Most of this nonsense has been blown to the four winds by Mr. Cannan’s publication of the Lectures delivered at Glasgow before Adam Smith went to France; but a vast quantity of similar rubbish is embedded in the economic literature of the last thirty or forty years, and a difficulty which learned investigators have invented and solved has been dignified in Germany by the name of “Das Adam Smith Problem.”
The truth, as Smith conceived it, is that men are actuated at different times by different motives, benevolent, selfish, or mixed. The moral criterion of an action is: will it help society, will it benefit others, will it be approved by the Impartial Spectator? The economic criterion of an action is: will it benefit me, will it be profitable, will it increase my income? Smith built his theory of industrial and commercial life upon the assumption that wage-earners and profit-makers are generally actuated by the desire to get as high wages and profits as possible. If this is not the general and predominant motive in one great sphere of activity, the production and distribution of wealth, the Wealth of Nations is a vain feat of the imagination, and political economy is not a dismal science but a dismal fiction. But there is nothing whatever either to excite surprise or to suggest inconsistency in the circumstance that a philosopher, who (to adopt the modern jargon of philosophy) distinguished between self-regarding and other-regarding emotions, should have formed the first group into a system of economics and the second into a system of ethics.
If this comes of learning, an even more extravagant charge has been preferred by an emotional school. A heated imagination, certainly not encumbered with facts, and informed only that Adam Smith was the founder of an odious science, denounced him as “the half-bred and half-witted Scotchman” who taught “the deliberate blasphemy”—“Thou shalt hate the Lord thy God, damn His Laws, and covet thy neighbour’s goods.” The same authority declares that he “formally, in the name of the philosophers of Scotland, set up this opposite God, on the hill of cursing against blessing, Ebal against Gerizim”—a God who “allows usury, delights in strife and contention, and is very particular about everybody’s going to his synagogue on Sunday.”[34] These three characteristics of Adam Smith’s deity were unfortunately chosen; for, as it happens, he disliked usury so much that he defended the laws which had vainly sought to prevent high rates of interest; disapproved vehemently of war, which he regarded as one of the deadliest enemies of human progress, and protested against the idea that a perfect Deity could possibly desire His creatures to abase themselves before Him. It is sad to think that to get his gold the Ruskinian must pass so much sand through his mind. The Fors Clavigera, with all its passionate intensity and high-strung emotion, is a standing warning to preachers not to abuse their masters, and to learn a subject before they teach it. Let those who climb so recklessly on Ebal deliver their curses from a safer foothold.
Perhaps what most impresses one in reading the Wealth of Nations is its pre-vision. The author seems to have been able to project himself into the centuries. He saw the blades of wheat as well as the tares that were springing up; and it would be hard to mention a single one of his forecasts and Utopias that has not been realised in some degree, or at least taken shape as a political project during the last century. He was, of course, above all, the precursor of Cobden and of the philosophic Radicals, who drew from him not only their economics, but their foreign and colonial policy. It is perhaps remarkable, after so fair a beginning had been made in his own lifetime, that the triumph of his doctrines was so long delayed. But most of what Shelburne, Pitt, and Eden did for commercial emancipation in the eighties was swept away by the French war. And when Napoleon fell, England was so weak, tyranny and superstition were so ground into the principles of her governing classes, that she seemed to be, in Milton’s phrase, beyond the manhood of a Roman recovery. For many years Smith’s disciples, and even the indefatigable Bentham, laboured almost in vain. Parliament was ignorant and bigoted. Until a great agitator arose, very little could be done; and the great agitator did not arrive quite soon enough to fulfil Pulteney’s prediction that Smith would convert his own generation and rule the next.
In the early years of the nineteenth century the practical influence of Smith’s teaching was felt principally in France and Germany. In France, as we have seen, Count Mollien was a professed disciple of the new economy. “It was then,” he said, in reviewing the events of his youth, “that I read an English book which the disciples M. Turgot had left eulogised in the highest terms—the work of Adam Smith. I had especially remarked how warmly the venerable and judicious Malesherbes used to speak of it—this book so disparaged by all the men of the old routine.” It is perhaps the most dazzling of all Smith’s posthumous triumphs, that he, through Mollien, should have been the philosophic guide of Napoleonic finance.
But his conquest of Germany was equally startling and momentous. The movement in that country can be directly traced to the university of Königsberg, where Kraus began to lecture on the Wealth of Nations in 1781. He soon gained the ears of the official class. In East Prussia, vexatious dues and taxes, with a multitude of feudal embarrassments, were removed from internal commerce, and in spite of much opposition Smith’s principles spread all over Germany. By the close of the Napoleonic war the officials as well as the professional economists were converts to the new ideas. Stein and Hardenberg, two truly great reformers, led the way. Year by year commercial restrictions were removed, and though jealousy of Prussia stood in the way of complete commercial union, the North German Zollverein constituted a great advance. It removed the barriers between Prussia and the adjoining States, and reduced external duties to such an extent that in 1827 Huskisson cited the example set by Germany to prove the wisdom of abandoning a restrictive policy. Even Friedrich List, who sought for political reasons to build up a counter theory of protection for infant industries, asserted that free trade was the right policy for England and for every adult nation. List, who often wrote with a bitterness and malice that only readers of his unhappy life can excuse, admitted in his principal work “the great services of Adam Smith”:—
“He was the first to introduce successfully into political economy the analytical method. By means of this method and of an unusual sharpness of intellectual vision he illuminated the most important branches of a science, which before his time had lain in almost utter darkness. Before Adam Smith there was only a policy (Praxis); his labours first made it possible to build up a science of political economy; and for that achievement he has given the world a greater mass of materials than all his predecessors and successors.”
