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Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism
The unlikely story of how Americans canonized Adam Smith as the patron saint of free markets
Originally published in 1776, Adam Smith’s The Wealth of Nations was lauded by America’s founders as a landmark work of Enlightenment thinking about national wealth, statecraft, and moral virtue. Today, Smith is one of the most influential icons of economic thought in America. Glory Liu traces how generations of Americans have read, reinterpreted, and weaponized Smith’s ideas, revealing how his popular image as a champion of American-style capitalism and free markets is a historical invention.
Drawing on a trove of illuminating archival materials, Liu tells the story of how an unassuming Scottish philosopher captured the American imagination and played a leading role in shaping American economic and political ideas. She shows how Smith became known as the father of political economy in the nineteenth century and was firmly associated with free trade, and how, in the aftermath of the Great Depression, the Chicago School of Economics transformed him into the preeminent theorist of self-interest and the miracle of free markets. Liu explores how a new generation of political theorists and public intellectuals has sought to recover Smith’s original intentions and restore his reputation as a moral philosopher.
Charting the enduring fascination that this humble philosopher from Scotland has held for American readers over more than two centuries, Adam Smith’s America shows how Smith continues to be a vehicle for articulating perennial moral and political anxieties about modern capitalism.
Originally published in 1776, Adam Smith’s The Wealth of Nations was lauded by America’s founders as a landmark work of Enlightenment thinking about national wealth, statecraft, and moral virtue. Today, Smith is one of the most influential icons of economic thought in America. Glory Liu traces how generations of Americans have read, reinterpreted, and weaponized Smith’s ideas, revealing how his popular image as a champion of American-style capitalism and free markets is a historical invention.
Drawing on a trove of illuminating archival materials, Liu tells the story of how an unassuming Scottish philosopher captured the American imagination and played a leading role in shaping American economic and political ideas. She shows how Smith became known as the father of political economy in the nineteenth century and was firmly associated with free trade, and how, in the aftermath of the Great Depression, the Chicago School of Economics transformed him into the preeminent theorist of self-interest and the miracle of free markets. Liu explores how a new generation of political theorists and public intellectuals has sought to recover Smith’s original intentions and restore his reputation as a moral philosopher.
Charting the enduring fascination that this humble philosopher from Scotland has held for American readers over more than two centuries, Adam Smith’s America shows how Smith continues to be a vehicle for articulating perennial moral and political anxieties about modern capitalism.
384 pages, Hardcover
First published November 29, 2022
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Displaying 1 - 22 of 22 reviews
January 9, 2023
This book is not meant for the general reader. Like Smith’s two famous works, Adam Smith’s America by Lui is dense and confounding to anyone without a cursory knowledge or interest in academia. I bought this book hoping to read about Smith’s influence on political figures’ ideology in America. There are two passing mentions of Reagan and countless footnotes to bygone economic papers and lectures from 18th century academics.
I’m sure Lui will be celebrated for her thorough research at AEA conventions, but I found this book frustrating for its inaccessibility.
I’m sure Lui will be celebrated for her thorough research at AEA conventions, but I found this book frustrating for its inaccessibility.
August 20, 2022
Liu takes a fresh approach to Adam's Smith's WEALTH OF NATIONS. The book many consider to be the bible of Free Market Capitalism played a part in the French Revolution and the American revolution. This book examines who, how and why Adam Smith was embraced. Fascinating!
January 16, 2023
Glory M. Liu, a Harvard University Professor, asserts a thesis that economists, politicians, and historians have interpreted and misinterpreted Adam Smith's work to address contemporary issues and support their ideological positions. Innovatively, she applies an analytic technique called reception history, which assesses why some ideas become widely accepted and others fall by the wayside. Liu traces the interpretations and reinterpretations of Smith's works throughout American history.
First, she describes Smith's influence on the founding generation, such as James Madison's Federalist Papers and Alexander Hamilton's Report on Manufactures. Next, Liu explains why Americans believed that Smith was the father of the political economy discipline. Later, Smith became the touchstone for all sides of the 19th-century free trade and tariff debates.
Perhaps, Liu's most interesting Smith scholarship assessments are associated with Milton Friedman and the Chicago School of Economics. Cheekily, she refers to the Chicago Smith, linguistically noting that the free market economists had perverted Smith's analysis of markets and moral philosophy. Interestingly, Liu asserts that contemporary leftists and conservatives cite Smith's works to justify their economic, moral and political policy judgments. While brief, her review of Smith in recent policy debates is most exciting and leaves the reader wanting more. Finally, I would have liked to see more of her views on Smith's legacy and take stronger stances on weaker interpretations. However, Liu provides copious, detailed footnotes as links to other perspectives.
While Liu's monograph requires careful reading and despite the need to take an occasional detour to understand an underdefined passage, I recommend that people interested in the conjunction of history, economics, politics, and moral philosophy read her book. Additionally, her work is illustrative of reception history, an underdeveloped historical method.
First, she describes Smith's influence on the founding generation, such as James Madison's Federalist Papers and Alexander Hamilton's Report on Manufactures. Next, Liu explains why Americans believed that Smith was the father of the political economy discipline. Later, Smith became the touchstone for all sides of the 19th-century free trade and tariff debates.
Perhaps, Liu's most interesting Smith scholarship assessments are associated with Milton Friedman and the Chicago School of Economics. Cheekily, she refers to the Chicago Smith, linguistically noting that the free market economists had perverted Smith's analysis of markets and moral philosophy. Interestingly, Liu asserts that contemporary leftists and conservatives cite Smith's works to justify their economic, moral and political policy judgments. While brief, her review of Smith in recent policy debates is most exciting and leaves the reader wanting more. Finally, I would have liked to see more of her views on Smith's legacy and take stronger stances on weaker interpretations. However, Liu provides copious, detailed footnotes as links to other perspectives.
