 Welcome, everyone, to the Cato Institute for our book forum today on this book, Adam Smith and Enlightened Light. And it's authored today with us, Nicholas Phillipson. I thought I would begin today by discussing some administrative detail, so we'll get that straight and then get to the meat of the affair. As you know, if you've come before to a Cato book forum, we usually begin with some comments from an author and a commentator and then go to question and answer about one o'clock or so. So we should have at least, we hope, about a half hour or so in which you can ask your questions of our author today about Adam Smith thereafter we go upstairs and have some lunch and conclude our event today. So the only thing I would have to add to that as I often do at the request of our conference staff, please throughout the forum today make sure that your cell phones are shut off so that we won't have the distraction from what is being said about this very fine book. I thought I would begin with a few remarks thinking back about the Cato Institute. Everyone knows that we're a libertarian institution concerned about human liberty and limits on government. Some signs of that I recall before the construction companies descended on the Cato to build our new building and back here. There used to be in the front in the atrium to give you some sense of the importance we associated with Adam Smith within a small window there was a first edition, I don't think a first printing, but a first edition of Adam Smith's Wealth of Nations. And I expect that will be restored eventually after the construction is done. Another thing that occurred to me and I think this is also revealing in many ways. As many of you would know our longtime chairman here at Cato is a man named Bill Nuskanen who worked in the Reagan administration and many other, much other government service and private service. If you go up to Bill's office what you find is that there's three pictures on his wall up there. Frame photos of or silhouettes of Sir Isaac Newton, Charles Darwin and Adam Smith. And I think of that in many respects is indicative for Bill and for Cato benefactors of mankind and Adam Smith stands very highly in that pantheon of benefactors for mankind. And so it's very appropriate today that we have with us a author of a new book on Adam Smith, an intellectual biography, Adam Smith and Enlightened Life. Our author today and our first speaker Nicholas Phillipson was an undergraduate at Cambridge University and graduated with a PhD from Cambridge in 1967. He was appointed lecturer in history at Edinburgh in 1965 and subsequently appointed senior lecturer and reader. He retired from full-time employment in 2004 and was appointed honorary research fellow. He has held research appointments at a number of leading universities in the United States and Europe. His research interests have focused on the cultural and intellectual history of early modern and modern Scotland with a particular interest in the history of the Scottish Enlightenment. He has secondary interest in the history of early modern British and French political thought. He is co-director of the project on the science of man in Scotland and he is a founder editor of a new journal Modern Intellectual History published by Cambridge University Press. He is past president of the 18th century Scottish Studies Society and he has lectured extensively on his topic today in both Europe and the United States. Now I hasten to add is to finish the intro and get to our speaker. One reviewer of this book has remarked that the book reveals that Adam Smith lived a wholly unremarkable, a wholly boring life. He was excited mostly by buying books. Apparently the most exciting thing that happened was going over the library's purchase plans according to this reviewer and of course he was excited by intellectual ideas. A shame according to this reviewer that he had such a boring life. Why wasn't Adam Smith like the poet Philip Larkin who lived a similar life but at least he enjoyed the odd dirty joke? So my question to get Professor Phillipson started is after all your research did you come across any evidence that Adam Smith enjoyed dirty jokes? Well now that's quite a question for a lecturer to start. I not only don't know of any dirty jokes that Adam Smith made or responded to I can't imagine what they'd have been like. There is nothing that as I say I'm now trying to, I'm racking my brains for 10 seconds on this. There is nothing I can think of in either in his lectures on rhetoric and bellett and nothing in the wealth of nations that begins to smack of smart. And the trouble is that there is nothing in Smith's life or virtually nothing to suggest that he, although he had women friends, that he had any emotional entanglements. One of my audience when I was lecturing on this in Germany said of either sex and I said of absolutely neither sex. There is no inkling of romantic attachments of any sort. It is a pity but I'm not absolutely sure that I agree with my kind reviewer actually who said that Smith, that this effectively added up to a boring life. And I really rather thank you very much for referring to this in the introduction because this was very much what I thought I ought to do by way of correction in introducing you to the sort of things that I set out to do and didn't set out to do in writing Adam Smith's life. Now one of the questions I've been asked so often it's not true and this book has been sometime in the making and I may say the question has been asked many times. What on earth is a historian like myself who has no degree in economics, who has no economics training whatsoever doing writing the biography of the greatest if I may say so of all economists certainly to one of my lay eye. And I have two answers to this question. One is a weak answer and it is that Smith's first biographer, Dougal Stewart, who was a partial pupil of his, was his first biographer and Dougal Stewart's account of Smith's life and works still plays an enormous part in shaping every subsequent author's thinking about their subject. My stronger answer to this question however is that Smith did not see himself as an economist or a political economist if we were to be more accurate. He saw himself as a philosopher and it seems to me that it would rather it seemed to me when I was planning this biography and it has seemed to me ever since that what a historian could try and do was to see Smith as Smith saw himself as a philosopher working in a particular context. Are you... Trying to say things about my delivery, which is awful. We have to get it up a little bit. You're turning it up. I didn't know that it did this magic. Oh I see, turning the thing up. I'm unfamiliar with such things. Right, okay. Sorry. I now don't... Is this going to go down or stay up? It'll go down for me. So as I say, my intention was to write a biography of Smith as Smith saw himself, that is to say as a philosopher and a philosopher who spent a great deal of his early career in raising questions which were essentially philosophical questions about the principles of human nature and found himself raising questions in such terms that they impinged on questions about the distribution of economic resources. Now, in getting down to the nuts and bolts of how a biography guided by that principle was to be delivered, I had as every biographer of Adam Smith has always had the primary practical problem to address and that problem was the appalling shortage of conventional biographical materials. When Smith was on his deathbed, he summoned his executors, he got them to take out of the cupboards, all Smith's manuscript remains, his lecture notes, his correspondence, drafts of chapters and one optimistically minded biographer has even suggested the text of an unfinished book. I'm not quite sure I believe that but anyway, that's the way it goes. And these were all destroyed in front of him two weeks before his death. And as Smith was one of the most thorough, one of the most systematic of all philosophers, that bonfire was thorough. Nothing from that has remained apart from a handful of unfinished essays he had a particular liking for, which he told his executors they had published if they wanted to. And added