the predominant form which this idea took
was the liberation of individual effort in the world of industry
and trade from oppressive restrictions and arbitrary and unequal
imposts ; and it found in the Code of Nature a quasi-philosophical
basis on which to build a complete economic ' system of natural
liberty.' The French Revolution, of which the seeds were then
being sown by the Economistes (or Physiocrates, as they were
afterwards called, from the name they gave to their system, a
name denoting the government of society by nature or natural
laws), was, in its origin, an economic revolution, a ' rebellion of
the belly,' stirred up ah initio by the Economistes, who saw in
the fetters and insecurity of industry the cause of the poverty



80 TJie Political Economy of Adam Smith.

of France, and in the superior freedom and security of its culti-
vators and tradespeople the secret of the superior prosperity of
Grreat Britain. Living in such a world of human misgovernment
and suffering toil, beholding, as the Physiocrates did, all the
natural sources of wealth locked up by human laws, it is not
surprising that the doctrine of a Code of Nature, of natural rights
of liberty and property, of a natural organization of society for
the increase of human prosperity and a just distribution of the
fruits of the earth and of industry, came upon them like a new
revelation, and carried the authority of one. Thus, like Adam
Smith, on whom their doctrines had no small influence, the
Physiocrates invested the ideal Code of Nature, which had com©
to them through the lawyers of their country from the juris-
prudence of Pome, with a divine origin, and found in it a
complete circumscription and definition of the province of human
sovereignty. The three same fundamental conceptions derived
from the three same sources — from Graeco-Poman speculation,
from Christian theology, and from the revolt of the age against
arbitrary interference with private industry and unequal imposts
on the fruits of labour, formed the groundwork of the political
economy of Adam Smith and the Physiocrates : the sole
difference in this respect is, that the latter gave the name
political economy to the whole of social philosophy, while Adam
Smith limits the particular name to a department of social
philosophy relating to wealth, and that they enunciated these
doctrines as laws of Nature and God with more passionate
emphasis. Adam Smith had not derived any of the three funda-
mental ideas of his political economy from the Physiocrates —
for those ideas came to both from the history and philosophy of
the past, and from the circumstances of the age — but he was
strongly confirmed in them by his visits to France, his personal
intercourse with them, and his study of their writings ; he
caught from them, moreover, not only particular propositions
and expressions, but something of the form which his doctrine
of natural distribution has taken, and also the precise limitation
which he gives to the functions of the State.

Smith was himself so sensible of his debt to the Physiocrates,



The Political Economy of Adam Smith. 31

that he not only speaks of Quesnay's system as ' the nearest
aj)prosimation to the truth that had been published upon the
subject of political economy,' but was prevented only by
Quesnay's death from dedicating to him his own great treatise.
He was, however, under a much more solid obligation to a much
greater Frenchman, the illustrious Montesquieu. Mr. Buckle,
who in his excellent chapters on the * Intellectual History of
France ' justly traces to England the origination of the spirit
of liberty which in the eighteenth century took possession of
French philosophy, nevertheless does injustice at once to France
and to Great Britain in overlooking the influence of Montesquieu
over Scotch philosophy in Adam Smith's age. And the same
oversight, coupled with a view of political economy which
Mr. Buckle himself adopted from Ricardo and his school, leads
him to describe Adam Smith's method as entirely deductive. The
philosophy of Great Britain, Mr. Buckle affirms, owes nothing
to France ; and he represents the intellect of Scotland as having,
under clerical guidance, become wholly deductive, referring as
a crucial example to Adam Smith, Scotland's most eminent
political philosopher. The clerical system of deductive reasoning
certainly runs through and warps the whole philosophy of Adam
Smith. Nevertheless, his philosophical love of truth, and of
interrogating nature itself in its real phenomena, and the
inductive method of doing so which Scotch philosophy iu his
age had adopted from Montesquieu, preserved him from many
errors into which the method of deduction from assumptions
respecting Nature and its laws has led one school of his followers,
which at the present day is not backward in claiming the
clerical prerogative of orthodoxy. It has already been observed
that two opposite systems of reasoning were before the world in
Adam Smith's age, and that he combined them both — thq
system of reasoning from a theoretical law of Nature, and th^
historical inductive method of Montesquieu, which traces th© , i^)
real order of things, and seeks in the circumstances and history
of society the explanation of its different states in different ages
and countries. The latter method had a powerful attraction for
a new school of political and jural philosophy in Scotland to