Mill’s Political Economy is the only English treatise that can be compared with the Wealth of Nations. Indeed in his preface Mill challenges the comparison, but adds that “political economy, properly so-called, has grown up almost from infancy since the time of Adam Smith.” He finds the Wealth of Nations “in many parts obsolete, and in all imperfect,” and though he speaks generously enough of Adam Smith’s “admirable success in reference to the philosophy of the [eighteenth] century,” it is plain from this preface and from the autobiography that the later economist felt he could look down upon the earlier from the serene temples of increased knowledge and better social ideas. Mill’s confidence was not only justified for the time being by unqualified success in the sense that his own book at once became, and remained for a generation, the principal text-book of English students, it was also based upon what appear at first sight to be enormous advantages. A more logical and systematic arrangement is adopted. Errors are corrected; digressions are few; and in order to attain scientific exactitude, historical illustrations from the conditions and experience of nations are replaced by more precise instances of imaginary societies labelled A, B, C. Technical terms and definitions make it easy for the student to move lightly about in an artificial atmosphere.
But in this realm of political economy, is it not well to keep a foot, or at least an eye, on the ground? In Mill’s treatise there is a danger of mistaking words for things. It is never so in Smith’s inquiry. He gave twenty years to a task for which Mill could hardly spare as many months. With a gift for exposition, certainly not inferior, he had what Mill had not, a love of the concrete, a faculty for the picturesque, and withal a nervous force and vigour in argument quite peculiar to himself. It has been said that Smith hunted his subject with the inveteracy of a sportsman. With a wonderful knowledge of history, law, philosophy, and letters, he combined an intuitive insight into the motives of men and the unseen mechanism of society. At the same time, by restricting his horizon to wealth and its phenomena, he was able to see how men always had acted and always would act under certain circumstances, and by what rules public finance should be governed. This is the secret of his success in making political economy queen of the useful arts, and in raising her alone among political studies to the dignity of a science. “I think,” said Robert Lowe, “that Adam Smith is entitled to the merit, and the unique merit, among all men who ever lived in the world, of having founded a deductive and demonstrative science of human actions and conduct.” True, he is not a systematic writer. He does not shine, as so many inferior geniuses have shone, in the art of comparing, correlating, and harmonising the great truths which it is his glory to have discovered and illustrated. He puts us, as Lowe remarked with his usual felicity, in mind of the Sages of Ancient Greece, who, after lives of labour and study, bequeathed half a dozen maxims for the guidance of mankind.
CHAPTER X
FREE TRADE
One of the least edifying features of modern controversy, and particularly of political and economic controversy, is the habit of appealing to precedents and authorities which, if honestly cited, would militate against the opinions of the controversialist. No great writer has suffered more of late years from this species of misrepresentation than Adam Smith; yet his contemporaries and immediate successors both in England and abroad perfectly understood his drift. When Pitt and Shelburne declared themselves disciples of Smith, they thereby declared themselves free traders, and Pitt’s commercial policy from 1784 to 1794 was simply an attempt to carry out Smith’s views. Resolute retrenchment, customs’ reform, the commercial treaty with France, reduction of debt, were all projected under the inspiration and countenance of Mr. Commissioner Smith.
Nor did the English economists, from Ricardo to Mill, ever suggest that Adam Smith had doubts about the main doctrine of his book. In France and Germany his opinions were eagerly embraced. To translate, interpret, and systematise the Wealth of Nations was the main function of continental economists in the early years of the nineteenth century; and its influence was seen in a rapid and radical modification of commercial policy. Internal barriers were swept away, feudal restrictions abolished, and tariffs reduced. When the waves of reaction—political rather than economic—began to roll in, and “national” economists tried to reconstruct the case for protection, they paid Smith the compliment of a violent onslaught. “Smithianismus” then became a term of abuse in protectionist circles, and so remained until it was superseded by the equally cacophonous “Manchesterthum.” It was in England that the idea was started of dressing up Adam Smith as a protectionist. While List was inveighing against “cosmopolitical economy,” our own free traders in their agitation against the corn laws found themselves confronted with a new interpretation of their prophet. At one of the League meetings (July 3, 1844) Cobden gave a humorous description of the way in which some protectionist pamphleteers tried to adapt Adam Smith’s opinions to their own views. “They have done it in this manner: they took a passage, and with the scissors snipped and cut away at it, until by paring off the ends of sentences and leaving out all the rest of the passage, they managed to make Adam Smith appear in some sense as a monopolist. When we referred to the volume itself, we found out their tricks, and exposed them. I tell you what their argument reminds me of. An anecdote is told of an atheist who once asserted that there was no God, and said he would prove it from Scripture. He selected that passage from the Psalms which says, ‘The fool hath said in his heart there is no God.’ He then cut out the whole passage, except the words, ‘there is no God,’ and brought it forward as proof of his statement.”
