History of Ideas
February Main 2019 Second Essay
1500 words, 30%
Due date: Thursday 15 August
* If the essay is more than 10% above the word count this will be taken into account when determining the grade of the essay. The bibliography and references in brackets are not included in the word count. The essay must be based on the recommended reading (both primary source extracts and secondary sources).
** Any materials used which are not on the recommended reading list must be provided electronically on TCOLE via the -Extra readings that I have used for my essay- link immediately below the Turnitin essay submission link. You can upload these files as PDFs or image files (JPEG, TIFF etc.), but the parts used in the text must be highlighted so that it is clear to your teacher what you have used.
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Question One:
Are Adam Smith's ideas about sympathy and self-interest in The theory of moral sentiments and On the wealth of nations consistent?
Reading:
Primary Sources
These primary sources extracts are provided on the following pages:
Smith, A 2019, The theory of moral sentiments extract, Trinity College Foundation Studies, Melbourne.
Smith, A 2019, On the wealth of nations extract, Trinity College Foundation Studies, Melbourne.
Secondary Sources
Note on page numbers: Where these are indicated, these are the most important sections, but you may also find useful material on other pages, depending on your approach and needs.
The following secondary sources have been placed in the High Use collection at both the Baillieu and/or Leeper libraries. PDF versions of the recommended pages are available via the Leeper library catalogue. This can be accessed via the Trinity portal on the internet in any location. Please do not print HOI materials in the library: use the Trinity computer labs for printing.
Works marked * are the most introductory, works marked ** are more difficult.
Fitzgibbons, A 1995, Adam Smith’s system of liberty, wealth, and virtue, Clarendon Press, Oxford. Recommended pages: pp. 137-45.
Fleischacker, S 2004, On Adam Smith’s Wealth of nations: a philosophical companion, Princeton University Press, Princeton.
Recommended pages: pp. 97-100. (Also useful: pp. 84-97).
** Griswold, C 1999, Adam Smith and the virtues of Enlightenment, Cambridge University Press, Cambridge.
Recommended pages: pp. 76 - 78 & 83-96
Heywood, A 2003, Political ideologies: an introduction, Palgrave Macmillan, Houndmills. Recommended pages: pp. 24-33 & 45-47.
Kennedy, G 2010, Adam Smith: a moral philosopher and his political economy, Palgrave Macmillan, Basingstoke.
Recommended pages: pp. 25-38, 108-111.
Muller, JZ 1995, Adam Smith in his time and ours, Princeton University Press, Princeton. Recommended pages: pp. 48, 53-60, 100-112.
Otteson, JR 2002, Adam Smith’s marketplace of life, Cambridge University Press, New York.
Recommended pages: 156-167. (Also useful: pp. 134-143, 148-167, 170-198).
McLean, I 2006, Adam Smith, radical and egalitarian: an interpretation for the twenty-first century, Palgrave Macmillan, Houndmills.
Recommended pages: pp. 82-90.
* Robertson, J 1984, ‘Adam Smith: the enlightenment and the philosophy of society’, in B Redhead
(ed.), Political thought from Plato to NATO, British Broadcasting Corporation, London, pp. 135-147. Recommended pages: pp. 135-147.
Wells T 2013,‘Adam Smith on Morality and Self-Interest’ in: Lütge C. (ed) Handbook of the
Philosophical Foundations of Business Ethics, Springer, Dordrecht, pp. 281-295 Recommended pages: pp. 281-295.
** Werhane, PH 1989, ‘The role of self-interest in Adam Smith’s Wealth of nations’, The Journal of Philosophy, vol. 86, no. 11, pp. 669-680.
Recommended pages: 669-680.
The following is not a recommended secondary source, but a very simplified version of the full primary source texts:
Butler, E 2011 The condensed wealth of nations and the incredibly condensed theory of moral sentiments https://www.adamsmith.org/research/the-condensed-wealth-of-nations
Introduction and notes2 by F. Andrewes and A. Coram (2019)
Are human beings only motivated by self-interest, or are we naturally inclined to help others? In what way should we act in order to be good people and to improve society? What role should the government play in creating a good society?
