Thus, if, in any particular society, one were to be asked, what the capital of some other person were, he might answer, "about a thousand pounds."If farther requested to state his reasons for saying so, he might reply, "the property he holds would fetch that in the market, he has been offered that for it," or, "I know it cost him that, and that he laid out his money judiciously." These are all the answers he would think of giving; for common purposes they are all he requires to give, and they are all that his notions actually embrace.If asked again, "what revenue does this person derive from his capital?" he might answer, "I suppose about that which such a capital generally yields, the usual profits of stock -- a fair, reasonable, mercantile profit, neither much above or below par." If questioned farther, as to the nature of this capital, and its return, which he terms profit, be would answer, if simply a practical observer, "Really as to this I have never inquired, I know that where I have lived, and I believe in all civilized societies, certain things, if sold, have certain values, bring certain sums of money, and if kept and judiciously employed, yield certain amounts of money, or moneys' worth.Why they do so, though it must arise, no doubt, from the circumstances and actions and reactions on each other of the various things and persons forming these societies, I have not examined into, and do not pretend to know." His answer, in short, would be that he knows them only as results of the laws governing the general system of which he makes a part.
By taking, therefore, these, and such like common and familiar notions, as the foundation of his reasoning, Adam Smith made his work an explanatory system, not an inductive inquiry.The principles of the inductive philosophy would have led him to inquire into the nature of those familiar notions, -- into the laws or causes of those common occurrences; and he would have set out with the question, What is it, in the nature of man and matter, that makes any thing constitute a capital, or yield a profit? In the words of the Novum Organum, already cited, he would have considered, "that no judgment can ever be formed of things that are rare and remarkable, much less can any thing new be brought to light, unless the causes, and even the causes of the causes, of occurrences the most common and familiar, be rigidly examined and clearly discovered."It is, therefore, an abuse of words to say, that the publication of the Inquiry into the Wealth of Nations, rendered political economy a science of experience.(143) It made it so in no other manner than as every philosophical system is, of necessity.They are all, of necessity, rounded on sortie observations, the fruits of experience.(144) The difference between them is, that those observations which men make concerning the general results of the laws of the universe, and to which convenience leads them to give names, are assumed by the systematic philosopher for the laws themselves, and that the scientific inquirer examines them patiently, and perseveringly, and ascending gradually, from one thing to another, endeavors thus at last to reach the real laws of nature.While the one assumes phenomena for principles, the other applies to the things giving rise to those phenomena, and collecting, comparing, and arranging these, traces out the real connexions between them, the real principles governing nature.
We may easily satisfy ourselves of the difference of the principles which true science reaches, and those employed in the Wealth of Nations, by taking any of the latter and seeing how it agrees with the rules by which the former may be tested.Thus the principle, that self-interest is the great and all-sufficient cause of the increase of wealth both private and public, is evidently nothing else than an application of the common assumption that a man's fortune and his interest are the same, and a generalization of the observation that he, therefore, who understands his interest best arid takes best care of it, will get rich the fastest.But if self-interest be, in the scientific sense, the cause of wealth, both public and private, (145) (the law according to which it either is, or is not produced,) whenever self interest, (the desire of bettering.one's condition)manifests itself in action, it must tend to the increase of public wealth.(146)Do the labors of the cool, calculating, gambler, or of the sharper, add to public wealth? Does the spirit of keen bargaining, and taking every possible advantage of those with whom transfers are effected, that sometimes pervade classes, and communities, add to public wealth? Assuredly not;yet in all these self-interest is the ruling motive of action.Let it not be said, that these are exceptions to a general rule.Though there may be exceptions to general rules, there are no exceptions to scientific principles.
"Wherever a scientific cause, or law, or principle operates, there the thing itself, of which it is said to be the cause, is necessarily produced.
