How is it that an eighteenth-century Scottish moral philosopher came to be featured on neck ties worn by Nobel laureate economists and cited by presidents and prime ministers? That, in essence, is the question Glory Liu sets out to answer in Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism.

The book is not a biography of Adam Smith the man, nor is it an exposition of his ideas. It is a biography, as Jennifer Burns described it in the Wall Street Journal, of Adam Smith the idea. It surveys the variety of causes—mostly in America—that the name Adam Smith has been invoked to support. It elaborates some of the competing ‘Adam Smiths’ that have emerged in the last 250 years and that to some extent remain with us today.

The book is not simply a historiography of Smith scholarship. It is offered as a window into the ‘politics of political economy,’ a phrase used to capture the fact that descriptive efforts in political economy are not easily disentangled from the ethical and political commitments of practitioners. Studying the receptions of Adam Smith foregrounds various rhetorical and normative dimensions of economic science.

After an introduction, Chapter 1 of the book treats the initial reception of The Wealth of Nations by Smith’s contemporaries. Smith’s friends and associates enthusiastically praised the book and perceived its scientific import. Thomas Pownall, a British MP and former governor of Massachusetts Bay, hailed the book as a successful exposition of social Newtonianism. The Wealth of Nations contained ‘the principia of those laws of motion, by which the system of the human community is framed and doth act.’

The founders of the American republic received the book as an authoritative treatment of the subject of political economy and an extension of the British ‘science of man.’ They drew on its arguments as one might draw on an academic anthology. James Madison found in its pages a compelling description of the effects of faction. Alexander Hamilton found competent discussions of wide set of issues pertaining to national wealth and public finance. Rather than The Wealth of Nations, John Adams turned to Smith’s The Theory of Moral Sentiments to reflect on the moral psychology of wealth.

Chapter 2 deals with the emergence in the nineteenth century of the image of Smith as the founder of modern political economy. In America, the primary platform for Smith’s ideas in the early nineteenth century was the college classroom. Although infrequently assigned as a college textbook, arguments from The Wealth of Nations were incorporated into standard textbooks of the day, such Francis Wayland’s Elements of Political Economy. Within the shifting contours of the field over the century, the academic status of Smith’s work was somewhat amorphous, as Liu describes it, but Smith nonetheless became an increasingly important focal point in academic discourse. Political economists of all stripes saw the need to read and take Smith’s arguments seriously, either to debunk his analysis or affirm their own positions. His reputation and authority grew, as one nineteenth century literary critic quoted by Liu put it, by virtue of ‘the care and acumen which succeeding writers have bestowed upon Wealth of Nations.’

Academic engagement with Smith’s ideas coincided with increasingly polemical political engagement on the issue of free trade, which is the subject of Chapter 3. In their vigorous disagreements about tariff policy, northern and southern American politicians alike recruited Smith to their cause. Southern politicians found in Smith a convenient figurehead for the cause of free trade, which they favored due to the large market Britian provided for their cotton exports. Northern proponents of Henry Clay’s ‘American System’ of high manufacturing tariffs and infrastructure spending ceded the point that Smith presumptively favored free trade, but they latched on to the exceptions Smith made to his presumptions, making use of an ‘even-Smith-said-so’ logic.

The growing authority of Adam Smith the idea is apparent in the use of his ideas by the early American institutional and historical economists towards the end of the nineteenth century, such as Richard Ely and Edwin Seligman. Seligman especially drew on German readings of Smith emphasizing Smith’s historical bent (evident especially in Book III of Wealth of Nations), pragmatism, and somewhat elastic vision of the role of government. Liu shows throughout Chapter 4 how Ely and Seligman, just as American politicians and academics before them, made Adam Smith in their own image as a would-be supporter of progressive American politics.

Like the late-nineteenth-century progressives, the twentieth century Chicago economists—especially the ‘new’ Chicago school of Milton Friedman and George Stigler—similarly recreated Adam Smith in their own image. The ‘old’ Chicago school of Jacob Viner and Frank Knight maintained, in Liu’s telling, a mostly balanced view of Smith as a cautious, non-dogmatic advocate of free markets with some ethical scruples about the commercial order. Friedman and Stigler and F.A. Hayek—who, it should be said was a somewhat peripheral figure in Chicago economics and never a part of the core Chicago school of thought—departed from the interpretations of their predecessors. They fashioned Smith not simply into an apostle of free trade, as the nineteenth century Southern congressmen had done, but a broader advocate of sweeping de-governmentalization. The Chicago Smith cast a long shadow. According to Liu, it is the Chicago construction of Smith that is largely responsible for popular conceptions of Smith as an apologist for individualism and market efficiency and an opponent of government intervention and collective action broadly.

The story about the Chicago School, told in Chapters 5 and 6, is the climax of the book. Chapter 7 treats the efforts by Donald Winch, Albert Hirschman, Istvan Hont and Michael Ignatieff, and Knud Haaksonssen after 1976 to recover a broader, contextual understanding of ‘the real’ Adam Smith, especially the political and moral dimensions of his thought. Gertrude Himmelfarb’s and Irving Kristol’s work to articulate a Smithian moral economy, with emphasis on the historical Smith’s care for the poor, also features. The Epilogue surveys the Smith scholarship renaissance of the past decades.

Adam Smith’s America is a remarkable scholarly achievement. It should be read and studied by historians of politics and economics and, of course, by Adam Smith scholars. In addition to its virtues as work of intellectual history, the book ably challenges those of us keen to invoke the venerable name of Adam Smith to pause and consider what we are asking Smith to do for us and why. Liu’s book magnificently frames the question: why do we read Adam Smith?

Liu, it must be said, is not innocent of the tendency she so ably diagnoses in others to eclipse context and shape history according to precommitments. She remarkably omits an able Smith scholar and Nobel laureate from Chicago from her narrative: Ronald Coase (1910-2013). Perhaps this is because Coase somewhat complicates the story about the Chicago Smith caricature, and she wants to foreground the idea that there is something fundamentally un-Smithian about Hayek, Friedman, and especially Stigler. Stigler’s reading of Smith evidently has its issues. But Hayek and Friedman were careful readers and generally sound interpreters of Smith’s corpus. Liu does not marshal any substantive evidence to the contrary, but simply resorts to charging Hayek with deploying his reading of Smith opportunistically and Friedman with exaggerating the importance of the invisible hand metaphor. More generally along these lines, the subtitle of the book suggests that Liu wants to communicate to reader that the ‘real’ Smith would likely have disapproved of the association of his name with modern American capitalism, although why exactly this is the case—or what ‘American capitalism’ actually entails—is never explicitly spelled out.

If political economy has inevitably political dimensions, so too do reception histories of the kind offered in Adam Smith’s America. The book tells us that many of us likely engage with Smith in ways that comport with our broader ethical and political visions. The book shows us, albeit inadvertently, that we might engage similarly even with the history of Smith’s reception. In a way, though, this observation makes Liu’s central thesis all the more persuasive.

‘Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism’ by Glory Liu was published in 2023 by Princeton University Press (ISBN 978-0-691-24086-2). 384pp.

Erik Matson is Senior Research Fellow at the Mercatus Center, Deputy Director of the Adam Smith Program at George Mason University, and Lecturer in Political Economy at The Catholic University of America