By Shinji Nohara

Book Cover: Commerce and Strangers in Adam Smith (2018)
Editions:Paperback: € 93.60 EUR
ISBN: 978-981-13-4299-8
Hardcover: € 103.99 EUR
ISBN: 978-981-10-9013-4

What Commerce and Strangers in Adam Smith offers:

  • Considers the impact of the global interaction of people through the lens of Adam Smith, the founder of political economy
  • Discusses how people with varied backgrounds and values can share rules of morality without social division and conflict
  • Examines how Adam Smith incorporated his knowledge of the world and globalization into his classical political economy

Commerce and Strangers in Adam Smith offers unique insights into how Adam Smith understood globalization, and examines how he incorporated his knowledge of the world and globalization into his classical political economy. Although Smith lived in society that was far from globalized, he experienced the beginning of globalization. Smith considered the most developed society the commercial society: the society that results from people meeting with strangers. Among Enlightenment thinkers, Smith was one of the most important figures with respect to interaction in the world, and it is through his lens that the authors view the impact of the mixing of diverse peoples.

Firstly, Commerce and Strangers in Adam Smith describes how Smith was influenced by information from around the world. Leaving eighteenth-century Europe, including Smith’s native Scotland, people travelled, traded, and immigrated to far-flung parts of the globe, sometimes writing books and pamphlets about their travels. Informed by these writers, Smith took into consideration the world beyond Europe and strangers with non-European backgrounds.

the theory of moral sentiments - coverAgainst that background, the book reinterprets Smith’s moral philosophy. In The Theory of Moral Sentiments, Smith developed his moral philosophy, in which he examined how people form opinions through their meetings with strangers. He researched how encounters with strangers created the sharing of social rules. As such, the book studies how Smith believed that people in dissimilar communities come to share common concepts of morality and justice.

cover the wealth of nationsLastly, it provides an innovative reading of Smith’s political economy. In The Wealth of Nations, Smith established the market model of economic society. However, he saw the limitations of that model since it does not consider the impact of money on economy and international trade. He also recognized the limitations of his own equilibrium theory of market, the theory that is still influential today.

Excerpt:

About Shinji Nohara

Shinji Nohara is associate professor at the Faculty of Economics of the University of Tokyo.

Table of Contents of Commerce and Strangers in Adam Smith

(Abstracts of chapters have been copied from the book's pages on SpringerLink)

