When Adam Smith Met The PM

My favourite story of Adam Smith is of the time he met the then Prime Minister, William Pitt the Younger. This was in 1787, three years before Smith's death. At the time, Smith was very ill - "wasted to a skeleton." And as for the younger Pitt, he was "at the moment reforming the national finances with the Wealth of Nations in his hand." John Rae describes the incident thus:

... they met on one occasion, of which recollection has been preserved, at Dundas’s house on Wimbledon Green, - Addington, Wilberforce, and Grenville being also of the company; and it is said that when Smith, who was one of the last guests to arrive, entered the room, the whole company rose from their seats to receive him and remained standing. ‘‘Be seated, gentlemen,” said Smith. ‘‘No,” replied Pitt; ‘‘we will stand till you are first seated, for we are all your scholars.”

About Pitt's devotion to Smith's ideas, Rae writes:

Pitt always confessed himself one of Smith's most convinced disciples. The first few years of his long ministry saw the daybreak of free trade. He brought in a measure of commercial emancipation for Ireland ; he carried a commercial treaty with France ; he passed, in accordance with Smith's recommendations, laws simplifying the collection and administration of the revenue.

Pitt was only 24 when he became PM. A popular ditty commented that it was "a sight to make all nations stand and stare: a kingdom trusted to a schoolboy's care." Rae also records how Smith was impressed by Pitt:

Smith was highly taken with Pitt, and one evening when dining with him, he remarked to Addington after dinner, ‘‘What an extraordinary man Pitt is; he understands my ideas better than I do myself.” Other statesmen have been converts to free trade. Pitt never had any other creed; it was his first faith. He was forming his opinions as a young man when the Wealth of Nations appeared, and he formed them upon that work.

To fully appreciate the influence of Adam Smith in his own lifetime, it is necessary to note that he had always been a devoted Whig - while Pitt was a Tory. However, it is equally noteworthy that Pitt preferred to call himself an "independent Whig." You can read more about Pitt here. He was one of Britain's better prime ministers, known affectionately as "Honest Billy." When he died, he left £40,000 in debts. He is buried in Westminster Abbey.

Adam Smith's Wealth of Nations became the "canon of western civilisation" for at least the next hundred years. Things changed with the advent of socialism - and then Keynesianism. But these false philosophies are on their way out, and let us hope that 2011 will see their final defeat.

A very happy new year to all of you.