to that, there is the problem that Smith himself was a lousy correspondent. One of the minor themes of the correspondence that has remained, the letters he sent to others and that have subsequently turned up, one of the enduring themes is that Smith never answered letters. It's a constant complaint. He was unlike, for example, so many of the great philosophers of the late Enlightenment, like Hume, like Rousseau, like Diderot, like Voltaire, he did not regard correspondence as a form of communication which is as natural to us as ordinary conversation is, or God help us, email is now. Smith wrote letters when there was business to be done and he wrote letters when they were goaded out of him by his friends. And they're good enough, but they are not the sort of correspondence we associate with the Enlightenment. And then if you turn to the institutions with which Smith was connected during his life, with Glasgow University, where he was professor of moral philosophy from 1752 to 1763, the university in which he said he spent the happiest and most fruitful years of his life. I'm not the only historian who has ransacked the records of Glasgow University to try and track down the records of their greatest professor and in fact a professor who played an extremely active part and a very responsible part in the management of his university's business. But yet the institutional records are pretty negative. And the same is true if you turn to the end of Smith's life. Smith in 1778 was appointed a commissioner of customs in Edinburgh. A job that could have been a sinecure, but he characteristically treated it seriously as a job to be attended to by a responsible public servant. You would have thought that in the records of any government departments, even 18th century government departments, the remains of a highly active senior manager must have survived and they don't. There are bits and pieces, but there is nothing that is going to change the record. In other words, what I'm saying is that one of the first tasks that Smith's biographer faces is this lack of biographical visibility. And this presents a problem, well it certainly presented a problem to me, because in my view you cannot write a successful biography, which you can hope people will read unless you can hear the biographical subject speak. I love voices in biography. If the voices aren't there, it's not biography for me. But the trouble is that if one wants to hear Smith speak, the only ways you can do it are by attending to his two great published works, The Theory of Moral Sentiments and The Wealth of Nations, and to the extraordinary, and in my view still neglected, series of student lecture notes taken between 1762 and 1763 of his lectures on jurisprudence and on rhetoric and belette. These are the only places in which Smith speaks to us now, and it seemed to me that these were going to have to be placed at the centre of Smith's biography. And what it meant was that my biography was going to have to be an intellectual biography, a biography of a philosopher seen through the making of different sorts of texts, lectures on one hand, great philosophical texts on the other. There was another problem, another preparatory problem that I had to address early on. And that is the meaning of philosophy. It's all very well to say Smith saw himself as a philosopher. But what did philosophy mean in the context of his own life, his own culture? Now, Smith's particular trade as a philosopher was moral philosophy. And by the time, and the moral philosophy in which he was trained and the moral philosophy tradition in which he was raised, the European moral philosophy tradition in which he was raised, presented moral philosophy as what some people called the queen of the sciences. It was a science you approached having had a classical education, having been educated in logic and metaphysics, having been educated in natural philosophy and possibly on the side mathematics that might or might depend on your university. And that was certainly the framework of his education at Glasgow University in 1736 to 1740 under the great Francis Hutchison. Hutchison, Smith, in preparing himself for the moral philosophy class, was lucky. The natural philosophy he was taught was taught by someone who was highly sensitive to Newton and to Newtonian philosophy. The mathematics he was taught, which I think in my view has been grossly neglected by students of Adam Smith, he was taught mathematics by one of the greatest, if not the greatest, of late enlightenment mathematicians, Robert Simpson, the geometer and the person who revolutionized Europe's understanding of Euclid. Smith, and I think this is often forgotten, was always a serious mathematician. He could talk mathematics with serious mathematicians and did so throughout his life. All of this was in his background before he entered the moral philosophy curriculum, before the agenda which he was to develop at Glasgow was made apparent. And what Smith did was, I'm so sorry, what Francis Hutchison did was to present him, first of all, to a critical introduction to the moral philosophy of the ancient world and the contemporary world and to the snags, to the intellectual snags which different sets of philosophy presented to the modern philosopher. He introduced him then to the study as all moral philosophers are bound to do, to the origins of those ideas we have about morality, justice, political obligation, aesthetics, and natural religion. Those ideas which shape the civic personality. Those ideas which make it possible to live sociably in a modern civil society. And he was also introduced to Hutchison's notion that these ideas should be thought of as sentiments of which we've become aware in the course of ordinary life and which, if we think philosophically about them, we will find to be controlled by a principle in human nature, the moral sense. Hutchison introduced him to the idea that if you want to practice the queen of the sciences, you must understand the origins of these sentiments. You must understand the working of the moral sense and in doing that, you will be able to function as a free citizen in a modern polity. Now, what I want to call attention to is what Smith does with this sort of agenda because the point I've tried to build my book round is that this curriculum that Smith's variant of this curriculum taken as a framework for Smith's work as a moral philosopher and as a political economist is really quite extraordinary and it is much more extraordinary than I believe that historians have realized. Smith began his course or added to his course his own equivalent of the study of logic and metaphysics, of the origins of knowledge. And he does it in the most peculiar way. He does it by inviting us to attend almost exclusively to the way in which we use language. His logic, his approach to the study of knowledge is to present us with the study of language and of how we acquire it, how we deploy it and particularly the taste we show we develop in the course of human life in using this language in the company of others and in social context. What a strange thing to do to what has been the study of logic and metaphysics. In his moral philosophy, he builds on this. He talks about the way in which we acquire sentiments of morality, justice, a political obligation, particularly aesthetics and he does two things which are interesting. The first is he very quietly distances himself from Hutchison's notion that there is a moral sense. We have a moral sensibility, of course we do. No one could doubt that we have a moral sensibility but is it hardwired in the human personality? Smith's all no reason to believe that. We acquire a sensibility. How do we do it? Essentially through sympathy with others. Sympathetic relationships which are fostered and shaped by language. That is where our sensibility comes from. That is where our moral sensibility comes from the various aspects of sensibility that make it possible for us to function as sociable animals. The moral sensibility, the sense of fairness and justice. The sense of obligation to our sovereigns. The sense of beauty which attends our thinking about morality and the social virtues. The second thing that Smith does in this is instead