RETHINKING THE “CHICAGO SMITH” PROBLEM: ADAM SMITH AND THE CHICAGO SCHOOL, 1929–1980
GLORY M. LIU
RETHINKING THE “CHICAGO SMITH” PROBLEM: ADAM SMITH AND THE CHICAGO SCHOOL, 1929–1980 - Volume 17 Issue 4
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RETHINKING THE “CHICAGO SMITH” PROBLEM: ADAM SMITH AND THE CHICAGO SCHOOL, 1929–1980

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GLORY M. LIU*

Affiliation: The Political Theory Project, Brown University E-mail: glory_liu@brown.edu

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Abstract

This article traces the origins and evolution of a popular interpretation of Adam Smith as a “Chicago-style” economist, and it challenges the idea that the “Chicago Smith” is simply a misinterpretation of Smith's ideas. To that end, it reexamines the role that the Chicago school of economics played in developing and propounding a distinct vision of Adam Smith, not only within the profession of economics, but also for the broader American public in the twentieth century. I argue that the readings, teachings, and interpretations of Smith from Chicago economists across different generations are more than just superficial symbolism, claims of intellectual authority, or rhetorical window dressing. Chicago’s engagement with Smith’s ideas constitute important interpretive and substantive arguments about the essence of Smith’s contribution to economics and the role that Smith’s ideas could play in shaping public policy.

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Modern Intellectual History , Volume 17 , Issue 4 , December 2020 , pp. 1041 - 1068

DOI: https://doi.org/10.1017/S147924431900009X [Opens in a new window]

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Copyright © Cambridge University Press 2019

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References

1

1 Winch's, Donald Adam Smith's Politics: An Essay in Historiographic Revision (Cambridge, 1978)CrossRefGoogle Scholar is one of the first major works of revisionist Smith scholarship. Following Winch, Haakonssen's, Knud The Science of a Legislator: The Natural Jurisprudence of David Hume and Adam Smith (Cambridge, 1981)CrossRefGoogle Scholar; and Hont, Istvan and Ignatieff, Michael, eds., Wealth and Virtue: The Shaping of Political Economy in the Scottish Enlightenment (Cambridge, 1983)CrossRefGoogle Scholar, explicated the philosophical and natural jurisprudential foundations of Smith's politics. Fleischacker's, Samuel On Adam Smith's Wealth of Nations: A Philosophical Companion (Princeton, 2004)Google Scholar; Hanley's, Ryan Adam Smith and the Character of Virtue (Cambridge, 2009)CrossRefGoogle Scholar; and Rothschild's, Emma Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment (Cambridge, MA and London, 2001)Google Scholar, are also significant contributions that forged a strong connection between Smith's political economy and moral philosophy. Works that have characterized Smith as a serious theorist of politics include Hont, Istvan's lectures on Politics in Commercial Society, ed. Kapossy, Béla and Sonenscher, Michael (Cambridge, MA and London, 2015)CrossRefGoogle Scholar; Herzog's, Lisa Inventing the Market: Smith, Hegel, and Political Theory (Oxford, 2013)CrossRefGoogle Scholar; and Sagar, Paul's recent book The Opinion of Mankind: Sociability and the Theory of the State from Hobbes to Smith (Princeton, 2018)Google Scholar.

2

2 Nicholas Phillipson characterizes Smith in such terms in his recent biography, Adam Smith: An Enlightened Life (New Haven, 2011). See also Buchan, James, “The Biography of Adam Smith,” in Hanley, Ryan Patrick, ed., Adam Smith: His Life, Thought, and Legacy (Princeton, 2016), 3–16Google Scholar, on the role of biography (including Phillipson's) in shaping our understanding of Smith's ideas.

3

3 Smith advertised this work on law and government at the end of the final edition to The Theory of Moral Sentiments published in 1790, and also in a letter to the Duc de la Rouchefoucault in 1785. It is believed that surviving student notes from Smith's Lectures on Jurisprudence contain some of the contents that would have appeared in the book on law and government.

4

4 The authoritative and detailed account on this subject is Fleischacker's, Samuel “Adam Smith's Reception among the American Founders,” William and Mary Quarterly 59/4 (2002), 897–924CrossRefGoogle Scholar.

