Adam Smith

Adam Smith

Statue of Adam Smith, located in the Gilbert Scott BuildingWhy the Adam Smith Business School?

Adam Smith is recognised worldwide as one of the most influential figures to emerge from the Scottish Enlightenment and the field of Economics. Naming the Business School in his honour commemorates his close ties to the University and enhances the University’s international reputation.

Enlightened, engaged and enterprising

By engaging in multi-disciplinary and research led teaching we engender in our students an appetite for critical enquiry and learning. We also encourage, informed by an employability and engagement agenda, the development of 21st century graduate attributes and skills. Internationally recognised research that informs academia, policy and practice will drive the Adam Smith Business School forward; its dissemination will inform teaching, shape our culture and deliver impact, whilst promoting the tradition of Scottish enlightenment and enterprise.

The University of Glasgow Business School is developing rapidly in its mission to be internationally known and highly regarded for both teaching excellence and high quality research. Our link to such a distinguished scholar differentiates the University and the Business School and demonstrates our interdisciplinary approach to business disciplines.

 


Adam Smith and the University of Glasgow

Smith described his time at Glasgow as: 'by far the most useful and therefore as by far the happiest and most honourable period of my life.'

Adam Smith was born in 1723 in Kirkcaldy. He entered Glasgow University in 1737 at the early – but for the time not unusual – age of fourteen. He returned to the University, first as Professor of Logic in 1751 and then a year later as Professor of Moral Philosophy, a post he held until he left academic life in 1764 for the more lucrative post of tutor/companion to the young Duke of Buccleuch. That was not his final association because in 1787 he was elected Rector of the University and in a letter of thanks he remarked that he remembers his professorial days as ‘by far the most useful and therefore as by far the happiest and most honourable period of my life.’ Beyond courses in philosophy and jurisprudence he also discoursed on history, literature and language and published essays on language and the history of astronomy. But the most notable other product of his Glasgow years is his second great book, Theory of Moral Sentiments which appeared in 1759. All Smith’s work is deeply steeped in moral philosophy. Indeed the simple fact that the final edition of Theory of Moral Sentiments, containing extensive revisions appeared in 1790, the year of his death, tells us is that Smith’s commitment to the moral point of view endured alongside and beyond the publication of The Wealth of Nations.


Theory of Moral Sentiments and Wealth of Nations

Theory of Moral Sentiments in many ways is a book of social and moral psychology. What we can call economic behaviour is necessarily situated in a moral context; it does not exist in some separate sphere that somehow isolates it from the moral norms of society at large. But more than that, the key theme of the book is an opposition to the view that all morality or virtue is reducible to self-interest. The moral interactions Smith treats in Theory of Moral Sentiments bear on the practices that characterise his contemporary commercial society.

The very complexity of that society, with its extensive division of labour, means that the bulk of inter-personal dealings are with strangers. These dealings are conducted on the basis of adhering to the general rules of justice, rather than the necessarily particular basis of mutual love and affection. Beneficence is thus less essential to the existence of society than justice.

Nothing in this means that Smith is denying the virtuousness of benevolence. When Smith came to write The Wealth of Nations he made it clear that the ‘wealth’ lay in the well-being of the people. This covered not only their material prosperity, being better fed, clothed and housed, but also their moral welfare. Accordingly he thought to be in poverty is to be in a miserable condition and also that to be condemned to repetitive limited tasks (like sharpening pins several thousand times a day) damaged our ‘social’ and ‘intellectual virtues’

The great achievement of The Wealth of Nations was to discern the principles of order in the seeming chaos of commercial or market behaviour – it wasn’t random, it could be reduced to a few simple principles. His enquiry is both analytic and historical. Analytically he identifies basic principles such as the human propensity to ‘truck, barter and exchange’ that he argues underlies the division of labour but that is then seen to depend on a market and that requires, in order to function efficiently and extensively, some institutional structures like those that uphold justice such as government and how that in turn mutually relies on principles of public finance. All of this is located by Smith into a historical narrative. In his Glasgow lectures he had outlined an account of four stages of social organisation focused around the characteristic form of economic endeavour – hunter-gatherer, herder, farmer, commerce – and this was put to use in The Wealth of Nations. His account of social change highlights the role of unintended consequences or the operation of the ‘invisible hand’. The public happiness, the general good, was not brought about by deliberate human policy or central direction, so it is not the job of government to make people make pins. However, as Smith himself acknowledges in the one reference to the ‘invisible hand’ in The Wealth of Nations the phenomenon applies in ‘many other cases’ and not always benignly.

The Legacy of Adam Smith

Smith is an opponent of attempts to direct ‘the market’ but what he really opposes is the attempt to direct individual’s activities, their ‘natural liberty’ to pursue their own ends in their own way. This is itself a ‘moral’ position and Smith never forsakes that perspective. Hence he notes that the division of labour, as a malign unintended consequence, renders the worker stupid and ignorant. To remedy this he advocates a publicly subsidised system of elementary schooling. In a similar vein the government can regulate institutions (including banks) in the public interest.

The Smith of popular repute is the “father of capitalism”, the advocate of “market forces” and believer in something called the “invisible hand” to produce optimum economic outcomes. Yet, if we actually read Smith then these attributions can be seen to be gross simplifications. If asked what would Smith have made of “securitised loan packages”, “toxic debts”, and the like, then his answer would certainly have been that these practices were contrary to what he tried to teach. His all-pervading concern with moral philosophy that would make him critical of the way the contemporary economy has been run. If he was the “father of capitalism” he would be a disappointed parent.

Smith is a holistic thinker. The economic component of his vision is only one of the many and that was woven into the total fabric of his thought. Smith was not only the first economist, he was also a subtle and significant philosopher, an informed and sophisticated historian, an attentive and insightful sociologist, and a perceptive analyst of culture. In short, he offers a view of the world, and of human behaviour inside it, that is rich and complex.

-Christopher J Berry, Professor of Political Theory (Emeritus)