of privileging the sense of morality as being the primary sense from which all our other different aspects of our social sensibility stem. He said no, it's justice. A sense of fairness which is the origins of our sense of justice which gives birth to a sense of justice. Until we have that sense of fairness until we acquire a sense of justice we have no hope of acquiring a moral sensibility and everything else. In fact, and then when he turns to government his ideas of why we obey government and where our sensibility to men of power and men of rank is entirely disgraceful. It is as contemptible as anything that has turned up ethically contemptible as anything that has turned up in the Enlightenment and he presents it as so. It is sympathy, a really disgraceful disposition to sympathize with the fortunes of the great and the powerful. Our natural respect for life. And this is the soul pillar on which our political sensibilities and our respect for our political obligation naturally arises. Now, the point I want to make here is that this agenda is really quite fascinating. Through it all runs a single theme and that is that the primary characteristic of human nature, the characteristic which renders, which makes it possible for us to understand the world and to understand ourselves and to operate effectively and happily within it in the last resort comes down to a disposition of exchange, to exchange goods, services and sentiments. And as I say, Smith says in The Wealth of Nations, the habit of exchange is the habit in which we indulge from the cradle to the grave. That principle of exchange runs through every single aspect of Smith's understanding of the principles of human nature as he develops them in his philosophy syllabus at Glasgow. And what that principle of exchange has built into it is a notion that if we want to understand the principles of human nature, then actually what we have to attend to is in fact something that is essentially historical as a process, something that takes place within the framework of historical time. Our own moral understanding of the world and of ourselves is the result of experience, which is something that happens within historical time, our own particular experience. But our own particular experience operates within the framework of the conventions of a particular civil society. And what is more, the conventions of that particular civil society are only truly explicable within a civilizational framework, within the framework of a pastoral or feudal or commercial or capitalist or post-capitalist society. In other words, what Smith is saying holds together and allows us to understand the principles of human nature is something like a deep historical process. And what I want to emphasise here is that what is completely lacking from all of this and what makes this study in itself of enormous and even revolutionary importance for a historian is that there is no mention of the necessity of religious belief. Smith never denies that a lot of people do what they do for religious reasons, but he says on every occasion you can find a natural reason drawn from philosophy and history and experience which will provide a stronger account of principles which otherwise theologians would import, essentially theological principles to understand. Religion has been taken out of the moral philosophy curriculum in Glasgow by Adam Smith. It has not happened anywhere else in Europe, in northern Europe, in north or south. It is a revolutionary moment in the history of moral philosophy and therefore a revolutionary moment in the sort of education which was designed to prepare boys essentially from the middling ranks of society for a life in the professions and public life. And as I say, because I must end here otherwise no one will get a chance to ask questions. I do want to say here that if you want one of the keys to why Adam Smith matters to a historian of the Scottish Enlightenment, it is that Smith, plus his friend David Hume whom I haven't had time to mention here, do present Scottish intellectuals and particularly Christian Scottish intellectuals with the most enormous challenge of how you can rebuild a public culture in Scotland on the basis of a credible system of natural theology, not the old one that has been rejected. And as I say, I do want to say that in talking about this, one of the things I've tried to do and would love to do more of and will do more of in future is to expose the huge debts that Adam Smith owed to his closest friend, David Hume. We are accustomed to acknowledge the importance of David Hume in shaping or partially shaping Smith's economic thinking. We know about that. The thinking that comes from the end of Hume's philosophical life in the authorship of the political discourses of 1752. What I don't think has been nearly enough appreciated is the huge importance of Smith's revolution in the understanding of the principles of human nature, Hume's skepticism, that is to say, not only his religious skepticism but his philosophical skepticism and its importance in shaping Hume's own agenda for a science of man. And really, I am concluding at this moment, Mr. Chairman. I do think that what is interesting is to think about Smith as a man who in many respects completed and extended that extraordinary project for creating a science of man which disregarded religious principles altogether. And it is that that I've tried to remember him in this book. Thank you very much. Very good. Very interesting. Now, if Professor Phillipson's talk has stimulated in you a desire to buy this book, you said, man, I'd like to read that book. Pretty reasonable. Here's what the book looks like. This is what you're looking for. If you say to me, samples, aren't you engaging in shameless marketing on behalf of this book? My response to you would be, I don't think Adam Smith would mind. Onto our commentator. James Odisson is joint professor of philosophy and economics at Yeshiva University in New York and the Charles G. Koch Senior Fellow at the Fund for American Studies in Washington, D.C. He received a BA from University of Notre Dame and MA in philosophy from the University of Wisconsin-Milwaukee and advanced degrees including the PhD from the University of Chicago. He has taught previously at Georgetown University and at the University of Alabama. He is the author of Adam Smith's Marketplace of Life, 2002 from Cambridge University Press and Actual Ethics by the same publisher in 2006. The latter won the 2007 Templeton Enterprise Award. He is the editor of the levelers. I thought we were against them, but I guess that's probably not right. Oh, okay. Okay, see, you can always get straightened out at these things. And he's also the editor of Adam Smith's Selected Philosophical Writings, which appeared in 2004. His book, Adam Smith, will be published by Continuum Press in 2011 and he is currently working on a book and he is very industrious, won't you agree? He is currently working on a book on the moral status of socialism. Would you please welcome Jim Otison. I think... Thank you, it's a pleasure to be here. As you all will know, Adam Smith is one of the most beloved and the most hated, the most cited and yet probably for that reason the least read figures in the pantheon of the great Western writers. His ideas have helped transform economic policy throughout much of the world. And his ideas are credited by many for the astonishing and unprecedented growth in wealth and prosperity in the West. Yet, but they are also blamed by many for the inequalities in wealth that have arisen since Smith's time. So we can have today the interesting spectacle of, on the one hand, a dirger McCloskey who argues that Adam Smith's ideas have led to more good for humanity than arguably any single other... That way I can see you better. Any other single person in the history of humankind, and on the other hand we can have a Jeffrey Sachs who suggests that Smithian markets have led to inequity, exploitation, and environmental depredation. And all of this accomplished by a socially awkward 18th century Scottish philosopher who wrote after all only two books his whole life which is hardly enough to get him a full professorship in an American university these days. So