Each Man for Himself

IDEAS

Philosophers have argued for centuries about the best means for longs to regulate trade and increase the riches of their kingdoms. But according to this season's new work by Scottish Professor Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London, W. Strahan and T. Cadell, 2 vols.; -L-! 16 shillings), they are all wrong. The best course for governments is to do as little as possible.

What does Smith mean by that seemingly innocent phrase, "wealth of nations"? Not, as usual, the King's treasuries. Smith submits the novel idea that the wealth of a nation must be measured by the resources of all the people. He writes: "No society can surely be flourishing and happy, of which by far the greater part of the numbers are poor and miserable." Thus, with deceptive reasonableness, he has proclaimed the radical notion that economic power--no less than political power --should be spread among the people.

What force then will serve to spread wealth "to the lowest ranks of the people"? The law of the free marketplace, says Smith, by which even greed is predestined to do good. That is because it is based on everyone's self-interest, which he defines as "the uniform, constant and uninterrupted effort of every man to better his condition." His logic runs like this:

The desire for wealth leads to competition. Competition, left to the ingenuities of balancing self-interests, will in turn produce the goods that society wants, in the quantities that society requires, at a price society is willing and able to pay. Take the subject of pins, as Smith does. In their self-interest--efficiency--the makers of pins will divide their labor into parts: "One man draws out the wire, another straights it, a third cuts it, a fourth points it," and so on. By this system the producers will achieve their goal: the maximum number of pins at the minimum cost. In then-self-interest customers will then make their choice in the pin market, where the buyer's and the seller's self-interests marvelously become one. Are there too many good and cheap pins? Then the least efficient pin makers will turn to making candles or clocks or whatever is needed in this best of all self-regulating worlds of supply and demand. The marketplace, left to itself, will grow indefinitely, bringing more and more wealth to everyone.

The mercantilist thinkers may be expected to react strongly against The Wealth of Nations. Smith's dynamic concept of wealth jeopardizes a favorite theory of these monopolists: that colonies should be exploited to heap up money to sit in the home country's vaults. In fact, Smith's ruling passion is to disfranchise all monopolies that concentrate and protect hoarded capital. Neither by temperament nor by intent is Smith a revolutionary. But his strength is that of a revolutionary: he knows what he is against. The anti-Smith argument, naturally, is that he means to destroy established order, and that the "invisible hand" of the free market is not really enough to restrain the greed of the merchant or improve the lot of the poor. The more persuasive case for Smith is that he would be destroying only those relics of feudal structure (and mercantilist logic) that prevent what he regards as the natural law of economy from operating freely.

Despite his materialistic ideas and his wide acquaintance with men of affairs, Smith personally is an unworldly man who once became so absorbed in an idea that he walked out his door and meandered 15 miles before he realized that he was in his dressing gown. His only dissipation is whist, which he plays to little profit.

This epic poet of adventurous enterprise is a quiet bachelor devoted to his mother. He wrote much of his book while in retreat in the small town (pop. 1,500) in which he was born 53 years ago --Kirkcaldy, a sail across the Firth of Forth from Edinburgh. He was briefly kidnaped by gypsies at the age of four, but this seems to be the only personal adventure ever to have befallen him. His head trembles from a nervous affliction, and he has an odd side-to-side gait.

Nor does he move in a much straighter line as a writer. He is unable to resist just one more illustration, even if it means forgetting the point. The topics covered in his book range from A (as in Abyssinian salt) to Z (as in Zeno of Elea). He discourses upon the rise and fall of cities since the Roman Empire, the possibilities for growing grapes in Scotland, the rules for transmitting property among the Tartars, and of course the "Revolt of our American Colonies." Smith writes: "The rulers of Great Britain have, for more than a century past, amused the people with the imagination that they possess a great empire on the west side of the Atlantic. This empire, however, has hitherto existed in imagination only."

Smith's treatise corrects outdated illusions about political economy--another kingdom that has often existed in the imagination only. His achievement is to draw the first map showing how the commercial affairs of nations really work. Perhaps it will also provide guide-posts for a new American nation.

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