I

The Industrial Revolution is hardly less a fundamental change in the habits of English thought than in the technique of commercial production. Alongside the discoveries of Hargreaves and Crompton, the ideas of Hume and Adam Smith shifted the whole perspective of men’s minds. The Revolution, indeed, like all great movements, did not originate at any given moment. There was no sudden invention which made the hampering system of government-control seem incompatible with industrial advance. The mercantilism against which the work of Adam Smith was so magistral a protest was already rather a matter of external than internal commerce when he wrote. He triumphed less because he suddenly opened men’s eyes to a truth hitherto concealed than because he represented the culmination of certain principles which, under various aspects, were common to his time. The movement for religious toleration is not only paralleled in the next century by the movement for economic freedom, but is itself in a real sense the parent of the latter. For it is not without significance that the pre-Adamite economists were almost without exception the urgent defenders of religious toleration. The landowners were churchmen, the men of commerce largely Nonconformist; and religious proscription interfered with the balance of trade. When the roots of religious freedom had been secured, it was easy for them to transfer their argument to the secular sphere.

Nothing, indeed, is more important in the history of English political philosophy than to realize that from Stuart times the Nonconformists were deeply bitten with distrust of government. Its courts of special instance hampered industrial life at every turn in the interest of religious conformity. Their heavy fines and irritating restrictions upon foreign workmen were nothing so much as a tax upon industrial progress. What the Nonconformists wanted was to be left alone; and Davenant explained the root of their desire when he tells of the gaols crowded with substantial tradesmen whose imprisonment spelt unemployment for thousands of workmen. Sir William Temple, in his description of Holland, represents economic prosperity as the child of toleration. The movement for ecclesiastical freedom in England, moreover, became causally linked with that protest against the system of monopolies with which it was the habit of the court to reward its favorites. Freedom in economic matters, like freedom in religion, came rapidly to mean permission that diversity shall exist; and economic diversity soon came to mean free competition. The latter easily became imbued with religious significance. English puritanism, as Troeltsch has shown us, insisted that work was the will of God and its performance the test of grace. The greater the energy of its performance, the greater the likelihood of prosperity; and thence it is but a step to argue that the free development of a man’s industrial worth is the law of God. Success in business, indeed, became for many a test of religious grace, and poverty the proof of God’s disfavor. Books like Steele’s Religious Tradesman (1684) show clearly how close is the connection. The hostility of the English landowners to the commercial classes in the eighteenth century is at bottom the inheritance of religious antagonism. The typical qualities of dissent became a certain pushful exertion by which the external criteria of salvation could be secured.

Much of the contemporary philosophy, moreover, fits in with this attitude. From the time of Bacon, the main object of speculation was to disrupt the scholastic teleology. In the result the State becomes dissolved into a discrete mass of individuals, and the self-interest of each is the starting-point of all inquiry. Hobbes built his state upon the selfishness of men; even Locke makes the individual enter political life for the benefits that accrue therefrom. The cynicism of Mandeville, the utilitarianism of Hume, are only bypaths of the same tradition. The organic society of the middle ages gives place to an individual who builds the State out of his own desires. Liberty becomes their realization; and the object of the State is to enable men in the fullest sense to secure the satisfaction of their private wants. How far is that conception from the Anglican outlook of the seventeenth century, a sermon of Laud’s makes clear. “If any man,” he said, “be so addicted to his private interest that he neglects the common State, he is void of the sense of piety, and wishes peace and happiness for himself in vain. For, whoever he be, he must live in the body of the commonwealth and in the body of the Church.” So Platonic an outlook was utterly alien from the temper of puritanism. They had no thought of sacrificing themselves to an institution which they had much ground for thinking existed only for their torment. The development of the religious instinct to the level of salvation found its philosophic analogue in the development of the economic sense of fitness. The State became the servant of the individual from being his master; and service became equated with an internal policy of laissez-faire.