While Liu's monograph requires careful reading and despite the need to take an occasional detour to understand an underdefined passage, I recommend that people interested in the conjunction of history, economics, politics, and moral philosophy read her book. Additionally, her work is illustrative of reception history, an underdeveloped historical method.
June 17, 2023
Illuminating.
September 9, 2023
As was the focus of The Big Myth by Naomi Oreskes, Erik M. Conway (and which I recently reviewed on Goodreads), this excellent – but, at times, daunting – review of how the noted economic thinker Adam Smith has been understood and intentionally “spun” over the course of US history since his publication of The Wealth of Nations in 1776 reveals how “big money” and libertarian conservatives have repeatedly sought to minimize or eliminate Smith’s clear rootedness in the larger field of 18th century humanities integrated approach to knowledge in order to falsely portray his views on economics as supporting “the market” being free from any government “interference” or regulation.
Ms. Liu has performed an amazing feat of scholarship, for she has ably tackled almost 250 years of commentary on, and interpretation of, Smith’s book. Not only does she list 23 pages of “works cited” at the conclusion of this volume, but it is a rare page in the book itself that does not feature at least one – and usually several – extensive footnotes.
The only reason I consider this possibly “daunting” for some is its thorough immersion in the vagaries of economic theory and interpretation over this two and one-half century period, including differing national interpretations, too, and not just primarily those of English and American scholars and theorists.
As she points out in her prologue, her purpose in writing this book was not to give us yet another interpretation of Smith’s The Wealth of Nations but, rather, to reveal how it has been interpretated, taught, and distorted over the years since its publication. Inevitably, all who read Smith approached him through their own lens of experience and expectation. Consequently, not all of what she considers “partial,” “incomplete,” or “misleading” interpretations of Smith were intentional. As but one example: when Smith wrote “economics” was not a separate sphere of knowledge but, rather, existed within the larger attempt by Enlightenment thinkers to understand humankind in toto. Yes, people engaged in trade and barter, and yes, governments found the consequences of these on a larger scale very important for national prestige and advancement, but such also took place – or should take place – within an overriding ethical context that governed what was permissible, acceptable, and moral.
However, as “economics” began to be considered a separate field of study – as well as of employment – Smith’s integrated understanding began to be exampled more piece-meal. Scholars of economics wanted to understand how things worked apart from moral concerns, while those engaged in competitive trade focused more on how Smith thought “markets” should most ably work.
It was only from the mid-19th century on – at precisely the time when the gap between the wealthy few and the impoverished and struggling many began to balloon – that scholars and others began to explore in greater depth the virtues of markets operating independent of government interference. And they justified this by glorifying Smith’s famous idea – but, in reality, something he little dwelt on – of “the market’s” alleged invisible hand, the concept that “the markets” possessed an inherent “wisdom” that would adjust to changing circumstances far more ably, efficiently, and fairly than could be achieved through government “intervention.” And, as the decades moved from the 19th to the mid-20th centuries, such “intervention” included all forms of attempted regulation, including child labor laws, laws addressing workplace safety, and the right of workers to form unions.
“This book,” she says, “is about who Adam Smith was and who he became in America. It charts how Americans have read, taught, debated, and used Smith’s ideas throughout history. It shows how Smith’s reputation as the ‘father of economics’ is an historical invention….” (P. xv)
For me, two things in particular stood out as being of first-rate importance:
1. Smith was not “just” an economist, but a man concerned with the whole of human experience, including suffering and loss and the responsibility of society to mitigate such suffering through appropriate action.
She writes that “he is remembered as an ambitious social scientist of the Enlightenment, whose The Wealth of Nations was but one part of a larger ‘science of man.’ This science sought to reveal and explain the hidden forces that governed human behavior and human society. In The Theory of Moral Sentiments, published in 1759, seventeen years before The Wealth of Nations, Smith explored how and why people learn moral behavior through the process of imaginative projection and sympathetic exchange. Smith also planned a work on the general principles of law and government, as well as a history of literature, philosophy, poetry, and rhetoric, both of which he never completed and ultimately had destroyed before his death in 1790.” (P. xv)
2. The myth of “the market” and the miracles supposedly wrought by its invisible hand are distortions of Smith’s work and the creation of those who increasingly became identified with extreme libertarianism.
In the 1880s, an American economist named Richard Ely attempted the first notable “push-back” against misinterpretations of Smith by attempting to “return economics to its humanistic, ethical foundations.” (P. 146)
Ely argued that “the end and purpose of economic life are held to be the greatest good of the greatest number, or of society as a whole.” “In Ely’s opinion, it was clear that the science of a political economy had foundations in social ethics, and that individual and society were mutually constitutive and ‘united in one purpose.’” (P. 149)
“The crises of American capitalism during the Progressive Era forced economists to once again reckon with a basic question about their profession: to what extent was economics directed toward what ought to be as opposed to what is? …These anxieties over the ethical and political boundaries of economics conditioned the way that economists reconstructed Smith’s intentions as a moral philosopher and as a political economist…. Their view of the consistency, compatibility, and contemporary relevance of Smith was therefore refracted through a much wider methodological debate about whether economics – and the American political economy itself – could and should be directed toward ethical ends.” (P. 149-50)
In a work entitled The Past and the Present of Political Economy, Ely wrote: [Present-day political economy] “no longer permits the science to be used as a tool in the hands of the greedy and the avaricious for keeping down and oppressing the laboring classes. It does not acknowledge laissez-faire as an excuse for doing nothing while people starve, nor allow the all-sufficiency of competition as a plea for grinding the poor. It denotes a return to the grand principle of common sense and Christian precept.” (P. 155)
Beginning in the 1940s, a major reaction to the New Deal and its expansionist, pro-labor and pro-majority population government policies set in with a vengeance. Buoyed by economic theorists from the so-called Austrian school, the University of Chicago became the home of some of the most radical interpretations – indeed, outright misinterpretations – of Smith’s work in the purpose of serving “the markets” and their “right to operate unimpeded by any form of government interference.”
