Entrepreneurship, knowledge and employment

National Defence and the Wealth of Nations in Adam Smith

Furuya Hiroyuki, Tokushima Bunri University

Twentieth-century studies of international relations called the political tradition of war ‘realism’ and understood it as politics practised independently of moral or ethical considerations to advance the national interest. By contrast, ‘liberalism’ was often unflatteringly described as a kind of utopian idealism based on the belief that commerce would make the globe peaceful. This paper argues that Adam Smith was closer to realism than liberalism in this sense, in contrast to the conventional interpretation of the history of economic thought. As Istvan Hont argued, The Wealth of Nations is a book not about Kantian perpetual peace, but rather, about national survival in a global market and competitive economic strategy in a century dubbed the ‘Second Hundred Years’ War’ between Britain and France. Smith described national defence as ‘the first duty of the sovereign’ (WN, V. i. a. 1). It is well known that Smith justified the English Navigation Acts, not as commercial policies designed for mere economic advantage, but rather as indispensable national security measures in the sense that ‘defence, however, is of much more importance than opulence’ (WN, IV. ii. 30). Smith did not underestimate the need for the external security of nations, as well as the contribution of economic power to it. National defence is funded by taxation, and the tax revenue of the state increases or decreases in proportion to the productivity of the wealth of the nation. This means that the pursuit of the wealth and power of the nation, or what Smith agreed was the object of political economy, ultimately establishes national security (WN, II. iii. 2). This paper concludes that war could not be feasible and sustainable for the early modern state unless its foreign trade, manufacturing and commerce succeeded, so that one needed to be an economic liberalist in order to be a realist about war, as Smith himself was.

Area:

Keywords: Adam Smith, national security, realism, liberalism

Paper file