IRA ECKSTEIN: Are they going to shut it down - the Suez? I don't - have no idea. But, you know, it's going to be a big problem if there is problems, and they had to go around. It's going to be a big mess.
(SOUNDBITE OF SONG, "I MET UP WITH THE KING")
FIRST AID KIT: (Singing) I met up with the king. He confessed his body was burning. I met up with the king. His body had begun to rot. And he said...
ALEX BLUMBERG, HOST:
Hello, and welcome to PLANEY MONEY. I'm Alex Blumberg.
JACOB GOLDSTEIN, HOST:
And I'm Jacob Goldstein. Today is Tuesday, February 1. And that was Ira Eckstein - he's president of the Area International Trading Corporation - that you heard at the top. On today's podcast, we'll talk with author Nick Phillipson. He just wrote a biography of Adam Smith.
BLUMBERG: The book is called "Adam Smith" - (laughter) - "An Enlightened Life." And this is one in an occasional series that we call "Deep Reads," where we have a wide-ranging conversation with an author or academic that we find interesting. Our very own Adam Davidson spoke with Nick Phillipson about his book. And we're going have that interview in a moment. But first, Jacob, you have an indicator for us, do you not?
GOLDSTEIN: I do. Alex, the indicator I have for you is 10 million. Egypt imports 10 million metric tons of wheat every year. I didn't know until today how much a million metric tons of wheat is, but it turns out it's a lot. Egypt is actually the world's biggest importer of wheat. And global wheat prices, of course, have been going through the roof lately in the - in recent months for all kinds of reasons. So given those facts, I wanted to understand more about Egypt and wheat for today's indicator.
BLUMBERG: Are you saying that wheat is the as-yet-untold economic story behind the protests in Egypt?
GOLDSTEIN: You know, Alex, I thought it might be, so I talked to an expert this morning. I talked to Abdolreza Abbassian. He's an economist and a grain expert at the U.N.'s Food And Agriculture Organization. And he laid it out for me.
BLUMBERG: OK. What did he say?
GOLDSTEIN: So Egypt, of course, is a very poor country. People there do spend a high percentage of their incomes on food. Wheat is a key staple. But the government runs this huge wheat subsidy program. So what you see is a very big chunk of the country's poorest people, they get their bread for free or almost free. Now, this subsidy program, it doesn't always work.
The last time global wheat prices spiked - that was back in '07, '08 - the subsidy program, to some degree it broke down. You saw bakers getting subsidized wheat from the government and selling it on to the private market at inflated prices. You saw protests, even violence over the price of bread. But the country did seem to get its act together after that. Abbassian told me that during the latest spike in the price of wheat over the past few months, there have not been these bread protests.
BLUMBERG: But there have been another kind of protest. Is...
GOLDSTEIN: (Laughter) Right.
BLUMBERG: (Laughter) So those protests are not about bread at all, is what he said.
GOLDSTEIN: Right. My bread hypothesis did not hold up. I examined the hypothesis. I can report negative data to you. I mean, basically Abbassian said, you know, these protests, they are in fact about something broader. They - the political ramifications and expression and all of these things, they actually are what's driving these protests, he said. You know, he even had this nice detail. He said, if you go to your neighborhood bakery, and it's closed, that's probably OK with you because there's a good chance that the baker is out in the street protesting with you.
BLUMBERG: But, I mean, eventually people are going to care about bread again. Like, you can't feed your family on street protests, right?
GOLDSTEIN: Right, or on belief. And he did say - I mean, he didn't want to talk about the short term too much. So I have to say, I don't have from that conversation, like, a clear picture of the day to day. But he was pretty confident that in the medium term - you know, a week, a few weeks - whatever happens politically, he said, it's very likely that this subsidy program will remain in place. I mean, it is flawed. But it does feed a lot of people, he said, and it's very popular.
BLUMBERG: Right. So Mubarak stays. Mubarak goes. Whoever comes in, they're all going to continue to give away bread for free.
GOLDSTEIN: That was what he said.