“‘Self-interest’ and ‘the invisible hand’ became synonymous with not only the market itself, but also with an entire way of thinking about society as being organized through the natural, automatic, and self-generating actions of individual economic actors.” (P. 192)
According to the Chicago school, “Smith, in other words, is an economist who believes in the social productiveness of self-interest alone, and whose master metaphor of the ‘invisible hand’ illustrates how free markets – not government – protect and promote individual freedom.” (P. 293)
By the late 1940s and 1950s, “This version of economically oriented liberalism encompassed a broad social theory: society was made up of autonomous, self-interested individuals; market mechanisms – specifically the price mechanism – facilitated the exchange of goods, services, ideas, and values; and market interactions were not just mutually beneficial but also globally stabilizing. Combined with an anti-statis political outlook, this worldview shaped the methodological choices by which economists reached their scientific conclusions, which, in turn, reinforced their political and philosophical commitments.” (P. 224)
All of this is the background to the poisonous soup of trickle-down theory embraced by both the Right and by neoliberals from the Reagan years until nearly the present.
Although the policies embraced by President Biden, and advanced by such people as Senators Warren and Sanders, are definitely a return to the progressive and majority-serving goals of FDR’s New Deal, we have not seen a commensurate return to an economic program and manifesto that explains to the American people both the false doctrines of those who have crammed welfare for the rich down our throats and the reality of how big money – coupled with myriad far-Right “think tanks” which constantly churn our propaganda supporting big money’s agenda – has thoroughly corrupted our political and civic life for decades.
This book can help you better understand how Smith has been badly misinterpreted and, thus, play a key role in helping us move together from falsehood and lies to a clear-viewed understanding of what is happening, why it is happening, and what must be done to change things.
Ms. Liu has performed an amazing feat of scholarship, for she has ably tackled almost 250 years of commentary on, and interpretation of, Smith’s book. Not only does she list 23 pages of “works cited” at the conclusion of this volume, but it is a rare page in the book itself that does not feature at least one – and usually several – extensive footnotes.
The only reason I consider this possibly “daunting” for some is its thorough immersion in the vagaries of economic theory and interpretation over this two and one-half century period, including differing national interpretations, too, and not just primarily those of English and American scholars and theorists.
As she points out in her prologue, her purpose in writing this book was not to give us yet another interpretation of Smith’s The Wealth of Nations but, rather, to reveal how it has been interpretated, taught, and distorted over the years since its publication. Inevitably, all who read Smith approached him through their own lens of experience and expectation. Consequently, not all of what she considers “partial,” “incomplete,” or “misleading” interpretations of Smith were intentional. As but one example: when Smith wrote “economics” was not a separate sphere of knowledge but, rather, existed within the larger attempt by Enlightenment thinkers to understand humankind in toto. Yes, people engaged in trade and barter, and yes, governments found the consequences of these on a larger scale very important for national prestige and advancement, but such also took place – or should take place – within an overriding ethical context that governed what was permissible, acceptable, and moral.
However, as “economics” began to be considered a separate field of study – as well as of employment – Smith’s integrated understanding began to be exampled more piece-meal. Scholars of economics wanted to understand how things worked apart from moral concerns, while those engaged in competitive trade focused more on how Smith thought “markets” should most ably work.
It was only from the mid-19th century on – at precisely the time when the gap between the wealthy few and the impoverished and struggling many began to balloon – that scholars and others began to explore in greater depth the virtues of markets operating independent of government interference. And they justified this by glorifying Smith’s famous idea – but, in reality, something he little dwelt on – of “the market’s” alleged invisible hand, the concept that “the markets” possessed an inherent “wisdom” that would adjust to changing circumstances far more ably, efficiently, and fairly than could be achieved through government “intervention.” And, as the decades moved from the 19th to the mid-20th centuries, such “intervention” included all forms of attempted regulation, including child labor laws, laws addressing workplace safety, and the right of workers to form unions.
“This book,” she says, “is about who Adam Smith was and who he became in America. It charts how Americans have read, taught, debated, and used Smith’s ideas throughout history. It shows how Smith’s reputation as the ‘father of economics’ is an historical invention….” (P. xv)
For me, two things in particular stood out as being of first-rate importance:
1. Smith was not “just” an economist, but a man concerned with the whole of human experience, including suffering and loss and the responsibility of society to mitigate such suffering through appropriate action.
She writes that “he is remembered as an ambitious social scientist of the Enlightenment, whose The Wealth of Nations was but one part of a larger ‘science of man.’ This science sought to reveal and explain the hidden forces that governed human behavior and human society. In The Theory of Moral Sentiments, published in 1759, seventeen years before The Wealth of Nations, Smith explored how and why people learn moral behavior through the process of imaginative projection and sympathetic exchange. Smith also planned a work on the general principles of law and government, as well as a history of literature, philosophy, poetry, and rhetoric, both of which he never completed and ultimately had destroyed before his death in 1790.” (P. xv)
2. The myth of “the market” and the miracles supposedly wrought by its invisible hand are distortions of Smith’s work and the creation of those who increasingly became identified with extreme libertarianism.