5

5 Bishop James Madison is believed to have taught the first course on political economy in America sometime in the 1780s. Madison used Smith's Wealth of Nations as the primary text, though the exact date at which he introduced it has been disputed. Whitaker, John K., “Early Flowering in the Old Dominion: Political Economy at the College of William and Mary and the University of Virginia,” in Barber, William J., ed., Economists and Higher Learning in the Nineteenth Century (Middletown, 1993), 15–41Google Scholar; Seligman, Edwin A., “The Early Teaching of Economics in the United States,” in Hollander, Jacob, ed., Economic Essays, Contributed in Honor of John Bates Clark (New York, 1927), 283–320Google Scholar, at 301.

6

6 Liu, Glory M., “‘The Apostle of Free Trade’: Adam Smith in the Nineteenth-Century American Trade Debates,” History of European Ideas 44/2 (2018), 210–23CrossRefGoogle Scholar; Rashid, Salim, “Adam Smith's Rise to Fame: A Reexamination of the Evidence,” The Eighteenth Century 23/1 (1982), 64–85Google Scholar; Rothschild, Emma, “Adam Smith and Conservative Economics,” Economic History Review 45/1 (1992), 74–96CrossRefGoogle Scholar; Willis, Kirk, “The Role in Parliament of the Economic Ideas of Adam Smith, 1776–1800,” History of Political Economy 11/4 (1979), 505–44CrossRefGoogle Scholar.

7

7 There is a large body of work devoted to understanding the “Chicago school,” who its members were (and are), and the extent of its consistency and coherency in the twentieth century. For general introductions see Emmett, Ross B., ed., The Chicago Tradition in Economics 1892–1945 (Londonand New York, 2001)Google Scholar; Emmett, ed., The Elgar Companion to the Chicago School of Economics (Cheltenham and Northampton, 2010); Overtveldt, Johan van, The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionized Economics and Business (Chicago, 2007)Google Scholar.

8

8 Evensky, Jerry, “‘Chicago Smith’ versus ‘Kirkaldy Smith’,” History of Political Economy 37/2 (2005), 197–203CrossRefGoogle Scholar, at 198.

9

9 Stigler, George, “Smith's Travels on the Ship of State,” History of Political Economy 3/2 (1971), 265–77CrossRefGoogle Scholar, at 265. Revisionist scholars who target this specific line include Fleischacker, On Adam Smith's Wealth of Nations, 84; Sen, Amartya, “The Uses and Abuses of Adam Smith,” History of Political Economy 43/2 (2011), 257–71CrossRefGoogle Scholar; Rasmussen, Dennis, “Adam Smith on What Is Wrong with Economic Inequality,” American Political Science Review 110/2 (2016), 342–52CrossRefGoogle Scholar.

10

10 Sen, Amartya, “The Contemporary Relevance of Adam Smith,” in Berry, Christopher J., Paganelli, Maria Pia, and Smith, Craig, eds., The Oxford Handbook of Adam Smith (Oxford, 2013), 581–91Google Scholar, at 586; see also Sen, “The Uses and Abuses of Adam Smith”; Smith, “Adam Smith and the New Right.”

11

11 Fleischacker, On Adam Smith's Wealth of Nations, 84.

12

12 Herzog, Inventing the Market, 6; Hont, Istvan, The Jealousy of Trade: International Competition and the Nation-State in Historical Perspective (Cambridge, MA, 2005), 100Google Scholar.

13

13 On the history of das Adam Smith Problem see Tribe, Keith, “‘Das Adam Smith Problem’” and the Origins of Modern Smith Scholarship,” History of European Ideas 34/4 (2008), 514–25CrossRefGoogle Scholar; III, Richard Teichgraeber, “Rethinking das Adam Smith Problem,” Journal of British Studies 20/2 (1981), 106–23Google Scholar; Dickey, Laurence, “Historicizing the ‘Adam Smith Problem’: Conceptual, Historiographical, and Textual Issues,” Journal of Modern History 58/3 (1986), 580–609CrossRefGoogle Scholar; Montes, Leonidas, “Das Adam Smith Problem: Its Origins, the Stages of the Current Debate, and One Implication for Our Understanding of Sympathy,” Journal of the History of Economic Thought 25/1 (2003), 63–90CrossRefGoogle Scholar.

