Group Analytics in Adam Smith’s Work

Abstract

The link between occupation and character began with David Hume and was extended by Adam Smith in service to their attack on the doctrine of innate national character. A worker’s awareness of the relative approbative rewards to occupation is central to Smith’s competitive labor market equilibrium. When the division of labor is extended by growth, the variance of character increases. With this insight Smith was able to offer a race-blind theory of civilization, something that escaped even Hume. Nineteenth century anthropological focus on the variance of character can be seen as a racialization of Smith’s work.

This is a preview of subscription content, access via your institution.

Figure 1
Figure 2

References

  1. Alexander of Aphrodisias. 1999. On Aristotle’s Prior Analytics 1.813, translated by Ian Muller with Josiah Gould. Ithaca: Cornell University Press

  2. Arrow, Kenneth J. 1963. Notes on the Theory of Social Choice, in Kenneth J. Arrow, Social Choice and Individual Value. New York: John Wiley, 92–120

    Google Scholar 

  3. Arrow, Kenneth J. 1971. Some Models of Racial Discrimination in the Labor Market. San Monica, CA: Rand

    Google Scholar 

  4. Arrow, Kenneth J. 1973. The Theory of Discrimination, in Discrimination in Labor Markets, edited by Orley Ashenfelter and Albert Rees. Princeton: Princeton University Press, 3–34

    Google Scholar 

  5. Arrow, Kenneth J. 1977. Extended Sympathy and the Possibility of Social Choice. American Economic Review, 67: 219–25

    Google Scholar 

  6. Beattie, James. [1770] 1809. An Essay on the Nature and Immutability of Truth, in Opposition to Sophistry and Scepticism. Philadelphia

  7. Becker, Gary S. 1957. The Economics of Discrimination. Chicago: University of Chicago Press

    Google Scholar 

  8. Garrett, Aaron. 2000. Hume’s Revised Racism Revisited. Hume Studies, 26: 171–78

    Article  Google Scholar 

  9. Hume, David [1753–1754] 1875. Of National Characters, in David Hume, Essays Moral, Political, and Literary, edited by T. H. Green and T. H. Grose. London: Longman, Green, 244–258

  10. Hume, David. [1777] 1987. Of National Characters, in David Hume, Essays Moral, Political and Literary, edited by Eugene F. Miller. Indianapolis: Liberty Fund, 197–215

  11. Hunt, James [1863] 1864. The Negro’s Place in Nature: A Paper read before the London Anthropological Society. New York

  12. Immerwahr, John. 1992. Hume’s Revised Racism. Journal of the History of Ideas, 53: 481–486

    Article  Google Scholar 

  13. Levy, David M. 1992. Economic Ideas of Ordinary People: From Preferences to Trade. London: Routledge

    Google Scholar 

  14. Levy, David M. and Sandra J. Peart. 2008. Inducing Greater Transparency: Towards the Establishment of Ethical Rules for Econometrics. Eastern Economic Journal, 34: 103–114

    Article  Google Scholar 

  15. Levy, David M., and Sandra J. Peart. 2009. Adam Smith and the Place of Faction, in Elgar Companion to Adam Smith., edited by Jeff Young. Cheltenham, UK: Edward Elgar, 335–345

  16. Levy, David M., and Sandra J. Peart. 2013. Adam Smith and the State. In Oxford Handbook of Adam Smith, edited by Christopher Berry, Maria Pia Paganelli and Craig Smith. Oxford: Oxford University Press, 352–392

    Google Scholar 

  17. Levy, David M. and Sandra J. Peart. 2016. The Ethics Problem: Toward a Second-Best Solution to the Problem of Economic Expertise. In Oxford Handbook of Professional Economic Ethics, edited by George E. DeMartino and Deirdre N. McCloskley. New York: Oxford University Press, 635–650

    Google Scholar 

  18. Lippmann, Walter. [1922] 1997. Public Opinion. New York: Simon & Schuster

  19. Loury, Glenn C. 2002. The Anatomy of Racial Inequality. Cambridge: Harvard University Press

    Google Scholar 

  20. Mill, James [1829] 1869. Analysis of the Phenomena of the Human Mind, edited by John Stuart Mill. London: Longmans, Green, Reader, and Dyer

  21. Miller, Eugene F. [1985] 1987. Editor’s Note, in David Hume, Essays; Moral, Political and Literary, edited by Eugene F. Miller. Indianapolis: Liberty Fund, xix–xxvii