BLUMBERG: All right. So shall we move on to the interview?
GOLDSTEIN: Yes. Enough about today. Let's go to the 18th century.
BLUMBERG: (Laughter) Exactly. All right. The 18th century - Adam Smith, as almost everybody probably knows, was the Scottish philosopher who wrote "The Wealth Of Nations." This is the magnum opus that, of course, underpins most of the ideas that people take for granted in economics - that price is where supply meets demand, also, you know, the invisible hand - the idea that by pursuing your self-interest in a competitive economy, you can also provide for the public interest. But as author Nick Phillipson pointed out to our very own Adam Davidson, not much is known about Adam Smith outside his scholarly work.
NICK PHILLIPSON: We really do know very little about Smith's ordinary life. In fact, he is probably the least well-documented of all the great thinkers of the late 18th century, the late Enlightenment. He was a lousy correspondent.
ADAM DAVIDSON, BYLINE: He - his friends - I mean, you quote a lot of letters. And his friends are constantly saying, why aren't you writing me more?
PHILLIPSON: I know. And he doesn't do it. And actually, his letters aren't all that exciting even when we get them. I mean, they're very efficient. They do the business. But they really - they tell you only what is necessary to tell you. He keeps himself to himself. He opens up when he meets his friends. He's enormously sociable face to face.
DAVIDSON: And everyone seems to really like him. At least, all of his friends seem to like him.
PHILLIPSON: Well, do you know, that's the - one of the really interesting problems I had in writing this book. I can't quite understand why so many people liked him. He had no enemies. There's no nasty gossip about him at all. But he's a strange man. I mean, he had a reputation for being rather awkward, rather gauche. He seems to have doctored his accent so it was rather sort of a mishmash of English and Scottish.
DAVIDSON: Sort of pretentious?
PHILLIPSON: Well, he went to Oxford as an undergraduate, and he seems to have thought he ought to have got an Oxford accent. And it came back a bit of a mess. He wasn't a good conversationalist. I mean, you know, he would sit down and actually switch off a lot of the time, even though all his friends were jabbering around among him. And then, suddenly, he would wake up and go into a great monologue.
And his friends thought that was a bit of a joke. They thought, this was the professor waking up. You know, they - and they got a lecture. Some people did not like it at all and thought that this was boring, antisocial. So I mean, he's uneasy person.
DAVIDSON: I guess the one thing that dominates his personal life that we do know is he is the world's greatest mama's boy. He - his most important relationship is his mother. She lived a very long time. And until her death, which completely devastates him, she really is the center of his life. We don't know about other love partners or - he never married. He didn't have kids that we (laughter) know of. But we know he has this intense relationship with his mother. I should say, his father died six months before he was born, so he obviously never knew his father.
PHILLIPSON: He never knew his father. His mother was formidable. Rather wonderfully, a portrait of her has surfaced. And you only have to look at that portrait to realize that this was a woman you didn't mess with.
PHILLIPSON: And she is a - she's a dragon. People learned that the way you got on with Smith was to chat his mother up. And if you couldn't chat his mother up, then you - (laughter) your relations with Smith were going - were not going to be as close as you would like. But he is a mama's boy. And I think what his mother does in a positive sense is that she guards his privacy.
Smith works very, very slowly. That's one of the things that intrigues me about what he does. He is a very, very slow, systematic thinker. Everything has to be got right. Arguments have to be beautifully formulated and beautifully executed. And he does that - you - it's not the sort of thing he can do by dashing off a paragraph here and a paragraph there between meetings and that sort of thing. He can't do it.
He needs absolute peace and quiet to do it. And that's what his mother gives him. And I think it's no coincidence that the the plans for trying to write more at the end of his life, they really come pretty much unstuck in terms of writing new books when his mother dies.
DAVIDSON: Yeah. He doesn't write anything significant after that.
PHILLIPSON: No, no. no.
DAVIDSON: And one of the most frustrating things is at the end of his life, he's obsessed with burning all the things he wrote that he didn't put that final Adam Smith-ian polish on. So he forced his friends to promise him, you will burn these papers.
