Thursday, November 19, 2009

Adam Smith on "Ruin of a Nation"

Ben Stein writes on “Four lessons from the recession” in (19 November) in Fortune HERE which includes this observation:

And another little note ... my much-missed father used to tell me with great approval Adam Smith's famous quote regarding prophecies of doom for America, "there is a lot of ruin in a nation."

Another example of a famous quotation from Adam Smith being misapplied in meaning and, in this case, in its location too.

Smith was not writing of “prophecies of doom for America”, a country that did not yet exist when he penned his observation, which was a mild rebuke in fact to an excitable young correspondent overreacting to British reverses in the war of independence waged by the British colonists in North America.

The then young man was John Sinclair (1754-1835) of Ulbster and Thurso Castle, Caithness (in northern Scotland), educated at Edinburgh, Glasgow and Oxford, and called to the English Bar in 1775, aged 21. Sinclair wrote to Smith in 1782 (aged 28, I think, from memory), in a not auspicious year for the King’s course:

If we go on at this rate, the nation must be ruined. Smith replied: “Be assured, my young friend, that there is a great deal of ruin in a nation” (Adam Smith, Correspondence of Adam Smith, 1977): p 262, note 3, from Sinclair, Corr., i. 390-1).

It most certainly was not a prophesy “of doom for America” – it was a young man’s ill-informed mood-panic about military reverses for the British (particularly the British surrender at Saratoga (Ian Ross, The Life of Adam Smith, 1996, 327; new, second edition about to be published by Oxford University Press).

The only thing likely to be ruined by the end of the war was the British monopoly of colonial trade, a prospect about which Smith was not worried at all. His Wealth Of Nations. Book IV, is a polemic against mercantile political economy, the central idea behind England’s (after, 1707, Britain’s) foreign policy in the colonies.

Ben Stein (and Fortune's sub-editors) slipped up in his attributed meaning to Smith’s wiser words to young Sinclair.



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