Paganelli on Sagar, 'Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics'

Paul Sagar. Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics. Princeton: Princeton University Press, 2022. 248 pp. $35.00 (cloth), ISBN 978-0-691-21083-4. 

Reviewed by Maria Pia Paganelli (Trinity University)
Published on H-Albion (March, 2023)
Commissioned by Jeffrey R. Wigelsworth (Red Deer Polytechnic)

Printable Version: https://www.h-net.org/reviews/showpdf.php?id=57876

Two of the many things that David Levy taught me about Adam Smith are, first, that Smith distinguishes between truth and belief in truth and, second, that specialization requires exchange to work. Paul Sagar’s Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics feels the opposite of Levy’s teaching. The book presents the true Smith, the only correct reading of Smith—the one that only Sagar among all the many readers of Smith is able to offer because everyone else before Sagar is wrong and has misread Smith (I have not counted the number of times that “misread,” “wrong,” “mistake,” and similar words are used, but it is a lot). And the book has a very specialized focus on political theory, overlooking a lot of the literature from, say, economics. The result feels like a very combative work that offers many clear and new ideas as well as many ideas that may appear a bit contradictory to readers with a different background from the audience that, I would guess, the book is meant to address.

Sagar opens with the claim that all readers before him misread and misused the term “commercial society.” Trade exists in all kinds of societies. Commercial society is a society where the larger part of the population lives off trade and not just on occasional exchanges. This definition may surprise political theorists, but I am not sure it would surprise many economists as I think it is the one commonly used in economics. Yet what I think is valuable in Sagar’s analysis is the distinction he brings to light between “commercial society” and “commercial nation.” In Sagar’s account, Smith does not use the two terms interchangeably, but rather he uses commercial society to refer to a society’s internal dominant means of subsistence and commercial nation to refer to the domestic and international relationships of this kind of society.

Sagar then continues by criticizing the interpretations (or use?) of the stadial theory of development in Smith. Sagar seems to claim that Smith does not use the four stages theory of development because he is more committed to a historical account of development. Yet he also seems to claim that Smith does use a two (or at times three) stages model of development, or some form of stadial “economic theory,” which, though, does not work in history because of the presence of “human institutions.” So, I, at least, remain confused: does Sagar believe that Smith has or has not a (whatever number) stage theory? And how would an “economic theory” differ from a (maybe not used) stage theory?

Chapter 2 offers an interpretation of Smith as caring to explain the emergence of “liberty in the modern sense,” which for Sagar is the liberty that the rule of law generates and differs from the traditional republican interpretation, since for Smith the rule of law is not something directly controlled by anyone, while for the republican it is (p. 75). For Smith, “liberty in the modern sense,” according to Sagar, is the lack of domination. And if there is someone thinking that, for Smith or in the actual world, commerce is sufficient for liberty, rather than being necessary but not sufficient, Sagar reminds them that commercial societies can instead take different forms (see ancient Greece and China) and only Europe experienced both commercial societies and “liberty in the modern sense.” Milton Friedman made it clear back in the early ’60s that capitalism is necessary but not sufficient for freedom, but maybe he should be disregarded because he talks about capitalism and not the smithian commercial societies.

Chapter 3 is meant to dismantle the misconception that Smith is a critic of Jean-Jacques Rousseau and is responding to him. Sagar claims that Smith is responding to Bernard Mandeville and David Hume instead, and it happens that accidentally Smith offers also a response to Rousseau. Sagar claims that Smith’s work needs to be read within the greater sociability debate of his time. This debate, in English, was not available to Rousseau, who thus presented an unsophisticated analysis compared to Mandeville and Hume, and this is why Smith can easily bypass Rousseau and address Mandeville and Hume directly.

Chapter 4 is a continuation of chapter 3. Here Sagar explains why Smith is not interested in the same kind of corruption that Rousseau is interested in. While Rousseau is concerned that a society based on commerce will give rise to excessive vanity, Smith thinks instead that the problem is the “quirk of rationality” human beings have (p. 137). This “quirk of rationality” is what drives human beings to be attracted to the means of promoting utility rather than utility itself.

The explanation is well argued, but I wish Sagar had explained a bit more the relation between this “quirk of rationality” and the sociability of human nature. If one focuses on the “means of promoting utility, rather than on utility itself,” one can still comfortably live on a desert island and be a naturally isolated individual, like the types described by Thomas Hobbes and Samuel Pufendorf, which Sagar claims Smith criticizes, as the difference between utility and means of obtaining utility is of degree not of kind (p. 173). I also wish Sagar had a clear explanation of the relation between this “quirk of rationality,” which drives our trading actions, and the natural propensity to truck, barter, and exchange.

Sagar seems to be determined to show also that, for Smith, societies in which commerce is the dominant means of subsistence do not have different kinds of human beings than other societies. For Smith some characteristics of human beings remain constant across different kinds of society. I wish Sagar had connected his claim more to the existing literature that sees Smith following Hume in the quest for a “science of man,” their task being indeed to identify what is constant and what is not, human nature being constant and human character being affected by the surrounding environment.

In chapter 4, Sagar also introduces three definitions of corruption: systemic corruption (“when politics corrupts economics”), venal corruption (“when economics corrupts politics”), and moral corruption (pp. 145-46). Chapter 4 is said to be about moral corruption and chapter 5 about systemic corruption. But chapter 5 is supposed to be about, among other things, the special interest groups capturing the state. How is this not venal corruption rather than systemic corruption? The book's concluding remarks reiterate that “Adam Smith is not a theorist of capitalism,” because for Smith commercial societies are not just capitalistic societies (p. 212).

The volume has many valuable as well as what appear to be contradictory insights in the midst of its provocative claims of presenting the only correct reading of Smith, while at the same time turning a blind eye to what is outside what may be limiting disciplinary boundaries. I believe it is a book that Smith scholars should read and will find stimulating. The cover has an interesting representation of weapons. Whom will they wound?

Citation: Maria Pia Paganelli. Review of Sagar, Paul, Adam Smith Reconsidered: History, Liberty, and the Foundations of Modern Politics. H-Albion, H-Net Reviews. March, 2023.
URL: https://www.h-net.org/reviews/showrev.php?id=57876