An Evening with the Wise Guys
Adam Smith, Benjamin Franklin, and David Hume
In this lesson, students examine the economic ideas of three friends: Adam Smith, Benjamin Franklin, and David Hume. Smith was the founder of the discipline of economics. Franklin was one of the best-known founders of the American republic. Hume wrote widely in the fields of philosophy, history, and politics but he also made major contributions to economic thought. The students read summaries of the lives and thoughts of Smith, Franklin, and Hume. They read a short description of the fictional circumstances of a dinner meeting between these three friends. Then four students are invited to read aloud the script of dinner conversation. In the exchange, they discuss their views regarding economics and the relationship between Great Britain and the American colonies.
The lesson is written for high school and college students enrolled in an introductory American history or civics course. It might also work in a introductory college philosophy course.
1. Students explain the economic ideas of Smith, Franklin, and Hume.
2. They analyze policy alternatives facing Great Britain in relationship to its American colonies.
Time Required: 60 minutes
- Complementary Google slides
- One copy for each student of Handout 1: The Wise Guys: An Evening with Adam Smith, Benjamin Franklin, and David Hume
1. Explain to the students that the purpose of this lesson is to gain a basic understanding of the ideas of three well-known and respected eighteenth century intellectuals — Adam Smith, the founder of economics, Benjamin Franklin, entrepreneur and statesman, and David Hume, philosopher and historian. The class will participate in a reader’s theater activity and discuss what they learn.
2. Distribute a copy of Handout 1 to each student. Ask the students to read the Directions. Check to see if they understand the assignment.
3. Ask for volunteers to play the roles of the narrator, Adam Smith, Benjamin Franklin, and David Hume.
4. Ask the students to read Setting the Stage and the Players. Discuss their responses to the Questions for Discussion.
What are the circumstances of the meeting between Smith, Franklin, and Hume?
(Franklin had been visiting Ireland and Scotland. Franklin and Smith were invited by David Hume to spend the evening at Hume’s home in Edinburgh, Scotland.)
What are two of Adam Smith’s the main economic ideas?
(Here are three. First, Smith believed that decisions should be left to those who have local knowledge. He was dubious of government interventions in the economy. Second, he showed how division of labor resulted in workers being much more productive. Division of labor set the stage to expand trade. Finally, Smith promoted free trade over the mercantilist ideas of the time.)
What are Smith’s views of the relationship between Great Britain and the American colonies?
(Smith argued that both the Great Britain and the American colonies would be better off if they voluntarily separated and the two nations would instead become trade partners.)
Describe two of Franklin’s accomplishments.
(There are many. Here are five. First, Franklin was an entrepreneur who began as a printer and gained more recognition as a publisher and author. Second, he was a scientist, famous for his research on electricity. Third, he created numerous public institutions such as the American Philosophical Society and the first lending library in America. Fourth, he was a diplomat who helped negotiate the Treaty of Paris. Finally, he attended the Constitutional Convention of 1787.)
Describe two of Hume’s accomplishments.
(Hume published several books on history and philosophy including his two-volume Essays, Moral and Political. Hume made key contributions to economics. He explained why exporting manufactured goods in exchange for gold currency could not enhance wealth.)
5. Ask the volunteers to read the Script: An Evening with the Wise Guys in Handout 1.
6. Discuss the student’s responses to the Questions for Discussion which follow the Script.
What was mercantilism?
Mercantilism was an economic plan followed by Great Britain in relationship to the American colonies. It involved restricting imports to Great Britain and encouraging exports to the colonies. The idea was that such a policy would bring gold into Great Britain. Gold was considered the source of wealth.
How are the views of Smith and Hume similar regarding mercantilism and free trade? Explain.
(Both were critics of the mercantile system. Hume explained that the British policy does not bring wealth. It only increases prices. Smith explains how mercantilism restricts division of labor and specialization. This limits the benefits from trade. Unrestricted division of labor and specialization, in contrast, expands trade. The whole system becomes more efficient and further trade creates still more wealth.)
