The Two Adams of the Scottish Enlightenment and Political Economy

scottish enlightenment political economy david hume central planning adam ferguson adam smith militias read the wealth of nations pin-factory

Max Skjönsberg for AdamSmithWorks

Adam Ferguson’s approval of Adam Smith's work was not unconditional.
Ferguson once wrote to Smith: ‘You have provoked, it is true, the church, the universities, and the merchants, against all of whom I am willing to take your part; but you have likewise provoked the militia, and there I must be against you.’"
March 30, 2022
This piece discusses the relationship between Adam Smith and Adam Ferguson–the two Adams of the Scottish Enlightenment–and the similarities between their approaches to political economy. Born in the same year, in 1723, they both became professors in moral philosophy, with Smith at Glasgow and Ferguson at Edinburgh. Though friends, they were of different temperaments, and at one point Smith accused Ferguson of plagiarism for using the famous ‘pin-factory’ example to illustrate the division of labour. Ferguson emphasised, however, that the example came originally from an unnamed French source, most likely with reference to an article in the Encyclopédie. Even if things were ‘a little awkward’ between the two Adams for a while – as Ferguson put in a letter to his friend John Macpherson – they rekindled their friendship on Smith’s deathbed. Probably because Ferguson’s Essay of the History of Civil Society (1767) was published before Smith’s Inquiry into the Nature and Causes of the Wealth of Nations (1776), Karl Marx somewhat misleadingly referred to Ferguson as Smith’s ‘master’ in the first volume of Capital (1867). It is clear, however, that Ferguson was, at least in his published writings, willing to defer to Smith on political economy.
In the 1773 edition of his Essay, Ferguson wrote in ‘Of Population and Wealth’: ‘I willingly quit a subject in which I am not much conversant…Speculations on commerce and wealth have been delivered by the ablest writers; and the public will probably soon be furnished with a theory of national œconomy, equal to what has ever appeared on any subject of since whatever.’ (241-2). A footnote clarified that Ferguson was referring to ‘Mr. Smith, author of the Theory of Moral Sentiments,’ and his reference was of course to Smith’s forthcoming Wealth of Nations, which was published three years later. Upon its appearance, Ferguson was ecstatic, writing in a letter to the author:
I have been for some time so busy reading you, and recommending you and quoting you, to my students, that I have not had leisure to trouble you with letters. I suppose, however, that of all the opinions on which you have any curiosity, mine is among the least doubtful. You may believe, that on further acquaintance with your work my esteem is not a little increased. You are surely to reign alone on these subjects, to form the opinions, and I hope to govern at least the coming generations.
However, Ferguson’s approval of his friend’s work was not unconditional. He continued: ‘You have provoked, it is true, the church, the universities, and the merchants, against all of whom I am willing to take your part; but you have likewise provoked the militia, and there I must be against you.’ (Smith Correspondence, 193-4), The later statement referred to Smith’s conviction that a militia ‘must always be much inferior to a well disciplined and well exercised standing army’ (WN.V.i.a, 699-700). Ferguson’s support for the militia, by contrast, was longstanding and unequivocal. Both Ferguson and Smith were members of the Poker Club, which promoted the establishment of a militia in Scotland, but Ferguson was certainly the more ardent member of the club, and he was also the author of a pamphlet entitled Reflections Previous to the Establishment of a Militia (1756).
Ferguson may have been modest when proclaiming himself as ‘not much conversant’ in political economy in 1773. His commitment to Enlightenment political economy and the principles of free trade was longstanding and preceded the Wealth of Nations. His general economic principles set out in the first set of his published lectures, Institutes of Moral Philosophy (1769), were similar to those in his later Principles of Moral and Political Science (2 vols., 1792). Already in the Institutes, he had stressed that ‘the state of a nation’s wealth is not to be estimated from the state of its coffers, granaries, or warehouses, at any particular time; but from the fertility of its lands, from the numbers, frugality, industry, and skill, of its people.’ (p. 276). One common source for Ferguson and Smith was their older mutual friend David Hume, who was the author of essays on political economy in his Political Discourses (1752) and undoubtedly among the ‘ablest writers’ Ferguson referred to in the 1773 edition of the Essay. 
