The “end” of economics: Adam Smith as theologian
ABC Religion & Ethics
Banishing teleology and narrowing the focus to efficient causes has arguably assisted theoretical and empirical advances in economics over the past two centuries. But it has hindered capacity of economics to engage with the policy questions that touch on our deepest hopes and sense of justice. In this respect, modern economics could not be further removed from its ‘founder’ ― Adam Smith.
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ABC Religion & Ethics
It is well known that Adam Smith constructed a system which comprised, not just economics, but history, jurisprudence and moral philosophy. In fact, he seemed more proud of his Theory of Moral Sentiments than his much more famous The Wealth of Nations. But the fact that Adam Smith was also a theologian has taken much longer to be appreciated.

Smith was born in Kirkaldy in 1723. He was brought up by his devout Presbyterian mother after the death of his father and, like most of his contemporaries, he attended church regularly throughout his life. His Scotland was dominated by the Presbyterian Kirk in a way that those of us living in contemporary secular societies find difficult to appreciate.

The young Smith left Glasgow in 1740 to be a Snell exhibitioner at University of Oxford, which entailed a commitment to take Anglican orders on his return to Scotland ― though, like many other exhibitioners, he never did. In 1751, when taking up his Chair at the University of Glasgow, Smith signed the Calvinist Westminster Confession of Faith before the Glasgow Presbytery, satisfied the University of his orthodoxy, and took the Oath of Faith. Smith’s scrupulousness in other similar matters suggests sincerity of this profession of orthodox Christian faith.

I would argue that there must be a presumption of a significant theological background to any work of moral philosophy or political economy produced in such a context. Such a presumption is confirmed by the abundance of theological language in Smith’s published works. He regularly refers to “the Deity,” “the author of nature,” “the great Director of nature,” “lawful superior” and so on. There are, moreover, repeated references to divine design and providence. For instance:

Every part of nature, when attentively surveyed, equally demonstrates the providential care of its Author, and we admire the wisdom and goodness of God even in the weakness and folly of man.

And:

the happiness of mankind, as well as all other rational creatures, seems to have been the original purpose intended by the author of nature, when he brought them into existence ... By acting according to the dictates of our moral faculties, we necessarily pursue the most effectual means for promoting the happiness of mankind, and may therefore be said, in some sense, to co-operate with the Deity, and to advance as far as in our power the plan of Providence.

And again:

The idea of that divine Being, whose benevolence and wisdom have, from all eternity, contrived and conducted the immense machine of the universe, so as at all times to produce the greatest possible quantity of happiness, is certainly of all the objects of human contemplation by far the most sublime.

And, in relation to morality:

the governing principles of human nature, the rules which they prescribe are to be regarded as the commands and laws of the Deity.

The presumption of a theological dimension to Smith’s work is confirmed by the fact that Smith was read theologically by his contemporaries, including important figures in the formation of political economy as a discipline in nineteenth-century Britain.

For instance, Richard Whately, holder of the first chair in economics at a British university, interpreted providentially Smith’s assertion of unintended positive consequences of self-interested behaviour: “Man is, in the same act, doing one thing by choice, for his own benefit, and another, undesignedly, under the care of Providence, for the service of the community.” Whately also placed Smith’s Theory of Moral Sentiments and Wealth of Nations above William Paley’s works as natural theology.

Among nineteenth-century British popularisers of political economy none was more influential than Thomas Chalmers. Chalmers also took Smith to be suggesting that the transformation of self-interested behaviour into the greatest economic good is providential:

Such a result which at the same time not a single agent in this vast and complicated system of trade contemplates or cares for, each caring only for himself ― strongly bespeaks a higher Agent, by whose transcendental wisdom it is, that all is made to conspire so harmoniously, and to terminate so beneficially.

Furthermore:

The whole science of political economy is full of these exquisite adaptions to the wants and comforts of human life, which bespeak the skill of a master-hand, in the adjustment of its laws, and the working of its profoundly constructed mechanism.

Theological readings of Smith also abound among the nineteenth-century pioneers of political economy as a discipline, and even more so in popular discussions of political economy.

Stoicism or Calvinism?

Much of the discussion of the theological language in Adam Smith’s works has connected it to Smith’s interest in Stoicism. For instance, Raphael and Macfie’s introduction to the bicentennial edition of Theory of Moral Sentiments states:

Stoic philosophy is the primary influence on Smith’s ethical thought. It also fundamentally affects his economic theory ... Adam Smith’s ethics and natural theology are predominantly Stoic.

As evidence, they point to the importance of self-preservation in Smith, the importance of self-command as a virtue, Smith’s commitment to a harmonious natural order and his universalism.

