ABSTRACT
The abundant strengths of this Companion are also the source of some of its weaknesses. First, at the time of publication, the nineteen substantial chapters collected in it are the best multi-author introduction toAdam Smith’s thought easily supplanting the (2006) Cambridge Companion. Second, Young’s Companion also gives a very good sense of the ‘state-of-play’ of research into Adam Smith among historians of economics within economics; the chapters make clear that research into Smith’s thought has both decisively moved beyond The Wealth of Nations and has distanced itself from, say, the long influential Stigler (i.e., ‘new Chicago School’) interpretation of Smith – the construction of which (and contrast with the ‘Good Old Chicago School’Smith associated with Viner, Knight, and Coase) is the topic of the very fine concluding chapter by Steven Medema. Jeffrey Young is, moreover, to be congratulated for managing to get a nice mix
of established scholars and some younger, important interpreters. It is also sobering to note that the late James Buchanan, Warren Samuels and Andrew Skinner contribute to this Companion. Young’sCompanion is self-consciously not philosophical, but is ‘oriented around
the concerns of historians of economics’ (p. xiii). Many of the best chapters are, in fact, straight contributions to the traditional history of economics, including chapters by Salim Rashid, Glenn Hueckel, Samuel Hollander, Medema and Samuels, and Levy and Peart. For example, while Hollander’s (1973) book on Smith falls short of his best work on, say, Ricardo, here, Hollander is on great form with a brilliant analysis of Smith’s treatment of usury and Bentham’s famous critique. Hollander shows that Smith’s treatment of usury is primarily motivated by two empirical claims: (1) that ‘where “high” interest rates are available Smith attributed to lenders a bias favouring high-risk loans rather than a roughly equal distribution of preference across the spectrum of opportunities’ (p. 280); and (2) ‘banks were unable to calculate objectively the risk-worthiness of their clients and financed irresponsible projects’ in addition to other forms of mismanagement (p. 287-8). Hollander is right to doubt that Smith (rightly) would not ‘have been convinced by Bentham’s objections’ (p. 295). Even so, Hollander notes that much of the empirical basis of Smith’s argument ‘breaks down…after 1778’, yet Smith does not change his position. This paper ought to be the start of more research in Smith’s economics of finance.