Such summary, indeed, abridges the long process of release from which the eighteenth century had still to suffer; nor does it sufficiently insist upon the degree to which the old idea of state control still held sway in external policies of trade. Mercantilism was still in the ascendant when Adam Smith came to write. Few statesmen of importance before the younger Pitt had learned the secret of its fallacies; and, indeed, the chief ground for difference between Chatham and Burke was the former’s suspicion that Burke had embraced the noxious doctrine of free trade. Mercantilism, by the time of Locke, is not the simple error that wealth consists in bullion but the insistence that the balance of trade must be preserved. Partly it was doubtless derived from the methods of the old political arithmetic of men like Petty and Davenant; the individual seeks a balance at the end of his year’s accounting and so, too, the State must have a balance. “A Kingdom,” said Locke, “grows rich or poor just as a farmer does, and no other way”; and while there is a sense in which this is wholly true, the meaning attached to it by the mercantilists was that foreign competition meant national weakness. They could not conceive a commercial bargain which was profitable to both sides. Nations grow prosperous at each other’s expense; wherefore a woolen trade in Ireland necessarily spells English unemployment. Even Davenant, who was in many respects on the high road to free trade, was in this problem adamant. Protection was essential in the colonial market; for unless the trade of the colonies was directed through England they might be dangerous rivals. So Ireland and America were sacrificed to the fear of British merchants, with the inevitable result that repression brought from both the obvious search for remedy.

Herein it might appear that Adam Smith had novelty to contribute; yet nothing is more certain than that his full sense of the world as the only true unit of marketing was fully grasped before him. In 1691 Sir Dudley North published his Discourses upon Trade. Therein he clearly sees that commercial barriers between Great Britain and France are basically as senseless as would be commercial barriers between Yorkshire and Middlesex. Indeed, in one sense, North goes even further than Adam Smith, for he argues against the usury laws in terms Bentham would hardly have disowned. Ten years later an anonymous writer in a tract entitled Considerations on the East India Trade (1701) has no illusions about the evil of monopoly. He sees with striking clarity that the real problem is not at any cost to maintain the industries a nation actually possesses, but to have the national capital applied in the most efficient channels. So, too, Hume dismissed the Mercantile theory with the contemptuous remark that it was trying to keep water beyond its proper level. Tucker, as has been pointed out, was a free trader, and his opinion of the American war was that it was as mad as those who fought “under the peaceful Cross to recover the Holy Land”; and he urged, indeed, prophesied, the union with Ireland in the interest of commercial amity. Nor must the emphasis of the Physiocrats upon free trade be forgotten. There is no evidence now that Adam Smith owed this perception to his acquaintance with Quesnay and Turgot; but they may well have confirmed him in it, and they show that the older philosophy was attacked on every side.

Nor must we miss the general atmosphere of the time. On the whole his age was a conservative one, convinced, without due reason, that happiness was independent of birth or wealth and that natural law somehow could be made to justify existing institutions. The poets, like Pope, were singing of the small part of life which kings and laws may hope to cure; and that attitude is written in the general absence of economic legislation during the period. Religiously, the Church exalted the status quo; and where, as with Wesley, there was revolt, its impetus directed the mind to the source of salvation in the individual act. It may, indeed, be generally argued that the religious teachers acted as a social soporific. Where riches accumulated, they could be regarded as the blessing of God; where they were absent their unimportance for eternal happiness could be emphasized. Burke’s early attack on a system which condemned “two hundred thousand innocent persons ... to so intolerable slavery” was, in truth, a justification of the existing order. The social question which, in the previous century, men like Bellers and Winstanley had brought into view, dropped out of notice until the last quarter of the century. There was, that is to say, no organized resistance possible to the power of individualism; and resistance was unlikely to make itself heard once the resources of the Industrial Revolution were brought into play. Men discovered with something akin to ecstasy the possibilities of the new inventions; and when the protest came against the misery they effected, it was answered that they represented the working of that natural law by which the energies of men may raise them to success. And discontent could easily, as with the saintly Wilberforce, be countered by the assertion that it was revolt against the will of God.