this suggests something of a puzzle. Who really is this person, Adam Smith? What were these momentous ideas good or bad? How could a person in an obscure profession in an obscure place, in an obscure time have wrought such tremendous effect on the world? Well, there's been as one might expect quite a range of writing on Adam Smith from all manner of perspectives and for full disclosure I myself have contributed to that. And Smith has indeed been appropriated by many people including entire academic disciplines, by political parties, by schools of economics, by moral agendas all to serve their own purposes. So it can make one wonder reasonably whether one might get a true measure of the man. Where can one find an account of Smith that one can trust, an account that sketches Smith's ideas and traces their development with due and proper reckoning of Smith's time, places, friends, experiences. Well, Professor Philipson's book, there you are, is an excellent place to start. Now I have to say Professor Philipson's book represents quite an impressive achievement. I certainly couldn't have pulled it off. It presents a creditable discussion of Smith's ideas that balances on the one hand the demands of scholars like me for precision, comprehensiveness and all of the scholarly apparatus. With, on the other hand, the demand of non-scholarly readers for a book that tells an engaging indeed compelling story. Professor Philipson has managed to do what some might have thought impossible. He tells an interesting story about an economist. Hats off to you. In truth, however, as Professor Philipson himself pointed out, Smith was much more than just an economist. He was a moral philosopher. That's what he called himself. And this moral philosopher sought to understand the principles that animate all human behavior. He spent a scholarly life trying to discover and describe these principles. And in so doing, he articulated not only a conception of human social institutions, grounded on empirical observation, and a plausible, naturalistic picture of human psychology and human nature. But he also delineated a methodology for research about human society that would set the agenda for new and future disciplines of the social sciences. He was the first great social scientist. Now, Professor Philipson reconstructs Smith's achievement not only by locating the key principles of human behavior and social sciences that Smith discovered, but also by explaining both what Smith takes from and how he departs from others. So you get in this book Smith's relationship to his teacher Francis Hutchison. You also get fleshed out conversations of the reliance on the departures from other major figures of the time, David Hume, Henry Home Lord Keynes, Adam Ferguson, Rousseau, Kiné, Toucheau, Edmund Burke, whose statue is just outside. All of these players fit into this story plausibly and understandably in Philipson's hands, allowing the reader to make sense of the complicated constellation of stars that made up the Scottish Enlightenment. What Professor Philipson has done, I think, is explained in clear, and this can't be emphasized too much, readable prose, Smith's project, as it found expression in the lectures he gave and the essays he wrote in the learned societies he joined, the friends he kept, and, of course, the two books that he published. And Philipson's hand, Smith becomes an empirically oriented social scientist, a brilliant mind trying to understand what the institutions are that lead to human happiness and to human flourishing, combined with the generosity of soul that Smith had, as a person sincerely committed to using his discoveries to help remove obstacles to the well-being of the common man. It is indeed an inspiring story. I say that in all sincerity, and its skillful telling in this book justifies recommending that you read it. Now, since part of my duty as a commenter is to point out and criticize faults of a book, I spent some time looking for faults as I worked through Philipson's book. Saddened to report that I had a hard time finding any. This is partly due to the fact that Philipson's interpretations of Smith's ideas are very close to my own, so that is a discovery that I was very happy to make. Phil, for the sake of discussion, let me point out a few things that I won't call them criticisms, maybe gentle suggestions. First, as a philosopher, I feel duty bound to raise the thorny issue of the so-called is-ought problem. This problem, this is-ought problem, relates to the logical fallacy of having a normative statement or an ought statement, one ought to this, to do this or ought not to do this, from a descriptive or is statement, such and such is the case or is the fact. It was Smith's friend David Hume, after all, who articulated this fallacy in his Treatise of Human Nature, remarking that he noticed the frequency with which moralists would go from describing a certain state of affairs to immediately drawing moral conclusions or moral injunctions from them. But Hume noted that that doesn't quite work logically. One can describe all the factual details of a murder, for example, without thereby determining any specific moral conclusion to draw from it. The moral value is something else that has to be added. One can't simply go from one to the other. I raise this now because Smith seems to have had a foot in both the normative and the descriptive camps in both of his two books, and it's not quite clear, or at least it's not uncontested, how he resolves this. So, for example, in Phillips's account, Smith discusses in the theory of moral sentiments the impartial spectator, both as a heuristic device that people in fact employ when deciding what to do. So if you want to know whether what you're contemplating doing is the right thing or the wrong thing, you ask yourself what an impartial observer of your conduct would think. Would such an observer approve? Would such an observer disapprove? And this can give you a guide On the other hand, according to Phillips, Smith also uses this impartial spectator not just as a description of how in fact people make decisions, but how they ought to make the decisions. To be a moral person, you should listen to this voice of the impartial spectator. Well, that raises the question of what exactly is Smith doing in the theory of moral sentiments. Is he a moral psychologist who is merely describing his empirical findings about the phenomenon of human moral judgment-making? Or is he also a moralist who is making recommendations about how people ought to live? It seems he's at least the former, arguably the latter as well, but the question is how they go together. I'm sure Professor Phillipsin hasn't answered to that, but one would be interested to hear what it is. A similar issue arises in the wealth of nations. When Smith declares that it is not from the benevolence of the butcher, the baker, can you recite this line with me? It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interests. Well, that sounds like a descriptive statement, and as some have said, a rather cynical one. But one might ask the question, perhaps that is how we often do behave, but is that how we should behave? So the question again is what kind of claim is Smith making? Is he really describing the way human beings tend to behave, or is he making some sort of recommendation? So my first gentle suggestion to Professor Phillipsin is that it would be nice if he addressed the issue and tried to sort it out one way or another. Now, there are a handful of other important topics to which one might wish Phillipsin had given more than just a nod or cursory attention. I'll mention one, and that question is how can one reconcile Smith's argument for free trade? Indeed, in his own words, Smith's very violent attack on the whole commercial system of Great Britain. That's Smith's words. How can one reconcile this with Smith as Professor Phillipsin describes it? Correctly, I add. Smith's vigorous, exacting, even punctilious fulfillment of his duties as the commissioner of customs for the last decade or so of his life. In other words, how can one square Smith argued for the abolition of tariffs, quotas, and other impediments to trade with the fact that when given the opportunity, he