We know that Smith read and admired the Stoics in his youth, and that Stoic ideas were popular among Scottish Enlightenment thinkers searching for a framework to replace a degenerate Aristotelianism. In his discussion of systems of philosophy in Part VII of Theory of Moral Sentiments, Smith devotes more space to the Stoics than any other system, but he also criticises many key Stoic ideas. He ultimately concludes: “The plan and system which Nature has sketched out for our conduct, seems to be altogether different from that of the Stoical philosophy.”

But in my view, more important than Stoicism to Smith’s theology is the British tradition of scientific natural theology, filtered through the moderate Calvinism of the Scottish Enlightenment. Smith held the Chair in moral philosophy at the University of Glasgow in the 1750s, and followed the tradition of his predecessors Gershom Carmichael and Frances Hutcheson in lecturing on natural theology. One student, John Millar, reported:

His course of lectures ... was delivered in four parts. The first contained Natural Theology; in which he considered the proofs of the being and attributes of God, and those principles of the mind on which religion is founded.

These Glasgow lectures were the foundation of Smith’s system ― with the second part on moral philosophy becoming Theory of Moral Sentiments and the final part being developed into The Wealth of Nations. Unfortunately, we do not have manuscript evidence or even student notes which might indicate the content of the natural theology lectures. It is therefore difficult to assess the accuracy of the anecdote of John Ramsay (who did not attend the lectures), that Smith’s:

speculations upon natural religion, though not extended to any great length, were no less flattering to human pride and that of Hutcheson. From both the one and the other presumptuous striplings took upon themselves to draw an unwarranted conclusion ― namely, that the great truths of theology, together with the duties which man owes of God and his neighbours, may be discovered by the light of nature without any special revelation.

The quotations above from Smith’s published work may be our best guide, and are only a few of many examples of the language and thought forms of the British tradition of scientific natural theology. My best guess about the content of his natural theology lectures is that they would be a Newtonian version of his predecessor’s lectures, consistent with Smith’s known admiration for Newton’s scientific methodology and his concern to avoid unnecessary theological controversy.

Calvinism has been inexplicably neglected as a background to Adam Smith’s work, despite the fact that Smith fits almost perfectly the picture of moderate Scottish Enlightenment Calvinism. Take the sketch provided by David Fergusson:

The role of God as creator and sustainer of the world is emphasised. The signs of the divine presence are evident in the natural world; in this respect, the design argument is widely assumed to be valid. The beneficial role of religion in civil society is stressed. Religion contributes to social order and harmony. When purged of irrational fanaticism and intolerance, faith exercises a cohesive function through the moral direction and focus it offers human life. As benevolent and wise, God has ordered the world so that its moral and scientific laws contribute to human welfare. The prospect of an eschatological state in which virtue and felicity coincide, moreover, provides further moral motivation.

The normative statement for Scottish Presbyterians in Smith’s day was the Westminster Confession of Faith, which Smith signed to take up his Glasgow Chair. The opening sentence states that “the light of nature, and the works of creation and providence do so far manifest the goodness, wisdom, and power of God, as to leave men inexcusable.” There is the important caveat “that knowledge of God, and of His will, which is necessary unto salvation” cannot come from nature, reflecting the Calvinist emphasis on how our sensory and moral capacities are limited and twisted by the Fall. Smith takes up this Calvinist theme, writing of “irregularity in the human breast” just before the previously cited passage about how:

every part of nature, when attentively surveyed, equally demonstrates the providential care of its Author, and we may admire the wisdom and goodness of God even in the weakness and folly of man.

Elsewhere vices and follies of mankind are seen as a necessary part of the plan of the universe. Ignorance of “all the connexions and dependencies of things” conditions our action, though we are comforted by the thought that God, the “benevolent and all-wise Being can admit into the system of his government, no partial evil which is not necessary for the universal good.”

Justice and the life to come

There is a key passage that Adam Smith modified through different editions of Theory of Moral Sentiments before settling on the following:

For it well deserves to be taken notice of, that we are so far from imagining that injustice ought to be punished in this life, merely on account of the order of society, which cannot otherwise be maintained, that Nature teaches us to hope, and religion, we suppose, authorises us to expect, that it will be punished, even in a life to come ... in every religion, and in every superstition that the world has ever beheld, accordingly, there has been a Tartarus as well as an Elysium; a place provided for the punishment of the wicked, as well as one for the reward of the just.

