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THE CENTENARY OF THE “WEALTH OF NATIONS”. ( From “ The Economist, ” 3 rd June, 1876.) - Walter Bagehot, The Works and Life of Walter Bagehot, vol. 9 (Essays from the Economist, the Saturday Review) 
The Works and Life of Walter Bagehot, ed. Mrs. Russell Barrington. The Works in Nine Volumes. The Life in One Volume. (London: Longmans, Green, and Co., 1915). Vol. 9.
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THE CENTENARY OF THE “WEALTH OF NATIONS”.
TheWealth of Nations which was published in 1776, is this year just a hundred years old, and the English Political Economy Club gave on Wednesday a dinner in celebration of the fact, at which they had the remarkable honour of entertaining the French Minister of Finance, who came from Paris for the purpose, and who made on the occasion a most admirable and suitable speech. No compliment could have been more suitable for a dinner in celebration of the beginning of the most effectual of political philosophies, and the one which has by far the most affected the intercourse of nations.
Nothing beforehand—nothing if we look at the matter with the eyes, say, of the year 1770, could have seemed more unlikely than that Adam Smith should have succeeded in such an achievement. Political economy is, above all things, the theory of business, and if ever there was an eminent man who pre-eminently was not a man of business it was Adam Smith. He was a bookish student who never made a sixpence, who was unfit for all sorts of affairs, and whose absence of mind is hardly credible. He once astonished a sentinel who did him some kind of military salute by drawing himself up and giving with perfect gravity a facsimile salute in return. On another occasion, when he had to put his signature to an official document, instead of doing so he copied with slow and elaborate care the name of the person who had signed before him. And these acts are but specimens of his life. If the townsmen of Kirkcaldy—the little place where the Wealth of Nations was written—had been told to select the townsman who was most unlikely, as far as externals went, to tell this world how to make money, most likely they would have selected Adam Smith, whose writings have, in fact, caused more money to be made, and prevented more money from being wasted, than those of any other author.
That there had been various preceding political economies, more than the common world much remembers, rather enhances the wonder. Unquestionably, many hardheaded men, and some sects of writers, can be mentioned who approached more or less nearly to the general doctrines now accepted as the true theory of commerce. What sort of “natural selection,” then, made Adam Smith’s political economy so much more successful than that of all others? Why was this most unlikely-looking Scotch student the “favoured” philosopher whose name was to be annexed for all time to the true theory of trade?
One great piece of good fortune to Adam Smith was his time. Historians of science remark that most great discoveries are based on large collections of new facts. And this was the case with trade in the eighteenth century. There was then a much vaster, a much wider, and much more varied commerce than the world had ever seen in any preceding time. And its contents were catalogued and were commented upon in a quantity and with an accuracy which there had been nothing like before. “Political Arithmetic,” as statistics were then called, was no doubt then very small in comparison with the mass of figures to which it has grown now; but still it existed, and existed for the first time—at least, in any connected bulk—and that existence was a sign of the recent extension of commerce and of the changed place it began to take in men’s minds. Adam Smith was singularly fortunate among philosophers, for he had a new world to explain and new data for explaining it.
And he had also a world to conquer. The new commerce which had grown up had done so in spite of any law which could be framed to prevent it—not that such had been in the least the intention of legislators. On the contrary, they were most anxious to develop trade, and to make the nations rich which were subject to them; but they had pursued a wrong, though very natural, method. Seemingly, the most obvious person to consult on matters of trade, is the trader; the person who, at first sight, seems likely to know most about a thing, is the person who makes it; and, accordingly, the European Governments had taken counsel with the producer. But, unhappily, the producer was just the wrong person to consult. What he wanted was a high price for his article, and a monopoly of the market in which to sell it; and the laws he recommended were inevitably framed, more or less, to obtain his wishes; whereas, the interest of the nations which the Governments were trustees for, and which they were sincerely desirous to serve, was a “low price,” unrestricted competition from abroad, and a freedom for every one to buy or sell everything at home. The legislative success of Adam Smith’s philosophy has transcended that of all other philosophers very much from this. He found a world in which the interests of the buyer were supposed to be secured by laws, framed at the suggestion of the seller, and he was able to show, not by mere elaborate argument—though he gave that too—but also by an unsurpassed store of living illustrations, that these laws worked ill, and were sure to do so, because they were framed in the wrong person’s interest. To use a homely illustration, Adam Smith was so fortunate as to find a world in “which the cat had the custody of the cream,” and to have had unprecedented facilities for showing the absurdity of the arrangement.