In the 1880s, an American economist named Richard Ely attempted the first notable “push-back” against misinterpretations of Smith by attempting to “return economics to its humanistic, ethical foundations.” (P. 146)
Ely argued that “the end and purpose of economic life are held to be the greatest good of the greatest number, or of society as a whole.” “In Ely’s opinion, it was clear that the science of a political economy had foundations in social ethics, and that individual and society were mutually constitutive and ‘united in one purpose.’” (P. 149)
“The crises of American capitalism during the Progressive Era forced economists to once again reckon with a basic question about their profession: to what extent was economics directed toward what ought to be as opposed to what is? …These anxieties over the ethical and political boundaries of economics conditioned the way that economists reconstructed Smith’s intentions as a moral philosopher and as a political economist…. Their view of the consistency, compatibility, and contemporary relevance of Smith was therefore refracted through a much wider methodological debate about whether economics – and the American political economy itself – could and should be directed toward ethical ends.” (P. 149-50)
In a work entitled The Past and the Present of Political Economy, Ely wrote: [Present-day political economy] “no longer permits the science to be used as a tool in the hands of the greedy and the avaricious for keeping down and oppressing the laboring classes. It does not acknowledge laissez-faire as an excuse for doing nothing while people starve, nor allow the all-sufficiency of competition as a plea for grinding the poor. It denotes a return to the grand principle of common sense and Christian precept.” (P. 155)
Beginning in the 1940s, a major reaction to the New Deal and its expansionist, pro-labor and pro-majority population government policies set in with a vengeance. Buoyed by economic theorists from the so-called Austrian school, the University of Chicago became the home of some of the most radical interpretations – indeed, outright misinterpretations – of Smith’s work in the purpose of serving “the markets” and their “right to operate unimpeded by any form of government interference.”
“‘Self-interest’ and ‘the invisible hand’ became synonymous with not only the market itself, but also with an entire way of thinking about society as being organized through the natural, automatic, and self-generating actions of individual economic actors.” (P. 192)
According to the Chicago school, “Smith, in other words, is an economist who believes in the social productiveness of self-interest alone, and whose master metaphor of the ‘invisible hand’ illustrates how free markets – not government – protect and promote individual freedom.” (P. 293)
By the late 1940s and 1950s, “This version of economically oriented liberalism encompassed a broad social theory: society was made up of autonomous, self-interested individuals; market mechanisms – specifically the price mechanism – facilitated the exchange of goods, services, ideas, and values; and market interactions were not just mutually beneficial but also globally stabilizing. Combined with an anti-statis political outlook, this worldview shaped the methodological choices by which economists reached their scientific conclusions, which, in turn, reinforced their political and philosophical commitments.” (P. 224)
All of this is the background to the poisonous soup of trickle-down theory embraced by both the Right and by neoliberals from the Reagan years until nearly the present.
Although the policies embraced by President Biden, and advanced by such people as Senators Warren and Sanders, are definitely a return to the progressive and majority-serving goals of FDR’s New Deal, we have not seen a commensurate return to an economic program and manifesto that explains to the American people both the false doctrines of those who have crammed welfare for the rich down our throats and the reality of how big money – coupled with myriad far-Right “think tanks” which constantly churn our propaganda supporting big money’s agenda – has thoroughly corrupted our political and civic life for decades.
This book can help you better understand how Smith has been badly misinterpreted and, thus, play a key role in helping us move together from falsehood and lies to a clear-viewed understanding of what is happening, why it is happening, and what must be done to change things.
January 16, 2023
This excellent book is a reception history of Adam Smith’s work, which means that Glory Liu covers how other political economists, as well as economists (a somewhat different animal from the former), and statesmen thought about and used his work to inform their thinking or to validate their policies. If you had asked me before I read this book to name some famous economists and how they contributed to the field, I would have said Adam Smith and Milton Friedman without anything in between. Now I have a solid beginner’s sense of how we progressed from Adam Smith, a man of the Scottish Enlightenment who saw capitalist/free trade markets as the new level playing field that would promote an economy of abundance, to Milton Friedman, the advocate of pure unregulated markets with an almost mystical faith in an invisible hand. As someone with no knowledge of economics whatsoever, I did rely on the chatbot quite a bit to get some basic background along the way to find out things like who was Ricardo, Hayek, Stigler and so forth, names that would be familiar to most people with a passing interest in the study of economics.
What Liu and others admire most in Smith was his thoughtful empiricism; his ability to provide careful accounts of behavior in the marketplace and use them to draw conclusions. Liu emulates this care in the way she looks at the interpreters of Smith throughout the centuries. Like Smith, she resists dogma or too many intractable conclusions before she commits to her position on how we can best use him going forward. For anyone who does have some sense of economic history, this was a highly accessible account of Adam Smith’s ideas and how economists have agreed, disagreed, built upon, or appropriated his thinking. Liu tells us she will dig Smith out from under their interpretations and distortions, distortions which take us far away from a man who believed capitalism would save us from market capture of any kind ––be it monarchical or plutocratic. The book more than delivers on this promise and is very thought-provoking as our world, with its new dislocating technologies, is much like the world of Smith’s time, which was undergoing a huge shift from mercantilism to capitalism and industrialization.
What emerges in the book are a number of ways people struggle to understand the work of Adam Smith. Some of the struggles seem to be genuinely concerned with making sense of contradictions people believed his work contained, while other struggles seem to be more cynically focussed on harnessing the name of Adam Smith to impose their own desired ordering of the the economy, while claiming that their imposed order is in fact the true and natural state of trade as documented by Adam Smith himself.
The most famous of these struggles is called Das Adam Smith Problem, which arose out of a perceived conflict between the importance Smith placed on human’s capacity for sympathy in guiding economic decisions as described in his Theory of Moral Sympathy VERSUS the importance he placed on self interest in The Wealth of Nations. Liu suggests that Smith was a philosopher first, whose Theory of Moral Sympathies laid out his vision, which contributed to his beliefs about the potential of capitalism for a fairer world in Wealth of Nations.