If these false notions about Adam Smith’s economic opinions had died with the pamphlets of obscure protectionists sixty years ago, no more need have been said. But as they have been revived again and again in England, Germany, and the United States, and solemnly adopted with all the plausibility of seemingly circumstantial moderation by persons of European repute, we shall examine the passages in the original, in order to settle the question whether Smith can be made to serve as “the spiritual father” of a commercial policy not essentially different from the one his criticism destroyed.
By a policy of free trade, which Adam Smith said was the best means a statesman could adopt of promoting national wealth and commerce, he meant a policy that would relieve commerce and industry from all internal dues and all external duties or prohibitions. Anything that would bring other nations into line commanded his warm sympathy and support. But what he desired as a patriot was a policy of free imports irrespective of what other countries might do. The object of a national, as of an individual policy in trade, should be to buy in the cheapest and sell in the dearest market.[35] This will appear at once from the so-called exceptions or limitations by which Smith is supposed to have watered down what Cobden’s biographer has called “the pure milk of the Cobdenic word.”
The Act of Navigation is the first of “the two cases in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry.”[36] But by “advantageous” Smith does not mean “likely to enrich.” It is a measure of defence, and is unfavourable to trade.
“The defence of Great Britain,” he says, “depends very much upon the number of its sailors and shipping. The Act of Navigation, therefore, very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country.” The Act is justified as a pure measure of defence, though it aims at monopoly, and offends against the principles of free trade. Lest, however, there should be any doubt upon the point, he goes on to make it quite clear that, while he praises the Act, as he might praise the building of a man-of-war, he condemns it as an economic measure. In the passage immediately following there are two sentences which exactly give the point of view, and should help to dissipate the false impression (accepted and circulated by authorities like Hasbach, who ought to know better) that Smith’s doctrines are very different from Cobden’s:—
“The Act of Navigation is not favourable to foreign commerce, or to the growth of that opulence which can arise from it.... As defence, however, is of much more importance than opulence, the Act of Navigation is, perhaps, the wisest of all the commercial regulations of England.”
How completely the Navigation Act failed as a commercial measure appears from a number of passages in the Wealth of Nations which together completely refute the fallacy, so generally adopted by English historians, that it ruined the Dutch, enriched England, and gave her a commercial and naval supremacy which she could not otherwise have achieved. Holland, he says, is richer than England; she gained the whole carrying trade of France during the late war; she still remains “the great emporium of European goods,” and so forth. All that Smith claims for the Act is that it helped to secure the country a sufficient supply of seamen for the navy in time of war.
Further, as there are two cases (the necessity of defence and the propriety of countervailing an excise duty) “in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, so,” continues Smith, “there are two others in which it may sometimes be a matter of deliberation”: in the one, how far it is proper to continue the free importation of goods from a particular foreign country; in the other, how, and how far, free importation, after it has been interrupted for some time, should be restored. The first case of doubt is that of doing evil by retaliation in order that good, in the shape of freer trade, may come. Occasionally, he writes, it may be wise to retaliate, “when some nation restrains by high duties or prohibitions” the importations of our manufactures. After giving some examples of commercial retaliation, one of which ended in war, Adam Smith lays down the cautious rule that there may be good policy in retaliations of this kind, but only where there is a probability that retaliatory duties will procure the repeal of the high duties or prohibitions complained of. “The recovery of a great foreign market will generally more than compensate the transitory inconvenience of paying dearer during a short time for some sorts of things.” He leans strongly against the policy, partly because he is unwilling to trust “that insidious and crafty animal vulgarly called a statesman” to use such a weapon wisely; partly because you rarely benefit the sufferers and always injure other classes of your own citizens, than those whom you are trying to assist.
The second case of doubt was merely one of expediency—whether free trade should be introduced quickly or slowly. “In what manner the natural system of perfect liberty and justice ought gradually to be restored” Smith left to the wisdom of future statesmen and legislators to determine. But he maintained that the evils attending the remedy were usually exaggerated, and this view proved to be correct when Sir Robert Peel and Mr. Gladstone effected the transformation by five mighty strokes of the fiscal axe.
We have now examined all the passages which could give colour to the impression that Smith was only a free trader—on conditions. That part of the task is easy enough. The difficulty begins when we seek positive arguments against protective or differential taxation. The woodman of Mount Ida was not more embarrassed in choosing a tree to fell. The Wealth of Nations is a forest of full-grown arguments for free trade. The more one reads it, the more irresistibly is one driven to the conclusion that the science of political economy, as established in this masterpiece, is inextricably bound up with the doctrine of free trade. Every assumption and conclusion, his criticisms of previous and existing theories, laws, customs, and opinions, his surveys of the commercial and colonial policy of Europe, all bear us directly or indirectly to the same goal. Yet there is one principle which seems to take precedence in the argument. In the division of labour, Smith found a key to the growth of wealth and to the enlargement of the material comforts that are necessary to the progress of refinement and civilisation. The division of labour is therefore his starting-point, and instead of leaving it where Plato and Aristotle let it rest—a barren formula of economic society—he sets it vigorously in motion, and converts it, as it were, from a slumbering lake into a vast reservoir that irrigates and fertilises the whole plain of inquiry. And had he been confined to one argument for free trade, this is probably the one he would have adopted.