II

Few lives represent more splendidly than that of Adam Smith the speculative ideal of a dispassionate study of philosophy. He was fortunate in his teachers and his friends. At Glasgow he was the pupil of Francis Hutcheson; and even if he was taught nothing at Oxford, at least six years of leisure gave him ample opportunity to learn. His professorship at Glasgow not only brought him into contact with men like Hume, but also admitted him to intercourse with a group of business men whose liberal sentiments on commerce undoubtedly strengthened, if they did not originate, his own liberal views. At Glasgow, too, in 1759, he published his Theory of Moral Sentiments, written with sufficient power of style to obscure its inner poverty of thought. The book brought him immediately a distinguished reputation from a public which exalted elegance of diction beyond all literary virtues. The volatile Charles Townshend made him tutor to the Duke of Buccleuch, through whom Smith not only secured comparative affluence for the rest of his days, but also a French tour in which he met at its best the most brilliant society in Europe. The germ of his Wealth of Nations already lay hidden in those Glasgow lectures which Mr. Cannan has so happily recovered for us; and it was in a moment of leisure in France that he set to work to put them together in systematic fashion. Not, indeed, that the Frenchmen whom he met, Turgot, Quesnay and Dupont de Nemours, can be said to have done more than confirm the truths he had already been teaching. When he returned to Scotland and a competence ten years of constant labor were necessary before the Wealth of Nations was complete. After its publication, in 1776, Adam Smith did little save attend to the administrative duties of a minor, but lucrative office in the Customs. Until the end, indeed, he never quite gave up the hope, foreshadowed first in the Moral Sentiments of completing a gigantic survey of civilized institutions. But he was a slow worker, and his health was never robust. It was enough that he should have written his book and cherished friendships such as it is given to few men to possess. Hume and Burke, Millar the jurist, James Watt, Foulis the printer, Black the chemist and Hutton of geological fame it is an enviable circle. He had known Turgot on intimate terms and visited Voltaire on Lake Geneva. Hume had told him that his book had “depth and solidity and acuteness”; the younger Pitt had consulted him on public affairs. Few men have moved amid such happy peace within the very centre of what was most illustrious in their age.

We are less concerned here with the specific economic details of the Wealth of Nations than with its general attitude to the State. But here a limitation upon criticism must be noted. The man of whom Smith writes is man in search of wealth; by definition the economic motive dominates his actions. Such abuse, therefore, as Ruskin poured upon him is really beside the point when his objective is borne in mind. What virtually he does is to assume the existence of a natural economic order which tends, when unrestrained by counter-tendencies, to secure the happiness of men. “That order of things which necessity imposes in general,” he writes, “... is, in every particular country promoted by the natural inclinations of man”; and he goes on to explain what would have resulted “if human institutions had never thwarted those natural inclinations.” “All systems either of preference or of restraint, therefore, being thus completely taken away,” he writes again, “the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest in his own way.... The sovereign is completely discharged from a duty in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge would ever be sufficient; the duty of superintending the industry of private people and of directing it towards the employments most suitable to the interests of the society.”

The State, in this conception has but three functions defence, justice and “the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain.” The State, in fact, is simply to provide the atmosphere in which production is possible. Nor does Smith conceal his thought that the main function of justice is the protection of property. “The affluence of the rich,” he wrote, “excites the indignation of the poor, who are often both driven by want and prompted by envy to invade their possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, acquired by the labor of many years, or perhaps many successive generations, can sleep a single night in security.” The attitude, indeed, is intensified by his constant sense that the capital which makes possible new productivity is the outcome of men’s sacrifice; to protect it is thus to safeguard the sources of wealth itself. And even if the State is entrusted with education and the prevention of disease, this is rather for the general benefit they confer and the doubt that private enterprise would find them profitable than as the expression of a general rule. Collective effort of every kind awakened in him a deep distrust. Trade regulations such as the limitation of apprenticeship he condemned as “manifest encroachment upon the just liberty of the workman and of those who may be disposed to employ him.” Even educational establishments are suspect on the ground not unnatural after his own experience of Oxford that their possibilities of comfort may enervate the natural energies of men.

