The Wealth of Nations

Reception and impact

The first edition of the book sold out in six months.[28] The printer William Strahan wrote on 12 April 1776 that David Hume had said that The Wealth of Nations required too much thought to be as popular as Edward Gibbon's The History of the Decline and Fall of the Roman Empire. Strahan also wrote: "What you say of Mr. Gibbon's and Dr. Smith's book is exactly just. The former is the most popular work; but the sale of the latter, though not near so rapid, has been more than I could have expected from a work that requires much thought and reflection (qualities that do not abound among modern readers) to peruse to any purpose".[29] Gibbon wrote to Adam Ferguson on 1 April: "What an excellent work is that with which our common friend Mr. Adam Smith has enriched the public! An extensive science in a single book, and the most profound ideas expressed in the most perspicuous language".[30] The review of the book in the Annual Register was probably written by Whig MP Edmund Burke.[31]

Smith's biographer John Rae contends that The Wealth of Nations shaped government policy soon after it was published. In 1777 the Prime Minister, Lord North, in the first budget after the book was published, got the idea for two new taxes from the book: one on man-servants and the other on property sold at auction. The budget of 1778 introduced the inhabited house duty and the malt tax, both recommended by Smith. In 1779 Smith was consulted by politicians Henry Dundas and Lord Carlisle on the subject of giving Ireland free trade.[32]

The Wealth of Nations was first mentioned in Parliament by the Whig leader Charles James Fox on 11 November 1783: "There was a maxim laid down in an excellent book upon the Wealth of Nations which had been ridiculed for its simplicity, but which was indisputable as to its truth. In that book 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 to make as large a saving during the peace as possible".[33] However Fox once told Charles Butler sometime after 1785 that he had never read the book and that "There is something in all these subjects which passes my comprehension; something so wide that I could never embrace them myself nor find any one who did".[34] In 1796 when Fox was dining with Lord Lauderdale, Lauderdale remarked that they knew nothing of political economy before Adam Smith wrote. "Pooh," replied Fox, "your Adam Smiths are nothing, but" (he added, turning to the company) "that is his love; we must spare him there". Lauderdale replied: "I think he is everything", to which Fox rejoined: "That is a great proof of your affection".[34] Fox also found Adam Smith "tedious" and believed that one half of The Wealth of Nations could be "omitted with much benefit to the subject".[35]

In an editorial of The Times on 3 August 1787, it was stated: "It is astonishing to consider, how few merchants are acquainted with Smith's Wealth of Nations, or Anderson's History of Commerce, which are certainly books that should be perused by every man who makes trade his pursuit".[36]

The Wealth of Nations was next mentioned in Parliament by Robert Thornton MP in 1787 to support the Commercial Treaty with France. In the same year George Dempster MP referenced it in the debate on the proposal to farm the post-horse duties and in 1788 by a Mr. Hussy on the Wool Exportation Bill.[33] In 1791 the English radical Thomas Paine wrote in his Rights of Man that "Had Mr. Burke possessed talents similar to the author ‘On the Wealth of Nations,’ he would have comprehended all the parts which enter into, and, by assemblage, form a constitution".[37] The Prime Minister, William Pitt, praised Smith in the House of Commons on 17 February 1792: " author of our own times now unfortunately no more (I mean the author of a celebrated treatise on the Wealth of Nations), whose extensive knowledge of detail, and depth of philosophical research will, I believe, furnish the best solution to every question connected with the history of commerce, or with the systems of political economy".[38] In the same year it was quoted by Samuel Whitbread MP and Fox (on the division of labour) in the debate on the armament against Russia and also by William Wilberforce in introducing his Bill against the slave trade. It was not mentioned in the House of Lords until 1793, by Lord Lansdowne and Lord Loughbourough. Lansdowne said: "With respect to French principles, as they had been denominated, those principles had been exported from us to France, and could not be said to have originated among the population of the latter country. The new principles of government founded on the abolition of the old feudal system were originally propagated among us by the Dean of Gloucester, Mr. Tucker, and had since been more generally inculcated by Dr. Smith in his work on the Wealth of Nations, which had been recommended as a book necessary for the information of youth by Mr. Dugald Stewart in his Elements of the Philosophy of the Human Mind". Loughborough replied that "in the works of Dean Tucker, Adam Smith, and Mr. Stewart, to which allusion had been made, no doctrines inimical to the principles of civil government, the morals or religion of mankind, were contained, and therefore to trace the errors of the French to these causes was manifestly fallacious".[39] On 16 May 1797 Pitt said in the debate on the suspension of cash payments by the Bank of England that Smith was "that great author" but his arguments "though always ingenious" were "sometimes injudicious".[40]

Sir John Mitford, the Solicitor-General, said on 22 December 1798 in speaking on cross-bills (a bill of exchange given in consideration of another bill) that Smith "in his Wealth of Nations, explains the nature and pernicious consequences of this practice with his usual perspicuity and philosophical accuracy".[41] On 5 December 1800 Lord Warwick said in a debate on the price of corn that:

There was hardly any kind of property on which the law did not impose some restraints and regulations with regard to the sale of them, except that of provisions. This was probably done on the principles laid down by a celebrated and able writer, Doctor Adam Smith, who had maintained that every thing ought to be left to its own level. He knew something of that Gentleman, whose heart he knew was as sound as his head; and he was sure that had he lived to this day and beheld the novel state of wretchedness to which the country was now reduced—a state, which as the like had never occurred before, could never have entered into his mind; that Great Man would have reason to blush for some of the doctrines he had laid down. He would now have abundant opportunities of observing that all those artificial means of enhancing the price of provisions, which he had considered as no way mischievous, were practised at this time to a most alarming extent. He would see the Farmer keeping up his produce while the poor were labouring under all the miseries of want, and he would see Forestallers, Regraters, and all kinds of Middle-men making large profits upon it.[42]

