Human Nature as the Foundation of Adam Smith’s International Theory

international trade self-interest man of system international relations

Edwin van de Haar for AdamSmithWorks

What can a Scottish Enlightenment-style "science of man" teach us about how to deal with our international neighbors? Van de Haar finds a close connection between Smith's moral philosophy and international politics and economics.

March 29, 2023
International relations is about human action. Of course, there are many institutions, rules, and organizations at the international level, all giving boundaries, guidelines, or incentives. Yet all of these are man-made. Ultimately, international relations is about people reaching agreement (or not) and making decisions, either good or bad, from the lowest grade civil servant to the head of state, alone or in groups. So, if you want to understand international politics you should (also) study people.
That is exactly what Adam Smith did, although international relations was just one of his many concerns. The study of the character of human nature was central to (Scottish) Enlightenment thought. Smith and his colleagues wanted to study the nature and the power of the human mind, much as Isaac Newton had set the standard for the study of the natural world in the 17th century. In their view the ‘science of human nature’ was still in its infancy, and they set out to study, among others, the role of reason, the passions and sentiments, to come to a new view on human sociability.
In this short contribution, some of Smith’s main findings are presented, in the larger context of his ideas about international politics and economics.

Smith’s view on human nature
In 1748, David Hume wrote in his Enquiry concerning Human Understanding, ‘it [is] universally acknowledged that there is a great uniformity among the actions of men, in all nations and ages, and human nature remains still the same in its principles and organizations’ (Hume, 1990:150). Smith agreed. Human behavior, including politics and economics (together referred to as ‘political economy’), could be traced back to the operation of mind and body. Therefore, economic and political behavior was also guided by the principles of ‘the science of man’. Smith studied those parts of human life as integral to his general moral philosophy, a philosophy that was explanatory and analyzed man as he was, not how he should become. The principles of human nature were universally applicable, and by studying them, men’s behavior would become more predictable, very much like the Newtonian approach to the natural sciences.

Smith took four steps in his analysis of human nature:
  • Describe the main features of the human mind.
  • Determine what happens in the interaction between people.
  • See to which moral practice this leads.
  • Note how people react in response to social, political, and economic questions.

He concluded that humans were uniform in their operating principles, such as the determining motives (passions), the source of knowledge (sense experience) and mode of operations (association of ideas). The faculties of speech and reason made humans different than (other) animals, although desires were far more important in the explanation of human behavior than reason. The latter was no source of virtue, only a means to reach judgement of right and wrong. The general maxims of morality were formed in experience and induction, for which reason was requisite. Smith followed his teacher Francis Hutcheson in stating that morality could not be based on the principle of self-interest.

Application in politics
Smith also noted that humans were social creatures, functioning in groups, and as members of society. Smith’s political economy, or ‘the science of the legislator’, had two goals: to enable people to provide for subsistence for themselves, and to provide the state with enough resources to pay for public services. Smith saw three public tasks: the duty to protect society from the violence of other societies; a justice system; and the duty of erecting public works and public institutions.
This would work best if the right kind of ruler was in power. Not the egoistic ‘man of system’, who would rule society like he played the pieces on the chess board, and who placed his own judgement above that of others, but rather the ‘man of public spirit’, who would govern with benevolence and humanity and would ‘never use more violence to his country than to his parents’. Smith’s political writings were (also) meant to reduce the possibility for men of system to do harm, not least through the introduction of legal rules, but also checks and balances including the separation of powers, free competition of ideas, public education and civic virtue.
The first public task mentioned above was about defense and therefore about international politics. In this field Smith did not limit himself to defense, but analyzed international affairs ‘bottom up’, starting with human nature. That was how he came to acknowledge that the nation was a central actor in international affairs, because the individual had a strong connection to his or her country. Applying his economic insights he argued for national defense by specialized forces, against many of his Scottish contemporaries who preferred a militia. Given human nature, war was inevitable, but its occurrence could be limited by the balance of power, together with the application of the Grotian just war principles. Positive international law could also be useful, but it’s power should not be overestimated (Van de Haar 2013).

International economics
Perhaps, Smith’s most famous contribution to the study of human nature was his assertion that all people had ‘the propensity to truck, barter and exchange’. From this, the division of labor and specialization follow, principles which undergird our modern economy, together with the accumulation and deployment of capital. For Adam Smith, economics was a natural part of human behavior.
Smith’s idea of natural liberty included the free exchange of ideas, sentiments and goods. Individuals has the right to economic conduct, this was another important part of his moral philosophy. He argued against political interference in the economy, hence his critique of mercantilism. The economic domain was far more important for most people than the political domain. Smith acknowledged that success in economics was tied to virtuous moral behavior, such as keeping contracts, saving, et cetera.
The importance of economics also spread out to the international level. Smith’s arguments in favor of free trade are well-known, as are his opposition to protectionism (‘the jealousy of trade’) and to monopolist trading companies such as the East India Company. Empires only cost money, he asserted. In line with the political views stemming from his view on human nature he did allow a small number of exceptions to the rule of free trade, for example for national defense, as ‘defense was of more importance than opulence’. He did not expect that trade would foster peace, again partly based on his view on human nature.

In Adam Smith’s moral philosophy, his view on human nature is tightly linked to his ideas on (international) politics and economics. One cannot understand the one, without the other. Of course his time differs from ours, but his ideas are still important for us. Individual people, their physical and psychological capacities, the human mind, will and determination still make the difference in world affairs.

Related Links
Edwin van de Haar, Adam Smith and International Relations, at Speaking of Smith.
An Animal That Trades, The Role of Authority, at AdamSmithWorks.
Walter Donway, The British East India Company: Hero of Free Trade? at AdamSmithWorks.

This contribution is based on Edwin van de Haar (2023, forthcoming) “Human Nature as the Foundation of Adam Smith’s International Theory”, in: Benjamin Bourcier and Mikko Jakonen (editors), British Modern International Theory in the Making, Palgrave Macmillan.
Christopher Berry (2012), Adam Smith’s “Science of Human Nature”, History of Political Economy 44, 471-492.
David Hume (1990), An Enquiry Concerning Human Understanding, Tom L. Beauchamp (editor), Oxford: Oxford University Press.
Adam Smith (1981), An Inquiry into the Nature and Causes of the Wealth of Nations, Indianapolis, Liberty Fund.
Adam Smith (1984), The Theory of Moral Sentiments, Indianapolis: Liberty Fund.
Edwin van de Haar (2013), ‘Adam Smith on Empire and International Relations’, in Christopher Berry,
Maria Pia Paganelli and Craig Smith (eds.), The Oxford Handbook of Adam Smith, Oxford: Oxford University Press, pp. 417-439.
Edwin van de Haar (2020), ‘Adam Smith and International Relations’, Adam Smith Works, February 3.