The key to this attitude is clear enough. The improvement of society is due, he thinks not to the calculations of government but to the natural instincts of economic man. We cannot avoid the impulse to better our condition; and the less its effort is restrained the more certain it is that happiness will result. We gain, in fact, some sense of its inherent power when we bear in mind the magnitude of its accomplishment despite the folly and extravagance of princes. Therein we have some index of what it would achieve if left unhindered to work out its own destinies. Human institutions continually thwart its power; for those who build those institutions are moved rather “by the momentary fluctuations of affairs” than their true nature. “That insidious and crafty animal, vulgarly called a politician or statesman” meets little mercy for his effort compared to the magic power of the natural order. “In all countries where there is a tolerable security,” he writes, “every man of common understanding will endeavor to employ whatever stock he can command in procuring either present enjoyment or future profit.” Individual spontaneity is thus the root of economic good; and the real justification of the state is the protection it affords to this impulse. Man, in fact, is by nature a trader and he is bound by nature to discover the means most apt to progress.

Nor was he greatly troubled by differences of fortune. Like most of the Scottish school, especially Hutcheson and Hume, he thought that men are much alike in happiness, whatever their station or endowments. For there is a “never-failing certainty” that “all men sooner or later accommodate themselves to whatever becomes their permanent situation”; though he admits that there is a certain level below which poverty and misery go hand in hand. But, for the most part, happiness is simply a state of mind; and he seems to have had but little suspicion that differences of wealth might issue in dangerous social consequence. Men, moreover, he regarded as largely equal in their original powers; and differences of character he ascribes to the various occupations implied in the division of labor. Each man, therefore, as he follows his self-interest promotes the general happiness of society. That principle is inherent in the social order. “Every man,” he wrote in the Moral Sentiments, “is by nature first and principally recommended to his own care” and therein he is “led by an invisible hand to promote an end which was no part of his intention.” The State, that is to say, is the sum of individual goods; whereby to better ourselves is clearly to its benefit. And that desire “which comes with us from the womb and never leaves us till we go to the grave” is the more efficacious the less it is restrained by governmental artifice. For we know so well what makes us happy that none can hope to help us so much as we help ourselves.

Enlightened selfishness is thus the root of prosperity; but we must not fall into the easy fallacy which makes Smith deaf to the plaint of the poor. He urged the employer to have regard to the health and welfare of the worker, a regard which was the voice of reason and humanity. Where there was conflict between love of the status quo and a social good which Revolution alone could achieve, he did not, at least in the Moral Sentiments, hesitate to choose the latter. Order was, for the most part, indispensable; but “the greatest and noblest of all characters” he made the reformer of the State. Yet he is too impressed by the working of natural economic laws to belittle their influence. Employers, in his picture, are little capable of benevolence or charity. Their rule is the law of supply and demand and not the Sermon on the Mount. They combine without hesitation to depress wages to the lowest point of subsistence. They seize every occasion of commercial misfortune to make better terms for themselves; and the greater the poverty the more submissive do servants become so that scarcity is naturally regarded as more favorable to industry.

Obviously enough, the inner hinge of all this argument is Smith’s conception of nature. Nor can there be much doubt of what he thought its inner substance. Facile distinctions such as the effort of Buckle to show that while in the Moral Sentiments Adam Smith was dealing with the unselfish side of man’s nature, in the Wealth of Nations he was dealing with a group of facts which required the abstraction of such altruistic elements, are really beside the point. Nature for Smith is simply the spontaneous action of human character unchecked by hindrances of State. It is, as Bonar has aptly said, “a vindication of the unconscious law present in the separate actions of men when these actions are directed by a certain strong personal motive.” Adam Smith’s argument is an assumption that the facts can be made to show the relative powerlessness of institutions in the face of economic laws grounded in human psychology. The psychology itself is relatively simple, and, at least in the Wealth of Nations not greatly different from the avowed assumptions of utilitarianism. He emphasizes the strength of reason in the economic field, and his sense that it enables men to judge much better of their best interests than an external authority can hope to do. And therefore the practices accomplished by this reason are those in which the impulses of men are to be found. The order they represent is the natural order; and whatever hinders its full operation is an unwise check upon the things for which men strive.