PHILLIPSON: And he made them burn them in front of him.
DAVIDSON: Oh I didn't realize (laughter).
PHILLIPSON: I mean, he said in his will that his papers were to be destroyed, except for one or two. But the bulk of them, they go. And they said, yes, that's fine. But then a couple of months later, he got them around his house and said, I want you to do it now so I can see it.
DAVIDSON: And what was that? He hated the idea of a thought that wasn't fully formed being out there in the world - is that what it was?
PHILLIPSON: I think so. I mean, what he does spend - what little writing time he's got at the end of his life he spends polishing and polishing and polishing "The Wealth Of Nations" and the - his first book, "The Theory Of Moral Sentiments."
DAVIDSON: So I want to talk about the intellectual world in which Smith is born. And I knew nothing about this till I read your book. It was extremely fascinating to me. Adam Smith is born in 1723 in Scotland at a fascinating moment. All the pillars of authority and respectability have collapsed over - you know, certainly over the last 50, 75 years. The church is no longer the unquestioned pillar of authority. And so the traditional hierarchy, the traditional ruling elite of Scotland no longer had the same cachet.
PHILLIPSON: Let's go back a couple of steps.
DAVIDSON: Yeah, yeah.
PHILLIPSON: Scotland had been part of a British polity since 1603. But it was a very, very loose arrangement. And the problem was, how on earth was Scotland going to be governed from London? 18th-century Britain is an oligarchy, a not altogether closed oligarchy, but an oligarchy nonetheless.
And what Smith is doing is to say, I'm going to present you with an analysis of the problems of maintaining government in a world which is changing in ways which not many of us realize. The changes are enormous. They're epochal. They involve the vast expansion of commerce and overseas trade, the terrifying expansion of empire. And I think it's interesting that one of the continuing themes of all his writing is his distrust of the great titled nobility.
DAVIDSON: Yeah. He hates them.
PHILLIPSON: He hates them. And he has rows in France with French economists about that because the French economists say, no, no, the key to rescuing the French economy in the 1750s and '60s is actually to work with the nobility. It's the nobility that are going to stop France falling to bits and becoming a despotism. Smith says, absolutely no. And he never loses an opportunity to spell out what a pain the nobility can be (laughter).
DAVIDSON: (Laughter) Right. Which is some of the most fun stuff in "The Wealth Of Nations" and in your book. So if Adam Smith happened to have been born, say, 200 years earlier, there would have been a nobility and a church that had unquestioned authority. And there wouldn't really be a space for an intellectual to say, let's go to first principles, and let's figure out what a good society is. Everyone would have said, we know (laughter) what a good society is. It's the church, and it's the nobility.
But he's born at a moment where you can actually begin to ask that question and a moment where he's able to see people who are advancing because of their own intelligence and skill and their competition with each other and not simply because they happened to be born to the good and the great, or they happened to acquire, you know, some huge position in the church. Is that a fair way to describe it?
PHILLIPSON: Yes, it is. I mean, Scotland has had a new start, and a new chapter has opened up in the history of Scotland. Now, it hadn't all been plain sailing, but that doesn't matter. What does matter for Smith's story is that his family and his friends' families are the people from the middling ranks who are making their way under the new regime. And it's a good time if you - to be on the make because although everything is a bit - still a bit chaotic in Scotland, what is not to be ignored is that England is at war nonstop with France. And war means contracts.
And it's fascinating how many people from Smith's circle have got fathers or grandfathers who've been making money out of international war and doing very, very nicely. And then there is a general move to really exploit the economic openings that the union has given. Free trade is opening up the colonies and England to Scottish traders. And what are they doing? They're trading dope, i.e., tobacco.
PHILLIPSON: If you want to get rich quick in any civilization, just do narcotics.
DAVIDSON: Right. Trade something addictive.
PHILLIPSON: You'd never go wrong (laughter).