14

14 A number of historians of economic thought identify this divide between the “old” and “new” Chicago schools. See Steven G. Medema, “Adam Smith and the Chicago School,” in Emmet, The Elgar Companion to the Chicago School, 40–51. Medema draws up his account based on terms coined by in, Dierdre McCloskey “The Good Old Coase Theorem and the Good Old Chicago School: A Comment on Zerbe and Medema,” in Medema, Steven G., ed., Coasean Economics: Law and Economics and the New Institutional Economics (Dordrecht, 1998), 239–48Google Scholar. Other works that identify this generational break include Smith, “Adam Smith and the New Right”; and Jones, Daniel Stedman, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, 2012)Google Scholar. In more recent work, Medema expands on his previous framework by identifying two “turning points” across three generations of the Chicago school. Steven G. Medema, “Identifying a ‘Chicago School’ of Economics: On the Origins, Evolution, and Evolving Meanings of a Famous Brand Name,” 2018 working paper, permission to cite granted by the author.

15

15 Medema, “Adam Smith and the Chicago School.”

16

16 Stedman Jones, Masters of the Universe, 87.

17

17 Arrow, Kenneth J. and Hahn, F. H., General Competitive Analysis (San Francisco, 1971), 1–2Google Scholar.

18

18 Teichgraeber, Richard F. III, “Adam Smith and Tradition: The Wealth of Nations before Malthus,” in Collini, Stefan, Whatmore, Richard, and Young, Brian, eds., Economy, Polity, and Society (Cambridge, 2000), 85–104CrossRefGoogle Scholar, at 92.

19

19 Ibid., 104. On the method of “legacy evaluation” see Winch, Donald and Haakonssen, Knud, “The Legacy of Adam Smith,” in Haakonssen, Knud, ed, The Cambridge Companion to Adam Smith (Cambridge, 2006), 367–8Google Scholar.

20

20 Teichgraeber, “Adam Smith and Tradition,” 92.

21

21 Or, in the words of David Ciepley, the Great Depression “completely wiped out the intellectual respectability of laissez-faire.” Ciepley, David, Liberalism in the Shadow of Totalitarianism (Cambridge, MA, 2006), 86Google Scholar.

22

22 Burgin, Angus, The Great Persuasion: Reinventing Free Markets since the Depression (Cambridge, MA, 2012), 4–5CrossRefGoogle Scholar, 8–9, 14–15.

23

23 Morgan, Mary S. and Rutherford, Malcom, “American Economics: The Character of the Transformation,” in Morgan and Rutherford, eds., From Interwar Pluralism to Postwar Neoclassicism (Durham, NC, 1998), 2–4Google Scholar; Márcia L. Balisciano, “Hope for America: American Notions of Economic Planning between Pluralism and Neoclassicism, 1930–1950,” in ibid., 153–78. As Balisciano notes (at 155), “In this climate [after the Great Depression], planning developed as a flexible and fluid concept. Forward actions of all kinds were proposed beneath the banner of planning in order, it was hoped, to define, shape, and ultimately improve economic outcomes … Planning was a mirror for the pluralism of American society in the 1930s and thus defied precise definition. As such, it was also a mirror for the pluralism of American economics and American economists during those years.”

24

24 Balisciano, “Hope for America,” 156.

25

25 This is obviously a very simplistic account of the impact of the Cold War on academic economics. For a more complete introduction to the subject of postwar neoclassicism see Morgan and Rutherford, “American Economics,” 14–17. See also Craufurd D. Goodwin, “The Patrons of Economics in a Time of Transformation,” in Morgan and Rutherford, From Interwar Pluralism to Postwar Neoclassicism, 53–81; and Márcia L. Balisciano, “Hope for America,” 171–4.

26

26 Van Overdtvelt, The Chicago School, 25–8; Reder, Melvin, “Chicago Economics: Permanence and Change,” Journal of Economic Literature 20/1 (1982), 1–38Google Scholar, at 2–3.

27

27 On the evolution of Chicago price theory see Glen Weyl, “Price Theory,” Journal of Economic Literature, forthcoming, available at SSRN, https://ssrn.com/abstract=2444233; see also Medema, Steven G., “Chicago Price Theory and Chicago Law and Economics: A Tale of Two Transitions,” in van Horn, Robert, Mirowski, Philip, and Stapleford, Thomas A., eds., Building Chicago Economics: New Perspectives on the History of America's Most Powerful Economics Program (Cambridge, 2011), 151–79CrossRefGoogle Scholar; J. Daniel Hammond, “The Development of Post-War Chicago Price Theory,” in Emmett, The Elgar Companion to the Chicago School, 7–24.

