Adam Smith famously said, in Wealth of Nations, Book IV, Chapter II, with paragraph breaks supplied by us:
As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it.
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
Adam Smith, we are told by Wikipedia:
… was a Scottish moral philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Adam Smith is widely cited as the father of modern economics.
As you know, the Scottish Enlightenment was that extraordinary outburst of intellectual activity, centered at the University of Glasgow and Edinburgh University, which developed an emphasis on reason, liberty, limited government, the scientific method, and free enterprise, and which gave rise to the American Revolution, Constitution, and Bill of Rights.
Fine, but you’re wondering: Where does Darwin’s theory of evolution fit into this? We’re getting to it.
Sometimes included among Enlightenment figures are Erasmus Darwin (Charles’ grandfather) and Benjamin Franklin, because of their close association (through visits and correspondence) with Scottish university scholars. Erasmus Darwin did, moreover, attend Edinburgh medical school, and he had a significant influence on the thinking of his famous grandson.
Charles Darwin, like his grandfather, studied medicine at Edinburgh. Although not considered a figure of the Scottish Enlightenment, Charles was undoubtedly affected by the ideas it produced. This is true not only because of his grandfather’s influence, but through the direct influence of geologists such as his friend, Charles Lyell, who in turn was influenced by James Hutton, an Enlightenment figure who is regarded as the father of modern geology.
It has often been remarked that the theory of evolution, according to which life on earth evolves without the guidance of a designer, is remarkably similar to the way a free-enterprise economy develops, with each enterprise doing its best to prosper, yet without the “benefit” of a centralized planner.
Was Charles Darwin influenced by Adam Smith? He was certainly aware of Smith’s work. Darwin mentioned Smith in Descent of Man, and provided a footnote to Smith’s Theory of Moral Sentiments. See: The Descent of Man. But that was in connection with Darwin’s discussion of emotions. It was his only mention of Smith, and he never used the expression “invisible hand.” We wish he had, as it would have been a useful metaphor for the misleading appearance of intentional design in nature.
Although it’s easy to make too much of this, we observe that throughout Origin of Species, Darwin uses the expression “economy of nature.” Additionally he has passages that literally suggest economic behavior, such as this in Chapter 4 – Natural Selection:
Though nature grants long periods of time for the work of natural selection, she does not grant an indefinite period; for as all organic beings are striving to seize on each place in the economy of nature, if any one species does not become modified and improved in a corresponding degree with its competitors it will be exterminated.
For the analogy to economics, you’ll have to substitute “bankrupt” for “exterminated” in that passage, of course.
We haven’t made an exhaustive search of Darwin’s works for everything that might suggest a comparison of the biosphere to the workings of a free enterprise economy; but it seems to us that the analogy is almost tangible.
We leave you with the following tentative conclusions: (1) Darwin was a late product of the Scottish Enlightenment; (2) Darwin was influenced by Adam Smith’s ideas, far more than is apparent from his one mention of Smith; and (3) The theory of evolution is remarkably compatible with free enterprise economics, especially regarding the “invisible hand.”
[Addendum: For a brief article in Reason Magazine on this topic, see: What Charles Darwin Owes to Adam Smith .]
See also: The Cult of the Invisible Hand.
See also: Someone Else Understands Darwin & Economics.
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