And when we look more closely at the matter, we find notwithstanding the outside impression, that he was a person singularly fitted to do this. He belonged to what—calling the group from the representative most familiar to us—we may call “the Macaulay type of Scotchmen”. He possessed in combination—exactly that power of lucid exposition, that eager interest in his subject, that immense power of illustrating it from all quarters, and that hard kind of predominant—we might almost say—intolerant common sense, of which every reader of Mr. Trevelyan’s excellent biography will just now have in his mind an almost perfect specimen. Many persons are now deterred from reading the Wealth of Nations by the dulness of modern books on Political Economy, but most of it really consists of some of the most striking and graphic writing in the language. And its defect, like that of several other great works of the eighteenth century, is rather that it tries to make its subject more interesting than it ought to be, and not to dwell on the dull standpoints of the truth, though these are often the most important parts of all. But perhaps for its peculiar time and purpose this defect was almost a merit. It gained a hearing from the mass of mankind, who always think they ought to be able to understand even the most complex subjects with little effort, and so brought home approximate truth to those most concerned in its application. A student familiar with abstractions may prefer teaching like Ricardo’s, which begins in dry principles, and which goes with unabbreviated reasoning to conclusions that are as dry. But such students are very rare. Teaching like Adam Smith’s, imperfect and external as from its method it is, vitally changes the minds and maxims of thousands to whom an abstract treatise is intolerable.
Three other circumstances, too, helped on Adam Smith. First—He was educated in England—educated, we mean, as a young man; and though Oxford may have taught him little of book learning in comparison with what she ought, as he always said she did, she gave him—for he lived there several years—a sort of familiarity with English things, and of sympathy with English life, which the Scotchmen of that day often wanted. Anyone who will compare Hume’s way of treating an English subject with Adam Smith’s, will at once feel the contrast. Hume without disguise hates the whole thing; Adam Smith—though, no doubt, even in him there are unextinguished vestiges of the old feud between the countries—abounds in kindly understanding, and seems always to remember that he spent a happy youth in England, though possibly not one of the elaborate book-training which he coveted.
Secondly—Adam Smith lived for years in Glasgow, then even a commercial city of intelligence, and was a member of a club of merchants, “in which the express design was to inquire into the nature and principles of trade in all its branches, and to communicate their knowledge on that subject to each other”. A set of strongheaded merchants, trained as the Scotchmen have ever since the Reformation been, in abstract reasoning, would be sure to argue out something near to Free-trade—and tradition preserves the name of a certain “Provost Cochrane,” to whom Adam Smith always said he was under great obligations. This club and the atmosphere of Glasgow life, probably taught him more than he was aware of, not so much in the way of definite ideas and conclusions, as in the way of “putting business things,” so that men of business can understand them—an art which a man cannot learn in his study, for books will never teach it, but which Adam Smith pre-eminently possessed, and which is an essential prerequisite to his characteristic work. Lastly—Adam Smith resided in France a considerable time in middle life, which not only brought him into contact with the French Économistes, who had like him, a Free-trade doctrine, and traces of whose influence curiously leavening the original Scotch substance of the thought, are everywhere to be found in the Wealth of Nations, but also generally widened his culture, excited his mind, and in those days of the old régime, introduced him to an almost complete specimen of commercial morbid anatomy on the greatest scale, showing how a treasury which ought to be full might be made empty, and how a nation which ought to have been rich and happy might be made and kept poor and miserable.
As far as England is concerned, most of the legislative effects of the work of Adam Smith are complete. He thought the adoption of a Free-trade legislation as unlikely as the creation of a “Utopia,” but yet it has been established. The fetters in which pre-existing laws bound our commerce have been removed, and the result is that we possess the greatest, the most stable, and the most lucrative commerce which the world has ever seen. Deep as was Adam Smith’s conviction of the truth of his principles, the history of England for the last thirty years would have been almost inconceivable to him. Thirty years ago Carlyle and Arnold had nearly convinced the world of the irrecoverable poverty of our lower classes. The “condition of England question,” as they termed it, was bringing us fast to ruin. But, in fact, we were on the eve of the greatest prosperity which we have ever seen, or perhaps any other nation. And it was to the repeal of the Corn Laws in 1846, and to the series of changes of which this was the type, and the most important, that we owe this wonderful contrast. The nature and the direction of the result Adam Smith would have unquestionably accepted; but the magnitude and the rapidity—the “figures and the pace”—would have been far beyond his imagination. Even to us, with the aid of our modern experience of large transactions, they are amazing, and no mind trained in the comparatively slow and small school of the eighteenth century would, a hundred years since, have been able to think them possible.