Many economists have tried to subordinate his moral philosophy and make it shrink to fit the more narrow dogma of free trade and libertarian policies, insisting that tampering with this dogma must be avoided at all costs. Where free trade zealots insist Smith abandoned his view of the importance of sympathy as a guiding force in his later works, today’s economists show that Smith returned to revise Moral Sympathies in 1790 as the problems of a developing capitalism emerged. Through the years, his accrued observations caused him to develop the view that the tyranny of absolute monarchy and mercantilism over the market were being replaced by new, undesirable forms of market capture within the framework of capitalism.
As she wends her way through the most influential economic philosophers over the centuries, Liu provides a reception history establishing how Smith went from being the pre-capitalist man whose hopes for capitalism included an economy of abundance for as many people as possible to a neoliberal/neoconservative purveyor of an Ayn Randian dystopian utopia (although Liu never mentions Rand). Current economists continue to challenge this myopic read of his work.
This is the time to put this book on at least one syllabus of every school of economics or business. There are many indications that business schools are taking a fresh look at the logic of what we associate with the Chicago school ethos. This book also would work as a framework for teaching the history of economic thought, and you could hang a semester’s worth of readings on it.
Liu encourages the study of Adam Smith. She does not pretend in any way to be the ultimate arbiter of what Adam Smith intended, and she cautions against doing so. She acknowledges that speaking for Adam Smith always involves the infusion of our own thinking, and I think she wants us to be aware that if we find ourselves using his name to get exactly what we want, we should give ourselves a red flag rather than a gold star. But still and all, she so values his work and probably considers it better to risk having his name taken in vain than to have no one speak for him at all.
What Liu and others admire most in Smith was his thoughtful empiricism; his ability to provide careful accounts of behavior in the marketplace and use them to draw conclusions. Liu emulates this care in the way she looks at the interpreters of Smith throughout the centuries. Like Smith, she resists dogma or too many intractable conclusions before she commits to her position on how we can best use him going forward. For anyone who does have some sense of economic history, this was a highly accessible account of Adam Smith’s ideas and how economists have agreed, disagreed, built upon, or appropriated his thinking. Liu tells us she will dig Smith out from under their interpretations and distortions, distortions which take us far away from a man who believed capitalism would save us from market capture of any kind ––be it monarchical or plutocratic. The book more than delivers on this promise and is very thought-provoking as our world, with its new dislocating technologies, is much like the world of Smith’s time, which was undergoing a huge shift from mercantilism to capitalism and industrialization.
What emerges in the book are a number of ways people struggle to understand the work of Adam Smith. Some of the struggles seem to be genuinely concerned with making sense of contradictions people believed his work contained, while other struggles seem to be more cynically focussed on harnessing the name of Adam Smith to impose their own desired ordering of the the economy, while claiming that their imposed order is in fact the true and natural state of trade as documented by Adam Smith himself.
The most famous of these struggles is called Das Adam Smith Problem, which arose out of a perceived conflict between the importance Smith placed on human’s capacity for sympathy in guiding economic decisions as described in his Theory of Moral Sympathy VERSUS the importance he placed on self interest in The Wealth of Nations. Liu suggests that Smith was a philosopher first, whose Theory of Moral Sympathies laid out his vision, which contributed to his beliefs about the potential of capitalism for a fairer world in Wealth of Nations.
Many economists have tried to subordinate his moral philosophy and make it shrink to fit the more narrow dogma of free trade and libertarian policies, insisting that tampering with this dogma must be avoided at all costs. Where free trade zealots insist Smith abandoned his view of the importance of sympathy as a guiding force in his later works, today’s economists show that Smith returned to revise Moral Sympathies in 1790 as the problems of a developing capitalism emerged. Through the years, his accrued observations caused him to develop the view that the tyranny of absolute monarchy and mercantilism over the market were being replaced by new, undesirable forms of market capture within the framework of capitalism.
As she wends her way through the most influential economic philosophers over the centuries, Liu provides a reception history establishing how Smith went from being the pre-capitalist man whose hopes for capitalism included an economy of abundance for as many people as possible to a neoliberal/neoconservative purveyor of an Ayn Randian dystopian utopia (although Liu never mentions Rand). Current economists continue to challenge this myopic read of his work.
This is the time to put this book on at least one syllabus of every school of economics or business. There are many indications that business schools are taking a fresh look at the logic of what we associate with the Chicago school ethos. This book also would work as a framework for teaching the history of economic thought, and you could hang a semester’s worth of readings on it.
Liu encourages the study of Adam Smith. She does not pretend in any way to be the ultimate arbiter of what Adam Smith intended, and she cautions against doing so. She acknowledges that speaking for Adam Smith always involves the infusion of our own thinking, and I think she wants us to be aware that if we find ourselves using his name to get exactly what we want, we should give ourselves a red flag rather than a gold star. But still and all, she so values his work and probably considers it better to risk having his name taken in vain than to have no one speak for him at all.
April 28, 2023
Very much an academic treatise. For the layman a decent long form essay would have sufficed.
August 15, 2025
- The age of Enlightenment was the era where the emerging independent America was born in. The idea of the age was that many things have connections towards each other, and could be studied (eventually understood) scientifically
- Smith's first book, Theory of Moral Sentiments, was a smash hit not just in Europe, but also in America
- History always repeats itself: just like the doomsday sayers of today, back then the idea that "food supply will run out" or "wage increase will eventually become unsustainable" was also accepted as main street theory
This is a really fascinating book.
In essence, the author argues that Smith’s ideas - which are interconnected and nuanced, got “watered down” once become more widespread (especially once becoming the de facto thinking behind the American economic thought (particularly the American freshwater economic school of thought).
Without going too much into the weeds - while The Wealth of Nations did touch on many of the things that the American school of thought embrace (and to some extent, so did the British school of thought with the Pitt administration enacting many changes arguably influenced by Smith’s work), alongside with Smith’s other work, The Theory of Moral Sentiments (which was written many decades before The Wealth of Nations), showed Smith as someone who cares deeply about empathy, communication, his hatred towards unfair practices (such as monopoly and lack of fair rules and enforcement of those rules) and many more. This contrasts greatly against the watered down version of Smith’s thought, which is that the free market is the most efficient and supreme method of governance.
