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Subject Area: Political Theory

Adam Smith & The Liberal Tradition - Leonard P. Liggio, Literature of Liberty, Spring 1981, vol. 4, No. 1 [1981]

Edition used:

Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.

Part of: Literature of Liberty: A Review of Contemporary Liberal Thought, 20 vols. 19781-982

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Adam Smith & The Liberal Tradition

C.B. Macpherson

  • University of Toronto

Review article of Adam Smith's Politics: An Essay in Historiographic Revision. By Donald Winch. New York: Cambridge University Press, 1978. In History of Political Economy 11(Fall 1979):450–454.

Professor Winch wishes to dismiss as anachronistic the traditional liberal capitalist perspective on Adam Smith's “politics.” Winch argues that the received view reads nineteenth-century meanings into Smith's eighteenth-century concepts. For Winch, placing Smith in his eighteenth-century context is to view him not as a “stage in the development of liberal capitalist ideology” (or utilitarianism or liberal individualist political theory) but as a thinker who thought within the language and concepts of his own age. Professor Macpherson, author of The Political Theory of Possessive Individualism, counterargues that “Winch has not shown that reading Adam Smith as a liberal capitaist or bourgeois ideologist is incompatible with a recognition of Smith's genius as an eighteenth-century thinker.” Smith is properly interpreted “as a crucial turning point in the bourgeois individualist tradition which runs from Hobbes and Locke to Bentham and Mill and was both appreciated and excoriated by Marx.”

Yes, we ought to interpret Smith, the thinker, in his own terms as Winch urges. But this is not incompatible with seeing Smith as “the turning point from Hobbes and Locke, with their natural rights, to Bentham and James Mill with their crass materialism, and to John Stuart Mill with his humanistic stance which recaptured some of Smith's concern for the whole human being.” Thus we can compatibly read Smith both as within the evolving capitalist tradition and as an eighteenth-century scientific humanist.

While Smith had no intention of working out a Marxian theory of exploitation, he made the important contribution of identifying a new class of profit-takers. His political economy's advance over his predecessors was to insist that profit differed from the wages of superintendence, rent, interest, or the merchant's gain from buying cheap and selling dear. Macpherson claims that Smith saw profits within the labor theory of value and “was the first to see that this new use of labour as a commodity had created a new tripartite class division (receivers of rent, profit, and wages).”

Smith, while not uncritically advocating capitalism, saw it as the wave of the future and prized it for leading to “personal freedom (security of person and property).” Macpherson shares with Winch the view that the tradition of liberal bourgeois ideology did undergo a profound change, but he places that break between Bentham and J.S. Mill. He suggests that “Mill, in breaking from Bentham by asserting that quality of life was more important than maximizing GNP, had brought bourgeois liberalism back full circle” to Adam Smith's more complete humanism which saw more in the human spirit than homo economicus.