Smith, Adam (1723–1790)

Adam Smith, along with John Locke (1632–1704), was the premier philosopher of modern commercial and industrial capitalism. Smith's tripartite model of society, however, is miscomprehended when his philosophy is reduced to nonintervention and laissezfaire. The error arises in extending his criticism of mercantilism to a general criticism of government.

Smith's tripartite model of society comprises three modes of social control. First, the domain of moral rules gives effect to the moral sentiments and the principles of approbation and disapprobation, as people seek moral approbation and social recognition. Second, law gives effect to the need to protect interests as rights and to the desire for justice. Finally, the market gives effect to the desire of people to better their condition.

Smith examined these domains in Theory of Moral Sentiments, Lectures on Jurisprudence, and Wealth of Nations, respectively. Economic growth takes place only within this system, generated technically by the division of labor as constrained by the extent of the market, the use of money rather than barter, capital accumulation, and free domestic and international trade.

Smith discussed the functions of government in the Wealth of Nations within an elaborate treatment of taxation. The functions—national defense, administration of justice, and public works—when briefly stated seem to minimize the economic role of government. National defense is clear enough, but administration of justice understates government's role in defining whose interests are to count. Injustice, the evidence thereof, and the logic of public works can be drawn narrowly or broadly. All occur within and in interaction with the process of working out moral rules. They comprise, in part, the vast array of government, law, and legal rights found in the Lectures on Jurisprudence.

Smith's analysis recognizes the economy as a system of power and, therefore, of conflict between the forces of hierarchy and equality. Businesspeople have an interest in deceiving and oppressing the public, in part by manipulating markets, wages, and prices and in part by controlling and using government. Civil society is fundamentally a matter of government controlled by the propertied, instituted for the defense of the rich against the poor.

These matters are obscured by Smith's repeated invocation of an “obvious and simple system of natural liberty.” Certainly, especially when compared with [Page 1379]monarchical paternalism and exploitation, his emphasis is on individualism and free markets. However, these do not exist without much government, even when business interests greatly influence, if not control, government. Importantly, interpretation of Smith is made complicated by his working within multiple paradigms: naturalism, supernaturalism, historicism, secularism, utilitarianism, empiricism, materialism, nationalism, individualism, and so on.