If we were asked to select that passage in the Wealth of Nations which gives most succinctly the broad objections to a protective policy, we should turn to the second chapter of the fourth book, “Of restraints upon the importation from foreign countries of such goods as can be produced at home.” He begins by admitting that high duties or prohibitions can secure to home producers a monopoly of the home market. At that time British graziers enjoyed the monopoly of providing the home market with butcher-meat. The manufacturers of wool and silk were equally favoured, and the duties on foreign linen, for which Hume had pleaded in one of his commercial essays, had lately been raised.
Smith thereupon asks whether these protective measures, by giving an artificial direction to industry, are likely to be of general benefit to society. The first answer is that in business every man seeks his own advantage, that every man knows his own business best, and that “the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society.” Though intending only his own gain, he is “led by an invisible hand to promote an end which was no part of his intention.” Indeed the selfish trader—the economic man, if you like—promotes the interest of society far more effectually than those who affect to trade for the public good. Is it not evident that the individual himself, though he may make mistakes, can judge best how and where to employ his own labour or capital? The statesman or lawgiver who attempted to direct private people how to manage their business and spend their money would not only be overloaded with work, but would be assuming an authority “which could safely be trusted, not only to no single person, but to no council or senate whatever.” From this consideration we pass almost insensibly into the argument from the division of labour.
“It is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy. The taylor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a taylor. The farmer attempts to make neither the one nor the other, but employs those different artificers. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for.
“What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.”
Capital and industry are certainly not employed to the greatest advantage when they are directed to objects which under natural conditions could be bought cheaper than they could be made. It is true, he adds, anticipating the infant industry argument of Alexander Hamilton, List, and Mill, that “by means of such regulations a particular manufacture may sometimes be acquired sooner than it could have been otherwise, and after a certain time may be made at home as cheap or cheaper than in the foreign country.” But cui bono? Even in this case “it will by no means follow that the sum total either of its industry or of its revenue can ever be augmented by any such regulation.” One immediate effect of such regulations must be to diminish the revenue of the society, “and what diminishes its revenue is certainly not very likely to augment its capital faster than it would have augmented of its own accord had both capital and industry been left to find out their natural employments.”
But though reason led him by every road to a complete system of liberty as the true end of commercial policy, he despaired of its adoption. “To expect indeed that freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it.” Even if public prejudice were overcome, the resistance of private interests would be unconquerable. The landlords indeed had not yet acquired a strong interest in protection. At that time the home supply of wheat and oats in ordinary years was sufficient, or nearly so, for the requirements of the population, and prices were much about the same in England as in other European countries. The moving spirits of protection were master manufacturers, who, “like an overgrown standing army,” had begun to intimidate the legislature.
“The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more, if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.”
Under these circumstances it is very surprising that Adam Smith should have chosen to submit the corn laws to so long and destructive an analysis. He seems to have foreseen that the great battle for which he was sounding the advance would ultimately rage round a question then almost academic, and that cheap food would be the keystone of the free trade argument.
After several years’ experience as a customs official, Adam Smith took the opportunity in his third edition (1784) of considerably enlarging the Wealth of Nations; and, among other important additions, he inserted at the end of Book IV. a new chapter, entitled “Conclusion of the Mercantile System.” It is a deeply instructive recital of the extremities of absurdity into which the British legislature had suffered itself to be led blindfold by a false theory and powerful interests. The encouragement of exportation, and the discouragement of importation, were the two great engines by which the mercantile system proposed to enrich every country; but with regard to some particular commodities, it followed an opposite plan: discouraging exports, and encouraging imports. Thus it penalised or prohibited the exportation of machinery, wool, and coal; nor was the living instrument, the artificer, allowed to go free. Two statutes had been passed in the reigns of George I. and II. to prevent any British artificer going abroad under penalty of being declared an alien, and forfeiting all his goods and chattels. “It is unnecessary, I imagine, to observe how contrary such regulations are to the boasted liberty of the subject, of which we affect to be so very jealous; but which, in this case, is so plainly sacrificed to the futile interests of our merchants and manufacturers.” Smith is very sarcastic about regulations whose “laudable motive” was to extend British manufactures, not by improving them, but by depressing those of our neighbours, and by putting an end as much as possible to the troublesome competition of such odious rivals. He then lays down a maxim “so perfectly self-evident, that it would be absurd to attempt to prove it”:—
“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
This golden rule was everywhere violated by the mercantile system, which seemed to consider production the ultimate object of all industry. But the worst of all its inventions was the colonial monopoly. “In the system of laws which has been established for the management of our American and West Indian colonies, the interest of the home consumer has been sacrificed to that of the producer with a more extravagant profusion than in all our other commercial regulations.” If there was anything more odious to Adam Smith than a protective duty, it was the discriminating or preferential duty which had been invented for the purpose of tying up the trade between Great Britain and her colonies. Both his “Utopias” were projected for the express purpose of putting an end to a colonial system which he regarded as a dead weight upon both the mother country and her dependencies.