28

28 Milton Friedman's textbook on price theory describes the price mechanism in pieces: “Prices serve as guideposts to where resources are wanted most, and, in addition, prices provide the incentive for people to follow these guideposts. The use of factor prices to distribute the product makes it possible for other prices, namely product prices, to serve the functions of fixing standards and organizing production,” and “Prices … transmit information, they provide an incentive to users of resources to be guided by this information, and they provide an incentive to owners of resources to follow this information.” Friedman, Milton, Price Theory (Hawthorne, NY, 1962), 9–10Google Scholar. Glen Weyl, “Price Theory,” 1, offers the following contemporary definition: price theory is an “analysis that attempts to simplify a rich (high-dimensional heterogeneity, many agent, dynamics, etc.) and often incompletely specified model for the purposes of answering a simple (scalar or unidimensional) allocative question.”

29

29 Weyl, “Price Theory,” 26; Emmett, Ross B., “Introduction,” in Emmett, ed., The Elgar Companion to the Chicago School of Economics (Cheltenham and Northampton, 2010), 1–4Google Scholar, at 2–3.

30

30 Medema, “Chicago Price Theory and Chicago Law and Economics,” 154.

31

31 Jacob Viner, lecture on 17 June 1930 in Economics 301, printed in Jacob Viner: Lectures in Economics 301, ed. Douglas A. Irwin and Steven G. Medema (New Brunswick, 2013), 19.

32

32 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (hereafter WN), ed. R. H. Campbell, A. S. Skinner, and W. B. Todd (Oxford, 1976; first published 1776), Book I, chapter 6, 1.

33

33 One can reasonably argue that this is not a novel reading or use of Smith's example from WN. In fact, Mark Blaug's monumental Economic Theory in Retrospect contains several pages of analysis centered on this “simple model in which only one factor of production is used to produce commodities.” See Blaug, Mark, Economic Theory in Retrospect, 4th edn (Cambridge, 1985), 38–9Google Scholar.

34

34 Viner, Lectures in Economics 301, 60.

35

35 Homer Jones, student notes, Econ 301: History of Economic Thought (winter 1934), Frank Knight Papers, Box 8, Folder 10, Special Collections Research Center (SCRC), University of Chicago.

36

36 Student notes (unnamed), Econ 301: Price and Distribution Theory (Summer 1938), Frank Knight Papers, Box 8, Folder 18, SCRC, University of Chicago.

37

37 Student notes dated 6 April 1933 (unnamed), Econ 304: Economic Theory and Social Policy (spring 1933), Frank Knight Papers, Box 8, Folder 4, SCRC, University of Chicago.

38

38 Ibid.

39

39 “The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which must be paid in order to bring it thither.” Smith, WN, Book I, chapter 7, 8.

40

40 Jones, student notes, Econ 301: History of Economic Thought.

41

41 Student notes dated 11 April 1933 (unnamed), Economics 304: Economic Theory and Social Policy, Frank H. Knight Papers, Box 8, Folder 4, SCRC, University of Chicago.

42

42 Frank H. Knight, lecture notes for Econ 301: Price and Distribution Theory (undated), Frank H. Knight papers, Box 9, Folder 19, SCRC, University of Chicago.

43

43 Frank H. Knight, lecture notes for Econ 301: Price and Distribution Theory (1943), Frank H. Knight Papers, Box 9, Folder 6, SCRC, University of Chicago.

44

44 Knight, lecture notes for Econ 301: Price and Distribution Theory (undated).

45

45 Ibid. Knight repeats this point a number of times: “I may point that a little by saying that I think that the change in name from ‘political economy’ to ‘economics’ is unfortunate.” Gladys Hamilton, a student in Knight's class in 1934, noted the following: “Economic science is political. The change of name was very unfortunate. Economics as a science should be applied only to mathematical economics.” Gladys Hamilton student notes, Econ 302: History of Economic Thought (fall 1934), Frank Knight Papers, Box 9, Folder 14, SCRC, University of Chicago.

46

46 Knight, lecture notes for Econ 301: Price and Distribution Theory (undated).

47

47 Ibid.

48

48 Gladys Hamilton student notes, Econ 302: History of Economic Thought (fall 1934), Frank Knight Papers, Box 9, Folder 14, SCRC, University of Chicago.

49

49 Knight, notes for Econ 301: Price and Distribution Theory (1943).

50

50 Viner, Jacob, “Adam Smith and Laissez Faire,” Journal of Political Economy 35/2 (1927), 198–232CrossRefGoogle Scholar, at 199, original emphasis.