Obviously enough, this attitude runs the grave risk of seeming to abstract a single motive the desire for wealth from the confused welter of human impulses and to make it dominant at the expense of human nature itself. A hasty reading of Adam Smith would, indeed, confirm that impression; and that is perhaps why he seemed to Ruskin to blaspheme human nature. But a more careful survey, particularly when the Moral Sentiments is borne in mind suggests a different conclusion. His attitude is implicit in the general medium in which he worked. What he was trying to do was less to emphasize that men care above all things for the pursuit of wealth than that no institutional modifications are able to destroy the power of that motive to labor. There is too much history in the Wealth of Nations to make tenable the hypothesis of complete abstraction. And there is even clear a sense of a nature behind his custom when he speaks of a “sacred regard” for life, and urges that every man has property in his own labor. The truth here surely is that Smith was living in a time of commercial expansion. What was evident to him was the potential wealth to be made available if the obsolete system of restraint could be destroyed. Liberty to him meant absence of restraint not because its more positive aspect was concealed from him but rather because the kind of freedom wanted in the environment in which he moved was exactly that for which he made his plea. There is a hint that freedom as a positive thing was known to him from the fact that he relied upon education to relieve the evils of the division of labor. But the general context of his book required less emphasis upon the virtues of state-interference than upon its defects. His cue was to show that all the benefits of regulation had been achieved despite its interference; from which, of course, it followed that restraint was a matter of supererogation.

III

It would be tedious to praise the Wealth of Nations. It may be doubtful whether Buckle’s ecstatic judgment that it has had more influence than any other book in the world was justified even when he wrote; but certainly it is one of the seminal books of the modern time. What is more important is to note the perspective in which its main teaching was set. He wrote in the midst of the first significant beginnings of the Industrial Revolution; and his emphatic approval of Watt’s experiments suggests that he was not unalive to its importance. Yet it cannot in any full sense be said that the Industrial Revolution has a large part in his book. The picture of industrial organization and its possibilities is too simple to suggest that he had caught any far reaching glimpse into the future. Industry, for him, is still in the last stage of handicraft; it is a matter of skillful workmanship and not of mechanical appliance. Capital is still the laborious result of parsimony. Credit is spoken of rather in the tones of one who sees it less as a new instrument of finance than a dangerous attempt by the aspiring needy to scale the heights of wealth. Profits are always a justified return for productive labor; interest the payment for the use of the owner’s past parsimony. Business is still the middleman distributing to the consumer on a small scale. He did not, or could not, conceive of an industry either so vast or so depersonalized as at present. He was rather writing of a system which, like the politics of the eighteenth century, had reached an equilibrium of passable comfort. His natural order was, at bottom, the beatification of that to which this equilibrium tended. Its benefits might be improved by free trade and free workmanship; but, upon the whole, he saw no reason to call in question its fundamental dogmas.

Therein, of course, may be found the main secret of his omissions. The problem of labor finds no place in his book. The things that the poor have absent from their lives, that concept of a national minimum below which no State can hope to fulfil even the meanest of its aims, of these he has no conception. Rather the note of the book is a quiet optimism, impressed by the possibilities of constant improvement which lie imbedded in the human impulse to better itself. What he did not see is the way in which the logical outcome of the system he describes may well be the attainment of great wealth at a price in human cost that is beyond its worth. Therein, it is clear, all individualistic theories of the state miss the true essence of the social bond. Those who came after Adam Smith saw only half his problem. He wrote a consumer’s theory of value. But whereas he had in mind a happy and contented people, the economics of Ricardo and Malthus seized upon a single element in human nature as that which alone the State must serve. Freedom from restraint came ultimately to mean a judgment upon national well-being in terms of the volume of trade. “It is not with happiness,” said Nassau Senior, “but with wealth that I am concerned as a political economist; and I am not only justified in omitting, but am perhaps bound to omit, all considerations which have no influence upon wealth.”