Smith suggests that belief in justice in the life to come is taught by nature, reinforced by religion. If nature teaches largely by analogy then Smith is departing from Hume’s position that such analogies are philosophically illegitimate, or at least suggesting that the fact that we learn about the afterlife by analogy is more important than a philosophical argument about the legitimacy of analogy. He also departs from Hume’s view that the laws of justice arise from the need to maintain order in society.

The importance of the naturally formed sense of justice leading us to a future hope comes out in another passage where Smith discusses the famous case of Calas who was broken on the wheel in France for supposed murder of his son:

To persons in such unfortunate circumstances, that humble philosophy which confines its views to this life, can afford, perhaps, but little consolation. Every thing that could render either life or death respectable is taken from them. They are condemned to death and to everlasting infamy. Religion can alone afford them any effectual comfort. She alone can tell them, that it is of little importance what man may think of their conduct, while the all-seeing Judge of the world approves of it. She alone can present to them the view of another world; a world of more candour, humanity, and justice, than the present; where their innocence is in due time to be declared, and their virtue to be finally rewarded: and the same great principle which can alone strike terror into triumphant vice, affords the only effectual consolation to disgraced and insulted innocence.

In a similar vein, Smith writes:

When we thus despair of finding any force upon earth which can check the triumph of injustice, we naturally appeal to heaven, and hope, that the great Author of our nature will himself execute hereafter, what all the principles which he has given us for the direction of our conduct, prompt us to attempt even here; that he will complete the plan which he himself has thus taught us to begin; and will, in a life to come, render to every one according to the works which he has performed in this world. And thus we are led to the belief of a future state, not only by the weaknesses, by the hopes and fears of human nature, but by the noblest and best principles which belong to it, by the love of virtue, and by the abhorrence of vice and injustice.

And further:

When the general rules which determine the merit and demerit of actions, come thus to be regarded as the laws of an All-powerful Being, who watches over our conduct, and who, in a life to come, will reward the observance, and punish the breach of them; they necessarily acquire a new sacredness from this consideration.

While Smith does not ground belief in future rewards and punishment in any calculation that individual or society benefits from such a belief, he is interested in the consequences of such a belief. Following the passage just quoted, he comments:

It is in this manner that religion enforces the natural sense of duty and hence it is, that mankind are generally disposed to place great confidence in the probity of those who seem deeply impressed with religious sentiments.

The afterlife is important in Smith’s system because the administration of justice in this present life is defective, and even if correct judgments are made, rewards and punishments in this life fall short of what justice demands. It is not just a philosophical or theological point, because Smith in both Theory of Moral Sentiments and The Wealth of Nations sees justice is necessary to the proper functioning of economic system:

If there is any society among robbers and murderers, they must at least, according to the trite observation, abstain from robbing and murdering one another. Beneficence, therefore, is less essential to the existence of society than justice. Society may subsist, though not in the most comfortable state, without beneficence; but the prevalence of injustice must utterly destroy it ... Justice ... is the main pillar that upholds the whole edifice.

We know that the imagination is important in Smith’s account or scientific progress, and the spectator mechanisms of morality. For Smith, the future state also operates as an imaginative space where morality can be negotiated under the gaze of the author of nature. An example is Smith’s recommendation of the active life and public engagement, as against quiet monkish life recommended by some of his religious contemporaries. Smith takes particular exception to the recommendation of monkish virtues by the French Catholic Bishop of Clermont, and his objection is developed in the imaginative space of the afterlife:

To compare, in this manner, the futile mortifications of a monastery, to the ennobling hardships and hazards of war; to suppose that one day, or one hour, employed in the former should, in the eye of the great Judge of the world, have more merit than a whole life spent honourably in the latter, is surely contrary to all our moral sentiments; to all the principles by which nature has taught us to regulate our contempt or admiration. It is this spirit, however, which, while it has reserved the celestial regions for monks and friars, or for those whose conduct and conversation resembled those of monks and friars, has condemned to the infernal all the heroes, all the statesmen and lawgivers, all the poets and philosophers of former ages; all those who have invented, improved, or excelled in the arts which contribute to the subsistence, to the conveniency, or to the ornament of human life; all the great protectors, instructors, and benefactors of mankind; all those to whom our natural sense of praise-worthiness forces us to ascribe the highest merit and most exalted virtue. Can we wonder that so strange an application of this most respectable doctrine should sometimes have exposed it to contempt and derision; with those at least who had themselves, perhaps, no great taste or turn for the devout and contemplative virtues.

Overall, for Smith, the judgment and future hope operate as a court of appeal where wrongs of this world are righted and persons receive their just deserts. The justice of this divine court of appeal is continuous with and reinforces the natural sense of justice we have in this present life. There is no conflict between the two because for Smith the “great Director of nature” is providentially at work in both.