The theory that Smith grew more protectionist as he grew older might be dismissed now that we have considered the lectures, and compared the first and third editions of the finished work. But it is possible that a very desperate casuist might still find one more plea to urge. He might say: granted that Smith remained to the last a theoretical free trader, yet he frankly admitted it to be a Utopian project, and he would not, as a responsible official, have advised its adoption. Did he not accept a Crown appointment under Lord North’s protectionist administration, and did he not spend the last years of his life as a principal instrument in collecting the proceeds of a highly protectionist tariff? Nay, further, did he not take a carnal satisfaction in the leaps and bounds by which the revenue under his charge was at that time advancing? In December 1785 he wrote to William Eden:—
“It may perhaps give that gentleman [Mr. Rose of the Treasury] pleasure to be informed that the net revenue arising from the customs in Scotland is at least four times greater than it was seven or eight years ago. It has been increasing rapidly these four or five years past, and the revenue of this year has over-leaped by at least one half the revenue of the greatest former year. I flatter myself it is likely to increase still further.”
Whatever force the argumentum ad officium might have in a country (if such there be) where customs officials are sworn supporters of the commercial policy of the Government, it has none in reference to Great Britain, and less than none if regard be had to the circumstances of Smith’s appointment. There is no reason for supposing that Lord North had any particular liking for protection, though as the instrument of the king’s war policy he had an insatiable craving for revenue, and in pursuit thereof adopted, as we shall see, several taxes of a non-protective character suggested by Smith in the first edition of his treatise. Further, when the above letter was written Pitt was already, under the inspiration of this very customs official, initiating a free trade policy, and was actually preparing the great commercial treaty with France which he was to carry into effect a few months later. A patriotic Scotsman might well delight in his country’s rapid recovery from the disastrous effects of the war, and the author of Pitt’s policy would naturally anticipate an increase of prosperity with an expansion of imports and a growth of the revenues under his charge.
Moreover, there is happily extant a relic of the correspondence which Smith carried on as financial adviser to ministers. In the year 1778 Ireland was in a terrible plight. In addition to all the evils of a minority rule, she suffered as a whole from a commercial persecution by the predominant partner. Her trade had been deliberately and malevolently throttled by the superior legislature of Great Britain. At that time Irish wool could be exported to no country save Great Britain. Irish woollens could only be exported from specified ports in Ireland to specified ports in Great Britain. All export of Irish glass was absolutely prohibited. Worst of all, she was not allowed to send her staple article—cattle—or even salt provisions to the English market. And she was excluded from the colonial trade.
Even so cool a political hand as Henry Dundas (then Lord Advocate), writing to Smith at the end of October 1779, confessed that he has been shocked at the tone and temper of the House of Commons in its dealings with Ireland’s prayers for elementary justice. But the Irish Parliament was now demanding free trade in tones too peremptory to be ignored, for they were backed by a threatening display of armed force. Dundas saw little objection to acceding to some of the requisitions; but he had no very clear grasp of the economics of the situation, and being in correspondence with Eden, the Secretary of the Board of Trade, he wanted an expert opinion from the Seer of Edinburgh. Smith replies that the Irish demand should be satisfied, first, because it is just; second, because it will be for the benefit of English consumers; and lastly, because English manufacturers will suffer so much less than the nation, and the national revenue, will gain. Dundas had seemed to be rather afraid that with cheaper labour and lower taxes the Irish manufacturers might be able to undersell their British competitors. Smith pointed out that they had neither the skill nor the stock [capital] to enable them to do so; “and though both may be acquired in time, to acquire them completely will require more than a century.” Besides, Ireland had neither coal nor wood; “and though her soil and climate are perfectly suited for raising the latter, yet to raise it to the same degree as in England will require more than a century.”
Before he can say precisely what the Irish Parliament means by a free trade, he must see the heads of the proposed bill. If it is only freedom to export, nothing could be more just and reasonable. If it is freedom to import, subject only to their own customs’ duties, that again is perfectly reasonable, though it would “interfere a little with some of our paltry monopolies.” If they wish to be allowed to trade freely with the American and African plantations, that also should be conceded. It would interfere with some monopolies, but would do no harm to Great Britain. Lastly, they might mean to demand a free trade with Great Britain. “Nothing, in my opinion, would be more highly advantageous to both countries than this mutual freedom of trade. It would help to break down that absurd monopoly which we have most absurdly established against ourselves in favour of almost all the different classes of our own manufacturers.” Dundas had hinted that the two Parliaments might be reconciled by a proper distribution of loaves and fishes. Smith did not shrink at all from promoting a good policy by what was then the ordinary method of promoting a bad policy:—
“Whatever the Irish mean to demand in this way, in the present situation of our affairs I should think it madness not to grant it. Whatever they may demand, our manufacturers, unless the leading and principal men among them are properly dealt with beforehand, will probably oppose it. That they may be so dealt with I know from experience, and that it may be done at little expense and with no great trouble. I could even point to some persons who, I think, are fit and likely to deal with them successfully for this purpose. I shall not say more upon this till I see you, which I shall do the first moment I can get out of this Town.”
A week later Smith repeated his argument with some additions and modifications in a letter of November 8th to Lord Carlisle, who then presided over the Board of Trade. He maintains that “a very slender interest of our own manufacturers is the foundation of all these unjust and oppressive restraints,” and ridicules “the watchful jealousy of the monopolists, alarmed lest the Irish, who have never been able to supply completely even their own market with glass or woollen manufactures, should be able to rival them in foreign markets.”