In such an aspect, it was natural for the balance of investigation to swing towards the study of the technique of production; and with the growing importance of capital, as machinery was introduced, the worker, without difficulty, became an adjunct, easily replaced, to the machine. What was remembered then was the side of Adam Smith which looked upon enlightened selfishness as the key to social good. Regulation became anathema even when the evils it attempted to restrain were those which made the mass of the people incapable of citizenship. Even national education was regarded as likely to destroy initiative; or, as a pauper’s dole which men of self-respect would regard with due abhorrence. The State, in short, ceased to concern itself with justice save insofar as the administration of a judicial code spelled the protection of the new industrial system. Nothing is more striking in the half-century after Adam Smith than the optimism of the economist and the business man in contrast to the hopeless despair of labor. That men can organize to improve their lot was denied with emphasis, so that until Francis Place even the workers themselves were half-convinced. The manufacturers were the State; and the whole intellectual strength of economics was massed to prove the rightness of the equation. The literature of protest, men like Hall and Thompson, Hodgskin and Bray, exerted no influence upon the legislation of the time; and Robert Owen was deemed an amiable eccentric rather than the prophet of a new hope. The men who succeeded, as Wilberforce, carried out to the letter the unstated assumptions of Puritan economics. The poor were consigned to a God whose dictates were by definition beneficent; and if they failed to understand the curious incidence of his rewards that was because his ways were inscrutable. No one who reads the tracts of writers like Harriet Martineau can fail to see how pitiless was the operation of this attitude. Life is made a struggle beneficent, indeed, but deriving its ultimate meaning from the misery incident to it. The tragedy is excused because the export-trade increases in its volume. The iron law of wages, the assumed transition of every energetic worker to the ranks of wealth, the danger lest the natural ability of the worker to better his condition be sapped by giving to him that which his self-respect can better win these became the unconscious assumptions of all economic discussion.

In all this, as in the foundation with which Adam Smith provided it, we must not miss the element of truth that it contains. No poison is more subtly destructive of the democratic State than paternalism; and the release of the creative impulses of men must always be the coping-stone of public policy. Adam Smith is the supreme representative of a tradition which saw that release effected by individual effort. Where each man cautiously pursued the good as he saw it, the realization was bound, in his view, to be splendid. A population each element of which was active and alert to its economic problems could not escape the achievement of greatness. All that is true; but it evades the obvious conditions we have inherited. For even when the psychological inadequacies of Smith’s attitude are put aside, we can judge his theory in the light of the experience it summarizes. Once it is admitted that the object of the State is the achievement of the good life, the final canon of politics is bound to be a moral one. We have to inquire into the dominant conception of the good life, the number of those upon whom it is intended that good shall be conferred.

In the light of this conception it is obvious enough that Smith’s view is impossible. No mere conflict of private interests, however pure in motive, seems able to achieve a harmony of interest between the members of the State. Liberty, in the sense of a positive and equal opportunity for self-realization, is impossible save upon the basis of the acceptance of certain minimal standards which can get accepted only through collective effort. Smith did not see that in the processes of politics what gets accepted is not the will that is at every moment a part of the state-purpose, but the will of those who in fact operate the machinery of government. In the half-century after he wrote the men who dominated political life were, with the best intentions, moved by motives at most points unrelated to the national well-being. The fellow-servant doctrine would never have obtained acceptance in a state where, as he thought, employer and workman stood upon an equal footing. Opposition to the Factory Acts would never have developed in a community where it was realized that below certain standards of subsistence the very concept of humanity is impossible. Modern achievement implies a training in the tools of life; and that, for most, is denied even in our own day to the vast majority of men. In the absence of legislation, it is certain that those who employ the services of men will be their political masters; and it will follow that their Acts of Parliament will be adapted to the needs of property. That shrinkage of the purpose of the State will mean for most not merely hardship but degradation of all that makes life worthy. Upon those stunted existences, indeed, a wealthy civilization may easily be builded. Yet it will be a civilization of slaves rather than of men.

The individualism, that is to say, for which Adam Smith was zealous demands a different institutional expression from that which he gave it. We must not assume an a priori justification for the forces of the past. The customs of men may represent the thwarting of the impulses of the many at the expense of the few not less easily than they may embody a general desire; and it is surely a mistaken usage to dignify as natural whatever may happen to have occurred. A man may find self-realization not less in working for the common good than in the limited satisfaction of his narrow desire for material advancement. And that, indeed, is the starting-point of modern effort. Our liberty means the consistent expression of our personality in media where we find people like-minded with ourselves in their conception of social life. The very scale of civilization implies collective plans and common effort. The constant revision of our basic notions was inevitable immediately science was applied to industry. There was thus no reason to believe that the system of individual interests for which Smith stood sponsor was more likely to fit requirements of a new time than one which implied the national regulation of business enterprise. The danger in every period of history is lest we take our own age as the term in institutional evolution. Private enterprise has the sanction of prescription; but since the Industrial Revolution the chief lesson we have had to learn is the unsatisfactory character of that title. History is an unenviable record of bad metaphysics used to defend obsolete systems. It took almost a century after the publication of the Wealth of Nations for men to realize that its axioms represented the experience of a definite time. Smith thought of freedom in the terms most suitable to his generation and stated them with a largeness of view which remains impressive even at a century’s distance.