In almost all other countries much remains to be done in the alteration of the laws in the way that Adam Smith would have suggested. The English race have gone into many countries, and have there done many wonderful things, but they have not been able to take their Free-trade principles with them. Everywhere “Protection” rises like a weed from the soil; the wish to consult, and the habit of being guided by the producer, are as strong in the United States in 1876 as ever they were in England in 1776; and almost all our colonies partake the same spirit. Probably no one can overestimate the loss of wealth and the diminution of happiness which this unhappy ignorance causes. A rational tariff in America would have done more indirectly to make American industry stable and prosperous, and directly to advance the growth of wealth and industry, than anything else which could be named. And yet an irrational and pernicious tariff seems fixed upon the United States for many years.
In Europe there has not been for many years any symptom of commercial progress so good as the presence of M. Léon Say—the French Finance Minister—at Adam Smith’s festival. The circumstances of France are for the moment very difficult; a very large revenue must be raised, and in this case, as in all similar ones, much of it will have to be raised not in the best way. But it is much that the guidance of such immense affairs should be in the hands of one who is thoroughly imbued with wise opinions, and much that they should no longer be at the mercy of M. Thiers, the last statesman in Europe, perhaps, who avers that he is “a Protectionist on principle,” and who only wishes that the “tall chimnies” of some favoured producer should smoke and thrive, no matter at what cost to the consumer, or at what ruin to other industries.
And though in England the legislative work of Adam Smith has nearly come to an end, there is much else which we have yet to learn from him,—at any rate, from the spirit of his teaching, if not from its letter. Though a political economist, he was not a mere economist—or, rather, he was the antithesis of one as we now think of him. Great as his work has been, he said, with much melancholy, not long before his death, “I meant to have done more”. The Wealth of Nations was but a part of a much larger work in which he meant to treat something like what we should now call the “evolution” of human society and of human improvement. He discovered, as it has been put, “the natural progress of opulence while looking for the natural progress of all things”. And he was disappointed to think that he finished so little of so great a scheme. In this critics, instructed by longer experience, will not agree with him. These great plans are the bane of philosophy; “the master mind,” as has been profoundly said, “shows itself in limitation,” and, fortunate as Adam Smith was in many ways, it is his greatest good fortune that fate constrained and compelled him to it. But, nevertheless, this wider design in which the Wealth of Nations began, is one of its peculiar features and one which we now-a-days much want Adam Smith to complete. The world is too much divided between economists, who think only of “wealth,” and of sentimentalists, who are never so sure they are right as when they differ from what political economy teaches. Now of course it is true that there are some things, though not many things, more important than money, and a nation may well be called on to abandon the maxims which would produce the most money, for others which would promote some of these better ends. The case is much like that of health in the body. There are unquestionable circumstances in which a man may be called on to endanger and to sacrifice his health at some call of duty. But for all that bodily health is a most valuable thing, and the advice of the physician as to the best way of keeping it is very much to be heeded, and in the same way, though the wealth is occasionally to be foregone, and the ordinary rules of industry abandoned, yet still national wealth is in itself and in its connections a great end, and economists who teach us how to arrive at it are most useful. Nor were they ever so useful as now, when there is a tendency to magnify the occasional exceptions to their doctrines into the rule. Their teaching, being based on hard fact, is often most painful to human nature, and accordingly in every age a whole race of socialists will gainsay and oppose it. They are like pleasant doctors who teach people to eat and drink too much, only they have higher pretensions, and say you must not think of health only; there are things which are higher than health, and so they appeal at once to the higher aspirations of humanity and to its lower weaknesses. We must not be deluded into thinking that the characteristic work of Adam Smith is over because the laws of which he disapproved are repealed. Perhaps there never was a time in which we more needed to combine a stern and homely sagacity resembling his, with the far-reaching aims and ample knowledge for which he was so remarkable.