51

51 See sources cited in note 13 above.

52

52 Viner, “Adam Smith and Laissez Faire,” 199–200.

53

53 Ibid., 206, 221.

54

54 Ibid., 215, 217.

55

55 Ibid., 231, 218.

56

56 Ibid., 201–3, 206–8.

57

57 Ibid., 201.

58

58 Burgin, Angus, “The Radical Conservatism of Frank H. Knight,” Modern Intellectual History 6/3 (2009), 513–38CrossRefGoogle Scholar, at 515. See also Burgin, The Great Persuasion, 14, 32–7, 41–6; Gordon, Scott, “Frank Knight and the Tradition of Liberalism,” Journal of Political Economy 82/3 (1974), 571–7CrossRefGoogle Scholar.

59

59 The final paragraph of Viner's essay beautifully summarizes some of the tensions Viner saw in Smith: Smith “attributed great capacity to serve the general welfare to individual initiative in competitive ways to promote individual ends. He devoted more effort to the presentation of his case for individual freedom than to exploring the possibilities of service through government … But even in his own day, Smith saw that self-interest and competition were sometimes treacherous to the public interest they were supposed to serve, and he was prepared to have government exercise some measure of control over them where the need could be shown and the competence of government for the task demonstrated.” Viner, “Adam Smith and Laissez-Faire,” 232.

60

60 Burgin, The Great Persuasion, 44.

61

61 Friedman's “The Methodology of Positive Economics” (often referred to as F1953 or F53) emphasized the importance of predictive capacity in judging economic theories and is arguably one of the most influential essays on economic methodology in the twentieth century. On the impact and legacy of F1953 see Mäki, Uskala, ed., The Methodology of Positive Economics: Reflections on the Milton Friedman Legacy (Cambridge, 2009)CrossRefGoogle Scholar; see also Eric Schliesser, “Friedman, Positive Economics, and the Chicago Boys,” in Emmett, The Elgar Companion to the Chicago School, 175–95.

62

62 Ross B. Emmett, “Frank Knight and the Chicago School,” Becker Friedman Institute for Economic Research, University of Chicago, 5 Oct. 2015.

63

63 Medema, “Identifying a ‘Chicago School’ of Economics.”

64

64 Ross B. Emmett also contends that “Chicago economics was different by the 1940s, primarily because of the emergence of a contingent of economists committed to developing market-based solutions to social problems.” Emmett, Ross B., “Introduction,” in Emmett, ed., The Chicago Tradition in Economics: 1898–1946, vol. 1 (London and New York, 2002), xvii–xxivGoogle Scholar, at xviii.

65

65 Milton Friedman, speech at the 54th Annual Board of Trustees’ Dinner for the Faculty, 9 Jan. 1974, Milton Friedman Papers, Box 55.8, the Hoover Institution, Stanford University.

66

66 Ibid.

67

67 Ibid.

68

68 Stedman Jones, Masters of the Universe, 101.

69

69 Stigler, George, “The Successes and Failures of Professor Smith,” Journal of Political Economy 84/6 (1976), 1199–1213CrossRefGoogle Scholar, at 1200. For a secondhand account see Rosenberg, Nathan, “George Stigler: Adam Smith's Best Friend,” Journal of Political Economy 101/5 (1993), 833–48.CrossRefGoogle Scholar

70

70 Rosen, Sherwin, “George J. Stigler and the Industrial Organization of Economic Thought,” Journal of Political Economy 101/5 (1993), 809–17CrossRefGoogle Scholar, at 811; Freedman, Craig, Chicago Fundamentalism: Ideology and Methodology in Economics (Hackensack and London, 2008)CrossRefGoogle Scholar.

71

71 George Stigler, Essays in the History of Economics (Chicago, 1965), v; see also Freedman, Chicago Fundamentalism, chap. 6; Rosenberg, “George Stigler: Adam Smith's Best Friend,” 835–6. It ought to be noted that Stigler was a self-declared history-of-thought enthusiast throughout his life, even as institutional interest in the subject waned.

72

72 Freedman, Chicago Fundamentalism, 165.

73

73 Stigler, “The Successes and Failures of Professor Smith,” 1201.

74

74 Stigler, George, “Smith's Travels on the Ship of State,” History of Political Economy 3/2 (1971), 265–77CrossRefGoogle Scholar, at 265.