Lord Grenville replied that "he must remind him, that so far from there having been any difference in the state of the Country when that great man lived, and the present times, his book was first published at a period, previous to which there had been two or three seasons of great dearth and distress; and during those seasons there were speculators without number, who raised an unfounded and unjust clamour against Forestallers and Regraters, and who proposed that a certain price should be fixed on every article: but all their plans were wisely rejected, and the Treatise on the Wealth of Nations, which came forward soon after, pointed out in the clearest light how absurd and futile they must have been".[42]

In 1800 the Anti-Jacobin Review criticised The Wealth of Nations and Robert Southey in 1812 in the Quarterly Review condemned The Wealth of Nations as a "tedious and hard-hearted book".[43]

In 1803 The Times argued against war with Spain: "She is our best customer; and by the gentle and peaceable stream of commerce, the treasures of the new world flow with greater certainty into English reservoirs, than it could do by the most successful warfare. They come in this way to support our manufactures, to encourage industry, to feed our poor, to pay taxes, to reward ingenuity, to diffuse riches among all classes of people. But for the full understanding of this beneficial circulation of wealth, we must refer to Dr. Adam Smith's incomparable Treatise on the Wealth of Nations".[44] In 1810 a correspondent writing under the pseudonym of Publicola included at the head of his letter Smith's line that "Exclusive Companies are nuisances in every respect" and called him "that learned writer".[45] In 1821 The Times quoted Smith's opinion that the interests of corn dealers and the people were the same.[46]

In 1826 the English radical William Cobbett criticised in his Rural Rides the political economists' hostility to the Poor Law: "Well, amidst all this suffering, there is one good thing; the Scotch political economy is blown to the devil, and the Edinburgh Review and Adam Smith along with it".[47]

The Radical MP Richard Cobden as a young man studied The Wealth of Nations; his copy is still in the library of his home at Dunford House and there are lively marginal notes on the places where Smith condemns British colonial policy. There are none on the passage about the invisible hand.[48] Cobden campaigned for free trade in his agitation against the Corn Laws. On 13 October 1843 Cobden quoted (accurately) Smith's protest against the "plain violation of the most sacred property" of every man derived from his labour.[49] On 8 May 1844 he cited Smith's opposition to slave labour[50] and on 3 July 1844 claimed that Smith had been misrepresentated by protectionists as a monopolist.[51] On 8 October 1849 Cobden claimed that he had "gone through the length and breadth of this country, with Adam Smith in my hand, to advocate the principles of Free Trade." He also said he had tried "to popularise to the people of this country, and of the Continent, those arguments with which Adam Smith, David Hume, Ricardo, and every man who has written on this subject, have demonstrated the funding system to be injurious to mankind, and unjust in principle".[52] Cobden believed it to be morally wrong to lend money to be spent on war. When The Times claimed the political economists were against Cobden on this, Cobden wrote on 16 October 1849: "I can quote Adam Smith whose authority is without appeal now in intellectual circles, it gives one the basis of science upon which to raise appeals to the moral feelings".[53] When in 1850 the Russian government attempted to raise a loan, ostensibly for the construction of a railway from St. Petersburg to Moscow, but actually to cover the deficit brought about by its war against Hungary, Cobden said on 18 January: "I take my stand on one of the strongest grounds in stating that Adam Smith and other great authorities on political economy are opposed to the very principle of such loans".[54] In 1863, during Cobden's dispute with The Times over its claims that his fellow Radical John Bright wanted to divide the land of the rich amongst the poor, Cobden read to a friend the passage in the Wealth of Nations which criticised primogeniture and entail. Cobden said that if Bright had been as plain-speaking as Smith, "how he would have been branded as an incendiary and Socialist".[55] On 23 November 1864 Cobden proclaimed: "If I were five-and-twenty or thirty, instead of, unhappily, twice that number of years, I would take Adam Smith in hand—I would not go beyond him, I would have no politics in it—I would take Adam Smith in hand, and I would have a League for free trade in Land just as we had a League for free trade in Corn. You will find just the same authority in Adam Smith for the one as for the other; and if it were only taken up as it must be taken up to succeed, not as a political, revolutionary, Radical, Chartist notion, but taken up on politico-economic grounds, the agitation would be certain to succeed".[56]

The Liberal statesman William Ewart Gladstone chaired the meeting of the Political Economy Club to celebrate the centenary of the publication of The Wealth of Nations.[57]

The Liberal historian Lord Acton believed that The Wealth of Nations gave a "scientific backbone to liberal sentiment"[58] and that it was the "classic English philosophy of history".[59]

United States

James Madison, in a speech given in Congress on 2 February 1791, cited The Wealth of Nations in opposing a national bank: "The principal disadvantages consisted in, 1st. banishing the precious metals, by substituting another medium to perform their office: This effect was inevitable. It was admitted by the most enlightened patrons of banks, particularly by Smith on the Wealth of Nations".[60] Thomas Jefferson, writing to John Norvell on 14 June 1807, claimed that on "the subjects of money & commerce, Smith's Wealth of Nations is the best book to be read, unless Say's Political Economy can be had, which treats the same subject on the same principles, but in a shorter compass & more lucid manner".[61]

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