  1. Introduction - Even though Adam Smith (1723–90), a Scottish moral philosopher and known as the founder of classical political economy, lived in a society that far from being globalized, he did experience the process of globalization. He was one of the first thinkers to consider the process of globalization explicitly. He called the most developed society a commercial society. In a commercial society, people live by exchange, not by self-subsistence. To exchange goods, what is required is the division of labor; that is, people must rely on the products of others’ labor to get their own necessities. This division of labor was the result of trade or communication between different societies. Smith saw the contemporary European commercial society as the result of world-wide communication. This view suggests that a commercial society is based on the global exchange of goods. Commercial society was an age of globalization, the age that he did examine. Indeed, throughout his writings, he paid attention to the world, including the non-European countries, and he tried to incorporate them into his picture of society in terms of its morality, politics, and political economy. Basically, this book elucidates how Smith thought about encountering strangers. He was inspired by people who met with strangers or those who were foreigners and did not share the same social, cultural values and background, as they had. He examined how meeting and interacting with strangers could influence morality, politics, and the political economy.
  2. Travel Literature and the Enlightenment World - This chapter is to elucidate how the Enlightenment thinkers, including Adam Smith, were influenced by information flowed in from all over the world. Certainly, before the Enlightenment, this information had already been collected and written; however, it was the Enlightenment thinkers who tried to grasp how the world was. Their recognition of the world indicates an early form of grasping the united world, or those connected with other part of the world. Although the world the Enlightenment thinkers lived was far from globalized or communication and trade between distant place were sometimes difficult, they tried to synthesize various information from the world into their world view. Especially, through reading books on North America and India, Smith understood the merits and limits of European civilization.
  3. Fellows and Strangers in The Theory of Moral Sentiments - Adam Smith thought that people form their morals through sympathy. Originally, they learn how they represent sympathy appropriately within their intimate and local spaces. Then, sympathy is “our fellow-feeling with the sorrow of others,” but could be used to “denote our fellow-feeling with any passion whatever” (TMS, I. i 1. 5). Samuel Johnson defined “fellow” as “a companion; one with whom we consort” (Johnson 1755, “fellow”). In fellowship with others, one can share feelings with them and form a sense of moral sympathy. However, as this chapter argues, even in this space, people form morals by seeing themselves as strangers to their society. A stranger is not a fellow, a companion or a member of the community. Being a stranger is contextual; in the local space, a neighbor from a different cultural and social background could still be a stranger. In an international relationship, members of the same country are fellows. In the local, intimate space, one forms morals among fellows from the view of oneself as a stranger. The view can adapt sentiments and behavior to be accepted by others, and can form impartial morals.
  4. Adam Smith's Historical Politics - Adam Smith situated feudalism and the modern free constitution in the broader historical framework. Smith saw the development of society as linked with the evolution of legal and political institutions. Feudalism was typical of the agricultural stage of society where government and the rule of law needs to be developed further. Unlike the other Scottish Enlightenment thinkers such as Lord Kames and Sir John Dalrymple, Smith saw this stage of the establishment of land property not as fully developed politically. At the bottom, the protection of land itself was not sufficient for the liberty of people. For the agricultural society in reality was linked with the domination of the power of aristocrats, who were destructive for the liberty of people. The four-stages theory constituted only a part of the evolution of legal and political institutions. In commercial age of society, the evolution requires the protection of foreigners and exchangeability of nationality. For Smith, commercial society requires the protection of strangers. Then, he described his unique international theory.
  5. Adam Smith on Regularity and Irregularity in Sentiments: Morality and Prudence - Adam Smith regarded human sentiments as irregular basically, in the sense that people feel different sentiments in different times and places. Encountering a sad event, they feel more sympathy for their intimates than for strangers, even if both suffer from the same kind of sadness. In spite of this, as this chapter examines, they behave in a regular manner in their everyday life, inasmuch as they follow certain rules of behavior. Because the general rules are approved by others, following the rules makes people behave in a regular manner, regardless of the difference in time and place. This was important for defining moral virtue with respect to justice and prudence; through justice or prudence, people can regulate their own sentiments and behavior. In particular, Smith presupposed prudence in the economic behavior he describes in The Wealth of Nations.
  6. Adam Smith on Money and the Impact of Encountering Strangers - This chapter argues that money moves around the world in movement that was sometimes incompatible with the abstract theoretical framework of money, such as David Hume’s quantity theory of money, the theory that denies the impact of monetary fluctuations on real economy. Adam Smith denied this theory when considering the historical fluctuations of money. In particular, whereas Hume’s quantity theory of money presupposed the stability of the demand for money, Smith described the change in demand as being dependent on economic growth. Then, the growth relies on the expansion of international interactions. As a result, his historical explanation of money includes the impact money of the world had when encountering Europe. At the bottom, what he focused on was the dynamics or change of economy caused by money. Then, he incorporated his economic argumentation into not only money as gold and silver but also paper money.
  7. Adam Smith on Markets - Adam Smith's equilibrium is divided into the different times and places of markets. Then, he focused on how people sometimes deviated from prudent or socially beneficial behavior, the deviation that is the cause of the dynamics or change of equilibrium. He had his own version of partial equilibrium that had its own dynamics; equilibrium is changed by production factors such as wages, rent, and profits. Because different stages had different assumptions, his equilibrium is not universally applicable. Instead, each model has its own assumption. Further, equilibrium here denotes the limit of economic growth because the equilibrium here assume one-country model which excludes the impact of encountering strangers or foreign trade and migration. Encountering strangers can break the limit of economic growth in one-country model.
  8. Encountering the World: The Model of International Trade - Whereas many theories of international trade focus on the supplier-side cause of foreign trade, Adam Smith thought that foreign trade is also based on demand. The change of demand changes the structure of supply. He paid attention not only to supply but also to demand, or to the way in which demand, through the activities of merchants, created the new network. By networking, merchants contribute to the creation of demand for foreign goods, and expand the international market. This merchant-led model of foreign trade adds to our understanding of foreign trade. Smith was concerned with the competition of merchants in creating demand for foreign goods. Based on this competition, merchants can conduct foreign trade. This finding reflected the age in which Smith lived. This chapter also describes the political institutions that encourage foreign trade. Although advocating free international trade, Smith also recognized that political institutions are useful for protecting property, and that this protection is necessary for foreign trade.
  9. Conclusion