Adam Smith: What He Thought and Why It Matters by Jesse Norman - review

A new book about the economist Adam Smith is a potent mix of biography and analysis

“In a world of uncertainty, extremism and misunderstanding we need Adam Smith,” argues Jesse Norman at the end of his compelling, original and well-judged exploration of the great thinker’s life and ideas. He does not add — but would surely not object to someone suggesting — that we need more people like Norman in politics too.

This would be an impressive book from an academic, which he once was. It is all the more joyous to see it come from a serving MP and Government minister. By day, as roads minister, he presumably concerns himself with speeding and signs. By night, he clearly puts aside his red box and turns his talents to Adam Smith’s Theory of Moral Sentiments (1759). The casual complaint from voters — that politicians are not smart enough — does not apply here.

To some of his parliamentary colleagues Norman may, perhaps, seem too smart to thrive in a system which rewards false debate and illogicality. Edmund Burke, the subject of Norman’s last and deservedly successful book — though this successor is better still — famously served as a Bristol MP and lived for parliamentary battles and rhetoric. Smith was different: his intellect of service at a higher level.

It would be fascinating to read Norman’s assessment of the contradictions between the purity of his thought — his four maxims of sound taxation, for instance — and the reality of doing anything practical in government. Interesting, too, to hear his judgement of the difficulties of putting the virtues of free trade into practice today when Brexit and President Trump are bringing down barriers.

But this is not that kind of book. Its purpose is more serious: to set out Smith’s life before decoding his thinking and setting it in historical context. This is not a biography in the strict sense and nor is it a simple read: you have to work at it to bring reward.

As with his book on Burke, Norman divides the work. First you learn about the man and what he did. Then you discover more about what he meant and why it matters. At the end you emerge as if from a university course. I now feel I need to revise again, before taking an exam.

Burke and Smith were joined by something more than Norman’s attentions and a passing friendship. Both have been adopted by subsequent generations to serve their own interests. Burke, who saw himself as a Whig, has been stolen as the prototype Tory thinker, a rare ideas man in a party where it usually pays well to pretend stupidity. Smith, the educated boy from Kirkcaldy, has been adopted by everyone from Gordon Brown — who also came from the Scottish town — to Right-wingers in defence of that abstract thing, the “market”. “The Scots invented Thatcherism long before I was thought of,” Margaret Thatcher told her party in 1988. For her, Smith was the sort of man who counted his pennies and would have had no truck with socialism.

As Norman shows, almost everything we think about Smith is wrong — or, at least, that we only ever dip into a corner of his immense intellect, the product of that most exciting age of British creativity, the mid to late 18th century. The fascination of this book is that his world view is suddenly shown in all its dimensions and colours.

Not so much his life. Smith, other than his mother, had no close family and no interesting anecdotes emerge. Barring travels abroad with the third Duke of Buccleuch (a family whose vast estates today might indicate that the first of Smith’s four maxims of taxation has never been followed through fully), he mostly seems to have sat in his room and written.

But what splendid things he produced. The Wealth of Nations is his most famous work but Norman makes a powerful case for The Theory of Moral Sentiments, which came before it, and his earlier work as a lecturer at Glasgow University, too. He shows not just that there is no contradiction between the human understanding of the first two and the economic analysis of the final book, but that The Wealth of Nations is much more than a capitalist cookbook.

Smith’s fluency — his wonderful description of the economics of nail-making for instance — has misled later generations. As Norman puts it, he offers “a powerful explanation of how we live in a world whose values are formed through human interaction”.

Smith also attacked “that insidious and crafty animal, vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs”.

“For Smith, as for Burke,” Norman writes, “a politician should be a ‘philosopher in practice’.” I wonder what they would have made of Jesse Norman, Conservative MP for Hereford and South Herefordshire as he has to sit through Prime Minister’s Questions and nod along to Theresa May.

Adam Smith: What He Thought and Why It Matters by Jesse Norman (Allen Lane, £25), buy it here.

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