Adam Smith, national ruin, and human progress

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During the American Revolution, British Member of Parliament John Sinclair wrote a letter to Adam Smith. He was worried about how badly the war was turning out for Britain. “If we go on at this rate, the nation must be ruined,” he wrote, emphasis in the original. Smith’s response was one of the wisest things he ever said. “Be assured, my young friend, that there is a great deal of ruin in a nation.” This was his way of saying that things would be fine.

Britain lost the war and 13 of its colonies, but things did turn out fine. British living standards continued to improve, and its population continued to grow. America also prospered and grew. Yet, most people continued to think more like Sinclair than Smith. In 1830, after a couple generations of rising living standards, the Smith-influenced thinker Thomas Babington Macaulay wrote:

On what principle is it that, when we see nothing but betterment behind us, we are to expect deterioration before us? If we were to prophesy that in the year 1930 a population of fifty million, better fed, clad, and lodged than the English of our time, will cover these islands, that Sussex and Huntingdonshire will be wealthier than the wealthiest parts of the West Riding of Yorkshire now are, that machines constructed on principles yet undiscovered will be in every house, many people would think us insane.

People of his day thought Macaulay was nuts, but his crazy predictions were almost spot-on. In 1930, the UK’s population was just under 46 million. Automobiles, radios, and electricity, undreamt of in Macaulay’s time, were within reach of ordinary people by 1930, even with the Great Depression setting in. Growth and prosperity in the US were even more dramatic. Over time, the two warring countries developed what has been called a “special relationship,” as one the world’s closest alliances.

Today, by almost every measure, nearly every country in the world is more prosperous than ever before in terms of life expectancy and income, as well as percentage of houses having appliances, air conditioning, and high-speed Internet. Even places still struggling with extreme poverty are seeing growth in sanitation and literacy, and declines in disease rates and malnutrition.

Smith’s point to Sinclair—and to us—is that things do not need to be perfect to be good. Every age has its problems. We can’t ignore them, but we can make progress against them.

This is wonderful news. But there is still a lot of ruin in the UK, the US, and in all countries. There always has been, and there always will be. There is not a place on Earth free from corruption, crime, addiction, rent-seeking, over-regulation, over-taxation, and every other form of ruin known to humankind. And yet, progress still happens. Generations of human have slowly been making make each other better off for more than two centuries, with no end in sight, despite all the problems we face.

This is an important point that should be heeded by today’s inheritors of liberalism. For instance, many self-described libertarians insist on ideological purity tests. They will not work with anyone who doesn’t pass muster, no matter how much common ground they have, and signal so loudly with public displays. They are similar in this respect to the left’s campus radicals and environmentalist purists, and to the right’s more strident social conservatives and right-populists.

This need to preen was one of those quirks of human nature that amused Smith. But through the smile, he would counsel his free-market friends to calm down a bit, just as he did his young friend Sinclair. There has never been a free-market golden age, and there never will be. And that’s ok.

If Smith were alive today, he would likely encourage liberals to push as best they can for peace, easy taxes, and a tolerable administration of justice. He would also likely warn against insisting on ideological purity for two reasons. One, there is no single correct regulatory policy, or trade policy, or any other policy. It’s all a work in progress. And two, as he reminded young Sinclair, there is a lot of ruin in a nation. Things do not have to be perfect to be good, or to improve. The last two centuries are proof.

For more on Adam Smith, please join us at CEI’s upcoming Policy Summit in Edinburgh, Scotland from May 30-June 2.