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Subject Area: Political Theory

Adam Smith & Paradigm Shifts - Leonard P. Liggio, Literature of Liberty, Spring 1982, vol. 5, No. 1 [1982]

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 & Paradigm Shifts

Salim Rashid

  • University of Illinois, Urbana

“Adam Smith's Rise to Fame: A Reexamination of the Evidence.” The Eighteenth Century: Theory and Interpretation 23 (Winter 1982): 64–85.

A common academic myth holds that Adam Smith's (1723–1790) Wealth of Nations became a popular and influential work upon its publication in 1776. Rashid counters that although Adam Smith lived for fourteen more years after the Wealth of Nations was published, the victory of Smithian free-market economics did not come during Smith's own lifetime. Rashid refutes the myth of Smith's instant popularity by comparing Smith's fame with that of the government interventionist, Sir James Steuart, in the years before 1790. By unveiling the reasons why Smith achieved the status of undisputed authority on political economy after 1790 (reasons other than Smith's scientific analysis), the author comments on the applicability of Thomas Kuhn's framework of scientific progress to economics. Rashid also calls into question the attempt to specifically identify Smith's free-trade doctrines as a “cause” of the Industrial Revolution.

The evidence is against the claim that Smith's influence dominated public policy, merchant opinion, and the public's mind in the period between 1776–1790. Mercantilism lingered, and what support for freer trade existed was promulgated long before Smith's volume by the influential popular writers on economics, the Rev. Josiah Tucker and Arthur Young. It is more instructive to contrast the reception of Smith's free-trade ideas with the more statist views of Sir James Steuart in the period before 1790. Smith, during this period, may have influenced an important elite, but he had not yet engaged the support of the more numerous, but necessarily more diffuse, educated classes. Rashid casts doubt on the myth of Smith's instantaneous fame by citing the lackluster reporting given to Smith in the leading English and Scottish journals of the 1770s and 1780s.

In the period before 1790, the most popular British journals, such as the Monthly Review and the Critical Review do not support the traditional view of the overnight victory of Smithian economic ideas. By contrast, these journals did not ignore either the mercantilist Sir James Steuart or the interventionist complex of ideas which he represented. Smith was not hailed as a new prophet except by some few, but very influential persons such as Lord Shelburne and William Pitt. Smith's death in 1790 did not set the intellectual world to mourning.

Even though there is no definite evidence to establish Smith's superiority over Steuart in popular estimation before 1790, there is no doubt of the drastic turn-about in favor of Adam Smith by 1815. The factors that contributed to this reappraisal go beyond Smith's analytical and scientific merits. First of all, Smith's stylistic merits outshone the heavy, stilted, and formal Steuart. Next, Smith's position as a professor of moral philosophy at a famous university seemed to confer greater objectivity on his analysis than that of Steuart, a known Jacobite. Also, by 1800, as Britain's industrial superiority displayed itself, Smith's free-trade doctrines appeared as the best policy to British manufacturers. The public admiration of politicians and the praise of partisan admirers also played a part in raising Smith's stock (as witness the support given Smith by the Whig spokesman, Charles James Fox, and the Smithian eulogy delivered by Prime Minister William Pitt).

The fact that a majority of influential men did not support the basic free-trade ideas of the Wealth of Nations until the mid 1790s should call in question the causal links between Adam Smith and the Industrial Revolution, which was clearly underway in England by 1780. A general move toward freeing trade from government restrictions was well under way by the 1750s.

The rise of Adam Smith in economic science seems, in one respect, to confirm Kuhn's view that the history of science consists of a succession of radical changes in viewpoint. We witness a sudden paradigm shift because of the Wealth of Nations. The Smithian vision disposed of the problem of reconciling the private and public interest as well as the problem of achieving full employment. This scientific “progress”, however, was dependent on factors that go beyond “science” (e.g. literary style, partisanship, and bias). Material interests of some groups as well as the sociology of knowledge are sometimes as important as scientific arguments in the victories of economic science.

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