What are Franklin’s objections to the Stamp Act?
(Franklin explains how the Stamp Act was a deviation from Great Britain’s traditional policy of leaving the colonists to manage their own internal affairs. The Stamp Act required the colonists to pay a tax on every piece of printed paper they used including newspapers and legal documents. Franklin explains how this restricted commerce in his country.)
What is Smith’s defense of the Stamp Act?
(Smith explains that Great Britain pays heavily to keep the colonies safe by providing troops and the Royal Navy.)
How does Smith think that Great Britain is harmed by possession of its colonies?
(Smith suggests that it is expensive for Great Britain to maintain the security of the colonies. He also notes that British mercantilist policies distort the British economy. Reducing trade restrictions would increase wealth for the British.)
What does Smith suggest as a solution to the rift between Great Britain and the American colonies?
(Smith suggests Great Britain should voluntarily give up its American colonies. America and Great Britain should negotiate a mutually beneficial trade treaty. The result would be a strong alliance between two friendly nations.)
Did Adam Smith attend the Constitutional Convention with Benjamin Franklin? Explain.
(Smith was not physically at the Constitutional Convention but his ideas were in plain view. The free trade zone among the states, the balance of powers, and the protections of the Fifth Amendment can all be traced to Smith’s ideas expressed in the Wealth of Nations.)
7. Review the main ideas of the lesson. Ask:
In what ways do the wise guys share a similar view of the economy?
(Smith was opposed to the mercantilist policy of Great Britain. He stressed that not only did mercantilism reduce the potential gains from trade for Great Britain and the colonies, it also placed a large financial burden on Great Britain. Hume explained how hoarding gold was not a source of wealth for Great Britain. It might actually cause of higher prices. Franklin stressed the negative effects of the Stamp Act of 1765 to colonial Americans.)
Smith in Wealth of Nations advocated that Great Britain and the colonies to separate voluntarily. In hindsight, how do you view Smith’s idea of how Great Britain and the American colonies should end their dispute?
(Accept a variety of answers. Here is one. Smith suggested that Great Britain should voluntarily allow the colonies to leave and should, instead, agree to a become close trade partners. He admits that probably no one in Great Britain agrees with him. Such a voluntary separation would, among other things, be a blow to the pride of the British Empire. That said, George Washington did, indeed, defeat the British with the help of the French. That was also a blow to the pride of the British. Smith’s solution would have saved lives and property lost in the prolonged war. It would also have reduced the time it took for Great Britain and the United States to become close allies, friends, and trade partners. Some might say that Smith’s ideas in hindsight stand up very well.)
Did Adam Smith attend the Constitutional Convention with Benjamin Franklin? Explain.
(Smith was not physically at the Constitutional Convention, but his ideas were in plain view. The participants had read Smith. His ideas were not a secret. The free trade zone among the states, the balance of powers, and the protections of the Fifth Amendment can all be traced to Smith’s ideas expressed in the Wealth of Nations.)
Want More on Adam Smith?
Teachers can ask students to watch high production value videos focused on the ideas of Adam Smith. Each video is accompanied by a set of questions for further thought and discussion.
· The Invisible Hand (6:44)
· The Free Market (7:37)
· Division of Labor (8:51)
· Sympathy (8:53)
· The Role of Authority (9:11)
· Full Feature (40:43)
For this lesson in particular, viewing The Free Market video reinforces Smith’s views on mercantilism and free trade.
1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. R.H. Campbell and A.S. Skinner: General Editors; W.B. Todd: Textual Editor (Indianapolis, Ind.: Liberty Fund, 1981 edition).
2. Ibid., bk IV, ch.2, para. 10.
3. Ibid., bk IV, ch.7, para. 58.
4. Ibid., bk IV, ch.7, para. 59.
5. Ibid., bk IV, ch.7, para. 66.
6. Ibid., bk IV, ch.7, para. 66.