The Wealth Of Nations

The Inquiry into the Nature and Causes of the Wealth of Nations was at length published on March 9, 1776.

Bishop Horne was one of Smith’s antagonists.

• He said the books which live longest are those which have been carried longest in the parent’s womb.

The Wealth of Nations took 12 years to write.

• It was in contemplation probably 12 years before that.
• It was explicitly and publicly promised in 1759, in the concluding paragraph of the Theory of Moral Sentiments, though it is only the partial fulfilment of that promise.

The promise was to give an account of=

• the general principles of law and government, and
• the different revolutions they have undergone in society’s different ages and periods in what concerns justice, policy revenue, arms, and whatever else is the object of law.

In the preface of the 6th edition of the Theory in 1790, Smith says=

“In the Inquiry concerning the Nature and Causes of the Wealth of Nations I have partially executed this promise, at least so far as concerns policy revenue and arms.” When Smith began writing his book in Toulouse, he was already thinking of the large plan. Some of the long delay in its composition [Pg 285] is probably because it possibly took a long time writing before he decided= to break his book in two, and push on with the section on policy revenue and arms, leaving his theory of jurisprudence to a separate future publication.

The work was published in two volumes 4to, at the price of £1= 16s. in boards. Smith uses this time all his honours on the title-page, describing himself as Adam Smith, LL.D. and F.R.S., formerly Professor of Moral Philosophy in the University of Glasgow. It is not exactly known= what was the extent of this edition, or the terms between author and publisher. The terms were not half-profits. That arrangement is proposed by Smith for the second edition as if it were a new one. It is accepted in the same way by Strahan. He writes about it as a “very fair” proposal, “and therefore very agreeable to Mr. Cadell and me” It was not printed for Smith for the presentation copies he gave away were deducted from the copy money he received. The book was probably was purchased from him for a definite sum. Smith mentions in his letter on November 13, 1776 that he= had received £300 of his money at that time, and still had a balance owing to him. One may reasonably conjecture that the full sum was £500. It was the same sum Cadell’s firm had paid for their last economic work, Sir James Steuart’s Inquiry into the Principles of Political Economy.

The book sold well.

• The first edition was sold out in six months.

We do not know how many were made.

From the beginning, the sale was better than the publishers expected, for on April 12 when it had only been a month out, Strahan notices David Hume’s remark that= Smith’s book required too much thought to be as popular as Gibbon’s, and “What you say of Mr. Gibbon’s and Dr. Smith’s book is exactly [Pg 286]just. Mr. Gibbon’s book is the most popular work. The sale of Smith’s book is not as rapid. But it has been more than I could have expected from a work that requires much thought and reflection to peruse to any purpose. (These are qualities that are not common among modern readers)”[244] The sale is the more remarkable because it was not helped by reviews. For example, the book was not noticed at all in the Gentleman’s Magazine. It was allowed only two pages in the Annual Register, while Watson’s History of Philip got 16 pages. However, this book review was probably written by Burke.

In one of his letters to Strahan, Smith says of having distributed many presentation copies. One of the first of these was of course sent to his old friend David Hume. That copy, with its inscription, probably still exists. It was with the late Mr. Babbage for a time. Hume received it in the following letter. This letter shows that not even Hume had seen the book’s manuscript before publication=

Edinburgh, April 1, 1776.

Euge! Belle! Dear Mr. Smith—

I am much pleased with your performance. Its perusal has taken me from a state of great anxiety. You, your friends, and the public expected so much from that work, that I trembled for its publication. But now, I am much relieved. Reading it requires so much attention. The public is disposed to give so little that I shall still doubt for some time of its being at first very popular. But it has depth and solidity and acuteness. It is so much illustrated by curious facts that it must at last attract the public attention. It is probably much improved by your last abode in London. If you were here with me, I would dispute some of your principles. I do not think that the rent of farms makes any part of the price of the produce. I think the price is determined altogether by the quantity and the demand. I think it is impossible that the King of France [Pg 287] can take a seignorage of 8% upon the coinage. Nobody would bring bullion to the mint. It would be all sent to Holland or England, where it could be coined and sent back to France for less than 2%. Accordingly, Necker says that the French king takes only 2% of seignorage. We should talk about these and a hundred other points. I hope we can talk soon, because my health is very bad and it cannot afford a long delay. I fancy you are acquainted with Mr. Gibbon. I extremely like his performance. I have told him that if I had not been acquainted with him, I would never have expected such an excellent work from an Englishman. It is sad to see how much England has declined in literature during our time. I hope he did not take amiss this national reflection. All your friends here are deeply saddened at the death of Baron Mure. It is is an irreparable loss to our society. He was among of my oldest and best friends.[245]

On the same day as Hume wrote this letter from Edinburgh, Gibbon wrote from London to Adam Ferguson= “Our common friend Mr. Adam Smith has done an excellent work to enriched the public! An extensive science in a single book. The most profound ideas expressed in the clearest language. He wants to visit you very soon. I think he really wants to persuade Mr. Hume to return with him to town. Mr. Hume is a truly great man. I am sorry to hear that his health and spirits are worse than what his friends could wish for. I am sure you will join your efforts to convince him of the benefits of exercise, dissipation, and change of air.”

