Shinji Nohara - Commerce and Strangers in Adam Smith

Springer Nature Singapore Pte Ltd. 2018

Shinji Nohara 1

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In 1765, when Adam Smith (172390), a Scottish moral philosopher and known as the founder of classical political economics, was staying in Toulouse, France, he received a letter from David Hume (17111776). Hume was Smiths friend and known as a path-breaking philosopher in Scotland. Then, Hume was staying in Paris. Hume wrote, Paris is the most agreeable Town in Europe, and suits me best; but it is a foreign Country. London is the Capital of my own Country; but it never pleasd [sic] me much. Letters are there held in no honour: Scotsmen are hated ( Corr ., 87, 5 Sep. 1765). Smith replied to Hume, writing, A man is always displaced in a forreign [sic] Country, and notwithstanding the boasted humanity and politeness of this NationYour objections to London appear to me to be without foundation. The hatred of Scotch men can subsist, even at present, among nobody but the stupidest of the People. Especially, in Humes case, the Clamour against you on account of Deism is stronger, no doubt, at London where you are a Native and consequently may be a candidate for everything, than at Paris where as a forreigner [sic], you possibly can be a candidate for nothing ( Corr ., 88, Sept. 1765). This interchange suggests that Smith and Hume as Scotchmen did not like the English hatred against the Scotch. Although, following the Union between England and Scotland in 1707, both countries became united as Britain, Smith and Hume still shared an ambivalence toward the English. As Robertson argued, especially since the Scottish debate on the Union, many Scotch had felt psychological distance to the English (Robertson 2005). Even though Hume and Smith affirmed the union itself and saw Britain as their own country, they felt a psychological distance toward the English. In this psychological ambivalence toward Britain, their own country, Smith still viewed the English at a distance as if he were a stranger in their own country.

As I discuss in this book, the concept of strangers, or those who do not belong to the same society or the same social background is important when analyzing Smiths thinking. He wrote about the international human relationship, including morality, politics, and political economy. Whereas he was not a cosmopolitan whose priority, in considering the human relationship, was international society beyond borders, he was also not a nationalist who placed his own national interest ahead of international interest. He detached himself from both trends.

This detachment is made possible because Smith examined the changing, ambiguous boundary between our own society and strangers. For him, this boundary is always changing, depending on the contexts; who we are is thus formed through our meeting with strangers. In this sense, at the bottom, such strangers are not only foreigners, but also those are considered as not yet belonging to our own society, or our own company.

The boundary between our own society and strangers was the product of interpersonal communication or commerce. Smith regarded the interaction or commerce between different peoples or societies as essential for the sake of morality, politics, and the economic development of society. Indeed, when examining human relationship and society, he thought about commerce. Etymologically, commerce meant not only the exchange of goods, but also communication in general. Samuel Johnson (17091784; an English lexicographer)s A Dictionary of the English Language in 1755 defined commerce as the intercourse; exchange of one thing for another; interchange of any thing (Johnson 1755, Commerce). By analyzing Smiths thinking in view of commerce as the exchange of goods and the intercourse of people, we can readily see how he thought of society and human relationship. For him, through peoples interaction, society can utilize their potential capabilities, capabilities that include both morals and economic competence. Through the interaction of people with strangers or different persons, people form a sense of morals. Similarly, through their interaction, they can use their resources, including land, human and material capital, more efficiently.

Smiths focus on strangers and commerce was based on the beginning of globalization happening during his age. Certainly, his age was different from ours. Today is the age of globalization. Many people travel overseas. Air routes cover almost all the world. They also now go abroad to travel or study or work more easily. More and more people both immigrate to and emigrate from foreign countries. Many more goods are imported and exported than ever before. Further, a large amount of money is now invested globally.

In contrast, Smiths age was far from globalized. Although manufactured exports constituted only 5% of GDP in 1700 and grew only to 15% by 1831, still, domestic markets remained the mainstay of in his age. The ration of exports and imports to GDP was 19% in 1720, 20% in 1755, and 24% in 1790 (AHearn 2014, 30). In spite of that, as Table indicates, in the eighteenth century, more and more goods were shipped all over the world. In 1700, Europe took 85% of England and Wales recorded exportsa similar proportion from Scotland (Zahedieh 2014, 410). As the eighteenth century went on, re-export of colonial goods to Europe, and exports to American and Asia increased (Zahedieh 2014, 41213). Especially, the import of foreign luxurious goods to Britain changed that society. After the late seventeenth century, there was an increase in imported goods, such as tea, sugar, coffee, tobacco, cotton, and china from America or Asia to Britain. Some of these goods were then re-exported to Europe.

To purchase these goods, people became more industrious, and worked longer (the so-called Industrious Revolution). Although the eighteenth century was still a family-based economy wherein the basic unit of production was family, not a company, families shifted their production from self-subsistence to the selling of goods to purchase these goods. Thus, they worked longer and became more industrious (de Vries 2008).

This new behavior, and luxurious imports accelerated urbanization. British ports flourished. The population shared this growth in the large cities (those more than 10,000 people) rose from 5.3% in 1600, 11.8% in 1700, 15.6% in 1750, to 22.6% in 1800 (AHearn 2014, 17). Urbanization also promoted the division of labor into specialization (Allen 2009). Although globalization was only rudimentary and still far from extensive, Britain had now experienced its beginnings in the sense that people enjoyed goods from almost all over the world.