  22. Mizuta, Hiroshi. 2000. Adam Smith’s Library: A Catalogue. Oxford: Clarendon Press

    Google Scholar 

  23. Ngram Viewer. Accessed 11 December 2015. https://books.google.com/ngrams

  24. Peart, Sandra. 2014. James Mill on Liberty and Governance. http://oll.libertyfund.org/pages/lm-mill

  25. Peart, Sandra J., and David M. Levy. 2005. ‘The Vanity of the Philosopher’: From Equality to Hierarchy is Post-Classical Economics. Ann Arbor: University of Michigan Press

    Google Scholar 

  26. Peart, Sandra J. and David M. Levy. 2015. On ‘Strongly Fortified Minds’; Discussion, Self-Restraint and Co-Operation, in Liberal Learning and the Art of Self-Governance, edited by Emily Chamlee-Wright. New York: Routledge, 35–49

    Google Scholar 

  27. Phelps, Edmund S. 1972. The Statistical Theory of Racism and Sexism. American Economic Review, 62: 659–661

    Google Scholar 

  28. Popkin, Richard H. 1980. Hume’s Racism, in Richard H. Popkin,The High Road to Pyrrhonism, edited by Richard A. Watson and James E. Force. San Diego: Austin Hill, 251–266

  29. Popkin, Richard H. 1992. Hume’s Racism Reconsidered, in Richard H. Popkin, The Third Force in Seventeenth-Century Though. Leiden: Brill, 64–75

  30. Smith, Adam. [1978] 1982. Lectures on Jurisprudence, edited by R. L. Meek, D. D. Raphael and P. G. Stein. Indianapolis: Liberty Fund

  31. Smith, Adam. [1776] 1981. An Inquiry into the Nature and Causes of the Wealth of Nations, edited by R. H. Campbell, A. S. Skinner and W. B. Todd. Indianapolis: Liberty Fund

  32. Smith, Adam. [1776] 1978. Letter from Adam Smith, LL.D. to William Strahan, Esq. In David Hume, Essays; Moral, Political and Literary, edited by Eugene F. Miller. Indianapolis: Liberty Fund, xliii–xlvix

  33. Smith, Adam [1793] 1982. Essays on Philosophical Subjects, edited by W. P. D. Wightman and J. C. Bryce. Indianapolis: Liberty Fund

  34. Stigler, George J., and Gary S. Becker. 1977. De Gustibus Non Est Disputandum. American Economic Review 67: 76–90

    Google Scholar 

Download references

Acknowledgments

We thank Jane Perry and August Hardy for a careful reading and Roger Koppl for helping us see how an eighteenth century idea might be applied to open problem. Earlier versions were presented at the 2015 Boston HES/ASSA meetings and the Eastern Economic Association 2016 conference. We thank participants for their helpful comments. We have benefited from the suggestions of the EEJ reader. All surviving mistakes are our responsibility.

Author information

Affiliations

Authors

Corresponding author

Correspondence to David M. Levy.

APPENDIX: ADAM SMITH AND DAVID HUME’S 1777 MODIFICATION

APPENDIX: ADAM SMITH AND DAVID HUME’S 1777 MODIFICATION

Between the publication of T. H. Green and T. H. Grose’s edition of Hume’s Essays of 1875, and the 1987 revision of Eugene Miller’s edition, it would have been reasonable to believe that the following note appeared in Hume’s “Of national characters” from its inclusion in the 1753/4 edition of Essays onwards:

I am apt to suspect the negroes, and in general all the other species of men (for there are four or five different kinds) to be naturally inferior to the whites. There never was a civilized nation of any other complexion than white, nor even any individual eminent either in action or speculation. No ingenious manufactures amongst them, no arts, no sciences. On the other hand, the most rude and barbarous of the whites, such as the ancient Germans, the present Tartars, have still something eminent about them, in their valour, form of government, or some other particular. Such a uniform and [630] constant difference could not happen, in so many countries and ages, if nature had not made an original distinction betwixt these breeds of men. Not to mention our colonies, there are Negroe slaves dispersed all over Europe, of which none ever discovered any symptoms of ingenuity; tho’ low people, without education, will start up amongst us, and distinguish themselves in every profession. In Jamaica indeed they talk of one negroe as a man of parts and learning; but ‘tis likely he is admired for very slender accomplishments, like a parrot, who speaks a few words plainly. Hume [(1753–1754) 1875, p. 252]

With the reawakening of scholarly attention to race, these remarkable claims became the subject of much discussion. Richard Popkin’s paper, “Hume’s Racism” [Popkin (1977–1978) 1980, pp. 260–62], is often given credit for calling attention to the fact that this note was subject of James Beattie’s attack [Beattie (1770) 1809, pp. 318–21]. As Hume thought Beattie’s general philosophical acumen negligible, it seemed reasonable to think that Hume simply ignored the empirical challenge that Beattie and others raised [Popkin 1992].

