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of the fact that the era of modern capitalism differs from earlier industrial epochs in something far deeper than mere methods of doing business. He points out that the dominant motive for doing business has changed. The controlling purpose of modern business is to increase the volume and enlarge the power of capital. Capital for its own sake, and for the social power it confers, is the standard of modern economic life.

On the other hand, capital has never been to any great degree an end in itself until the last three centuries, and particularly since the industrial revolution at the end of the eighteenth century. Previous to that time the idea of wealth, in the minds of rich and poor alike, was that it was worth having only to spend. Men wanted wealth because they wanted to consume it, not because they wanted to capitalize it. In other words, their whole philosophy of life, whether it was expressed in their economic actions or in abstract theory, was to the effect that the life was more than the things; that people and their needs were the end-end, while wealth was merely a means-end.

Whatever the influence of Adam Smith's work may have been, one cannot study his philosophy as a whole, even in the fragment of it that has come down to us, without being certain that his

basic positions were clearly and positively the human rather than the capitalistic principles. The author of The Wealth of Nations did not assume that the service of capital was the goal of economic activity. On the contrary, he assumed that all economic activity was, as a matter of course, a means of putting people in possession of the means of life.2

Furthermore, to state the same fact in a little different way, Smith assumed that the whole value of economic activities was to be decided by their effects on consumption. That is, instead of putting the production of wealth in the forefront, as the most significant measure of economic processes, he evidently, at least in his fundamental theory, regarded the production of wealth as merely incidental to the consumption of wealth. His whole moral philosophy-or, as we should say today, his sociology-was the ultimate evaluator of all production and consumption; that is, the human process, as it was analyzed and

Thus, in the "Introduction" to Book IV of The Wealth of Nations, he says: "Political Economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects; first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign.

synthesized by moral philosophy, was judged to be the tribunal of last resort for verdict upon the economic process.

This has most certainly not been the perspective of nineteenth-century political economy as a whole, so far as England is concerned. To speak figuratively, then, the apostolic succession in social philosophy from Adam Smith is through the sociologists rather than the economists. The sociologists have kept alive the vital spark of Smith's moral philosophy. They have contended for a view of life in terms of persons rather than in terms of technology. That is, they have put persons in the center of their picture of life, and have assigned a subordinate place to the theory of those technical activities which deal with the material products of persons. The economists are the separatists and heresiarchs, in exaggerating the importance of a technology till it has overbalanced, in social doctrine, the end to which it is normally tributary.3

If we did not know that Smith's economic philosophy was merely a division of his sociology, the beginning of his Wealth of Nations would

3 Throughout this essay I speak of the classical political economy as though it were still dominant in England and the United States. I leave to a later essay the modifications which are necessary in order to make the generalizations fit subsequent developments in economic theory.

seem to be very abrupt. As a matter of fact, there is no abruptness, because the preliminaries which have to be understood as an introduction to the book have to be supplied from what we know of his general philosophy. For our purposes it is unnecessary to ask how adequate Smith's view of human life was, according to the ideas of present sociology. It is enough that the moral order was the inclusive concept in his philosophy, while the economic process was the included and tributary concept. In so far as eco

This initial proposition not only contains nothing new, but it repeats the invariable conclusion of all who have given attention to Smith's whole system of thought. As Hasbach has rather caustically hinted (Untersuchungen, p. 20), this primary fact seems to have been duly observed by everyone but the economists! It was pointed out distinctly enough by Dugald Stewart in 1793, and it has been recognized by nearly every writer on Smith who does not confine attention merely to his economic doctrines. For example, Oncken (Smith und Kant, Leipzig, 1877) remarks (p. 16): “Es sind Glieder eines Systemes der praktischen oder Moral-Philosophie in ihrem Gesammtum fange, und man wird der Arbeit des Urhebers nicht gerecht, wenn ein Glied selbständig herausgehoben wird, um es unabhängig für sich einer weiteren Ausbildung zu unterwerfen. Ethik, Politik und Oekonomik, so lautet die Trias, welche den Inhalt der Smith'schen Philosophie bildet. . . . . Diese Dreitheilung ist dem schottischen Meister übrigens nicht einmal original. Sie hat sich langsam aus dem Entwickelungsgange der praktischen Philosophie seit ihren Anfängen im Alterthum herausgebildet, und war im vorigen (18ten) Jahrhundert allgemein üblich." Variations of the same conclusion might be cited in large numbers.


nomic theory has obscured and beclouded this view, it is an aberration, rather than an orderly extension of social science. This is always the case when a theory of means overshadows the theory of the ends which the means should serve.

The opening paragraph of Smith's introduction is strictly consistent with these claims, viz.:

The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other


This passage invokes a picture of a nation consuming the products of its annual labor. The inquiry is, in a word: How may the aggregate wealth available for consumption be made as great as possible? There is no reference to accumulation, to increase of capital. That comes later, in its proper place. The center of interest is the nation of consuming persons. How may they have the most of the things which they need to consume in order to be the most prosperous persons? We are in danger of being branded as enemies of our kind, if we bring to light the distance economic theory and practice have drifted from this anchorage. Today the main question is: How may the social machinery for grinding

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