applied and exacted exactly those things with great enthusiasm, perhaps even with relish. In 1773, Smith was offered the chance to become the tutor to the Duke of Hamilton. He turned it down, and instead in 1778, he became the commissioner of customs. As Phillipsin rightly notes, it was surely a mistake. In other words, and I entirely agree. It was surely a mistake to turn down the Hamilton offer because the job of commissioner of customs consumed more and more of Smith's time and it also negatively affected his health as well. As a result, it probably prevented him from completing the great and large and tragically never published project, philosophical project that he had been working on at the end of his life. Instead, Smith's connected history of liberal sciences and arts as his executors described it on which he had worked for many years was never brought to fruition and instead his notes and manuscripts as Professor Phillipsin recounted a few minutes ago were burned at his direction only a few weeks before he died. So why one would like to know would Smith not only have taken a job that seemed to conflict with his principles but also prevented him from completing projects that he loved and believed in and I would guess that no one would be in a better position to address these questions than Professor Phillipsin so I'd be interested to know what he thinks. And on a related but perhaps more philosophical note one might ask how one should understand Smith's endorsement of free trade in the wealth of nations and also his endorsement of limited government with his as Phillipsin described it pervasive doubts about the competence of modern governments on the one hand with on the other hand his rather long list of duties that Smith were the sovereigns including I might add frequent and gay public diversions. How do these things go together? In the interest of time I have some other examples but if we're perhaps the issue that Professor Phillipsin raised about religion is an interesting one whether Smith in fact retained his religion on the one hand and what role religion or God play in the theory of moral sentiments or the wealth of nations is the second issue be happy to discuss those in the question and answer session. Another issue that I myself have written about but I was quite interested to see that Phillipsin did not broach was the so called Adam Smith problem some of you may be interested in the discussion of that or even knowing what that is Professor Phillipsin didn't discuss this in his book. But I would like to close my remarks by pointing out what I found to be one of the most important and even enlightening lessons from Phillipsin's book. Professor Phillipsin near the end of the Smith's wealth of nations quoting him now quoting Professor Phillipsin now is the greatest and most enduring monument to the intellectual culture of the Scottish enlightenment. That's quite a statement. I'll read it again the greatest and most enduring monument to the intellectual culture of the Scottish enlightenment. If you know something about the astonishing production of human knowledge in a whole range indeed virtually every area of human learning that went on during the Scottish enlightenment to locate that book as the greatest achievement. That's saying it's quite an important and strong statement. But I would like to say about that that Phillipsin's book shows that it is not unfair to say that the story of the Scottish enlightenment actually parallels and reflects the story of Adam Smith himself. Indeed the story of the Scottish enlightenment is in a deep and profound sense the story of Adam Smith. Now given how profoundly our own world has in turn been shaped by the ideas that came out of the Scottish enlightenment I think we can say that Smith's story is the story also of us. So to understand Adam Smith is to understand ourselves. Phillipsin's book provides a deep and thorough picture of the complex life of Adam Smith and his integration into this astonishing period of learning that we know is the Scottish enlightenment. And in so doing I think Phillipsin's book ends up providing an illuminating and surprisingly timely window onto our own place in the world today. Thank you. Okay we've had a very good form here today this is an extraordinary I think and now we're going to cap it off with a great question and answer session. Now as a prelude to that I would say please raise your hand if you have a question please say you might want to indicate your name in an affiliation also and wait for a microphone to arrive so we can get the sound throughout and finally please have your comments in the form of a question and if you want to direct them to one or the other indicate so. The gentleman here in front here hand up first. The name is Steve Hanken no real affiliation just retired attorney. I guess both of you whether you think in any way Adam Smith could be considered a forerunner of the Austrian school and now when I say that I mean the kind of method of the a four shiari deductive reasoning that the Austrians embrace versus the experimental models that have come up afterwards do you think another question is do you think that he pretty much embraced a four shiari deductive reasoning method as opposed to the scientific method both gentlemen but first our author I think the short answer is no whether he can be seen as a forerunner to the Austrian school of economics that's not to say that they won't at the end of the day agree on many aspects of what the proper scope and function of the government is for example but Smith was anything but an a priori theorist he did not begin with first principles and then deduce from that the principles of government or economics he was much more of a grounded and empirically oriented philosopher and indeed that's one of the main characteristics I would argue of the Scottish enlightenment or the Scottish historical school method that Smith and human others are emblematic of if you want to know what sort of government you should have if you want to know how human societies work go and look see what different because after all the panoply of human experiments that there have been offer quite a range of human experiments go see and what go look at them and see what has worked what hasn't worked and I think that really typifies the approach of Adam Smith that's not to say that he wouldn't be in agreement with say for at least a historical figure Smith read John Locke read the second treatise was fully conversant with the tradition that a Lockean would have represented where we have certain principles of human nature and natural law and we deduce from that the proper scope of government that just wasn't his approach so they may well have agreed in many conclusions but they would have arrived at them in very different ways I think one of the things that is often forgotten with the wealth of nations is the consequences of the sheer richness of that book and it very much it tends to encourage speculation about what might Smith have thought about something as well as what Smith did think now I make that distinction because Smith it seems to me is extremely careful both methodologically and as an executant in writing the wealth of nations to produce an analysis which explains why we have got in western Europe basically in France, in French and British civilization to the stage we have got at present and his method doesn't allow him to formulate principles that are any more general than that the humane underpinning of his thinking of the historicist well it's not historicist I would prefer to say character of his reasoning does not allow him to explain anything more than the dilemmas and the problems of governance that exist within his own society now the trouble is in doing that he raises all sorts of general questions which may or may not apply to the experience of civilizations lying beyond his own reach and I think it's very interesting that's one of the things I tried to do in I may say many goes writing my chapter on the wealth of nations was to strip the analysis back to what Smith was claiming he could throw light on as a political economist with a sense of public duty and he is very careful about stopping the argument at the point