Ji bai zi

A man after my own heart

What a wonderful sentence at the end of Smith's chapter on the Origin and Use of Money:

I am always willing to run some hazard of being tedious in order to be sure that I am perspicuous; (p42)

I just want to pause in admiration of his modesty and honesty.  The sentence continues:

and after taking the utmost pains that I can to be perspicuous, some obscurity may still appear to remain upon a subject in its own nature extremely abstracted.

Money is indeed an abstract subject.  The possible tedium that Smith refers to is his extremely patient, step-by-step consideration of the topic.  Possibly only a programmer (a systems programmer at that) would be interested in anything considered in such detail.  But that's me, or the part of me who found the careful presentation wonderfully precise and intelligible exactly because of the minute consideration of the details.

The costs of transport

In chapter 3 of book 1, Smith touches on the enormous cost advantage of sea transport over land transport in the 18th century.  He doesn't compare prices directly, but he breaks down the labor input:

A broad-wheeled waggon, attended by two men, and drawn by eight horses, in about six weeks time, carries and brings back between London and Edinburgh near four ton weight of goods.

That stopped me short.  Three weeks in each direction!  As the footnotes, Britain made rapid improvements in ground transportation in the subsequent decades, but still...

In about the same time a ship navigated by six or eight men and sailing between the ports of London and Leith, frequently carries and brings back two hundred ton weight of goods.

He of course realizes that one could send two hundred tons by land transport, by sending 50 wagons.  But then he reckons that in that case, instead of 6 to 8 men, you'd have 100 men and 400 horses to feed for six weeks; and notes as an aside that feeding a work horse is just as expensive as feeding the laborers.

Whereas, upon the same quantity of goods carried by water, there is to be charged only the maintenance of six or eight men, and the wear and tear on a ship of two hundred tons burthen, together with the value of the superior risk, or the difference of the insurance between land and water-carriage.

(I'm working for memory, but as far as I can tell this is the first place where he casually mentions that increased risk must be accounted for as increased cost.)

Smith rightly concludes that at this cost, were only land travel to be available, that long-range commerce would be impossible.  "Who could bear the cost of land transport between London and Calcutta?"

Cannan (the editor) quibbles a bit:

The superiority of carriage by sea is ... probably exaggerated.  [Playfair in 1805] says a waggon of the kind described could carry eight tons, but, of course, some allowance must be made for thirty years of road improvement.

But then in a later note he drops some really interesting data:

Playfair ... says that equalizing the out and home voyages goods were carred from London to Calcutta [around 1805] at the same price (12s per cwt.) as from London to Leeds by land.

I make London to Leeds at about 200 miles, and London to Calcutta by sea (prior to the Suez Canal) as about 8,000 miles -- so this is a roughly forty-fold difference in cost per mile.

To return to chapter 3 -- these costs are cited to explain why some locations and countries developed division of labor earlier, especially focusing on the availability of easy transport. 

I suspect that economic historians might treat this topic differently now (particularly in light of Marxism).  However, as an example of Enlightenment practical reasoning, this chapter is delightful: an educated person reasoning and educating the reader about society much as a physicist (Feynman comes to mind) might reason and educate the reader about an interesting physical problem. 

Generally speaking, one must work hard to prepare a graceful argument. We should admire chapters such as this not only for the insight they give us, but also for the skill of their construction.

Getting started

My copy of The Wealth of Nations is the Bantam Classic edition -- fifth edition, with a cover vaguely in Diego Rivera heroic worker style: stage left, a buxom woman with a scarf and welding glasses; behind her, stage right, a muscular man with a gigantic open-ended wrench clutched fasces like in a fist thrust into the foreground; between them and behind, a third face, evidently male, whose occupation cannot be distinguished.  Quite amazing to see such an evidently Marxist fresco on the cover of Adam Smith.

As is the case with most paperback classics these days, it was taken from an out-of-copyright edition.  This keeps the cost down, allowing the book to be found (as I found it) in an airport bookstore of moderate size.  I suspect that a modern edition could not be found anywhere except in university bookstores or on-line.

I should comment on how I'm using "edition".  Of course, Adam Smith isn't going to be doing any more editions of The Wealth of Nations.  The text in this book is based on the fifth (and last) edition that he edited himself, from 1789.  As is the case with classics, it was then further edited and annotated by Edwin Cannan.  So in this use of "edition", the emphasis should be on "edit". 

I'm reading the 1904 Cannan edition of the fifth edition, as reprinted.  As such, the book is a dialog between Smith and Cannan.  Smith seems to have used few footnotes (especially when compared to Gibbons), but Cannan is much in evidence.  I'm reminded of my beloved (and, I understand, non-canonical not being based on Bury) Modern Library edition of Gibbons.  The notes range from simply tracking the revisions that Smith made in his various editions to rather prim corrections of mistakes, real or imagined.  I get a clear image of a slightly eccentric man laboring in a library with a text he knows, loves and admires -- and yet with the irresistable urge to comment.

The timing of the edition fits me well.  Cannan was certainly almost as ignorant of 20th century economic opinion as I am.  I have no idea to what degree he specialized in economics, but given the huge developments in the field since he wrote, all the comments will be (or at least are so far) pitched at no higher level of economic literacy than what I flatter myself to possess.

As long as I'm being cheeky enough to compare my level of economic knowledge with Cannan, we might as well ask about Smith.  I was reading a posthumous essay by a former editor [check ref] in Science a few weeks ago.  He (rather infelecitously) grouped discoveries into three kinds.  Smith's work was of the first kind -- a great break-out from previous limits.  But although he went in for the occasional table, and seems to have tried to remain empirical to the best of his abilities (considering the state of his knowledge), Smith was not quantitative in the sense of modern economics.  As such, he was arguing to his peers who had a general education and a lively interest in the way the world worked.  I therefore will attempt to avoid intimidation -- I may be no enlightenment savant, but I think my education and experience will enable me to sustain my part of the discussion.

The Wealth of Nations

My copy of The Wealth of Nations has the following jacket blurb:

It is symbolic that Adam Smith's masterpiece of economic analysis, The Wealth of Nations, was published in 1776, the same year as the Declaratoin of Independence.

After stumbling over the curious "symbolic", I was struck by the year:  1776 was the year when Gibbons published the first volume of The Decline and Fall of the Roman Empire.  One supposes that a historian someday might regard the year in the light of the work of Johnson, Gibbons, Burke, Smith, Hume, and find 1776 to be as significant in the history of the British Enlightenment, as the reign of the Antonines was to Gibbons in his history of the Empire.

Of course the Declaration is elegantly written and powerfully argued -- in such an intellectual environment, it could hardly be otherwise and be effective.  If the Declaration is more widely read than Adam Smith these days, it's not very surprising -- it's shorter, and thus more suited to the times. 

In any event, this series of notes has nothing much to do with the Declaration of Independence.  For that matter, it won't have much to do with The Wealth of Nations.  Instead, I intend the series to record my occasional reactions as I take a leisurely pass through a work I've treated as I suspect most people treat the Declaration of Independence -- acknowledging its worth while avoiding the effort of actually reading it.

The series thus framed, the reader is alas more likely to learn more about me than about The Wealth of Nations -- possibly more than either of us would like, and more than I intend!