When he passes from commercial considerations to the larger aspects of freedom and good government, his wisdom is no less manifest. What Ireland most wants, he writes, are order, police, and a regular administration of justice, both to protect and to restrain the inferior ranks of people: “articles more essential to the progress of industry than both coal and wood put together, and which Ireland must continue to want as long as it continues to be divided between two hostile nations, the oppressors and the oppressed, the Protestants and the Papists.” He then points out that what the monopolists dread (the prosperity of another country) is not an evil but a good:—“Should the industry of Ireland, in consequence of freedom and good government, ever equal that of England, so much the better would it be not only for the whole British Empire, but for the particular province of England. As the wealth and industry of Lancashire does not obstruct but promote that of Yorkshire, so the wealth and industry of Ireland would not obstruct but promote that of England.” For exactly the same reasons he wanted free trade with France, and with the whole world. If it is good for one man to trade freely with another, for a town with a town, and for a county with a county, how can it be otherwise than good for countries to trade freely together? An economist who strikes at the last proposition should hail Smith’s humorous project of a tariff which would secure Scotland a vintage as well as a harvest.
Much more might be said upon a subject that enters into the politics of every State, and vitally affects the welfare of every struggling toiler in the universe. But the purpose of this chapter will be fulfilled if it restores to Adam Smith his identity as the protagonist in a great contest, as the champion of the right to trade with all the world, against those who stand for privileges, monopolies, and tariffs. According to Bagehot, Smith’s name can no more be dissociated from free trade than Homer’s from the siege of Troy. “So long as the doctrines of protection exist—and they seem likely to do so, as human interests are what they are, and human nature is what it is—Adam Smith will always be quoted as the great authority on Anti-Protectionism, as the man who first told the world the truth, so that the world could learn and believe it.”
CHAPTER XI
LAST YEARS
(1776-1790)
After seeing the Wealth of Nations through the press, Smith lingered a few weeks in London. He was anxious to persuade Hume to come up and consult the London physicians, but Hume shrank from the journey, and implored his friend to return to Edinburgh. So about the middle of April, Smith and John Home[37] took the coach for Edinburgh. But at Morpeth, where the coach stopped, they saw Hume’s servant at the door of the inn. Hume had changed his mind, and was on his way to see Sir John Pringle. Home returned with Hume to London, but Smith, hearing that his aged mother was ill, went on to Kirkcaldy. Before parting, however, the two friends carefully discussed the question of what should be done with Hume’s papers in the event of his death. From a desire to avoid religious controversy and public clamour, Hume had kept by him unpublished his Dialogues on Natural Religion; and he now tried to persuade his friend and literary executor to edit them after his death.
But Smith resolutely declined the task. Although he had himself lectured on Natural Religion, he had warily avoided the subject in his own publications. Moreover, he was now hoping to be appointed to an office under the Crown, and such a publication would certainly be prejudicial. Hume argued that these objections were groundless: “Was Mallet anywise hurt by his publication of Lord Bolingbroke? He received an office afterwards from the present king, and Lord Bute, the most prudent man in the world, and he always justified himself by his sacred regard to the will of a dead friend.” And he reminded Smith of a saying of Rochefoucauld, that “a wind, though it extinguishes a candle, blows up a fire.” So he wrote from London at the beginning of May. However, he agreed to leave the question of publication entirely to Smith’s discretion. “By the little company I have seen,” he added, “I find the town very full of your book, which meets with general approbation.” Soon afterwards Hume changed his mind, and made Strahan his literary executor, with instructions to publish the Dialogues within two and a half years.
In July the two friends were again in Edinburgh, conversing together. Smith was deeply impressed by the philosophic courage, and even gaiety, with which the great sceptic faced the approach of death. In the well-known letter to Strahan,[38] that is always printed with Hume’s autobiography, he mentions among other touching incidents that a certain Colonel Edmondstone paid a farewell visit to Hume, but afterwards could not forbear writing a last letter “applying to him as to a dying man the beautiful French verses in which the Abbé Chaulieu, in expectation of his own death, laments his approaching separation from his friend the Marquis de la Fare.” “Mr. Hume’s magnanimity and firmness were such,” continued Smith, “that his most affectionate friends knew that they hazarded nothing in talking or writing to him as a dying man, and that, far from being hurt by this frankness, he was rather pleased and flattered with it.”
At the end of the first week of August, Hume had now become so very weak that the company of his most intimate friends fatigued him:—
“At his own desire, therefore, I agreed to leave Edinburgh, and returned to my mother’s house here at Kirkcaldy, upon condition that he would send for me whenever he wished to see me; the physician who saw him most frequently, Dr. Black, undertaking in the meantime to write me occasionally an account of the state of his health.”
The correspondence which followed marks the close of a deep, unbroken, and memorable attachment. On August 15th Hume’s anxiety for the Dialogues revived: “On revising them (which I have not done these five years) I find that nothing can be more cautiously and more artfully written. You had certainly forgotten them. Will you permit me to leave you the property of the copy, in case they should not be published in five years after my decease? Be so good as write me an answer soon.” On the 22nd Smith replied:—
“I have this moment received yr. letter of the 15th inst. You had, in order to save me the sum of one penny sterling, sent it by the carrier instead of the Post, and (if you have not mistaken the date) it has lain at his quarters these eight days, and was, I presume, very likely to lie there for ever.”
