Economics as a Moral Science: The Political Economy of Adam Smith.

By Jeffrey T. Young.

Cheltenham, UK: Edward Elgar Publishing, 1997. Pp. x, 225. $80.00.

At their annual meetings over the past 10 years, the History of Economics Society has seldom scheduled a session on Adam Smith that did not include Jeffery Young. His presentations have often led to articles, appearing in such journals as History of Political Economy and Journal of the History of Economic Thought. It should come as no surprise, then, that Professor Young has now produced a book with Smith as its subject matter. And, though the subtitle of the text indicates that Smithian economics is the subject, the title's theme of economics as a moral science certainly holds a place in contemporary discussions regarding the purpose, or limits, of the discipline.

Young begins by acknowledging that significant parts of the book are reproduced from previously published articles and unpublished manuscripts, which might lead the reader to conclude that the work could be disjointed. But Young maintains that it "is intended to be read from start to finish" and that his goal is "to offer a coherent interpretation of Smith based on the interplay of economics and moral philosophy" (p. ix). To assist in creating this smooth and even flow from chapter to chapter, Young provides introductory and concluding comments that state how each chapter is meant to relate to the previous or following ones.

The book is divided into two general sections. The first focuses on positive economics with reference to Smith's impartial spectator, jurisprudence, and theory of natural price. The second section considers the normative aspects of Smith's views on natural liberty, justice, and the common good. Both of these sections would have benefited from an introduction, conveying what the author intended to accomplish in each. Similarly, except for some very brief comments in the introductory acknowledgments, the book lacks a stated organizational plan or goal for writing the book. Although the conclusion does a good job of focusing Young's work, placing an outline at the front of the book to convey where the author intends to go would benefit the reader and perhaps tempt an uncommitted browser to go further. A brief introductory plan is oddly located at the end of the first chapter, which, as noted, would be more useful if it were located prior to the first main section of the text.

In the first chapter, Young offers a moral dilemma from 30 years past (whether to move the 1968 annual meeting of the American Economic Association from Chicago because of the violence associated with the recently concluded Democratic National Convention) to show that, as Kenneth Boulding stated in his presidential address, "not even the study of economics can turn people into purely economic men" (p. 3). In fact, the beginning of this chapter focuses on demonstrating the fallacy of there even being such a thing as "positive economics." Although this seems like an odd way to begin a section devoted to positive economics, Young defends this approach by maintaining that Smith held no distinction between positive and normative issues, viewing science as being rightly interconnected with moral (normative) considerations. From this perspective, Young exhaustively maintains that there is no "Adam Smith problem."

The first section, as Young notes, is actually more concerned with how Smith's moral theory influenced his economics, and this is clearly evidenced by the title of the second chapter, "The Theory of Moral Sentiments (TMS) and Political Economy." The title, however, is a bit deceptive because the chapter is a heavily referenced summary narrative that lays out the basic ideas found in TMS, especially as they relate to the impartial spectator and the role of the self-regarding virtues. Although this chapter is necessary for introducing the uninitiated to the basic concepts in TMS, how these concepts relate to Smith's views on political economy is left to later chapters.

The third chapter takes the Smithian concept of the impartial spectator and explores how it relates to markets and prices. This, for Young, is how we can analyze Smith's political economy in a positivistic light. By treating the theory of the impartial spectator in a manner similar to Rawls's veil of ignorance, we reach a "position of objectivity, impartiality, and perfect information from which to make moral and ethical judgements [sic]" (p. 56). Now, although I might be more sympathetic to Smith's standards for moral judgments as opposed to Rawls's, the same criticism leveled at Rawls (that he imposes his own value system in determining unanimity) can also be leveled at Smith to question the notions of objectivity and impartiality. Further, if we are to take seriously what Young writes in the first chapter - that there is no such thing as a purely positivistic approach - it is hard to understand his approach here.

In any event, Young proceeds to use the impartial spectator model to examine exchange in both primitive and more advanced societies, which follows Smith's discussions. Here Young shows how viewing trade from a benevolence standpoint is consistent with Smith's writings on the subject. In fact, Young refers to a friendship/gifts/self-interest/persuasion/exchange nexus as the "benevolent model." But he also points out that Smith was well aware of the malevolent side of self-interest and did not ignore it in his interpretations. Here I found Young's arguments both persuasive and compelling in exploring some of the underlying considerations motivating Smith's analysis.