Yet reading this book, I can’t help but think back on the other book, Positioning by Al Ries. Ries’ thesis is that the human brain, through the game of telephone, simply can’t comprehend complicated and dualistic, highly interconnected and nuanced thought Smith aims to bring to his readers. Ries argues that a good marketer would simply stick with one simple image and nothing more. In the case of Smith, arguably the idea of “the invisible hand” (which only appeared 3 times in his book) became the de facto idea that the American school of thought embraced. Which result in this highly ironic result of - what this book argues brilliantly - the author’s idea became an almost unrecognizable new idea once it travelled out of the author’s pen.
(This reminds me - the book Battle Hymm of the Tiger Mother was about how the author embraced non Tiger Mother parenting style later on, contrasting that with her initial parenting style that was heavily used in Asian cultures (which was the style Chua grew up with so she knew no other parenting style when becoming a young mother). The most ironic thing is that people only read an excerpt of the book and - myself included, which I’m ashamed of doing now looking back, especially after reading Chua’s other highly brilliant book Political Tribes - begin debating why Chua’s Tiger Mother parenting style is wrong (or right).)
- Smith's first book, Theory of Moral Sentiments, was a smash hit not just in Europe, but also in America
- History always repeats itself: just like the doomsday sayers of today, back then the idea that "food supply will run out" or "wage increase will eventually become unsustainable" was also accepted as main street theory
This is a really fascinating book.
In essence, the author argues that Smith’s ideas - which are interconnected and nuanced, got “watered down” once become more widespread (especially once becoming the de facto thinking behind the American economic thought (particularly the American freshwater economic school of thought).
Without going too much into the weeds - while The Wealth of Nations did touch on many of the things that the American school of thought embrace (and to some extent, so did the British school of thought with the Pitt administration enacting many changes arguably influenced by Smith’s work), alongside with Smith’s other work, The Theory of Moral Sentiments (which was written many decades before The Wealth of Nations), showed Smith as someone who cares deeply about empathy, communication, his hatred towards unfair practices (such as monopoly and lack of fair rules and enforcement of those rules) and many more. This contrasts greatly against the watered down version of Smith’s thought, which is that the free market is the most efficient and supreme method of governance.
Yet reading this book, I can’t help but think back on the other book, Positioning by Al Ries. Ries’ thesis is that the human brain, through the game of telephone, simply can’t comprehend complicated and dualistic, highly interconnected and nuanced thought Smith aims to bring to his readers. Ries argues that a good marketer would simply stick with one simple image and nothing more. In the case of Smith, arguably the idea of “the invisible hand” (which only appeared 3 times in his book) became the de facto idea that the American school of thought embraced. Which result in this highly ironic result of - what this book argues brilliantly - the author’s idea became an almost unrecognizable new idea once it travelled out of the author’s pen.
(This reminds me - the book Battle Hymm of the Tiger Mother was about how the author embraced non Tiger Mother parenting style later on, contrasting that with her initial parenting style that was heavily used in Asian cultures (which was the style Chua grew up with so she knew no other parenting style when becoming a young mother). The most ironic thing is that people only read an excerpt of the book and - myself included, which I’m ashamed of doing now looking back, especially after reading Chua’s other highly brilliant book Political Tribes - begin debating why Chua’s Tiger Mother parenting style is wrong (or right).)
August 16, 2023
My full review will be up on my Substack soon at https://bathruminations.substack.com/ Excerpt below:
This book was an excellent primer on Adam Smith generally and his most famous work, An Inquiry Into the Nature and Causes of the Wealth of Nations (The Wealth of Nations) more specifically. For someone who has not had the time, and until very recently the inclination to read a thousand page treatise written over 200 years ago (it was published in 1776, shortly before the adoption of the US Declaration of Independence), this book clarified so many misconceptions I had heard at one point or another about The Wealth of Nations and gave me a much deeper appreciation and understanding of Smith’s political economy and moral philosophy.
For anyone not very familiar with Smith, he was a moral philosopher of the Scottish enlightenment period and is widely regarded as the father of modern economics because of The Wealth of Nations. The book details the various factions in the US which have claimed Adam Smith as the foundation of their school of thought and breaks down the rhetorical strategies and arguments they have made. As Milanovic states in his review “One could divide the reception of Smith in America into three eras. The first that lasted from Independence until the early 20th century was dominated by the discussion of free trade vs. protectionism in the Wealth of Nations. The second, from the early to the mid 20th century by the debate on the roles played in Smith’s overall work by sympathy vs. self-interest. The third, which continues, was dominated by the disagreement over the roles of the price system (free market) and government. As these antinomies illustrate, the broadness of Smith’s oeuvre allowed a sensible discussion of all the themes, and made each of the six positions defensible.”
The great power of Liu’s work is that she deeply interrogates the positions of each of the ideological factions that argued over Smith’s work and presents concise summaries of their positions using their own words and the words of their critics. As an overview of the history of the philosophy political economy, this book provided me with an extensive list of authors and works to read later to deepen my understanding. She allows the philosophers, historians, and economists to speak for themselves and presents arguments and counterarguments without judgment. Especially when we get to the more modern period marked by the Chicago School, or neoliberal economists, from the late 1940s to early 2000s she presents their misinterpretation of Smith as a continuation of an American tradition of reading Smith through an ideological lens. She makes clear that while Smith is not the stalwart of laissez-faire, free-market ideology as the Chicago School confidently asserted, he cannot be boxed into other progressive, or even socialist conceptions of political economy either.