We can find many of these fundamental questions about human nature, ethics and political theory addressed in the work of Adam Smith (1723–1790). Smith was a prominent figure in the Scottish Enlightenment, and is commonly seen by modern writers as the founder of the discipline of economics. His work was produced in the context of the industrial revolution, which created extraordinary changes in economic and social relations and bought new challenges and ways of thinking. Like many other Enlightenment figures, Smith was deeply influenced by the success of the ‘new science’, and sought to apply scientific methodology to his investigation of economic and human problems.
Smith’s most famous and influential work, On the wealth of nations (1776), makes the case for economic liberalism—the idea that the economic system should be left to regulate itself without government intervention (also known by the French term ‘laissez faire’, meaning ‘leave it to operate’). Smith’s justification for economic liberalism is based on his claim that, if we allow individuals to pursue their own economic self-interest, the ‘invisible hand’ of the free market will produce what is best for the whole of society. It seems that self-interest both is and should be the driving force of the economy according to this argument—free trade is essential for economic growth, and government intervention should be kept to a minimum in order for the economy (and, indirectly, society) to prosper.
Because of these claims, Smith has been interpreted as a defender of the market against interference from the state and someone who encouraged individuals to follow their self-interest without any other considerations. However, Smith’s contribution to our understanding of ourselves and society is far more complex than this. Smith was a professor of moral philosophy at the University of Glasgow, and wrote on moral themes, notably in The theory of moral sentiments (1759), published years before On the wealth of nations. In this work, Smith examines how human beings react to the misfortune of others, and suggests that people are naturally inclined to sympathise with their needs and sufferings. He develops a system of morality that addresses both our tendency toward self-interest and our sympathetic connection to others, claiming that a virtuous person will be guided by the sympathies of an internalized ‘impartial spectator’ – an inner conscience that considers the interests of others as well as our own.
On the surface, Smith’s moral and economic writings appear to be contradictory. This is the basis of the so-called ‘Adam Smith problem’: how can we reconcile the focus on the importance of sympathetic connection with others in The theory of moral sentiments, with the apparent support for unrestrained self-interest in On the wealth of nations? In answering this essay question, you might consider the following: is there really an inconsistency in his thinking? If so, how great is this inconsistency, and why would he hold conflicting views? If not, how can we resolve the apparent inconsistency? Do self-interest and concern for others play different roles in these works or have different meanings? Could differences in the context and Smith’s motives in these two works help us understand the different positions he seems to adopt?
Extract from Adam Smith The theory of moral sentiments (1759)
Adapted for TCFS use from Early Modern Texts, viewed 26 June 2019, http:www.earlymoderntexts.com )
Part I
1. No matter how selfish you think man is, it’s obvious that there are some principles in his nature that give him an interest in the welfare of others, and make their happiness necessary to him, even if he gets nothing from it but the pleasure of seeing it. That is what is involved in pity or compassion, the emotion we feel for the misery of others when we see it or are made to think about it in a vivid way. The sorrow of others often makes us sad—that’s an obvious matter of fact that doesn’t need to be argued for by giving examples. This sentiment , like all the other basic passions6 of human nature, is not confined to virtuous and humane people, though they may feel it more intensely than others do. The greatest ruffian , the most hardened criminal, has some sympathy.
2. As we have no direct experience of what other men feel, the only way we can get an idea of what someone else is feeling is by thinking about what we would feel if we were in his situation…We see or think about a man being tortured on the rack ; we think of ourselves enduring all the same torments, entering into his body (so to speak) and becoming in a way the same person as he is. In this manner we form some idea of his sensations, and even feel something that somewhat resembles them, though it is less intense. When his agonies are brought home to us in this way, when we have adopted them and made them our own, they start to affect us and we then tremble and shudder at the thought of what he feels. Just as being in pain or distress of any kind arouses the most excessive sorrow, so conceiving or imagining being in pain or distress arouses some degree of the same emotion.
