Adam Smith: the economist versus the philosopher

Glory Liu is a PhD Candidate in Stanford’s department of political science with research interests in the history of political thought, economic thought, and American politics. She holds a BA in political economy and classics from UC Berkeley, and an MPhils in political thought and classics from Cambridge University.

Her dissertation, “Inventing the Invisible Hand: Adam Smith in American Thought and Politics, 1776 to Present,” traces the reception of philosopher Adam Smith's ideas in American thought, culture and politics from the eighteenth century to the present. In showing how certain of Smith's ideas became politically salient over time, Liu's project sheds light on the changing nature of intellectual authority and the role that economic ideas play in American politics.

Q. What is the focus of your research?

Very broadly, I'm a historian of political ideas; more specifically, I’m interested in where certain ideas about the free market come from and how those ideas shape peoples’ political and moral convictions about what we owe one another in society.

My dissertation looks at the reception of Adam Smith’s ideas in American history. Most people are probably familiar with Adam Smith as being “the father of economics,” whose Wealth of Nations is allegedly the gospel of free-market capitalism. However, most political theory scholars and historians recognize Adam Smith as a moral philosopher of the Scottish Enlightenment, whose works on moral philosophy and politics were just as important as his “economics.” What I do in my dissertation is show how and why Adam Smith went from being known as a holistic political economist of the eighteenth century, to being an iconographic economist of a particular political ideology in the twentieth century.

Q. What drew you to recover this version of Adam Smith’s political philosophy?

I’ve had a long-standing interest in understanding where our beliefs and anxieties over inequality and poverty come from. It’s always puzzled me that people can have such strong aversions to poverty (and to a lesser extent, inequality) at the individual and even at the communal level; and yet, when it comes to doing anything about these issues, people’s ideas are met with a lot of resistance from a variety of sources. I think one of the biggest sources of that resistance is our attachment to this very fuzzy notion that “the market can solve all of our problems,” and that we don’t need to rely on government or even other social institutions to fix or improve the situation. But where did we get that idea in the first place?

As someone who first started reading Adam Smith’s works very seriously at the beginning of my graduate studies, I was surprised to find such a big discrepancy between the popular misperception of Adam Smith as the father of free-market fundamentalism, and so much scholarship that has tried to overturn that view. And I was even more surprised that no one has bothered to answer the question, “Well, why did we get this very narrow rendition of Adam Smith’s ideas in America in the first place?” Clearly, there’s some kind of connection between a very small set of Adam Smith’s ideas and the overwhelming power they have over the way we frame debates about trade, wealth, and equality and other subjects. So I set off to figure out what that connection was and is.

Q. What are the materials you examine to conduct your research?

Adam Smith was being talked about and used by different kinds of people in different periods in U.S. history. So, for example, I looked closely at letters, papers, major and minor works of Alexander Hamilton, Thomas Jefferson, and John Adams for one chapter. For another, I dug through a bunch of historical newspapers and the older versions of the Congressional Record (like the Annals of Congress, the Congressional Globe, etc.) to see how congressmen and partisan papers were using Smith’s ideas in trade debates in the nineteenth century. In another chapter, I did some research in the archives of famous economists—Milton Friedman, George Stigler, Frank Knight, Henry Simons, and Aaron Director, for example—to see how economists were reading, teaching, and re-inventing Smith’s ideas in the twentieth century. And of course, on top of all of these primary sources, I have to do a lot of synthesizing of secondary sources on topics like moral philosophy and political economy courses at early American universities, the different schools of economic thought in the 1950s, contemporary scholarship on Adam Smith’s ideas themselves, etc.

Q. What would people be surprised to learn about your research?

I think people take for granted that ideas like “free trade” and “the invisible hand” have been contested. A lot of my research shows that for much of American history, Adam Smith’s ideas on free trade were not the orthodox view, even if America’s intellectual and political elite readily accepted Smith as a kind of “textbook.” It’s also remarkable that this book is over 240 years old, and it’s still considered one of the greatest works not just of Enlightenment thought, but of social science thinking of all time. In 1876, a hundred years after its first publication, people still thought it was the best book on political economy; and in 1976, economists at MIT gathered for an “Adam Smith Roast” to celebrate the 200th anniversary of its publication.

Today, according to one study, The Wealth of Nations is the 37th most assigned book across all college courses in the country. The fact that this book, among the hundreds maybe
even thousands of works produced in the eighteenth century, could withstand the test of time and reach this level of recognition is really surprising and worth investigating.

Q. Why is it valuable to revisit how Adam Smith's ideas have been remembered in American history?

I think the most valuable thing to learn from the kind of work I do is that ideas are not static objects; they don’t get made at one moment, never change, and get rediscovered again sometime in the future. We have a very dynamic relationship with ideas, especially ideas from the past—we read them, we reinterpret them, and we repurpose them for our own ends. Studying the reception of Smith’s ideas helps us understand various processes by which ideas get repurposed and politicized, which then sheds light on where some of our modern political ideas come from and how they differ from their historical source. I think that can be a very powerful exercise if we want to improve political discourse and civic dialogue today; we need to be more thoughtful about the way in which we use big ideas when we’re forming, defending, or refuting arguments in a principled way.