33 The Political Economy of Adam Smith.

which Adam Smith belonged. Lord Kaimes, his literary
patron, and Millar, his own pupil, alike followed Montesquieu's
method. Dalrymple, also a disciple of Lord Kaimes, states in
the dedication of his 'History of Feudal Property'— a work
which seems to liave afforded Adam Smith not a few important
suggestions — that much of his manuscript had actually been
' revised by the greatest genius of the age, President Montes-
quieu.' And Millar expressly states that in his lectures on the
Philosophy of Law, his great master ' followed the plan which
seems to have been suggested by Montesquieu ; endeavouring to
trace the gradual progress of jurisprudence from the earliest to
the most refined ages, and to point out the effect of those arts
which contribute to subsistence and to the accumulation of
property in producing corresponding improvements in law and
government.' But, as Mr. Buckle himself says, Adam Smith's
political economy and the rest of his philosophy were ' part of
a single scheme.' And a comparison of Books iii., iv., and v.
(chapter i.) of the ' Wealth of Nations ' with Adam Smith's own
description, on the one hand, of the work he had previously
contemplated on the History of Law, and Millar's account of
his lectures, on the other, shows how closely connected were his
economic and his jural researches. So closely indeed were they
so, that internal evidence confirms the statement of Dugald
Stewart, that he actually published in the ' Wealth of Nations '
a valuable part of the work he had long before announced on
the jural history of mankind ; and we have in this fact a pro-
bable explanation of the story that he destroyed a few days
before his death the manuscript of his lectures on jurisprudence.
He preserved in the ' Wealth of Nations ' what he probably
thought their most valuable results.*



* An eminent Scotcli philosopher of the present day, Mr. Alexander Bain, has
expressed to me a doubt that Adam Smith destroyed anything which he considei-ed
vaUiable ; adding, that he was little disposed to consider anything to which
he had given research and thought of small value. The preservation of the chief
results of his jural studies in the Wealth of Nations reconciles Mr. Bain's opinion
on this point with the destruction of the manuscripts, of which there seems to me
■conclusive evidence.



The Political Economy of Adam Smith. 3S

The problem wliich Adam Smitli proposed to himself was by
DO means only the illusive one, What is a jjriori the order of
Nature, or * the natural progress of opulence ?' He inquired
further ' What had been the actual order of things, the actual
progress of opulence, and its causes ?' What had occasioned
the slow progress of Europe from the time of the barbarian con-
quests down to modern times ? What the more rapid advance of
Ghreat Britain than of France and other parts of the continent ?
To answer these inquiries he subjected the phenomena of history
and the existing state of the world to a searching investigation,
traced the actual economic progress of different countries, the
influences of laws of succession, and of the political distribution
of property, the action and reaction of legal and industrial
changes, and the real movements of wages and profits so far as
they could be ascertained. Nor was he content with the induc-
tions of the closet from written evidence — though necessarily the
most important field of inductive investigation in social philosophy
— he compared all the phenomena which careful personal obser-
vation, both in his own country and in France, had brought under
his view. In short, he added to the experience of mankind a
large personal experience for inductive investigation. Even the
Physiocrates, although their study of actual phenomena was
much less comprehensive and minute, though they were far more
given to accepting at once their own unverified ideas as laws of
nature, yet by no means neglected experience entirely. They
had studied the economic condition of their own country, and
compared it with what they knew of Great Britain ; and they
believed their theories of the natural order of things founded on
the evidence of the results of interference with industry and
spoliation of its fruits on the one hand, and of individual liberty
and security of property on the other. The extent to which
observation guided their doctrines is remarkably illustrated by
their division substantially into two schools, whose conclusions,
though converging in the main, were reached by different
paths of personal experience, and moulded by it. Quesnay, the
son of a small farmer, reared in the country amid the sufferings
of the peasantry and the stagnation of agriculture under despotic



34 The Political Economy of Adam Smith.

restriction and ruinous imposts, and knowing of what imprisoned
riches the soil was possessed, taught that land was the sole
original source of wealth, agriculture the sole really productive
employment, to whose fruits other industries gave only changes
of form or place. Gournay, on the other hand, a merchant
himself, and of a line of merchants, made the freedom of trade
his staple doctrine, and summed up in the maxim, Lcdssez /aire
et passer, the duties of government.* The distinction exemplifies,
moreover, that influence of personal history on the forms of
political economy to which reference has been made.

There ran thus through the political economy of both Adam
Smith and the Physiocrates, though much more extensively and
systematically in the former, a combination of the experience
philosophy, of inductive investigation, with a priori speculation
derived from the Nature hypothesis. Hence, while on one hand
the inductive method preserved the great Scotchman from grave
errors into which not a few of his English followers in the
mother-country of inductive philosophy have been led by the a
priori method, on the other hand the bias given by preconceived
ideas was so strong in the case of Smith himself, as to cause him
to see in all his inductions proofs of a complete code of nature —
of a beneficent order of nature flowing from individual liberty
and the natural desires and dispositions of men. Like the
Physiocrates, he blended the so-called * evidence,' or self-evidence,
of the law of nature in itself, with the evidence of phenomena
carefully collated and sifted. The truth is, that Smith wrote
before the physical sciences had developed canons of induction,
and he thought an induction complete when he had obtained an
immense number of instances, and a theory proved when it
seemed to fit every observed case. Throughout history, and
over Europe, he saw nothing but disorder and misery from such
human legislation as the world had known, wherever it went
beyond protecting personal liberty and property ; he saw on all
sides a mass of poverty traceable to State interference ; the only



* Les Economlstes Fran



Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 4 of 41)