Then, after reassuring Hume about the Dialogues, he continued:—
“If you will give me leave I will add a few lines to yr. account of your own life, giving some account in my own name of your behaviour in this illness, if, contrary to my own hopes, it should prove your last. Some conversations we had lately together, particularly that concerning your want of an excuse to make to Charon, the excuse you at last thought of, and the very bad reception wh. Charon was likely to give it, would, I imagine, make no disagreeable part of the history. You have in a declining state of health, under an exhausting disease, for more than two years together now looked at the approach of death with a steady cheerfulness such as very few men have been able to maintain for a few hours, tho’ otherwise in the most perfect Health. I shall likewise, if you give me leave, correct the sheets of the new edition of your works, and shall take care that it shall be published exactly according to your last corrections. As I shall be at London this winter, it will cost me very little trouble.”
But “the cool and steady Dr. Black” still gave him some hopes of his friend’s recovery. On the following day Hume dictated a brief answer to this letter, explaining that he had only taken an extra precaution in case anything might happen to Strahan. “You are too good,” he added, “in thinking any trifles that concern me are so much worthy of your attention, but I give you entire liberty to make what additions you please to the account of my life.”
Two days afterwards Hume died, and was buried in Calton Cemetery. Smith did not like the round tower erected under a provision of the will to mark the grave—“it is the greatest piece of vanity I ever saw in my friend Hume.” By the will a legacy of £200 and copies of all Hume’s published works were left to him; but he stoutly refused to accept the money, as he had ceased to be executor, although he had no thought of relinquishing his promise to edit Hume’s life and works. “I have added,” he wrote to Hume’s brother (Kirkcaldy, October 7th), “at the bottom of my will the note discharging the legacy of £200 which your brother was so kind as to leave me. Upon the most mature deliberation I am fully satisfied that in justice it is not due to me. Tho’ it should be due to me therefore in strict law, I cannot with honour accept of it.”
A month earlier he had written to Strahan from Dalkeith, where he was staying with the Duke of Buccleuch, a careful explanation of Hume’s will and last wishes. “Both from his will and from his conversation I understand that there are only two [manuscripts] which he meant should be published—an account of his life, and Dialogues concerning Natural Religion. The latter, tho’ finely written, I could have wished had remained in manuscript to be communicated only to a few friends. I propose to add to his Life a very well authenticated account of his behaviour during his last illness.”
Smith’s addition to Hume’s autobiography took the form of a letter to Strahan giving an account of Hume’s last illness, concluding with the words: “Upon the whole, I have always considered him both in his lifetime and since his death as approaching as nearly to the idea of a perfectly wise and virtuous man, as perhaps the nature of human frailty will permit.” This warm-hearted and eloquent, but surely extravagant eulogy of the “virtuous heathen,” created precisely the kind of popular clamour that Smith had been so anxious to avoid. Strahan liked the addition exceedingly; but as this and the autobiography together were too short to make even a tiny volume, he wrote back, good publisher that he was:—
“I have been advised by some very good judges to annex some of his letters to me on political subjects. What think you of this? I will do nothing without your advice and approbation, nor would I for the world publish any letter of his but such as in your opinion would do him honour. Mr. Gibbon thinks such as I have shown him would have that tendency. Now if you approve of this in any manner, you may perhaps add partly to the collection from your own cabinet and those of Mr. John Home, Dr. Robertson, and others of your mutual friends which you may pick up before you return hither. But if you wholly disapprove of this scheme, say nothing of it, here let it drop, for without your concurrence I will not publish a single word of it.”
A decisive reply came at once from Kirkcaldy. It gives a peremptory judgment—quite against the drift of modern opinion—upon what will always be a case for the casuist:—
“I am sensible that many of Mr. Hume’s letters would do him great honour, and that you would publish none but such as would. But what in this case ought principally to be considered is the will of the Dead. Mr. Hume’s constant injunction was to burn all his Papers except the Dialogues and the account of his own life. This injunction was even inserted in the body of his will. I know he always disliked the thought of his letters ever being published. He had been in long and intimate correspondence with a relation of his own who dyed a few years ago. When that gentleman’s health began to decline he was extremely anxious to get back his letters, least the heir should think of publishing them. They were accordingly returned, and burnt as soon as returned. If a collection of Mr. Hume’s letters besides was to receive the public approbation, as yours certainly would, the Curls of the times would immediately set about rummaging the cabinets of all those who had ever received a scrap of paper from him. Many things would be published not fit to see the light, to the great mortification of all those who wish well to his memory. Nothing has contributed so much to sink the value of Swift’s works as the undistinguished publication of his letters; and be assured that your publication, however select, would soon be followed by an undistinguished one. I should therefore be sorry to see any beginning given to the publication of his letters. His life will not make a volume, but it will make a small pamphlet.”
The nervous objection felt by Hume and Smith to the publication of correspondence or of any manuscript not carefully considered by the writer, and intended by him for publication, may be overstrained; but perhaps this generation errs as much in its anxiety to penetrate the privacy of the dead as they did in wishing to destroy everything that was incomplete, or too easy, intimate, and negligent—as they thought—for the eye of a critical posterity.