In 1987 in the revision of his edition of Essays, Miller pointed out a dreadful mistake in the Green and Grose edition.22 They had failed to notice that the note had been changed in a rather remarkable manner in the 1777 edition. The new material is in italics; what is deleted is struck out:

I am apt to suspect the negroes, and in general all the other species of men (for there are four or five different kinds) to be naturally inferior to the whites. There scarcely ever never was a civilized nation of any other that complexion, than white nor even any individual eminent either in action or speculation. No ingenious manufactures amongst them, no arts, no sciences. On the other hand, the most rude and barbarous of the whites, such as the ancient Germans, the present Tartars, have still something eminent about them, in their valour, form of government, or some other particular. Such a uniform and constant difference could not happen, in so many countries and ages, if nature had not made an original distinction betwixt these breeds of men. Not to mention our colonies, there are Negroe slaves dispersed all over Europe, of which none ever discovered any symptoms of ingenuity; tho’ low people, without education, will start up amongst us, and distinguish themselves in every profession. In Jamaica indeed they talk of one negroe as a man of parts and learning; but ‘tis it is likely he is admired for very slender accomplishments, like a parrot, who speaks a few words plainly. [Hume (1777) 1987, p. 208]

John Immerwahr [1992] argued that Hume revised the note in response to Beattie’s attack. Yet, as Aaron Garrett [2000] points out (i) Hume did not withdraw the claim of Negro inferiority which Beattie explicitly addressed and (ii) non-white civilizations could have come from any number of sources that Hume respected. The first on the list Garrett suggested as source is Smith’s works [Garrett 2000, p. 175]. This possibility we consider.

Hiroshi Mizuta, in the newest study of Smith’s library, has helpfully collected the extant evidence of the interconnections between Smith and Hume’s Essays. In a letter from 1752, when presumably he was working on the very edition in which he added the footnote to “Of national characters,” Hume wrote to Smith that he was revising the Essays and asked “If any thing occur to you to be inserted or retrench’d, I shall be obliged to you for the hint.” [Mizuta 2000, p. 126].

New editions of Hume’s work were much discussed in Smith’s last visit with Hume. Indeed, Hume’s curiosity about the fate of the new edition of his works was offered as an excuse to Charon to delay his crossing for a while [Smith (1776) 1978, p xlvi].

What in the Wealth of Nations might have mattered and why did the attack on Negro capacity remain? Hume seems to claim that Negroes are not full language users – “like a parrot, who speaks a few words plainly.” Smith explains why people trade and why dogs do not trade. We have a language:

Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that. When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain the favour of those whose service it requires. [Smith WN I.ii.2; p. 26]23

Thus, nothing in Smith’s construction can explain the actions of those without full competence in the use of language. Hume’s claim seems to put Negroes out of Smith’s class of human.

Second, what could motivate the removal of the assertion about the lack of non-white civilization? Smith, in the third chapter of book 1 explains variation in levels of development by facts about the local physical environment. When the ready availability of calm water attenuates the costs of moving goods, we find greater specialization and the greater extension of the division of labor. This greater specialization is Smith’s signature of a greater degree of civilization. He starts his argument by an appeal to cases for which we have good reason to believe that civilization developed first:24

The nations that, according to the best authenticated history, appear to have been first civilized, were those that dwelt round the coast of the Mediterranean sea. That sea, by far the greatest inlet that is known in the world, having no tides, nor consequently any waves except such as are caused by the wind only, was, by the smoothness of its surface, as well as by the multitude of its islands, and the proximity of its neighbouring shores, extremely favourable to the infant navigation of the world; [WN I.iii.5; p. 34]

Inland water that allows goods to be moved cheaply, whether the water is a product of the physical world (a river) or of human policy (a canal). [WN I.iii.7; p. 35] Without calm water, economic development does not proceed. [WN I.iii.8; p. 35-6].

We collect our steps: we know Hume had, as early as 1752, asked Smith for advice for changes in his Essays. He had read the Wealth of Nations and wanted to talk with Smith about it. The Wealth of Nations has nothing to say about people without full capacity for language; Smith’s analytical egalitarianism simply assumes that possibility away. So Wealth of Nations cannot refute an assertion that Negroes do not have full language capacity. However, Smith offers a theory of economic development that appeals to variation in the physical environment confronting the universal human. The phrase, still current in modern economics, the division of labor is limited by the extent of the market, explains why some societies develop and others do not. Some developed societies are characterized as non-white so Hume’s assertion here cannot stand.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Levy, D.M., Peart, S.J. Group Analytics in Adam Smith’s Work. Eastern Econ J 42, 514–527 (2016). https://doi.org/10.1057/s41302-016-0004-y

Download citation

Keywords

  • national character
  • race
  • occupation
  • Adam Smith
  • David Hume

JEL

  • B12
  • J70