75

75 Stigler, “The Successes and Failures of Professor Smith,” 1212.

76

76 Viner, “Adam Smith and Laissez Faire,” 212–13.

77

77 For analysis on the concept of self-interest and self-love in Smith's works see Paganelli, Maria Pia, “The Adam Smith Problem in Reverse: Self-Interest in Adam Smith’s Wealth of Nations and Theory of Moral Sentiments,” History of Political Economy 40/2 (2008), 365–82CrossRefGoogle Scholar; Fleischacker, On Adam Smith's Wealth of Nations, chap. 5 (“On Self-Interest”); Mehta, Pratap Bhanu, “Self-Interest and Other Interests,” in Haakonssen, The Cambridge Companion to Adam Smith (Cambridge, 2006), 246–69CrossRefGoogle Scholar.

78

78 George Stigler, “Economics or Ethics?”, the Tanner Lectures on Human Values, delivered at Harvard University, 24, 25, 28 April 1980.

79

79 Stigler, George, “The Influence of Events and Policies on Economic Theory,” American Economic Review 50/2 (1960), 36–45Google Scholar, at 44.

80

80 Medema, “Adam Smith and the Chicago School,” 42–3.

81

81 Ibid.

82

82 Stigler, George, Memoirs of an Unregulated Economist (New York, 1988), 64Google Scholar.

83

83 Stigler, “The Successes and Failures of Professor Smith,” 1201.

84

84 Stigler, “Economics or Ethics?”, 171.

85

85 Breit, William and Spencer, Roger W., Lives of the Laureates: Thirteen Nobel Economists (Cambridge, MA, 1995), 95Google Scholar.

86

86 Craig Smith also makes this point in “Adam Smith and the New Right,” 545.

87

87 Milton Friedman, “The Invisible Hand,” in The Collected Works of Milton Friedman, Hoover Institution Archives, at http://miltonfriedman.hoover.org/objects/57602.

88

88 Friedman, Milton and Friedman, Rose, Free To Choose (New York, 1990), 14Google Scholar. Friedman used similar language about Smith's “flash of genius” and “greatest achievement” in many instances, including in Free to Choose (television series) Episode 2 (“The Tyranny of Control”); as well as in “The Case for Freedom,” The Collected Works of Milton Friedman, Hoover Institution Archives, at http://miltonfriedman.hoover.org/objects/57138 (originally published in The Listener, 27 March 1980).

89

89 Milton Friedman, “The Case for Freedom.”

90

90 Friedman, Milton and Friedman, Rose, Two Lucky People (Chicago and London, 1999), 495–6Google Scholar.

91

91 Friedman and Friedman, Free to Choose, 6, 292. The same language is also used in Free to Choose, Episode 10, “How to Stay Free.”

92

92 Friedman repurposes the same quote in “The Invisible Hand”; Milton Friedman, “Humphrey-Hawkins,” Newsweek, 2 Aug. 1976, 55; and in his essay “Adam Smith's Relevance for Today,” Challenge 20/1 (1977), 6–12, at 8.

93

93 The full passage from WN is as follows: “The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.” Friedman repurposes this quote in many of the same instances cited in the note above.

94

94 Smith uses the phrase “invisible hand” three times in his corpus: once in his Essay on the History of Astronomy (Book 3, chap. 2), once in The Theory of Moral Sentiments (Book IV, chap. 1, 10), and once in The Wealth of Nations (Book IV, chap. 2, 9).

95

95 Emma Rothschild has advanced one of the most widely recognized revisionist interpretations of the invisible hand. Rothschild argues that that Smith's invisible hand is nothing more than a “mildly ironic joke” and something that Smith himself would not have readily accepted as a normatively desirable feature of economic and moral life. Rothschild, Emma, “Adam Smith and the Invisible Hand,” American Economic Review 84/2 (1994), 319–22Google Scholar; further elaboration can be found in Rothschild, Economic Sentiments, chap. 5. See also Kennedy, Gavin, “Adam Smith and the Role of the Metaphor of an Invisible Hand,” Economic Affairs 31/1 (2011), 53–7CrossRefGoogle Scholar; Stimson, Shannon, “From Invisible Hand to Moral Restraint: The Transformation of the Market Mechanism from Adam Smith to Thomas Robert Malthus,” Jounral of Scottish Philosophy 2/1 (2004), 22–47CrossRefGoogle Scholar; Schliesser, Eric, Adam Smith: Systematic Philosopher and Public Thinker (Oxford, 2017), chap. 10CrossRefGoogle Scholar.

