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Though contemporaries, Adam Smith and Sir James Steuart are commonly portrayed as if they belonged to different eras. Whereas Smith went down in history as both founder of the science of political economy and patron saint of economic liberalism, Steuart became known as the last, outdated advocate for mercantilist policies in Britain. Smith himself was responsible for popularizing the notion of the “system of commerce” as an approach to political economy that dominated the early modern period. As a historiographical concept, the mercantile system became a misguided international trade theory grounded upon the Midas fallacy and the favorable balance of trade doctrine. Smith’s treatment of international trade in the Wealth of Nations, however, was criticized for its inconsistencies and lack of analytical clarity even by some among his own followers. Given Smith’s doubtful credentials as an international trade theorist, the chapter investigates the reasons that led him and Steuart to be placed on opposite sides of the mercantilist divide. The authors analyze the works of both authors in depth, showing that their disagreements had chiefly to do with different views on money and monetary policy. Additionally, the authors explore how early nineteenth-century writers such as Jean-Baptiste Say and J. R. McCulloch helped forge the intellectual profiles of both Steuart and Smith.

Religion and philosophy satisfy the basic human needs of understanding, belonging, and finding meaning. They provide tranquility of mind and satisfy the desire to be loved and lovable. However, they present their own failings and can counter each other in positive and negative ways, that threaten the communities of beliefs they form and their interactions. An appropriate institutional framework can control the fanaticism and sectarianism that can come with established religion and philosophy.

Edward J. Harpham (2001, p. 139) once began an article by writing that “many Adam Smiths are presented to us in the secondary literature.” The new wave of Smith scholarship is so varied that one's reading of the 18th-century Scot is bound to change significantly as one switches secondary sources. While recent scholarship on Smith is, in fact, diverse in both its methodology and its overall picture of Smith's system, Harpham is wrong. There aren’t many Smiths. Essentially, there are just two: one that adopts a certain caricature bending A Theory of Moral Sentiments (hereafter TMS) into irrelevance, and one that regards him as a moral philosopher with a theory of political economy fully integrated into his ethics.

The memorial is an account of Smith's personality and work by a former and favored student. It is a sustained personal reminiscence backed by the reminiscences of others who admired Smith together with an account of Smith's working practices and of his main texts. It is in this sense subjective as well as objective. It is not a full-scale biography, rather a biographical sketch and it is necessarily limited by its very proximity to the subject. The principal and other informants knew Smith and liked him. However, given Stewart's own profession, the work is more than this. It was written in the context of the consequences for Smith's reputation in the light of the French Revolution. Stewart is anxious, given the sensitivities concerning the destructive radicalism in France and in the context of the conservative reaction in Britain, to distance Smith's ideas on liberty and on policy from those ideas as they were being expressed in revolutionary France. In this way, Stewart's biographical work is both an account of Smith's life and works and a politicized interpretation of his principle economic ideas.

This paper gives an account of important aspects of Smith’s methods in An Inquiry Concerning the Nature and Causes of the Wealth of Nations (WN). I reinterpret Smith’s distinction between natural and market prices, by focusing on Smith’s account of the causes of the discrepancies of market prices from natural prices. I argue that Smith postulates a “natural course” of events in order to stimulate research into institutions that cause actual events to deviate from it. Smith’s employment of the fiction of a natural price should, thus, not be seen merely as an instance of general or partial equilibrium analysis, but, instead, as part of a theoretical framework that will enable observed deviations from expected regularities to improve his theory. For Smith theory is a research tool that allows for a potentially open-ended process of successive approximation. These are the Newtonian elements in Smith. I provide evidence from Smith’s posthumously published Essays on Philosophical Subjects (EPS, 1795), especially “The History of Astronomy” (“Astronomy”), that this accords with Smith’s views on methodology.¹ By way of illumination, Smith’s explanation of the introduction of commerce in Europe is contrasted with that of Hume as presented in “Of Commerce.” I argue that Smith’s treatment is methodologically superior.