The continuity between the present and future life might suggest that Smith adheres to a version of eighteenth-century “cosmic utilitarianism,” or is even a precursor of models in the contemporary economics of religion literature where heavenly and earthly utility are traded off against each other. While there doubtless are utilitarian elements in Smith ― especially when he is giving policy advice, and he sometimes notes that behaviour driven by other forces promotes utility ― his moral philosophy overall cannot be described as utilitarian.

For instance, he criticises utilitarian accounts of justice, and more generally accounts of justice which ground it in reason. There is a great distance between Smith and his utilitarian contemporaries Paley and Bentham. Furthermore, no passage in Smith’s writings describes such trade-offs an individual makes between earthly and heavenly utility.

Economics from the perspective of eternity

If Smith resists the utilitarian flattening of moral discourse, and the equating of the present and future lives that make trading them off possible, then what sort of framework should we place Smith’s eschatology in as we seek to understand its place in his system? I suggest that there is a teleological relationship between justice in the present life and justice in the future life. What happens in the future life is continuous with and completes the present life. That Smith operates in a teleological framework that is perfectly consistent with his theological roots in the British tradition of scientific natural theology and the moderate Calvinism of the Scottish Enlightenment.

The teleological elements in his work have been emphasised in recent years by Smith scholars against a number of prominent detractors who made Smith part of their larger narratives bout the banishment of teleology from modern science: for instance, in the work of Alasdair MacIntyre (who located the abandonment of teleology in the eighteenth century) and Charles Taylor (who regarded the providential deism of the seventeenth and eighteenth centuries as an intermediate stage between the old and modern worlds, as the idea that God was needed to achieve mutual beneficial ends was lost).

Examining Smith’s writings closely it is pretty clear teleology is important, though final causes are separated carefully from efficient causes. Here is a key passage:

In every part of the universe we observe means adjusted with the nicest artifice to the ends which they are intended to produce; and in the mechanism of a plant, or animal body, we admire how everything is contrived for advancing the two great purposes of nature, the support of the individual, and the propagation of the species. But in these, and in all such objects, we still distinguish the efficient from the final cause of their several motions and organizations. The digestion of the food, the circulation of the blood, and the secretion of the several juices which are drawn from it, are operations all of them necessary for the great purposes of animal life. Yet we never endeavour to account for them from those purposes as from their efficient causes, nor imagine that the blood circulates, or that the food digests of its own accord, and with a view or intention to the purposes of circulation or digestion. The wheels of the watch are all admirably adjusted to the end for which it was made, the pointing of the hour. All their various motions conspire in the nicest manner to produce this effect. If they were endowed with a desire and intention to produce it, they could not do it better. Yet we never ascribe any such desire or intention to them, but to the watch-maker, and we know that they are put into motion by a spring, which intends the effect it produces as little as they do.

But though, in accounting for the operations of bodies, we never fail to distinguish in this manner the efficient from the final cause, in accounting for those of the mind we are very apt to confound these two different things with one another. When by natural principles we are led to advance those ends, which a refined and enlightened reason would recommend to us, we are very apt to impute to that reason, as to their efficient cause, the sentiments and actions by which we advance those ends, and to imagine that to be the wisdom of man, which in reality is the wisdom of God. Upon a superficial view, this cause seems sufficient to produce the effects which are ascribed to it; and the system of human nature seems to be more simple and agreeable when all its different operations are in this manner deduced from a single principle.

Here for Smith, ends such as the propagation of the species clearly move the system, and the open question is the relationship between divine and human agency.

Contemporary economics is a long way from Adam Smith. MacIntyre and Taylor may have placed Smith wrongly on the modern side of the line dividing modern from older teleological approaches to scientific explanation and moral philosophy. This line for economics, in my view, runs through the middle of the nineteenth century in Britain, and the early decades of the twentieth century in America, although it is difficult to be precise. Contemporary economics is clearly on the modern side of the dividing line and has no place for teleology.

Banishing teleology, together with any meaningful discussion of eschatology, and narrowing the focus to efficient causes has arguably assisted theoretical and empirical advance in economics over the past two centuries. But it has hindered capacity of economics to engage with the really big policy questions, those touch our deepest hopes and sense of justice. Hence, the future that economists take to their fellow human beings is the same as the present, just with further growth of income and consumption. As Paul Fiddes has put it, there is a “hopelessness of a future that is an inexorable extension of the present.”

Adam Smith could engage with these issues because his system had an end that was not just an extension of the present, and an imaginative space in which to reconceive present possibilities.