Some of Smith’s personal friends had the common prejudice that a good work on commerce could not be expected from a man who had never done any practical business. It seemed in outward air and appearance so ill fitted to succeed in such a line of business if he had [Pg 288]engaged in it. One of these was Sir John Pringle, President of the Royal Society. Like Smith, he was formerly Professor of Moral Philosophy at a Scotch university. When the Wealth of Nations appeared, Sir John Pringle told Boswell that Smith, having never been in trade, could not be expected to write well on that subject any more than a lawyer on physics. Boswell repeated the remark to Johnson, who immediately sent it to the winds. Johnson said “He is mistaken that a man who has never been engaged in trade can write well about trade. There is nothing that requires more to be illustrated by philosophy than does trade. As to mere wealth—money—it is clear that one nation or one individual cannot increase its store but by making another poorer. But trade procures what is more valuable, the reciprocation of the peculiar advantages of different countries. A merchant only thinks of his own trade. To write a good book about trade, a man must have extensive views. He does not need to practice trade to write well about it.”

This book will not give an account of the doctrines of the Wealth of Nations. It will not= estimate their originality or value,or estimate their influence on= the progress of science, the policy and prosperity of nations, or mankind’s practical happiness. Buckle said= it was “ultimately probably the most important book that has ever been written”. it has “done more towards man’s happiness than the united abilities of all the statesmen and legislators from history;[246] Even those who take the most sober view of its place in history readily admit that its public career, which is far from being ended yet, is a very remarkable story of successive conquest.

It has been seriously asserted that the book’s fortune [Pg 289] in Britain was made by Fox quoting it one day in the House of Commons. But this happened in November 1783, after the book had already gone through two editions and was on the eve of appearing in a third. However, it is curious that that was the first time it was quoted in the House. It is also curious that Fox was the one to quote it. He was not= an admirer of the book a believer in its principles a lover of its subject. He once told Charles Butler that he had never read the book. The remark must have been made many years after its publication. For it was made at St. Anne’s Hill, to which Fox only went in 1785. Fox explained= “There is something in all these subjects which passes my comprehension. It is something so wide that I could never embrace them nor find any one who did.”[247] On another occasion, when he was dining one evening in 1796 at Sergeant Heywood’s, Fox showed his hearty disdain for Smith and political economy. The Earl of Lauderdale was an economist of great ability. He was not a blind follower of Smith. He remarked that we knew nothing of political economy before Adam Smith wrote. Fox said= “Pooh, your Adam Smiths are nothing. But that is his love; we must spare him there.” Lauderdale replied= “I think he is everything.” Fox rejoined= “That is a great proof of your affection.” Fox was no believer in free trade. He actively opposed the Commercial Treaty with France in 1787 on the express and most illiberal ground that= it came from a novel system of doctrines, it was a dangerous departure from the established principles of our forefathers, and France and England were enemies by nature, and should be kept enemies by legislation.

Smith had many admirers and disciples in the House of Commons. It is curious that his book was never mentioned for nearly eight years after it appeared. It was [Pg 290]mentioned then by an enemy of its principles. Fox’s quotation from it then was of the most unimportant character. It was in his speech on the Address of Thanks to the Throne. He said= “A maxim was laid down in an excellent book in the Wealth of Nations. It had been ridiculed for its simplicity. But it was indisputable as to its truth. It was stated that the only way to become rich was to manage matters so as to make one’s income exceed one’s expenses. This maxim applied equally to an individual and to a nation. The proper line of conduct therefore was by a well-directed economy to= retrench every current expense, and make as large a saving during the peace as possible.”[248] To think of this allusion having any influence on the fortunes of the work is not reasonable. It was never even mentioned in the House again until 1787, when= Mr. Robert Thornton invoked it in support of the Commercial Treaty with France, and Mr. George Dempster read an extract from it in the debate on the proposal to farm the post-horse duties. It was quoted once in 1788 by Mr. Hussy on the Wool Exportation Bill. It was not referred to again until Pitt introduced his Budget on February 17, 1792. He explained the progressive accumulation of capital that was always spontaneously going on when it was not checked by calamity nor vicious legislation. Pitt was= a great minister a deep student of Smith’s book, and the most convinced of all Smith’s disciples. He remarked= “This principle is simple and obvious. It has been felt and observed as it must have been even from the earliest periods. It has been fully developed and sufficiently explained in Smith’s writings. His extensive knowledge of detail and depth of philosophical research will furnish [Pg 291]the best solution of every question connected with= the history of commerce and the system of political economy.”[249] In the same year, it was quoted= by Mr. Whitbread and by Fox (from the exposition of the division of labour in the first book) in the debate on the armament against Russia, and by Wilberforce in his speech introducing his Bill for the Abolition of the Slave Trade.