3. So my thesis is that our fellow-feeling for the misery of others comes from our imaginatively changing places with the sufferer, thereby coming to understand what he feels or even to feel what he feels….[But] our sympathy with someone else’s grief or joy is incomplete until we know the cause of his state. General wailing and crying that express nothing but the anguish of the sufferer don’t cause any strongly-felt sympathy; what they do is to make us want to inquire into the person’s situation, and to make us likely to sympathize with him. The first question we ask is ‘What has happened?’ Until this is answered, our fellow-feeling is not very considerable…So the main source of sympathy is not seeing the other person’s passion but rather the situation that arouses the passion.
Part II
4. The only actions that seem to require reward are ones that tend to do good and come from proper motives…The only actions that seem to seem to deserve punishment are ones that tend to do harm and come from improper motives.
5. We feel that we are under a stricter obligation to act according to justice than to act in ways that fit with friendship, charity, or generosity. Whether we perform these last three virtues seems to be left somewhat to our own choice; but we feel somehow that we are in a special way tied, bound, and obliged to conform to justice in our behaviour. We feel that force may, with the utmost propriety and with the approval of all mankind, be used to make us conform to justice.
6. [But] even the most ordinary degree of kindness or beneficence can not, among equals, be obtained by force. Among equals each individual is—naturally, and independently of the institution of civil government—regarded as having a right to defend himself from injuries and to exact a certain degree of punishment for injuries that have been done to him …But [for example] when a father falls short of the ordinary degree of parental affection towards a son…or a man shuts out compassion and refuses to relieve the misery of his fellow-creatures though he could easily do so — in all these cases, though everyone blames the behaviour, no-one imagines that those who might have reason to expect more kindness have any right to obtain it by force.
7. There’s no doubt that nature gives to each man the primary responsibility for his own care; and it’s fit and right that this should be so, because each man is better able to take care of himself than anyone else is. It follows from this that each man is much more deeply concerned with whatever is immediately connected with himself than with what has to do with anyone else…But although the ruin of our neighbour may affect us much less than a small misfortune of our own, we must not ruin him in order to prevent that small misfortune—or even to prevent our own ruin. In all cases like this we must see ourselves not in the way in which we naturally appear to ourselves but rather in the way in which we naturally appear to others…Though each man’s happiness may matter to him more than the happiness of the rest of the world, to every other person it doesn’t matter any more than anyone else’s.
8. When he views himself in this light… he sees that to them he is merely one of many people and not better than any of the others. If he wants to act as if an impartial spectator can enter into his motives of his behaviour—that being what he wants most of all—he must humble the arrogance of his self-love, bringing it down to something that other men can go along with. They [spectators] will accept his self-love far enough to allow him to care about his own happiness more than anyone else’s…In the race for wealth, honours, and promotions he may run as hard as he can, straining every nerve and muscle in order to outstrip all his competitors. But if he should shove or trip any of them, he no longer has their acceptance—it is a violation of fair play that they can’t allow.
9. That is how man, who can’t survive except in society, was prepared by nature for the situation for which he was made [to be in society]. Each member of the human society needs help from the others, and is vulnerable to harm from them. When the needed help is given and returned from love, gratitude, friendship, and esteem, the society flourishes and is happy. Its different members are all bound together by the agreeable bonds of love and affection.
10. But even if the needed help is not given from such generous and disinterested motives, even if the different members of the society don’t have love and affection for one another, the society won’t necessarily fall apart, though it will be less happy and agreeable. Society can stay alive among different men, as it can among different merchants , from a sense of its utility , without any mutual love or affection. Even if no-one has any obligations or debts of gratitude to anyone else, society can still be held together by a trade in benefits, on the basis of agreed valuation for each benefit.
11. What society can’t do is to survive among those who are constantly ready to harm and injure one another. The moment that injury begins…all society’s bonds are snapped and its different members are (so to speak) broken up by the violence and opposition of their conflicting affections…So beneficence is less essential than justice is to the existence of society.
