October 1, 2023 Reading Time: 3 minutes

“The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind.”

—   Adam Smith, The Wealth of Nations

That is the first sentence of a paragraph recently referred to by Professor Jeffrey Sachs in an interview he did with Alexander Mercouris and Glenn Diesen.

The paragraph is remarkable. Let’s look at it in full, a couple of sentences at a time.

This year is the tercentenary of Smith’s birth in 1723. The 1776 paragraph, first published 247 years ago, when Smith was 53 years old, presages 21st-century shifts in Great Power politics, toward a multipolar world. Also, we find the balance of power.

Twenty-four years prior, in 1752, Smith’s friend David Hume wrote “Of the Balance of Power.” I reckon that Hume and Smith had similar views on the matter.

The sentence quoted above refers to Columbus’s discovery in 1492 and Vasco de Gama’s discovery of the Cape of Good Hope in 1497–1498. Those events were indeed momentous, for they brought the then-exceptionally dynamic peoples of Europe into contact with other peoples around the world.

“Their [that is, the two events’] consequences have already been very great: but, in the short period of between two and three centuries which has elapsed since these discoveries were made, it is impossible that the whole extent of their consequences can have been seen. What benefits, or what misfortunes to mankind may hereafter result from those great events, no human wisdom can foresee.”

The connections have been double-edged. Smith elaborates the positive: “By uniting, in some measure, the most distant parts of the world, by enabling them to relieve one another’s wants, to increase one another’s enjoyments, and to encourage one another’s industry, their general tendency would seem to be beneficial.” Voluntary association generates mutual gains.

“To the natives, however, both of the East and West Indies,” Smith now turns to the negative, “all the commercial benefits which can have resulted from those events have been sunk and lost in the dreadful misfortunes which they have occasioned.”

But things that start badly might take a turn for the better. Smith himself now takes a hopeful turn: “These misfortunes, however, seem to have arisen rather from accident than from any thing in the nature of those events themselves.”

Smith means the accident of history: “At the particular time when these discoveries were made, the superiority of force happened to be so great on the side of the Europeans, that they were enabled to commit with impunity every sort of injustice in those remote countries.”

In the video conversation, after Sachs explains Smith’s paragraph, he, Mercouris, and Diesen elaborate on the notion that there was a vast asymmetry in technology, science, and wealth. That asymmetry gave rise to a dominance by European powers and eventually an ascendance of Britain as a great colonial power, which in the 20th century consciously passed to the United States, as dominant—and, after 1991, even unipolar.

The three gentlemen say that figures today, such as US Secretary of State Anthony Blinken, see that the unipolar moment is passing and seek foolishly to reverse the trend—as expressed in a speech by Blinken at Johns Hopkins University.

Smith saw ahead, into 2023. The next sentence from the 1776 paragraph reads: “Hereafter, perhaps, the natives of those countries may grow stronger, or those of Europe may grow weaker, and the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another.”

Smith, thus, anticipates a more even balance of power as the effects of connection and communication take hold. It is said that an armed society is a polite society. Smith, by analogy, suggests that an international cosmos of armed nations will be a polite international cosmos.

The final sentence of the paragraph reads: “But nothing seems more likely to establish this equality of force than that mutual communication of knowledge and of all sorts of improvements which an extensive commerce from all countries to all countries naturally, or rather necessarily, carries along with it.”

Connection, commerce, and communication shall diffuse the ingredients—moral, intellectual, cultural, and material—that give a people “force.” This balance of force shall, he says, “by inspiring mutual fear… overawe the injustice of independent nations into some sort of respect for the rights of one another.”

Smith believed that every man and woman has rights. And Smith believed that for outside powers to try to dominate other societies is an injustice.

Connection can be a mutual blessing if allowed to be. In the video, Mr. Mercouris expresses hope that throughout the world, and especially in the United States and Europe, chief magistrates shall come around to the attitude of peace and trade, as opposed to bullying, belligerence, and domination.

Daniel B. Klein

Daniel B Klein

Daniel Klein is professor of economics and JIN Chair at the Mercatus Center at George Mason University, where he leads a program in Adam Smith, and author of Smithian Morals.

He is also associate fellow at the Ratio Institute (Stockholm), research fellow at the Independent Institute, and chief editor of Econ Journal Watch.

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