beyond which only the imagination can take us and only the utopian can go and in that respect I don't so much I say a poor economist I don't so much see Smith's affinities lying with the Vienna school so much as lying with I'm afraid Keynes I think well I'm sorry I knew someone was going to say that a whole new set of hands have gone up the frame of mind the frame of mind let's leave aside the execution in terms of governments the frame of mind has much more in common with that of Maynard Keynes than I think is often realized we'll just leave that hanging for the moment let's I'm of gentlemen in the second row from the aisle right here I tend to go about it random there's no plan here we did get more hands though thank you my name is Howell Posner I'm not affiliated Professor Phillipson what things did you learn while writing this book that you didn't know about previously or things that added to your understanding that surprised you the relationship with Hume I've always been intrigued by the relationship between Hume and Smith as anyone is bound to be it's the depth of that relationship and the thing that I must say really got the text moving as far as I could see was when I tried to present Smith as as in fact an extremely friendly an intelligent critic of Hume's project for a science of man as set out in the treatise of human nature it is very interesting to reflect on what it is that Smith does almost certainly at the very beginning of his career in Edinburgh between 1748 and 51 and continued in Glasgow to read these as developing things that for some reasons we probably don't really know about Smith never thought of doing why is there no theory of language in the treatise of human nature Hume's science of man depends upon a theory of language which will privilege an understanding of discourse conversation and all the rest of it he doesn't produce one, Smith does again the historicism the fact that Hume has an understanding that our ideas of justice and therefore of morality political obligation and everything will vary in different types of civilisation hunter-gatherer, pastoral feudal, commercial but he doesn't work it out I mean he makes these distinctions are there in his early work but they're not developed Smith came over to me as someone who was developing these lacunae in the most friendly and brilliant way and that I think was the most exciting thing for me to be able to develop and then to carry that through but it's an interesting question actually it really is the woman right here yes my name is Rosland Lacey and I'm a theatre reviewer for DCTheaterScene.com and I just survived Candide which had a very successful run here a musical which Bernstein continuously revised because he couldn't quite figure out what Voltaire was trying to say but that's my basic question is do you explore Adam Smith's relationship with the French and what was going on with the French at that time especially between 1750 and 1770 I believe you're going to have to help me out here the physiognomists there was a movement physiocrats physiocrats thank you yes and this idea that you can guarantee individual liberty but you can't guarantee the results and there's just these delightful numbers in the musical you know in Candide the outrageous fun Voltaire did of this belief this ridiculous belief that came out of the enlightenment that this is the best of all possible worlds when there's an earthquake in Lisbon people are living in dire poverty and what's the use of all this dishonest endeavor at being so clever if you just have to pass it along pass it along pass it along all it is you just pass it along what about it professor no we both thought you'd have a go at that but well I must say I wish I'd seen that version of Candide well there was one another version approved by Bernstein himself and conducted by John Mouchery in Scotland a few years ago which was vastly intriguing all sorts of things happened to it but I'm not sure that I think that Bernstein's indeed is necessary I think it's a pretty free go at Voltaire what Voltaire himself would have said about it I don't think I mean it would have undoubtedly been memorable but the point was Adam Smith I think it's important to remember although Voltaire does not appear on the surface as a player in any of his debates with the French with the Philozov or let alone the physiocrat he does not play at all but that does not mean that Voltaire is not there Smith owned and bought he met Voltaire he talked with Voltaire and he once told one of his people who started to criticise Voltaire he said sir there is only one Voltaire and he bought a magnificent bust of him and what that reminds me is this is Smith on the Voltaire as the anti-clerical it's very interesting that in this classic confrontation between the Philozov or the Enlightenment and religion and the all the classic invocation all of that that does not appear on the pages of Smith at all in the way it does with Hume Hume's anti-clericalism his religious scepticism is constantly resurfacing in his writing Smith it never is and one of I think the very interesting things questions to ask about Smith is why when he has adopted a philosophy which in fact argues for the irrelevance of the philosophical irrelevance of theology why in fact and when there is very little doubt that he had he was alarmed by the consequences of clericalism as Hume, Voltaire or anyone why he does not allow it to intrude into the centre of his philosophy but he doesn't I think he does in the following way so he does mention Voltaire and he does Smith does the answer to your first question is Professor Phillipson does discuss the Smith's connection to the French Enlightenment but I think there is in fact quite an important way in which Voltaire figures into part of at least Smith's political and philosophical program at least I'd suggest this to you for your consideration and that is the following you remember at the end of Candide I haven't seen the musical but at the end of the book you see one's own garden this I think is a powerful insight and it figured mightily in Smith's D-classing of political philosophers indeed the extent to which our policy makers and legislators should no longer imagine that they can apprehend the good with a capital G the way Plato had imagined that the political philosophers would do and then organise the entire state from top to bottom in terms of their conception of the good life what they can do is to create a framework in which individuals can tend to their own gardens we can become a nation of shopkeepers as Smith said in the wealth of nations and that's all right you manage your life in the best way you know how given the talents and opportunities you have and the values that you have whatever they are the state's job is to provide a framework in which you can do that to the degree possible and hence I think that's a transformation of the idea that whereas God might be the monarch in the next realm and Voltaire wants to get rid of that as well for Smith what we're doing is in this realm we're taking the political leaders the magistrates the legislators who imagine themselves as something like secular gods and bringing them down and saying no just allow us to have a framework thank you very much I think that's a powerful idea certainly figures in Smith but I would not be surprised and in fact I would suggest to Professor Phillips that Voltaire might have been one of the sources of this idea okay do you want to say just a bit more on that I mean what Jim has said I completely agree with and he said it very elegantly I just don't I don't see that it has roots in Voltaire it belongs to a family of views but if I had to track exactly if I had to track the makings of that thinking I wouldn't feel the need to drag Voltaire into it there may be other reasons for that well we don't care just as long as Keynes doesn't show up again do you know I always make that point about Keynes actually because it is absolutely fascinating how the hands go up well let's give a shot here in the back on the right side where we're going this time John Starziak I've got a question and I hope it's not redundant because I came in a little late how do you feel that Adam Smith would