12. Beneficence is an ornament that makes the building more beautiful, not the foundation that holds it up; so it is good that it should be recommended, but it doesn’t have to be imposed. In contrast with that, justice is the main pillar that holds up the entire building. If it is removed, the whole of human society…must in a moment crumble into atoms. In order to ensure justice, therefore, Nature has implanted in mankind the awareness of guilt…as the great safeguard of human society, to protect the weak, curb the violent, and punish the guilty. Although men are naturally sympathetic, they feel so little for anyone with whom they have no special connection, compared with what they feel for themselves…that if this fear-of-punishment mechanism didn’t go to work within them in their fellow man’s defence…they would like wild beasts be ready at all times to attack him, and a man would enter an assembly of men as he enters a den of lions.
Part III
13. Up to here I have mainly considered the origin and foundation of our judgments about the sentiments16 and behaviour of others. I now turn to the origin of our judgments concerning our own sentiments and behaviour…We try to examine our own behaviour as we imagine any other fair and impartial spectator would examine it. If when we place ourselves in his situation we thoroughly enter into all the passions and motives that influenced it, we approve of it by sympathy with the approval of this supposed fair judge. If not, we enter into his disapproval, and condemn the behaviour.
14. Let us suppose that the great and populous empire of China was suddenly swallowed up by an earthquake, and let us consider how a humane man in Europe—one with no sort of connection with China—would be affected when he heard about this dreadful disaster. I imagine that he would first strongly express his sorrow for the misfortune of those unhappy people, and would make many melancholy reflections on how precarious human life is, and the pointlessness of all the labours of man, which could be destroyed in a moment. He might also…think about how this disaster might affect the commerce of Europe and the trade and business of the world in general. And when all this fine philosophy was over, and all these humane sentiments had been expressed, he would go about his business or his pleasure…with the same ease and tranquillity as if no such accident had happened. The most trivial ‘disaster’ that could befall him would disturb him more. If he was due to lose his little finger tomorrow, he wouldn’t sleep tonight; but he will snore contentedly over the ruin of a hundred million of his fellow man, provided he never saw them; so the destruction of that immense multitude seems clearly to be of less concern to him than this trivial misfortune of his own. Well, then: Would a humane man be willing to avoid this trivial misfortune to himself—this loss of a little finger— by sacrificing the lives of a hundred million of his fellow man, provided he had never seen them?
15. Human nature jumps back with horror at the thought…But what makes this difference?…Given that we’re always so much more deeply affected by whatever concerns ourselves than by whatever concerns other people, what is it that prompts generous people always (and mean people sometimes)
to sacrifice their own interests to the greater interests of others? It is not the soft power of humaneness, that feeble spark of benevolence that Nature has ignited in the human heart, that is capable of stopping the strongest impulses of self-love. What happens in these cases is a stronger power, a more forcible motive. It is reason, principle, conscience, the inhabitant of the heart, the man within, the great judge and arbiter of our behaviour. It is he who, whenever we are about to act in some way that will affect the happiness of others, calls to us with a voice capable of astonishing the most brazen of our passions!
16. What he [the inhabitant of our heart] tells us is that we are only one of many, in no respect better than any other person, and that when we prefer ourselves so shamefully and so blindly to others we become proper objects of resentment, hatred, and cursing…It is not the love of our neighbour, the love of mankind, that often prompts us to practice those divine virtues. What usually happens on such occasions is a stronger love, a more powerful affection—the love of what is honourable and noble, of the grandeur and dignity and superiority of our own characters.
17. [T]he moral faculties which are my present topic have as their special role the giving of censure [disapproval] or applause [approval] on all the other drives in our nature. These moral faculties may be considered as a sort of sense, of which those other drives are the objects…the role of our moral faculties is…to decide when the ear ought to be soothed, when the eye ought to be indulged, when the sense of taste ought to be gratified, when and to what extent any other drive in our nature ought to be indulged or restrained. Whatever is agreeable to our moral faculties is fit, right, and proper to be done; whatever is disagreeable to them is wrong, unfit, and improper…The whole meaning of the words ‘right’, ‘wrong’, ‘fit’, ‘improper’, ‘graceful’, ‘inappropriate’ etc. has to do only with what pleases or displeases those faculties.
18. Since these faculties were clearly meant to be the governing motivations in human nature, the rules that they prescribe should be regarded as the commands and laws of God, passed on to us by the deputies that he has set up within us…[who] always punish any disobedience of the rules that our moral faculties lay down, by the torments of inward shame and self-condemnation; and they always reward obedience with tranquillity of mind, contentment, self-satisfaction.
