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The Cambridge History of English and American Literature in 18 Volumes (1907–21).
Volume X. The Age of Johnson.

XIV. Philosophers

§ 15. Adam Smith’s Scientific Treatment of Economic Facts

Adam Smith isolates the fact of wealth and makes it the subject of a science. But he sees this fact in its connections with life as a whole. His reasonings are grounded in a view of human nature and its environment, both of which meet in labour, the source of wealth and also, as he thinks, the ultimate standard of the value of commodities. In the division of labour, he sees the first step taken by man in industrial progress. His treatment of this subject has become classical, and is too well known for quotation; it is more to the purpose to point out that it was an unerring instinct for essentials which led him, in his first chapter, to fix attention on a point so obvious that it might easily have been overlooked and yet of far-reaching importance in social development generally. The division of labour, according to Smith, is the result of “the propensity to truck, barter, and exchange one thing for another.” But his analysis of motives goes deeper than this; and, so far as they are concerned with wealth, human motives seem to be reduced by him to two: “the passion for present enjoyment” which “prompts to expense,” and “the desire of bettering our condition” which “prompts to save.” Both are selfish; and it is on this motive of self-interest, or a view of one’s own advantage, that Smith constantly relies. He constructs an economic commonwealth which consists of a multitude of persons, each seeking his own interest and, in so doing, unwittingly furthering the public good—thus promoting “an end which was no part of his intention.”

  • “The natural effort of every individual to better his own condition,” he says, “when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.”