Smith was an intellectual magpie whose gems of wisdom still sparkle

“One thing I often tell my students about Adam Smith is to remember he lived a long time ago.” That’s the advice of Dr Maha Rafi Atal, Lecturer and Assistant Professor in Global Economy at the School of Social and Political Sciences in the University of Glasgow.

She notes that, unlike in Smith’s time as student, lecturer and ultimately as rector, modern universities have departments: a department of economics, a department of philosophy, a department of politics and a department of education. 

“If you do a degree in any of these departments you study there, you learn something quite specific. All of these disciplines exist in a formal structure, yet none of this existed in Adam Smith’s time,” she says.

“At the University of Glasgow Adam Smith nominally had a professorship in philosophy, however what he wrote about is way above and beyond what would be covered by somebody who would be considered a philosopher right now.

“He wrote about things that we would think of as real philosophical questions. What is the meaning of life? How do you have a good life?

Things like that. However, he also posed questions about the economy. How should the tax system be structured? What is the purpose of government? How should we educate our children? How should we organise farming resources?”

Dr Atal notes that such aspects of gaining knowledge would today incorporate an entire degree programme beyond that a student would experience as one single topic in one specific department. 

‘So, when we consider Adam Smith as a ‘man for all seasons’, obviously he was a very intelligent, interesting person but that’s also a reflection of the normality of being a scholar of all things at that particular time. You had to be a polymath: a bit of a magpie.”

Dr Atal’s own work focuses on modern capitalism and, in particular, contemporary business and companies. This includes viewing how large corporations through time have become so powerful, both in terms of the influence they exercise in the global economy and how wealthy they actually are, but also how they influence our society, our politics and our culture more broadly.

“Facebook, Google, Amazon and so on are obviously very large and very wealthy as economic powerhouses, and this has economic implications around what tax they’re paying or not paying in the countries where they operate. Obviously. there’s been some controversy about that. 

“This is a situation that is hugely influential on our culture and on our politics, domestically and globally. It raises questions about the impact these platforms have on the way elections are conducted, how quite toxic ideas can rapidly spread on social media, and the wider impact these actions have on our culture and our society as a whole. 

“Smith was very interested in and troubled by the role of the really powerful corporations of his day, which were the vast colonial trading companies. The most famous one – and the one that we still hear of today – is the East India Company. Others, too, were involved in the tobacco and cotton trades and, by implication, in the slave trade in the American and Asian colonies. 

“Of course, they exerted enormous economic power at the time and had the kind of revenues that were vastly more than the GDP of any countries, including Britain, who sponsored them. They also had their own private armies and even their own currencies. This meant they could exercise a lot of influence on British and global politics.”

Dr Maha Rafi Atal, Lecturer and Assistant Professor in Global Economy at the School of Social and Political Sciences in the University of Glasgow

Dr Atal points out that even 300 years ago Adam Smith was writing about what he believed were the economically distorting effects of having companies that have extraordinarily special relationships with the state: organisations he believed were receiving perks from the state body and that this was not helpful for a truly free market. 

“He was quite critical of that and he was worried that the companies were the tail wagging the dog of government,” says Dr Atal, “and that the British government, Indian government or any other government could be influenced to do things that would not be in the interest of the public because of the sheer size of these companies.

“We say sometimes today ‘too big to fail, too big to regulate’. Adam Smith would not have used those words, but those are certainly his ideas. 

“It sounds very familiar, right? He’s talking about what we would now call state capture. That to me is something I come back to quite often in my understanding of Adam Smith: the fact of what he wrote about those companies and the particular and apposite warnings that he’s still offering us.

“At a certain point, these companies simply become so big, they’re actually controlling the government and then the government is no longer accountable to the people.”

That Smith’s two great works – The Theory of Moral Sentiments and The Wealth of Nations – both still have such a lasting and tangible impact on modern thinking is an aspect of his intellectual legacy of the man that still surprises many, but not Dr Atal.

“I think one of the things that his insight into large corporations and the critique Smith is making is that when these companies become so large that governments can no longer regulate them, this becomes that norm because the legislature has given them certain regulatory carve-outs, have turned a blind eye to their conduct, have given exemptions and so on.

“Ultimately, what you have is not a free market because they’re distorting the market and, therefore, people in the market are not actually able to engage freely.

"One of the things I always say to my students, Smith and his peers speak English in the 18th-Century sense, they speak a different English than we speak today. So when they say freedom in the market, or free market or free commerce or free exchange, they don’t just mean that money can move freely. They mean that all of the people participating in the market are politically free human beings.

“This is why people like Adam Smith would have had a real problem with a violation of people’s rights as human beings; it actually inserts into the economy this basic unfreedom, and then the whole economy is not free because the labour in it is not transacting freely. 

“Again, that’s another other piece of Smith’s work that still feels very contemporary.”

“Thinking in the broader corporate world today, some of what is taking place around trying to unionise workers in an economy where lots of people are working in a casualised fashion as state workers on precarious contracts, means we’re having to really rethink how we organise labour environment.

“You can’t have a free economy, if the people in it are not really free in the choices that they’re making. I think, in terms of Adam Smith’s legacy, that’s a very contemporary idea, given everything that’s happening just now with the trade unions and industrial disputes all across the UK and worldwide.

“It’s possible to read historical thinkers in a clumsy way. The historian Holly used to say the past is a foreign country, that they do things differently there. So you know, it’s always difficult to apply our contemporary left or right party labels to somebody who lived and died hundreds of years ago. 

“I think it’s not fair to say, if Smith were alive today, he would think ‘this’. That’s quite different from saying Smith is making this argument about problems with this type of labour or this particular type of corporation and we can see that those particular problems still exist. 

“It speaks to the richness of his skill to write broadly on a lot of topics that people of many different ideological persuasions can find something of value in or something that speaks to them directly in his work.” 
Dr Atal is keen to note that one of the primary things Smith was writing about was the necessity of labour in all aspects being free and what that meant for his personal commitment to abolishing slavery. 

“That’s something I hope people do take away from the tercentenary commemoration because these events are happening at a time when the University of Glasgow has, of course, recently undertaken quite a full accounting of its own relationship with the history of the British Empire. 

“I think this is an opportunity perhaps to further those conversations because Smith was himself someone who wrestled with the idea of colonialism and, in the end, The Wealth of Nations spoke strongly against it.”

Look out for part four of our Adam Smith tercentenary series in tomorrow’s Herald