support free market, unregulated, regulated capitalism because I've read several essays and including one by John Kenneth Galbraith and they quote parts of the wealth of nations which diametrically opposed free market capitalists for example just one example is Adam Smith thought there should be a legal limit on interest and though they quote a number of other parts of the wealth of nations which are diametrically opposed to free market capitalism where do you fall in this argument one of the books that Smith did not succeed in writing was a treatise on legislation and this and the treatise on jurisprudence again which is probably part of the same package does remind us that Smith that Smith's governing interest lies in the role of government in managing an economy and I think that one of the things I did want to do in my book in fact was to centralise the point that government there is no situation in which government you could envisage a civil society without government and any government by very definition in Smithian terms is going to have to think of the role of government in the management of the economy and the point is that this is an ideal which is in fact all about political prudence and what Smith is it seems to me is doing and I come back to someone made a point I think in fact I think it was you Jim about what earth is Smith doing in the customs as a customs manager I think it's better to think of Smith as someone who devoted an enormous amount of his time to the realities and the practice of taxation this is a continuing interest of Smith and he was consulted continuously by politicians on this business and so it's not a question of what should government intervene in the management of the economy or not it's the question of how it should intervene and a lot of the I think myself the puzzles that some people find in the wealth of nations about the role of government in the management of economy come down to Smith's arguing about particular prudential considerations there is no way in which for example in the management of the landed interest which is something people tend to forget people tend to talk about Smith and mercantile capitalism not many people pay attention to Smith and the landed interest and to the role of government in managing the agrarian economy and we should remember actually something I was very happy to be able to I think throw a bit of light on the work of one of my graduate students the Smith's involvement with the Duke of Baclou probably one of the three or four greatest landowners in Britain with the young Duke of Baclou helping him to re-manage these vast estates while he's actually working on the wealth of nations but my point is this there is no way he never in fact is unequivocal about the role of government government should abandon intervention in the management of trade or the management of agriculture and leave it to the market he never says that and the reason it seems to me is the prudential one and the prudential reason is that the primary duty of government is the maintenance of civil society and the maintenance of sociability and there is no way in which a prudent government can intervene too directly in a pluralistic political and essentially oligarchic political world such as the one he is involved with in his own day the wealth of the book five of the wealth of nations is very much about the relationship between principle and prudence and I'm pretty sure that the book on legislation would have been a book in which he elaborated that we have no agenda for it but in which he would have elaborated that but as I say it seems to me important to remember that he is not in fact a principled reasoner about the principles of government he is a prudential reasoner and as I say he had every reason to take that position it seems to me as an expert on taxation someone who is very much involved in the business of advising governments on principles of taxation he comes over to me in that respect not so much as a libertarian but as a wig now the relationship between wiggory is something we could talk about for a long time and it would be interesting but we better not Jim would you like a comment on that I think I'm in agreement with Professor Philipson I would not classify Smith as a as one might say somewhat uncharitably an ideal log with respect to markets he thought markets were a powerful force for good things but what he was looking for were the institutions that allowed human beings to flourish whatever those institutions are and it turns out historically speaking that markets are an important part of that his argument for free trade is not based on any sort of principles about it being a person's right to do with his property as he sees fit but much more about we all just do much better when we allow free trade and the arguments against free trade are usually driven by special interests so that's a pragmatic practical old style liberalism is what I would call it a classical liberalism if you like it's not a nozikian or even a lockian form of libertarianism let me propose that Smith was a prudential libertarian let's go over here I have the gentleman right there 3M my name is Dan Lieberman I believe that Smith was a studied mercantilism you mentioned he really studied mercantilist capitalism and I believe you also originated the term surplus value which people have interpreted as profit and to get rid of the surplus value you had to export I think that was one of his prime contributions to the wealth of nations and we see today that China is a principal exporter and the US is a tremendous deficit in the balance of trade so would you say that there is a great follower of Adam Smith and the US is a poor follower of Adam Smith Adam Smith is certainly read in China and I may say I live in the hope of getting a Chinese translation to my book but I very much doubt whether the present government and the government for the last for the last half generation in China have actually been sitting there with copies of the wealth of nations on the desk I think the intellectual history of policy formation in respect to the management of trade in China over the last 25 years is much more complicated than that and I suspect extremely interesting but as I say I am no economist to judge but it comes over to me a much more multifaceted and not necessarily exclusively pragmatic approach to the management of trade but as I say that is from an economics amateur like myself can I say something to that I would suggest that in the last 30 years or so China has been quite surprised the Chinese communist leadership has been quite surprised the extent to which Adam Smith's ideas have worked what they have done is affected in small and targeted ways areas in which Smithian style markets have been allowed to operate given people property rights allowing them to do with their profits as they would like and to exchange surplus value and surplus goods as they would like and look at the astonishing growth in production that that has enabled I think it has been very so is the Chinese communist government turning into a Smithian style if you like pragmatic liberal government no on the other hand are they coming perhaps some of them grudgingly to see the power of markets and the good that they can do yes I think they certainly are seeing that may I make one more comment on that I think one of the things that we don't take enough account of in Smith is precisely what he means by markets now if you look at the modelling of his discussion of markets it's essentially he's taking an essentially a regional view of what a market is he's thinking of the interplay between town and country but also between countries wouldn't you say? oh yes between countries but the notion of moving I mean these are the two poles on which he operates but it seems to me that there's a real ambiguity and it's actually an interesting ambiguity about what he means by a national market and I think that I suspect although this is speculative that there may be very good reasons for that I mean was there a Scottish market was there a Scottish economy that actually in Smith's own time was it legitimate to talk of Scotland as a particular market well it was in some respects they say in