19. The man of the most perfect virtue, the man whom we naturally love and admire the most, is he who combines a perfect command of his own original and selfish feelings with a real appreciation of the original and sympathetic feelings of others. [He] must surely be the natural and proper object of our highest love and admiration.
Part IV
20. When a public-spirited man encourages the mending of highways, it is not usually from fellowfeeling with those who earn their living driving carts or carriages. When a government [intervenes] to advance the manufacture of linen or woollen garments, its behaviour does not often come from pure sympathy with the wearer of cheap or fine cloth, let alone sympathy with the manufacturer or merchant. The perfection of policy, the extension of trade and manufacturing, are noble and magnificent objectives. The thought of them pleases us, and we have a concern with anything that can tend to advance them.
21. But no constitution of government is valued except to the extent that it promotes the happiness of those who live under it. That is its sole use and end—it’s all it does and all it is for. And yet we have certain spirit of system, a certain love of art and contrivance, that sometimes leads us…to want to promote the happiness of our fellow-creatures not so much from any immediate sense of what they either suffer or enjoy as from a desire to perfect and improve a certain beautiful and orderly political system.
22. If you want to implant public virtue in the heart of someone who seems not to care about his country’s interests, it will often be no use telling him about the advantages people get from living in a well-governed state—that they are better housed, better clothed, better fed…You’ll have a better chance of persuading him if you describe the great system of public policy that gets these advantages.
Part VI
23. Every man, as the Stoics used to say, is first and foremost recommended by Nature to care for himself; and every man is indeed in every way more capable of taking care of himself than taking care of anyone else. Every man feels his own pleasures and his own pains more intensely than those of other people, feels the original sensations more intensely than the reflected or sympathetic images of those sensations, feels the substance more intensely than the shadow.
24. After himself, the members of his own family…are naturally the objects of his warmest affections. They are the people whose happiness or misery is most influenced by his behaviour. He is more used to sympathizing with them, he knows better how everything is likely to affect them, and he can have a more precise and definite sympathy with them than he can have with most other people. In short, what he feels for them is a close approximation to what he feels for himself…What is called ‘affection’ is really nothing but habitual sympathy.
25. Among [those] who need in their occupations to accommodate themselves to one another there often comes to be a friendship not unlike that between those who are born into the same household...Even living in the same neighbourhood has some effect of the same kind…But by far the most respect-worthy of all attachments to an individual is the one that is completely based on respect and approval of what he does and how he does it, confirmed by much experience and long acquaintance… Such friendship is possible only between men of virtue.
26. Of all the persons nature points out for our special beneficence , however, it seems most properly directed to those who have already been our benefactors. Nature, which formed men for a mutual kindness that is necessary for their happiness, makes every man the special object of the kindness of people to whom he himself has been kind…Kindness is the parent of kindness; and if the great object of our ambition is to be beloved by our fellow men, the surest way of obtaining it is to show by our behaviour that we really love them.
27. [Next come] those whom nature points out to us not for friendship but for our benevolent attention. What picks these people out…[is] their special situation: they are greatly fortunate or greatly unfortunate—rich and powerful or poor and wretched. The distinction of ranks , the peace and order of society, are largely based on the respect that we naturally have for the rich and powerful. The relief and comfort of human misery depend entirely on our compassion for the poor and wretched.
28. [We find the same order in our connections to different societies]. The ones that we find it natural to attend to first are those that are of most importance to us. The state [country] in which we have been born and brought up, and under the protection of which we continue to live, is usually the one on whose happiness (or misery) our good (or bad) behaviour can have the most influence. So fittingly it is the one that nature most strongly recommends to us…The wisdom that designed the system of human affections, as well as the system of every other part of nature, seems to have thought that the best way to further the interests of the great society of mankind would be for each individual to attend firstly to the particular part of it that lies most within the range of both his abilities and his understanding.
29. Although our effective help can’t often be extended to any society wider than that of our own country, our good-will isn’t constrained by any boundary—it can embrace the universe. We can not imagine any innocent and conscious being that we wouldn’t want to be happy.
