Adam Smith and International Relations

international relations war free trade peace

Edwin van de Haar for AdamSmithWorks

In true liberal fashion, Adam Smith commenced his analysis of international politics with his view on human nature, which includes the idea that people are bound to quarrel and fight and are often guided by emotion rather than reason.
It is often overlooked that Adam Smith had a lot to say about international relations. However, questions of war, peace and international order were as important in the eighteenth century as they are today. To provide context: after four relatively tranquil decades at the beginning of the century, history took its ‘normal’ course again with the War of the Austrian secession (1740-48), the short-lived Jacobite rebellion in 1745 (with start and finish on Scottish soil), the Seven Years War (1756-63) and of course the revolutions in France and America in the last quarter of the century. These and other events ensured that the Scots, from Gershom Carmichael, to Francis Hutcheson, to David Hume and Adam Smith were not naïve in their international thought, as Richard Tuck noted. This article will provide a brief summary of Smith’s ideas in international relations.
Sympathy and nation
In true liberal fashion, Adam Smith commenced his analysis of international politics with his view on human nature, which includes the idea that people are bound to quarrel and fight and are often guided by emotion rather than reason. Also, humans are far more concerned with their own lives than with the welfare of others. Therefore, he noted, human conduct is not driven by concern over the welfare of humanity as a whole. 

Sympathy and fellow feelings are limited  in a geographical sense as well. In the Theory of Moral Sentiments Smith says that love for country and love for mankind co-exist, but are different. Countries are loved for their own sake, not because they are part of some world community. Feelings for the nation are part of human nature, people who give up their lives for the safety and glory of the country are to be admired. Humans are better off directing their love towards their own life and the people near to them, because that is in line with human capacity and man’s moral and natural inclinations and affections. So, in deviation from the Stoic part of his influences, Smith was definitely not a nationally-oriented  thinker.

International institutions
Instead, Smith views international politics as an anarchical society of states, and he regards external defense as the prime duty of the sovereign. This should be accomplished by the interplay of a number of ‘international institutions’.

Diplomacy is one of these institutions. It is important for states to keep good relations and good communications with one another. Smith emphasizes that the immunity of ambassadors should be sacred, although they should be imprisoned if they conspire against their host countries. Despite their political usefulness, their main task is commercial, through the protection of trade and other economic interests. 

Diplomats also have a crucial role to play in maintaining the balance of power. This balance allows groups of states to make arrangements and alliances (often through treaties) to militarily balance each other, with the (unintended) result that there will be less wars. It is a way to inspire mutual fear which prevents injustice done to independent nations. For him, the balance of power is ‘the most extensive form of public benevolence statesmen could offer’. Although it is no guarantee of  international tranquility, it does achieve international order which allows individuals and states to focus on economic and other matters.  

The influence of international law in the external defense of a state is more limited, but useful nevertheless. Smith admires Grotius, and shares his ideas about bringing ethics into questions of peace and war. International law brings some regulation into the relations between states, although Smith realizes its limitations, as there is no judge or power to see to the execution of the rules. Still, Smith embraces the just war tradition, because it brings ‘the same foundation as a law suit before a court’ and provides rules for belligerent parties in a war. This is useful, especially to try to prevent unnecessary harm done to innocent parties. 

Smith is no pacifist. He thinks war is inevitable in international relations, if only because it is impossible to rule out conflicts due to human nature. Diplomacy, the balance of power, and international law do not suffice to resolve conflicts. Sometimes war is needed, although he never endorses it lightly. The costs of war are large, and war leads to increasing public debt. Therefore wars should be paid by taxes that are immediately felt by the population, which would certainly shorten their length. On the other side, Smith also sees positive sides of war. It offers  chances on character building, as ‘warfare is the noblest... and most complicated’ art, where men learn to overcome the fear of death and develop the important virtue of self-control. 

Free trade does not bring peace          
There are a number of modern writers who connect Smith to the idea that trade leads to peace. Yet the evidence in his writings is to the contrary. As we saw above, in his mind, defense is required for any stable and wealthy state, and free trade -while important- can never be an absolute policy goal: ‘defense is more important than opulence’.   

Free trade is great for economic and cultural purposes, and it ‘ought naturally be a bond of union and friendship’ as Smith once wrote. However: the ’ought’ is no ‘is’. Smith never argues that trade is able to overcome the fundamental traits of human nature, or other causes of war, such as religion or geopolitics. Actually, he underlines that free trade could just as likely be a cause of war. ‘The jealousy of trade’ also leads to international conflict, and ‘the violence and injustice of rulers is an ancient evil for which/…the nature of human affairs can scarce admit of a remedy’. Additionally, he notes that free trade makes countries richer, which means they have more money to spend on defense. So it also allows the (geographical) extension of war, as happened in the colonies. 

Smith did not try not remedy this development, which he took as part of life. Instead he proposed a number of exceptions to the principles of free trade that were all related to defense, such as the preservation of the defense-related industry, or trade restrictions for foreign policy purposes.      

Smith’s ideas on international relations should be understood as an integral part of his moral philosophy, especially his views on human nature. He is no supporter of utopian schemes aimed at a peaceful world. In an anarchic world of states, sovereigns always have the prime task to provide defense, because only then their citizens can turn to economic and other interests. Diplomacy, international law, the balance of power, and sometimes war, contributed to that end. Free trade was great, but had no peace-fostering effects. Adam Smith’s insight into the world’s realities made sure he also made realistic analyses about questions of war, peace and international order.  

Adam Smith (1981),  An Inquiry into the Nature and Causes of the Wealth of Nations, Indianapolis, Liberty Fund.
Adam Smith (1982), Lectures on Jurisprudence, Indianapolis: Liberty Fund
Adam Smith (1984) The Theory of Moral Sentiments, Indianapolis: Liberty Fund. 

Edwin van de Haar (2009), Classical Liberalism and International Relations Theory. Hume, Smith, Mises, Hayek. New York and London: Palgrave Macmillan. 
Edwin van de Haar (2010), ‘The Liberal Divide over Trade, War and Peace’, in International Relations, 24(2): 132-154.
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.
Please also refer to the notes in the secondary sources.