It was not mentioned in the House of Lords until 1793, when in the debate on the King’s Message for an Augmentation of the Forces it was referred to by Smith’s two old friends= The Earl of Shelburne (now Marquis of Lansdowne) and Alexander Wedderburn (now Lord Loughborough, and presiding over the House as Lord Chancellor, of England). The Marquis of Lansdowne said= “The ‘French’ principles were exported from us to France and could not have come from France. The Dean of Gloucester, Mr. Tucker, first propagated to us the new principles of government founded on the abolition of the old feudal system. It had since been more generally inculcated by Dr. Adam Smith in the Wealth of Nations. In his Elements of the Philosophy of the Human Mind, Mr. Dugald Stewart recommended it as required reading for the youth “ The Lord Chancellor replied merely that “The works of Dean Tucker, Adam Smith, and Mr. Stewart had no doctrines hostile to= the principles of civil government, the morals or religion of mankind. It would be wrong to trace the errors of the French to them.”[250]

Smith was a trusted teacher of Dugald Stewart, a Whig nobility. It is curious that Lord Lansdowne attempted to shield Smith’s political orthodoxy by mentioning Douglas Stewart. It is also curious that [Pg 292] identified the new political economy with the ‘French principles’ which excited so much alarm back then. In the same year 1793, Dugald Stewart was (on the evenings of January 21 and March 18) reading his Memoir of Adam Smith to the Royal Society of Edinburgh. He tells in 1810 how he was compelled to abandon the idea of giving a long account of Smith’s opinions because back then, “it was not unusual to confound the speculative doctrines of political economy with the first principles of government. The principles of government unfortunately agitated the public back then. The doctrine of a Free Trade was represented as of a revolutionary tendency. Some were proud to know Mr. Smith very well and had a zeal to propagate his liberal system. They now began to question the expediency of subjecting to the disputation of philosophers= the arcana of State policy, and the unfathomable wisdom of feudal ages.”[251] People were so set on edge by the events in France. Lord Cockburn tells us that when Stewart first began to give lectures in the University on political economy in the winter 1801-2, the mere term “political economy” made them start. “They thought it included questions on the constitution of governments. Many hoped to catch Stewart in dangerous propositions.”[252]

For a time, the French Revolution checked= the growing vogue of Smith’s book and the advance of his principles in Great Britain, just as it checked the progress of parliamentary and social reform. Because it filled men’s mind with= a fear of change, a suspicion of all novelty, and an unreasoning dislike of anything in [Pg 293] the nature of a general principle. The public thought that the French principles meant more than the abolition of all commercial and agrarian privilege which was advocated by Smith. But in their recoil, they made no fine distinctions. They naturally felt their prejudices strongly confirmed when they found men like the Marquis of Lansdowne, who were believers in the so-called French principles and believers at the same time in the principles of Adam Smith, declaring that the two things were substantially the same. It would be difficult to gauge whether and how far Smith or Tucker had any influence on that development of opinion which eventuated in the Revolution. Before Lord Lansdowne made this speech in 1793, two different translations of the Wealth of Nations into French had already been published. A third (by the Abbé Morellet) had been written but not published. A fourth was possibly under way, for it appeared in a few years. The first and worst of these translations, moreover (Blavet’s), had already gone through three separate editions, after having originally run through a periodical in monthly sections for two years. These are all tokens that the work was unquestionably influencing French opinion.

But if the French Revolution temporarily stopped, as is most likely, the onward advance of Smith’s free-trade principles, it did not stop the actual sale of the book. I do not know whether the successive editions were uniform in number of copies. But as many editions of the Wealth of Nations—four English and one Irish—appeared between the years 1791 and 1799 as between the years 1776 and 1786, and since none was called for from 1786 till 1791, the edition of 1786 took longer to sell off than the subsequent editions of 1791, 1793, and 1796. It is quite possible and only natural that the wave of active antagonism which, according to Stewart’s testimony, rose against the principles of the book after the outbreak of the French[Pg 294] Revolution would have helped on the sale of the book itself by keeping it more constantly under public attention, discussion, and, if you will, vituperation. The fortune of a book, like that of a public man, is often made by its enemies.

But the very early influence of the Wealth of Nations in the English political world is established by much better proofs than quotations in Parliament. It had actually shaped parts of the policy of the country years before it was ever publicly alluded to in either House. The very first budget after its publication bore its marks. Lord North was then on the outlook for fresh and comparatively unburdensome means of increasing the revenue, and obtained valuable assistance from the Wealth of Nations. He imposed two new taxes in 1777, of which he got the idea there; one on man-servants, and the other on property sold by auction. The budget of 1778 owed still more important features to Smith’s suggestions. It introduced= the inhabited house duty so strongly recommended by him, and the malt tax.[253] In 1779, Smith was consulted by statesmen like Dundas and the Earl of Carlisle on the pressing and anxious question of giving Ireland free trade. His answers still exist and are in Chapter 23.[254]