30. The wise and virtuous man is always willing for his own private interest to be sacrificed to the public interest of his own particular order or society. He is always willing, too, for the interests of this order or society to be sacrificed to the greater interests of the state of which it is a subordinate part. So he should be equally willing for all those inferior interests to be sacrificed to the greater interests of the universe—the great society of all sentient and thinking beings whose immediate administrator and director is God himself…[T]he management of the great system of the universe— the care of the universal happiness of all rational and sentient beings—is God’s business, not man’s. Man is assigned a role that is much humbler but also much more suitable to his limited powers and intellect—namely the care of his own happiness and of the happiness of his family, his friends, his country.
Part VII
31. [Smith considers, and rejects, the claim that acting virtuously is based in self-interest] …According to this theory, society becomes necessary for a man, and anything that favours the support and welfare of society he regards as having an indirect tendency to promote his own interests; and anything that is likely to disturb or destroy society he regards as to some extent harmful to himself. Virtue is the great support of society, and vice its great disturber. That is why virtue is agreeable to every man and vice is offensive to him; he sees virtue as pointing to the prosperity of the society that is necessary for the comfort and security of his existence, and vice as pointing to its ruin and disorder.
32. But there is nothing selfish about sympathy! When I sympathize with your sorrow or your indignation, it may be claimed that my emotion is based on self-love because it arises from…putting myself in your situation, and in that way getting a sense of what I would feel in those circumstances. But although it’s true that sympathy arises from an imaginary change of situations with the person principally concerned, this imaginary change is not supposed to happen to me in my own person and character, but to me in the character of the person with whom I sympathize.
33. When I sympathize with you over the death of your only son, in order to enter into your grief I don’t think about what I, a person of such-and-such a character and profession, would suffer if I had an only son who died. What I think about is rather what I would suffer if I were really you.
In this thought I don’t just switch your circumstances with mine; I change persons and characters. So my grief is not in the least selfish: it is entirely on your account, and not in the least on my own.
Extract from Adam Smith An inquiry into the nature and causes of the wealth of nations (1776)
Adapted for TCFS use from Early Modern Texts, viewed 26 June 2019, http:www.earlymoderntexts.com )
Book I: Chapter II
1. This division of labour from which so many advantages are derived doesn’t initially come from human wisdom that foresees and intends the general affluence to which it leads. Rather, it comes— slowly but inevitably—from the natural human tendency to barter and exchange one thing for another.
2. Is this tendency a basic principle in human nature of which no further account can be given, or rather a necessary consequence of the faculties of reason and speech? The latter seems more probable, but I needn’t go into that here. The tendency is common to all men, and apparently no other animals know this or any other kind of contract… Nobody ever saw one animal use gestures and sounds to signify to another ‘This is mine, that yours; I’m willing to give this in exchange for that’. When an animal wants something from a man or another animal, its only means of persuasion is to gain the favour of those whose service it requires. A puppy fawns on its mother, and a spaniel26 wanting to be fed tries by a thousand attractions to engage the attention of its master who is at dinner.
3. Man sometimes uses the same arts with his fellow men, and when he has no other means of engaging them to act according to his dispositions, endeavours by every servile and fawning attention to obtain their good will. However he does not have time to do this on every occasion. In civilised society he always needs the help and co-operation of many people, while his whole life is scarcely long enough to gain the friendship of a few. In most non-human species, each adult animal is entirely independent, and in its natural state has no need for the help of any other living creature. But man nearly always needs the help of his fellow men, and it is no use his relying on their benevolence for it! He will do better to interest their self-love in his favour, and show them that they will benefit from doing what he requires. Whoever offers someone else a bargain of any kind is proposing ‘Give me that, which I want, and you shall have this, which you want’, and this is how we obtain from one another most of the help that we need.
4. We don’t expect our dinner from the benevolence of the butcher, brewer29, or baker but from their concern for their own interest; we appeal not to their humanity but to their self-love, and talk to them not of our needs but of their advantages. Only a beggar chooses to depend chiefly on people’s benevolence, and even he doesn’t depend on it entirely. The charity of kind people provides him with all the necessities of life that he needs, but it does not—cannot—provide him with them just when they are needed. Most of his occasional wants are supplied in the same manner as those of other people, by treaty, barter, and purchase.