PHILLIPSON: Smith sees all of that. And this is Smith actually as a child of the new Scotland. And this is Smith who is actually on the side of something that can be called modernity. The word they would use is improvement. And this is fundamental. It's fundamental to Smith's political thinking that we've been through utopian remodelings. The church...
DAVIDSON: Radical views. Let's destroy everything and start over.
PHILLIPSON: Right. The church has tried it in the previous century. It's been a catastrophe. All over Europe, there have been utopian start-again exercises. They've invariably led to catastrophe. All you can do is take the institutions you've got and make them work better, improve them. You take what you've got, and you work within it. And I think this is - I had difficulty with commentators on Smith who see essentially democratic principles at work here. I don't see any trace of democracy in his thinking. Whether or not there was in his private thinking is a - another question.
DAVIDSON: So the - one of the things that fascinated me most in your book is to realize that Adam Smith would have been shocked to learn that he's primarily known as a specialist in economics. He really had a much grander, much broader lifetime project. It was a project he shared with his dear (laughter) friend, David Hume.
And it's this fascinating project that he wants to get to very first principles. He says, let's not assume there's a God or that we can take authority from the Bible or some other revealed text from God. Let's just look at human beings and understand what human beings are like. And then, let's understand from that what a good society is. And it's this very big project. The economic interactions are sort of a subset of that larger project. Is that a...
PHILLIPSON: Yes. I mean, I think that puts it pretty well. Smith was trying to construct what contemporaries knew of as a science of man. How do you study human beings scientifically? That was the question he had to ask. Hobbes had asked it in the 17th century because he said, it's all very well. I mean, if we want to study plants, they're another species. But how do you study a species to which you yourself belonged? There are huge technical problems and conceptual problems about that. Smith seemed, to me, to be taking these problems hugely seriously.
And he stumbles on David Hume's great "Treatise Of Human Nature," which not many people read, actually. And we still don't know quite how he stumbled on it. And it seemed to me that if you put Hume and Smith together, they were actually talking to each other about how do you construct a science of man. And what is so engaging and I found made such a helpful starting point was to say that they - it starts from a very simple proposition. What is it that human beings are like when compared with the other animals?
The only thing you can be sure is that human beings are the weakest and the feeblest and most defenseless of all animal species. The only reason they can survive is because they learned to cooperate. And Smith speculates that this goes right the way back to the dawn of creation. He starts with aboriginal - an aboriginal boy and an aboriginal girl trying to survive...
DAVIDSON: Right. Performing...
PHILLIPSON: ...Surrounded by wild beasts and caves and an odd tree.
DAVIDSON: Right. You have these - did he call them speculative histories? Or you call them...
DAVIDSON: Conjectural history.
PHILLIPSON: Conjectural history. And so Smith says, the one speculation I am going to make is we learn from the moment we're born to exchange ideas, goods, services, sentiments with others. And we do that because if we don't, we die.
And this is the simple and absolutely brilliant and enormously powerful concept which goes right the way through Smith's work from the 1740s right the way through to "The Wealth Of Nations." It's a great analysis of exchange. And the moment you put the notion that it's as essential to us human beings to exchange ideas and services as exchanging goods, then you begin to get a very, very fascinating framework for seeing "The Wealth Of Nations" as an essentially philosophical book.
(SOUNDBITE OF SONG, "I MET UP WITH THE KING")
FIRST AID KIT: (Singing) I feel just like the king. And as I fall on the muddy ground...
GOLDSTEIN: We'll post links to Nick's book "Adam Smith: An Enlightened Life" on the blog. That's at npr.org/money.
BLUMBERG: And as always, please send us your questions and comments to firstname.lastname@example.org or check us out on Facebook. I'm Alex Blumberg.
GOLDSTEIN: And I'm Jacob Goldstein. Thanks for listening.
(SOUNDBITE OF SONG, "I MET UP WITH THE KING")
FIRST AID KIT: (Singing) There's people thinking they know something now. Well, I don't know anything at all. And we mean nothing to history. Well, thank God.
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