In the fourth chapter Young uses a similar methodology in an attempt to show how Smith's understanding of jurisprudence influenced his considerations on value theory. Some of Young's points are intriguing and novel, such as Smith's economic theory of value being grounded in the concept of injury, as it is associated with cost. Since there have been a number of varying interpretations as to what Smith actually said regarding value, Young addresses these from his own perspective and reaches what I believe to be valid conclusions. Although Young's position regarding Smith on value has been reached by other writers, it is certainly not a unanimous position among Smith watchers. For example, Young challenges the notion (held by Schumpeter and Kauder among others) that Smith took value theory in the wrong direction and lays the blame for this misdirection, properly in my opinion, on Ricardo. Although Young is not the first to show the subjectivism existing in Smith's theory, his analysis does offer some new twists.

The next chapter is the opening one for the second section of the book, focusing on what Young has categorized as "normative issues." Although its focus is on natural price and commutative justice, its presence does give the reader the sense that the text is more of a compilation of essays than a unified piece. The success Young had with tying the first few chapters together is absent here as about half of this chapter addresses precursors of Smith. What results is more of a work on the evolution of commutative justice and how prior thinkers influenced Smith than a thorough analysis of Smith's views on the subject.

The chapter that follows delves into Smith's views regarding distributive justice, and it provides a much more developed critique (as opposed to the previous chapter). Although Smith's writings on the subject were not pieced together systematically, Young does a good job organizing these thoughts to demonstrate consistency and coherence. He also demonstrates how Smith's position on distributive justice is advanced through the workings of his economic system.

Since virtually all of what Smith wrote was directed toward improving humankind, Young devotes the last two chapters to Smith's views on the common good. The first focuses on the role of the invisible hand, and although this might be the most familiar aspect of Smith, Young does offer some interesting discussion on the subject. He begins by constructing a two-by-two matrix that shows the interplay of the individual and society in both the economic and the political sphere. I found this matrix of little value, though it might assist those who are more visually inclined.

Most of Young's discussion on justice is based on Smith's writings in TMS, and, once this view is delineated, Young turns to the Wealth of Nations to show how the public sector can be an agent for promoting justice through wealth creation. Smith's views of how the lower classes benefit from capital accumulation and the division of labor are presented, as are his views regarding the role of the public sector in creating a climate for economic growth to occur. Although material well-being is promoted through trade, Young also points out that Smith saw secondary social benefits resulting that involve the civilizing effects of commerce and the encouragement of individual savings (frugality). Individual self-interest, combined with virtue, are viewed as powerful forces for promoting the common good.

The eighth chapter focuses on the functions of the public sector and how, unlike the unintended consequences of the invisible hand, good law can result only from an explicit desire to promote the public good. Since, in the political sphere, self-interest is more likely to be a corrupting force, morality must serve as a guide for public servants. Young shows two possible sequences in the legislative process. The "corrupting sequence" is explained and the example is given of how the granting of exclusive trading privileges at the macro level led to corruption at the micro level. On the other hand, if a parliament is led by those genuinely committed to the public good, the "virtuous sequence" can be achieved in which society is more likely to flourish and grow "for many succeeding generations" (p. 184). Smith held that promoting the public good was the only purpose of government, but Young shows that Smith placed specific obligations on private individuals for promoting the general welfare as well.

In a brief, final chapter, Young posits that the true Smithian model of exchange rested on the assumption of equality. This, for Young, is what lies at the heart of much of modern economics, and he maintains that scientific economics ultimately does have a moral base, as Smith demonstrated.

In concluding, let me note that I am not a big fan of books that bring together an author's journal publications. My reasoning behind this position is similar to the reasoning that does not lead me to purchase "greatest hits" compact discs by musical groups: If I have all the songs already on a number of LPs, why buy them again? This position is attenuated some, in the case of Young's book, by the fact that he has included some previously unpublished materials and by the fact that, with some exceptions, he ties the works together so that it reads more like a unified undertaking. (To finish the metaphor, we might, therefore, consider it as akin to a medley.) What results is a thoughtful volume on the work of Smith, with special attention being given to the role that morals play in his economic system. Although Young asserts that "old Adam Smith problems neither die nor fade away" (p. 203), it is my opinion that Young actually makes the case that there was never much of an Adam Smith problem in the first place.

John J. Bethune University of Tennessee - Martin