Did Adam Smith Uncharacteristically Predict the Course of Globalisation?

Adam Smith rarely made predictions about political economy or anything related to conjectures about the future. In his entire approach to all the subjects he studied and reported he had, what Samuel Fleischacker, the philosophy professor, described as his looking ‘backwards’, not forward's vision, or as I saw somewhere the other day, he took a ‘rear mirror’ view of his subjects.

Hence, it is remarkable when Smith indulged in a rare bits of speculation. In this case, his motives I think were from his moral conscience driving him to break the habits of a lifetime. He was no indifferent academic to the misfortunes of others, be they labourers and their families in Scotland or ‘natives’ in the discovered foreign lands visited by European adventurers.

Smith had an excellent rhetorical ability (in the 18th-century sense, not the 21st-century somewhat disparaging sense in which we use the word today); he was an accomplished master of classical studies of oratory and literary expression, and we have students’ notes of his lectures on rhetoric to demonstrate his grasp of style and composition (Smith, A. [1763] 1985, Lectures on Rhetoric and Belles Lettres, J. C. Bryce, ed. Liberty Fund, Indianapolis, Indiana).

In one such passage in his books there is the following gem, illustrating an aspect of his humanity (I shall offer others on Lost Legacy in the course of the next month of so, as I approach the end of writing my new book on Adam Smith, and as I check references for the publisher’s editor, which may be of interest to readers):

“The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind. Their consequences have already been very great: but, in the short period of between two and three centuries which has elapsed since these discoveries were made, it is impossible that the whole extent of their consequences can have been seen. What benefits or what misfortunes to mankind may hereafter result from those great events, no human wisdom can foresee. By uniting, in some measure, the most distant parts of the world, by enabling them to relieve one another's wants, to increase one another's enjoyments, and to encourage one another's industry, their general tendency would seem to be beneficial. To the natives however, both of the East and West Indies, all the commercial benefits which can have resulted from those events have been sunk and lost in the dreadful misfortunes which they have occasioned. These misfortunes, however, seem to have arisen rather from accident than from any thing in the nature of those events themselves. At the particular time when these discoveries were made, the superiority of force happened to be so great on the side of the Europeans, that they were enabled to commit with impunity every sort of injustice in those remote countries. Hereafter, perhaps, the natives of those countries may grow stronger, or those of Europe may grow weaker, and the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another. But nothing seems more likely to establish this equality of force than that mutual communication of knowledge and of all sorts of improvements which an extensive commerce from all countries to all countries naturally, or rather necessarily, carries along with it.' [WN IV.vii.c.80: p 626]

Comment
Looking backwards today, long after the era of imperialist empires and colonies, gun-boat diplomacy, and world affairs centred on the interests of Europe and North America, we can see the gradual emergence, still underway, but probably accelerating, of the erosion of the ‘superiority of force’ formerly monopolised by the Europeans until the early years of the 20th century, joined by the United States from mid-century.

The growth of China and India, from their fairly decisive moves away from statist economies, reversing their economic dogmas, based on failed models of European economics associated with Karl Marx, and socialism, to adopt that ‘mutual communication of knowledge and of all sorts of improvements’, i.e., the successful European models of economics, to gain shares in ‘the extensive commerce from all countries to all countries’.

Globalism, derided by the former followers of Marx and varied brands of socialist ‘true believers’, is producing what Smith anticipated might happen when the conquered nations adopted the workable market economies of the West, rather than the unworkable romantic fantasies of scribblers, in what for his generation were perceived to be ‘the most distant parts of the world’. The foci of the world economy, wherever we argue about where it was or is, it is certainly shifting slowly, eastwards and westwards (depending in which direction you look).

Smith noted that ‘the discovery of America, and that of a passage to the East Indies by the Cape of Good Hope’, were ‘the two greatest and most important events recorded in the history of mankind’, to which we might add ‘so far’, and that the next greatest event ‘in the history of mankind’, perhaps to be witnessed closely by the next few generations, will be the arrival of ‘that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another’.