This book was an excellent primer on Adam Smith generally and his most famous work, An Inquiry Into the Nature and Causes of the Wealth of Nations (The Wealth of Nations) more specifically. For someone who has not had the time, and until very recently the inclination to read a thousand page treatise written over 200 years ago (it was published in 1776, shortly before the adoption of the US Declaration of Independence), this book clarified so many misconceptions I had heard at one point or another about The Wealth of Nations and gave me a much deeper appreciation and understanding of Smith’s political economy and moral philosophy.
For anyone not very familiar with Smith, he was a moral philosopher of the Scottish enlightenment period and is widely regarded as the father of modern economics because of The Wealth of Nations. The book details the various factions in the US which have claimed Adam Smith as the foundation of their school of thought and breaks down the rhetorical strategies and arguments they have made. As Milanovic states in his review “One could divide the reception of Smith in America into three eras. The first that lasted from Independence until the early 20th century was dominated by the discussion of free trade vs. protectionism in the Wealth of Nations. The second, from the early to the mid 20th century by the debate on the roles played in Smith’s overall work by sympathy vs. self-interest. The third, which continues, was dominated by the disagreement over the roles of the price system (free market) and government. As these antinomies illustrate, the broadness of Smith’s oeuvre allowed a sensible discussion of all the themes, and made each of the six positions defensible.”
The great power of Liu’s work is that she deeply interrogates the positions of each of the ideological factions that argued over Smith’s work and presents concise summaries of their positions using their own words and the words of their critics. As an overview of the history of the philosophy political economy, this book provided me with an extensive list of authors and works to read later to deepen my understanding. She allows the philosophers, historians, and economists to speak for themselves and presents arguments and counterarguments without judgment. Especially when we get to the more modern period marked by the Chicago School, or neoliberal economists, from the late 1940s to early 2000s she presents their misinterpretation of Smith as a continuation of an American tradition of reading Smith through an ideological lens. She makes clear that while Smith is not the stalwart of laissez-faire, free-market ideology as the Chicago School confidently asserted, he cannot be boxed into other progressive, or even socialist conceptions of political economy either.
November 24, 2023
What a great book! This has filled a hole I've had for a long time. The Smith of scholars, who is nuanced, deeply moral, worried about equal human happiness, repudiated greed, differs dramatically from the Smith of popular American conservatives - "greed is good", the marketplace solves all our problems via the "invisible hand", and inequality is not an important issue.
How did we get there? What was the journey? Liu methodically and carefully traces the evolution of Smith on American intellectual thought.
I really enjoyed the American founders chapter. They all read Smith, and the Adams had even read and recommended Theory of Moral Sentiment. Jefferson praised The Wealth of Nations. Later, it was the English translation of Say that became more popular. It was easier to read and more concise than WoN. In the second half of the 19th century, debates about free trade evoked Smith as an authoritative figure over and over again. This symbolic use continues to today.
Gradually, it was the Chicago School that read back into Smith their own price theories, rejected government intervention, and ignored his moral philosophy. Particular George Stiglitz and Milton Friedman brought "their version" of Smith into the mainstream to become the version we all think of today.
It has been the exasperation of scholars for the past 50 years to constantly fight back against the Friedman/Stiglitz father-of-freemarket Smith.
The book is dense, but well written. The footnotes are plenty. We are all influenced by the ideas of those past. A conscious consumption leads to honest engagement and truth.
How did we get there? What was the journey? Liu methodically and carefully traces the evolution of Smith on American intellectual thought.
I really enjoyed the American founders chapter. They all read Smith, and the Adams had even read and recommended Theory of Moral Sentiment. Jefferson praised The Wealth of Nations. Later, it was the English translation of Say that became more popular. It was easier to read and more concise than WoN. In the second half of the 19th century, debates about free trade evoked Smith as an authoritative figure over and over again. This symbolic use continues to today.
Gradually, it was the Chicago School that read back into Smith their own price theories, rejected government intervention, and ignored his moral philosophy. Particular George Stiglitz and Milton Friedman brought "their version" of Smith into the mainstream to become the version we all think of today.
It has been the exasperation of scholars for the past 50 years to constantly fight back against the Friedman/Stiglitz father-of-freemarket Smith.
The book is dense, but well written. The footnotes are plenty. We are all influenced by the ideas of those past. A conscious consumption leads to honest engagement and truth.
June 12, 2023
This is a book of intellectual history, looking at how leading thinkers and academics and economists in the US have viewed Adam Smith over the last 200-some years. He was always in the conversation, but his centrality has ebbed and flowed. His focus on free trade made him passe at points in the 19th century when the US had definite protectionism. The Chicago school made him an embodyment of all that is libertarian free market capitalism - but that caused a backlash as critics noted how much of Adam Smith had to be airbrushed out of the picture.
So, yeah - it's an intellectual history. That's fine, but it's not the book I expected. This book is "America's Adam Smith" rather than "Adam Smith's America" in that we don't really get much sense of how Smith's views affected America (or even how America's views of Smith affected America). It's all so heavily focused on the intellectual discourse. Ironically, in the intro Liu debates on if the title should be reversed. Clearly, I think she got it backwards.
The above paragraph might sound like a minor point - and I guess it is. But I really was not expecting a book to be so narrowly focused on an academic conversation.
So, yeah - it's an intellectual history. That's fine, but it's not the book I expected. This book is "America's Adam Smith" rather than "Adam Smith's America" in that we don't really get much sense of how Smith's views affected America (or even how America's views of Smith affected America). It's all so heavily focused on the intellectual discourse. Ironically, in the intro Liu debates on if the title should be reversed. Clearly, I think she got it backwards.
The above paragraph might sound like a minor point - and I guess it is. But I really was not expecting a book to be so narrowly focused on an academic conversation.