Fortune now played our provident philosopher one of her most insolent tricks. When the dreaded Dialogues appeared, they fell perfectly flat; but the letter to Strahan excited, as Mr. Rae says, “a long reverberation of angry criticism.” His words, few and simple, but warm with the glow of friendship, “rang like a challenge to religion itself.” Pamphlets poured forth, the cleverest of which, “A Letter to Adam Smith, LL.D., on the Life, Death, and Philosophy of David Hume, Esquire, by one of the People called Christians,” was still being printed and circulated for edification by the Religious Tract Society in the thirtieth year of the nineteenth century. Its anonymous author, Dr. George Horne, President of Magdalen College, Oxford, proclaimed that no unbeliever could be virtuous or charitable, and charged Smith as well as Hume with the atrocious wickedness of diffusing atheism through the land. “You would persuade us,” he cried, “by the example of David Hume, Esq., that atheism is the only cordial for low spirits and the proper antidote against the fear of death; but surely he who can reflect with complacency on a friend thus employing his talents in this life, and thus amusing himself with Lucian, whist, and Charon at his death, can smile over Babylon in ruins, esteem the earthquakes which destroyed Lisbon as agreeable occurrences, and congratulate the hardened Pharaoh on his overthrow in the Red Sea.”
Smith made no answer to this attack, for which the author was afterwards rewarded by a Bishopric. After Christmas, when his mother’s health allowed him to leave her, he travelled to London, and early in January 1777 he had taken lodgings in Suffolk Street, near the British Coffee House, and was busy preparing his second edition of the Wealth of Nations, a reprint, with corrections and two additional pages. In March he was at a dinner of the Literary Club with Gibbon, Garrick, Reynolds, Johnson, Burke, and Fox. Mr. Rae thinks he remained most of the year in London, and probably he had some intercourse with Lord North and other members of the Government. At any rate Lord North, who had studied Smith’s chapters on taxation to more purpose than his chapters on expenditure and policy, borrowed two of his ideas in the Budget of 1777—for he laid taxes on men-servants and on property sold by auction.[39] Smith was back in Edinburgh by the end of this year, and there heard from Strahan that he had been appointed by Lord North one of the Commissioners of the Customs in Scotland. In the middle of January he writes from Kirkcaldy to Strahan, requesting him to send two copies of the second edition of the Wealth of Nations, “handsomely bound and gilt, one to Lord North, the other to Sir Gray Cooper,” and adds, “I believe that I have been very highly obliged to him [Cooper] in this business.”[40] The Commissionership was worth £600 a year, and Smith at once proposed to relinquish his pension; but the Duke of Buccleuch would not hear of it.
Early in 1778 Smith removed to Edinburgh. He was now in the enjoyment of a certain income of £900 a year apart from the considerable sums which he derived from the sale of his books. He took Panmure House in the Canongate, not far from the deserted palace of Holyrood—a fashionable quarter where some of the Scottish nobility, forsaken by King and Court, still kept their town houses. Panmure House is now a dismantled store; and it needs some imagination to realise how Windham, accustomed to London palaces, should have called it “magnificent,” as he looked from its newly painted windows and plastered walls “over the long strip of terraced garden on to the soft green slopes of the Calton.”[41]
The rent was probably very nearly £20 a year. But Smith was one of the richest men in Edinburgh, and felt, no doubt, that he could well afford to take one of the best houses in the city. To share and crown his happiness he brought his mother, his cousin Miss Douglas, and her nephew, a schoolboy David Douglas (afterwards Lord Strathendry), whom he made his heir. From Panmure House “Mr. Commissioner Smith” walked every day to his official duties in Exchange Square, attired in a light-coloured coat, white silk stockings, and a broad-brimmed hat, holding a cane at his shoulder as a soldier carries a musket. He used to turn his head gently from side to side as he walked, and swayed his body “vermicularly,” as if at every other step he meant to alter his direction or even to turn back.[42] His lips often moved, and he would smile like one conversing with an invisible companion. He was not always unaware of his surroundings, and was fond of relating how a market woman in the High Street took him for a well-to-do lunatic. “Hech, sirs!” she cried, “to let the like of him be about! And yet he’s weel enough put on!”
His letters show that he was very regular in attending to his duties at the Customs, which indeed were important in themselves, and not unattractive to one who took so deep an interest in the art of revenue and the growth of wealth. The duties of the Commissioners were administrative and judicial. Sometimes they had to despatch soldiers to guard part of the coast against smugglers, or to put down an illegal still. They heard merchants’ appeals from assessments; they appointed and controlled the local officers, and every year they prepared returns of customs’ revenue and expenditure. There is good reason to think that he found his work congenial, though Dugald Stewart, who always grows morbid at the thought of any check to the output of philosophic literature, laments that these duties, “though they required little exertion of thought, were yet sufficient to waste his spirits and dissipate his attention,” and that the time they consumed was not employed in labours more profitable to the world and more equal to his mind. During the first years of his residence in Edinburgh “his studies seemed to be entirely suspended, and his passion for letters served only to amuse his leisure and to animate his conversation.” This young mentor often caught our misguided veteran wasting precious time in his library with Sophocles or Euripides, and would be told that re-acquaintance with the favourites of one’s youth is the most grateful and soothing diversion of old age. Let us forgive, and more than forgive, the tired economist, who disapproved that care, though wise in show,