In the Essay, Ferguson argued that commercial progress paved the way for political progress, in typical Scottish Enlightenment fashion:
A people, possessed of wealth, and become jealous of their properties, have formed the project of emancipation, and have proceeded, under favour of an importance recently gained, still farther to enlarge their pretensions, and to dispute the prerogatives which their had been in use to employ. (Oz-Salzberger, ed., p. 247).
Ferguson is sometimes believed to have been more pessimistic than Smith and Hume about commercial modernity. In some ways, however, he was more optimistic. Notably, his attitude towards public credit was much milder than that of Hume. In the Institutes, Ferguson stated that credit could be useful or pernicious: ‘It is useful to an industrious and thriving people. It is pernicious to the spendthrift and prodigal.’ (274). In the Principles, he elaborated on this by suggesting that debt financing could be useful since the alternative measure of hoarding savings meant withdrawing capital from lucrative trade (ii.549). His general argument was that we should not ‘rashly…conclude, that a nation is the poorer for every article of debt it has contracted, until we have considered to what effect the money so procured has been expended, and whether the public advantages gained by means of it are fully adequate to the risk and the cost.’ (ii.455). He further pointed out that the practice of public credit was most suitable in countries where people or their representatives had a share in the government, since it required ‘that the good faith of the public should be known’ (ii.450).
True to the theory of unintended consequences and spontaneous order explored at length in the Essay, Ferguson tended to be suspicious of centralised planning. Indeed, in the Principles, Ferguson cited Smith’s Wealth of Nations as an authority on the potential destructiveness of government intervention in the economy (ii.427). He argued that government should not protect certain sectors or monopolies, but promote ‘the freedom of trade’ and give ‘equal protection…to the people in every branch of commerce unrestrained and unforced’ (ii.430). Instead, the key regulator of commerce for Ferguson was the private interest of the trader. This principle was as far removed as it could be from public spirit, but the wealth it produced for individuals benefited the state by providing productive labour and commodities. Accordingly, Ferguson stressed that ‘private interest in trade operates with the least erring direction for the public benefit, and is secure of its purpose, where public councils would mistake or miss of their aim.’ (ii.425). 
In a later piece, I will reveal how Ferguson continued to grapple with Smith’s theories and legacy in his private correspondence in old age and adopted a more critical attitude, citing new archival evidence which will be published for the first time in a forthcoming edition I am co-editing with Ian Stewart: Adam Ferguson’s Later Writings: New Letters and an Essay on the French Revolution, to be published by Edinburgh University Press. 
Primary sources cited:
Adam Ferguson, An Essay on the History of Civil Society (London, fourth revised ed., 1773[1767]).
Adam Ferguson, An Essay on the History of Civil Society, ed. Oz-Salzberger (Cambridge: Cambridge University Press, 1995 [1767]).
Adam Ferguson, Institutes of Moral Philosophy (Edinburgh, 1769).
Adam Ferguson, Principles of Moral and Political Science (2 vols., Edinburgh, 1792)
E. C. Campbell and Ian Simpson Ross (eds.), The Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1985).
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (2 vols., Indianapolis: Liberty Fund, 1982 [1776]).
Further Reading:
Anthony Brewer, ‘Adam Ferguson, Adam Smith, and the Concept of Economic Growth’, History of Political Economy, 31 (1999), 237-54.
Ronald Hamowy, ‘Adam Smith, Adam Ferguson, and the Division of Labour’, Economica, 35 (1968), 249-59.
Ronald Hamowy, The Scottish Enlightenment and the Theory of Spontaneous Order (Carbondale: Journal of the History of Philosophy Monograph Series, 1987).
Iain McDaniel, Adam Ferguson in the Scottish Enlightenment: The Roman Past and Europe’s Future (Cambridge, MA: Harvard University Press, 2013).
Max Skjönsberg. ‘Adam Ferguson on Partisanship, Party Conflict, and Popular Participation’, Modern Intellectual History, 16 (2019), 1-28.
Richard B. Sher, ‘Adam Ferguson, Adam Smith, and the Problem of National Defense’, Journal of Modern History, 61 (1989), 240-68. 
Craig Smith, Adam Ferguson and the Idea of Civil Society: Moral Science in the Scottish Enlightenment (Edinburgh: Edinburgh University Press, 2018).
Craig Smith, ‘The Scottish Enlightenment, Unintended Consequences and the Science of Man’, Journal of Scottish Philosophy, 7 (2009), 9-28.