relation to the workings of the tobacco trade and possibly linen but on the other hand just what the nature of that market is you know when you move between the market that is recognised by a simple pattern of interchange between town and country and the sort of market is determined by in fact customs regulations and operating individuals I find myself wondering just what Smith meant by market in that respect whether or not it matters economically I don't know but for someone who's thinking is as precise usually on these matters I find that that vagueness is intriguing and frankly I don't know quite what to make of it this gentleman right here has been waiting sorry I have a cold my name is Vito Tanzi I'm the author of a forthcoming book with Cambridge University Press on the role of the state so I had to discuss some of these issues I have just one comment and one question you know the comment is that the view that Adam Smith had a very limited role of the state is really not correct for the time this was an enormous expansion of the role of the state what he wanted was to redirect the role of the state away from mercantilism to a more efficient role that's my comment the question is that Adam Smith had a lot of confidence in markets clearly this is very central at the same time he was very confident there are lots of statements in the wealth of nations and so forth so my question if you were living today after two years of financial market chaos what role would you assign to the state in terms of regulations may I make a preface before you get your answer I would give one addendum to your comment which is Smith was certainly quite critical of merchants in the wealth of nations but he was critical of many classes of people not just merchants professors, priests and other people who use certain kinds of social institutions to their own advantage that was really I think the crux of the argument of the criticism he was raising towards merchants the problem he had with merchants was when they joined hands with ministers of the state in order to protect them from competition to give them monopolies give them special privileges for those protected merchants and usually indirectly then the politicians who gave them those protections but always at the expense of the common man so it wasn't just merchants that he was criticizing it was anybody who would try to use various kinds of social political and economic apparatuses to enrich themselves at other people's expense there's my preface I mean I absolutely agree with your comment and I agree with most of Jim's Jim's gloss on it I think the important thing is that Smith would not have denied that there was a role for regulation the question of regulation was one that would have to be taken seriously the interesting evidence of that is Smith on the role of banking in the wealth of nations I got particularly interested in this because he spent some time on Scottish banking and ghastly banking crisis in 1772 it's the end of a boom there's a housing crisis it's really quite ridiculous the thing is that this is and the question he comes up with in the context of 18th century banking is that these little credit shops should actually be allowed to fall fine but that is a comment but I think the point that is worth making is that he regards this question of regulation whether there should be or shouldn't be as a highly serious question and he does not give a universal answer to it his answer is historically defined by the limits of the existing system he's dealing with and we know he took this question seriously because he delayed the completion of the wealth of nations by at least 18 months while he attended to it the question of I read Smith as being essentially beginning middle and end a pragmatist in the matter of regulation but always accompanied as Jim was saying by an extraordinary acute sensitivity to the way in which interest groups operated in relation to parliament to government, to civil service and to the ministry may I say one other thing I guess this may be a difference between us I think Smith would be agnostic with respect to a great deal of the regulation so what he'd want to do is see what regulations we're talking about and what are the effects but he's not neutral I think his reading of human history is that government intervention tends to reduce productivity various kinds of unintended bad consequences so I think much of the argument of the wealth of nations is for shifting the burden of proof we want to assume that human beings ought to be allowed to lead their own affairs without third party interposition into willing exchanges with others unless you can demonstrate that there's some very specific reason why in this case there has to be an intervention so that shift it's not a principled objection to all regulation and it is an important shifting of the burden of proof this is what Smith has in mind when he talks about the obvious and simple system of natural liberty what that is we allow for protections of people's private property and that's going to be it unless there's some very specific reason why and the burden of proof will then be on you the proposer of the regulation or the proposer of the intervention to show why everyone would benefit and there's no other way to do it for third party or state intervention so I think there is a shifting of the burden of proof so I don't think he's purely neutral with respect he's going to view any sort of regulation with a measure of skepticism in the sense that you need to make your case on the other hand if you make your case okay then you've made your case well can I just gloss that just a little because one of the things I mean someone spoke of Jim you did of Smith as one of the first great social scientists and as such one of the key interests that comes through his jurisprudence which is absolutely wonderful stuff it's richly textured it's a tough read but it really is a terrific one is how do societies reproduce themselves the analysis is designed to show at every point how in fact a regime will perpetuate itself perpetuate its rule and all the rest of it now the point is that there's a paradox built into this into this sort of anthropological realism if you like to think of it like that that the more effective any period of rule is the more any regime whether it's the Tartars or whether it's a feudal regime or what have you the better able it is to maintain the rules of justice and to secure regularity in the rules of justice the more that in fact people sense of what is just and sense of what is fair will move round and any government which then wishes to to preserve itself is actually on the long term going to have to respond to that shift in sensibility the sensibility of fairness the sensibility of what it is that government can provide and if it doesn't it's going to be in trouble and I think it may be that there is a tension between this anthropocentric sensibility that comes through the lectures on jurisprudence and the wealth of nations because what Smith his historic analysis allows him to do is to say that the fabric of British and French society is changing in ways in which its governors do not fully understand and here is an analysis which will explain that and it's a profound analysis it's really a profoundly serious analysis and what he is then saying is that the public interest and therefore the long term interest of traditional interest groups must be seen as changing and if it doesn't there is a French Revolution waiting down the road for you and so I would put the problem like that and that is in fact what under lies his sense his desire to try and teach a new sort of prudence in the governors particularly British but to a lesser extent French society we will end today where we start it with the picture on Bill Nascannon's wall that claims I think rightly that Adam Smith was a great benefactor of mankind Nicholas Phillipson has written a book about Adam Smith that is very fine on this great benefactor of mankind one you want to consider I think for your time for reading and this great benefactor of mankind I think we have concluded was a prudential libertarian but a libertarian for all that please join us for dinner lunch upstairs