The Answer Is Transaction Costs Adam Smith's Wealth of Nations: Episode 1 (Background)
Scottish Enlightenment's Unique Rise
- The Scottish Enlightenment thrived despite Scotland's poverty and political subordination.
- Its unique cultural and institutional context fostered a major intellectual surge in philosophy, economics, and social sciences.
Presbyterian Literacy Fuels Inquiry
- Scottish Presbyterianism emphasized literacy and critical inquiry despite doctrinal rigidity.
- This fostered an intellectual culture conducive to inquiry, education, and civic responsibility.
Act of Union Sparks Innovation
- The 1707 Act of Union politically subordinated Scotland but preserved key cultural institutions.
- This duality fostered intellectual innovation and economic growth in Scottish cities.
(N.B.: This episode is cross-posted at our partner site, Adam Smith Works. There are lots of resources and background material there, if you want to delve deeper)
The Scottish Enlightenment emerged as a remarkable intellectual movement that shaped modern economics, philosophy, and social science, with Adam Smith at its center developing a dual theory of human nature through his two masterworks.
• Scottish Presbyterian education fostered literacy and critical inquiry despite doctrinal rigidity
• The 1707 Act of Union created unique conditions where Scots pursued intellectual achievement rather than political power
• Scottish universities thrived through student-funded education while Oxford professors "gave up even the pretense of teaching"
• Thinkers like David Hume, Francis Hutchison, and Thomas Reid established key intellectual foundations
• Smith's concept of sympathy involves synchronizing sentiments with others, not just feeling pity
• Justice protects "person, property and promise" as the foundation of social order
• Beneficence is "the ornament" of society while justice is essential to its existence
• Smith was strongly anti-slavery, describing enslaved Africans as "nations of heroes" superior to their captors
• The Theory of Moral Sentiments and Wealth of Nations form a unified system, not contradictory works
• Commercial society requires both moral foundations and economic understanding to function properly
For the complete series on Adam Smith's Wealth of Nations and additional resources, you can also visit Liberty Fund's Adam Smith Works website. For the material on this episode, go here.
APPENDIX:
To reduce transaction costs, here is substantial amount, probably more than you want, of primary and secondary material on Smith and WoN. Enjoy!
Primary Smith Sources From Liberty Fund
1. The Theory of Moral Sentiments (1759/1790). Edited by D. D. Raphael & A. L. Macfie (Indianapolis: Liberty Fund, 1982)
https://oll.libertyfund.org/titles/theory-of-moral-sentiments-and-essays-on-philosophical-subjects
2. An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Edited by Edwin Cannan (Indianapolis: Liberty Fund, original editions 1904, in two vols.): https://oll.libertyfund.org/titles/smith-an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations-cannan-ed-in-2-vols
3. Lectures on Astronomy (c. 1748). Essays on Philosophical Subjects (1795), which contains Smith’s “History of Astronomy”—based on his lectures.
https://oll.libertyfund.org/titles/theory-of-moral-sentiments-and-essays-on-philosophical-subjects
General Resources
1. Aristotle. (n.d.). Nicomachean ethics. (Jowett translation)
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