August 24, 2025
I assigned The Wealth of Nations as summer reading for my AP Gov students. I think this book would be a perfect complement as Liu's "reception history " of the work over time really creates a vibrant context for Smith's ideas within the political economy of the United States. I was completely unaware of Smith's lectures on jurisprudence, policy, revenue, and arms which offer insight into his philosophy of justice and his largely historicist worldview. I was struck by the 19th century Gilded Age rivalries over Smith's contributions to laissez faire and the attempts to separate ethics from economics and what ought to be from what is. I will primarily use this book to connect Smith to Madison , Hamilton , and Adams and the hints of both the Theory of Moral Sentiments and The Wealth of Nations in the founding documents, most famously Federalist 10. The Chicago School appropriation and caricature of Smith, activating libertarian impulses with the public square, is fascinating
September 8, 2025
Smith by Your Need
1, What Smith icon was always depend on how intelligentsias interpret him, for different purposes on different eras or circumstance.
2, Interpretations always contradict each other, say ‘protect domestic industries’ when facing competition, say ‘free trade’ after upper hand.
3, Together with American dominated, Smith icon became more and more attached to American theories, more and more loudly.
4, All interpretations are in fact political all the way, no matter how differently they interpreted, consensus is American capitalism always right.
5, Even consider Smith’s moral philosophy, they set individual conservatism as premise of well running of privatized capitalism.
1, What Smith icon was always depend on how intelligentsias interpret him, for different purposes on different eras or circumstance.
2, Interpretations always contradict each other, say ‘protect domestic industries’ when facing competition, say ‘free trade’ after upper hand.
3, Together with American dominated, Smith icon became more and more attached to American theories, more and more loudly.
4, All interpretations are in fact political all the way, no matter how differently they interpreted, consensus is American capitalism always right.
5, Even consider Smith’s moral philosophy, they set individual conservatism as premise of well running of privatized capitalism.
May 5, 2024
Whenever somebody cites Adam Smith, I think to myself, "sure, but didn't he also say...". Smith is a more complicated and nuanced thinker than the one bit about the invisible hand. Liu digs in and demonstrates that Smith has been read selectively and differently by many thinkers over time and traces how the interpretations, as much as Smith himself, have had a profound influence on economic thought.
The prose style is academic and this is not a casual read, but then neither is Smith himself.
btw, Lui is an excellent speaker, https://www.youtube.com/watch?v=8OyYN... provides a good thumbnail overview of the book.
The prose style is academic and this is not a casual read, but then neither is Smith himself.
btw, Lui is an excellent speaker, https://www.youtube.com/watch?v=8OyYN... provides a good thumbnail overview of the book.
April 1, 2024
This is an in depth survey not of Adam Smith’s own works but of 200 years of the critical and social and political interpretation of his works especially in an American context. This is extensive and comprehensive and full of rich and detailed footnotes. As a stand-alone book it is great but also likely prone to inspire you, if interested, into countless other works of scholarship and research.
And perhaps to revisit the original texts. Highly recommended if you like meta histories of interpretation (not just economic history, importantly also political history and culture).
And perhaps to revisit the original texts. Highly recommended if you like meta histories of interpretation (not just economic history, importantly also political history and culture).
April 9, 2025
Liu provides a fascinating reception history of the moral and economic philosopher (and, arguably, political economist), Adam Smith. As one might suspect, interactions with his work were used to support positions on both sides of the ail. What is clear, regardless of the various contorted readings of Smith, is that he work was nuanced and ambiguously complex hence the many different interpretations.
March 22, 2024
Great book chronicling how Adam Smith has read and interpreted in America at various points in time. Really highlights how people can find what they want in Smith’s writings and take it however they want. Very well researched and and really effective lens to discuss American history and economic culture.
May 17, 2023
Really interesting but challenging to read. But worth the effort!
December 30, 2024
This book was was a historical walkthrough of how Adam Smith has been interpreted throughout time, mainly in American Economics and Politics. We start with Smith himself, covering his two priciple works - Wealth of Nations and A Theory of Moral Sentiments - and also his lectures, which have been assembled from students notes. We dont spend much time on the actual texts, instead how they landed with his contemporaries. They really didnt, but upon his death in 1791, they gained influence as the primary texts of political economy, a burgeoning new field. Alexander Hamilton used Smith to argue for banking and fnance. By the mid 1800s, some in the south were using his works to argue against the protectionism that northern manufacturers wanted. Unfortunately for Smith, Jean Baptiste Saez replaced him as the primary political economy scholar. But then, Smith was reincarnated at the University of Chicago. But the UChicago scholars ignored non-free market ideas, painting Smith as a neoliberal. in the 1980's Smith's morals were reintroduced into the narrative academic vein about him. Finally, the author concludes that Smith had ideas on both sides of the modern political spectrum, and so can be used to support both, and has throughout time.
Overall, a very well researched and accessible book. Was a bit dry, but for the subject matter of choice, I think it was the most interesting it could be.
Overall, a very well researched and accessible book. Was a bit dry, but for the subject matter of choice, I think it was the most interesting it could be.
August 20, 2022
ADAM SMITH’S AMERICA by political scientist Glory Liu traces how Americans have perceived Adam Smith and his ideas over time. the book illuminates how the ways that readers approach a text become part of that text’s story.
December 18, 2023
It was enlightening to learn how monumental Adam Smith's works were when they came out, how differently they've been interpreted over the years. It was also insightful getting glimpses into how people generally processed and shared ideas in the 18th and 19th century. The writing structure is extremely academic and seems to be an exceptional graduate thesis turned into a book.
December 15, 2024
Great, informative read. Most readers won't need to read the whole thing; you could probably pick the epoch you're most interested in (e.g. early influences, Chicago School, etc.) and get a lot out of it. It took me a while to read the whole book (I read it as an ebook, which always takes longer for me), but your mileage may vary.
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