Book III: Chapter I
5. The great commerce of every civilised society is what is carried on between the inhabitants of the town and those of the country. It consists in the exchange of raw for manufactured product, either immediately or by the intervention of money or of some sort of paper representing money. The country supplies the town with the means of subsistence and the materials of manufacture. The town pays for this by sending back a part of the manufactured product to the inhabitants of the country. The town, which cannot produce raw materials, can properly be said to get its whole wealth and survival from the country. But we must not infer from this that the town’s gain is the country’s loss. The gains of both are mutual and reciprocal, and the division of labour in this—as in all other cases—-is advantageous to all the persons employed in the various occupations into which it is subdivided. The inhabitants of the country purchase manufactured goods from the town with the product of much less of their own labour than they would have needed to make those goods themselves.
Book IV: Chapter I
6. Political economy, considered as a branch of the science of a statesman or legislator, has two aims: (a) to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide it for themselves; and (b) to supply the state or commonwealth with enough revenue for the public services. It proposes to enrich both the people and the sovereign .
Book IV: Chapter II
7. [T]he annual revenue of every society is always precisely equal to the exchangeable value of the whole annual product of its industry…As every individual tries as much as he can to use his capital in the support of domestic industry and to direct that industry so that its product may be of the greatest value, every individual necessarily works to make the annual revenue of the society as great as he can. He generally does not intend to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a way that its product has the greatest value, he intends only his own gain, and he is in this—as in many other cases—led by an invisible hand to promote an end that was not part of his intention.
8. Nor is society worse off because it was not part of [the decision of the individual]. By pursuing his own interest [the individual] often promotes the interest of the society more effectively than when he really intends to promote it. I have never known much good done by those who claimed to trade for the public good. It is indeed something that merchants do not often claim, and very few words need be used in discouraging them from it.
9. The question: ‘What sort of domestic industry that I could use my capital for is likely to have the product of the greatest value?’ is obviously one to which the questioner can, in his local situation, give a much better answer than any statesman or lawgiver can give for him. A statesman who tried to tell private people how they ought to use their capital would....assume an authority that could not safely be trusted to any single person, to any government, and would be especially dangerous in the hands of a man who had foolishness and presumption enough to consider himself fit to exercise it.
10. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, we are better off buying it from them with some of the product of our own industry, used in a way in which we have some advantage. The general industry of the country, which is always in proportion to the capital that employs it, will not therefore be diminished…but only left to find out how it can be used for the greatest advantage. It is certainly not employed to the greatest advantage when directed towards an object that it can buy cheaper than it can make. The value of its annual product is certainly lessened when it is turned away from producing commodities of more value than the commodity it is directed to produce.
Book IV: Chapter IX
11.[E]very system that tries by special encouragements to bring to a particular kind of industry a greater share of the society’s capital than would naturally go to it, or by special restraints to force from a particular kind of industry some share of the capital that would otherwise be employed in it, is actually undermining the great purpose it means to achieve. It slows down instead of speeding up society’s progress towards real wealth and greatness; and is lessens instead of increasing the real value of the annual product of its land and labour.
12. If we completely remove all systems either of preference or restraint, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interests in his own way, and to bring his industry and his capital into competition with those of any other man or group of men.
13. The sovereign is completely relieved of a duty that he could not perform without being exposed to many mistakes—a duty for the proper performance of which no human wisdom or knowledge could ever be adequate. I mean the duty of guiding the business of private people, directing it towards those works most suitable to the interests of the society.
14. According to the system of natural liberty, the sovereign has only three duties to attend to…They are the duty of: 1) protecting the society from the violence and invasion of other societies; 2) protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, i.e. of establishing an exact administration of justice; and 3) building and maintaining certain public works and public institutions that it can never be in the interests of any individual or small number of individuals to build and maintain because the profit could never repay the expense to any individual or group of individuals, though it may frequently do much more than repay it to a great society.39