96

96 See, for instance, Fleischacker, On Adam Smith's Wealth of Nations, chap. 11; Haakonssen, The Science of a Legislator, 97–8, contrasting the “man of system” with the ideal “legislator.”

97

97 Smith, “Adam Smith and the New Right,” 546.

98

98 Burgin, Angus, “The Age of Certainty: Galbraith, Friedman, and the Public Life of Economic Ideas,” History of Political Economy 45/supplemental (2015), 191–219CrossRefGoogle Scholar, at 215.

99

99 Viner, “Adam Smith and Laissez-Faire,” 207.

100

100 Burgin, “The Radical Conservatism of Frank H. Knight,” 537.

101

101 An estimated 3 million people on average watched Free to Choose when it aired on public television in 1980, and the accompanying book sold over a million copies, making it a nonfiction best seller in the United States. Friedman and Friedman, Two Lucky People, 497–8. On the various determinants of Free to Choose’s success (production, scripting, Friedman's rhetoric, etc.) see Angus Burgin's illuminating article “The Age of Certainty.”

102

102 “Smith and Jefferson alike had seen concentrated government power as a great danger to the ordinary man,” the Friedmans argued in Free to Choose. “They saw the protection of the citizen against the tyranny of government as the perpetual need.” Friedman and Friedman, Free to Choose, 4. The Friedmans also called the Declaration of Independence “in many ways the political twin of Smith's economics.” Milton Friedman and Rose Friedman, “The Tide in the Affairs of Men,” Collected Works of Milton Friedman Project records, Hoover Institution Archives, Stanford University. Reprinted in Anderson, Annelise and Bark, Dennis L., eds., Thinking about America: The United States in the 1990s (Stanford: Hoover Institution Press, 1988), 455–68Google Scholar.

103

103 Ian Hunter has described the following interpretive dilemma in the history of philosophy as the “great philosophical impasse.” Hunter, Ian, “The History of Philosophy and the Persona of the Philosopher,” Modern Intellectual History 4/3 (2007), 571–600CrossRefGoogle Scholar. Among the most important essays on the interpretation of the history of philosophy are those in Rorty, Richard, Schneewind, J. B., and Skinner, Quentin, eds., Philosophy in History: Essays on the Historiography of Philosophy (Cambridge, 1984)CrossRefGoogle Scholar.

104

104 Hunter, “The History of Philosophy and the Persona of the Philosopher,” 573.

105

105 Winch, Adam Smith's Politics, 1.

106

106 Though it is fair to object to Boucoyannis's use of the term “conservative” in this case, I think it is fairly obvious that she is gesturing toward a Friedman-esque interpretation of Smith and the invisible hand here. See Boucoyannis, Deborah, “The Equalizing Hand: Why Adam Smith Thought the Market Should Produce Wealth without Steep Inequality,” Perspectives on Politics 11/4 (2013), 1051–70CrossRefGoogle Scholar, at 1052.

107

107 Hunter, “The History of Philosophy and the Persona of the Philosopher,” 573.

108

108 Richard Rorty, “The Historiography of Philosophy,” in Rorty, Schneewind, and Skinner, Philosophy in History, 49–75, at 49.

109

109 Samuel Fleischacker discusses these features of Smith's literary method in chap. 1 of his On Adam Smith's The Wealth of Nations. See also Rothschild, Economic Sentiments.

110

110 Sen, “Uses and Abuses of Adam Smith,” 264.

111

111 Ibid.

112

112 Sen discusses these ideas in fuller detail in “Uses and Abuses of Adam Smith,” as well as in Sen, Amartya, “Adam Smith's Prudence,” in Lall, S. and Stewart, F., eds., Theory and Reality in Development (London, 1986), 28–37CrossRefGoogle Scholar; Sen, On Ethics and Economics (London, 1987); and Sen, , “Adam Smith and Economic Development,” in Hanley, Ryan, ed., Adam Smith: His Life, Thought, and Legacy (Princeton, 2016), 281–302Google Scholar.

A correction has been issued for this article:

RETHINKING THE ‘CHICAGO SMITH’ PROBLEM: ADAM SMITH AND THE CHICAGO SCHOOL, 1929-1980 – CORRIGENDUM

GLORY LIU

Modern Intellectual History , Volume 17 , Issue 4

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