But nothing is more certain in the history of political philosophy than that the problem of freedom changes with each age. The nineteenth century sought release from political privilege; and it built its success upon the system prepared by its predecessor. It can never be too greatly emphasized that in each age the substance of liberty will be found in what the dominating forces of that age most greatly want. With Locke, with Smith, with Hegel and with Marx, the ultimate hypothesis is always the summary of some special experience universalized. That does not mean that the past is worthless. Politics, as Seeley said, are vulgar unless they are liberalized by history; and a state which failed to see itself as a mosaic of ancestral institutions would build its novelties upon foundations of sand. Suspicions of collective effort in the eighteenth century ought not to mean suspicion in the twentieth; to think in such fashion is to fall into the error for which Lassalle so finely criticized Hegel. It is as though one were to confound the accidental phases of the history of property with the philosophic basis of property itself. From such an error it is the task of history above all to free us. For it records the ideals and doubts of earlier ages as a perennial challenge to the coming time.

The rightness of this attitude admits of proof in terms of the double tradition to which Adam Smith gave birth. On the one hand he is the founder of the classic political economy. With Ricardo, the elder Mill and Nassau Senior, the main preoccupation is the production of wealth without regard to its moral environment; and the state for them is merely an engine to protect the atmosphere in which business men achieve their labors. There is nothing in them of that fine despair which made Stuart Mill welcome socialism itself rather than allow the continuance of the new capitalist system. Herein the State is purged of moral purpose; and the utilitarian method achieves the greatest happiness by insisting that the technique of production must dominate all other circumstances. Until the Reform Act of 1867, the orthodox economists remained unchallenged. The use of the franchise was only beginning to be understood. The “new model” of trade unionism had not yet been tested in the political field. But it was discovered impossible to act any longer upon the assumptions of the abstract economic man. The infallible sense of his own interest was discovered to be without basis in the facts for the simple reason that the instruments of his perception obviously required training if they were to be applied to a complex world. Individualism, in the old, utilitarian sense, passed away because it failed to build a State wherein a channel of expression might be found for the creative energies of humble men.

It is only within the last two decades that we have begun to understand the inner significance of the protest against this economic liberalism. Adam Smith had declared the source of value to lie in labor; and, at the moment of its deepest agony, there were men willing to point the moral of his tale. That it represented an incautious analysis was, for them, unimportant beside the fact that it opened once more a path whereby economics could be reclaimed for moral science. For if labor was the source of value, as Bray and Thompson pointed out, it seemed as though degradation was the sole payment for its services. They did not ask whether the organization they envisaged was economically profitable, but whether it was ethically right. No one can read the history of these years and fail to understand their uncompromising denial of its rightness. Their negation fell upon unheeding ears; but twenty years later, the tradition for which they stood came into Marx’s hands and was fashioned by him into an interpretation of history. With all its faults of statement and of emphasis, the doctrine of the English socialists has been, in later hands, the most fruitful hypothesis of modern politics. It was a deliberate effort, upon the basis of Adam Smith’s ideas, to create a commonwealth in the interests of the masses. Wealth, in its view, was less the mere production of goods than the accumulated happiness of humble men. The impulses it praised and sought through state-action to express were, indeed, different from those upon which Smith laid emphasis; and he would doubtless have stood aghast at the way in which his thought was turned to ends of which he did not dream. Yet he can hardly have desired a greater glory. He thus made possible not only knowledge of a State untrammelled in its economic life by moral considerations; but also the road to those categories wherein the old conception of co-operative effort might find a new expression. Those who trod in his footsteps may have repudiated the ideal for which he stood, but they made possible a larger hope in which he would have been proud and glad to share.