Princeton University April 2013

Alex Salmond MSPFirst Minister Alex Salmond 

Princeton University

The Wealth and Wellbeing of Nations

Saturday, April 6, 2013





I spoke yesterday at the Carnegie Council for Ethics in International Affairs, and noted the influence of Andrew Carnegie on philanthropy and education in the USA as just one example of the ties between Scotland and the USA.

So I was delighted to find that Carnegie gave money to Princeton when Woodrow Wilson – another Scots American - was the 13th President of this university. The money was used to create Carnegie Lake, and later, when Wilson asked him for a further donation, Carnegie replied "I have already given you a lake''.

Wilson’s response was apparently "We needed bread and you gave us cake.''

If this caused any rift between the two, it was clearly mended soon enough. Carnegie’s memoirs, written when Wilson was President of the USA, end with words which were intended as the highest possible praise: “Watch President Wilson! He has Scotch Blood in his veins!”

Wilson himself was deeply proud of that fact - he once said that “every line of strength in American history is a line coloured with Scottish blood”.

Many people are equally proud of their Scottish ancestry – regardless of whether or not it exists. From time to time there have been surveys of the people in this country who claim Scots or Scots-Irish ancestry, and I think my favourite one is a survey that was carried out some 10 years ago, simultaneously with the official census .

The census recorded that there were 10 million people across the United States who were of Scots or Scots-Irish descent. But the survey, which asked people’s opinion on what they were, found that 30 million people claimed Scots or Scots-Irish descent. It’s maybe the most fundamental compliment that any country has ever been paid by any nation anywhere else, that there’s 20 million people across these United States who want to be Scottish.

So my message here at Princeton to those 20 million is: ‘you’re in’.

Woodrow Wilson may have been thinking in particular of the contribution to American history made by James Witherspoon, one of his predecessors here at Princeton. Witherspoon was a minister at Paisley when he was invited to become the 6th President of what was then called the College of New Jersey. The statue of Witherspoon in the grounds here, which I have just seen, is matched by an identical one at the University of the West of Scotland.

Witherspoon became a great American patriot. Together with James Wilson of Fife, he was one of the two Scottish-born signatories to the Declaration of Independence.

A British observer at New Jersey College’s commencement day celebrations of 1777 said that: “An account of the present pace of things in America would be very defective indeed if no mention was made of this political firebrand, who perhaps had not a less share in the revolution than Washington himself.”

That might overstate his significance, of course, but he was part of a distinct Scottish influence on the United States Constitution. He taught James Madison, who drafted significant parts of that document. Other sections were the work of James Wilson.

We know that Thomas Jefferson –perhaps the greatest genius of the founding fathers - had Scottish teachers, such as James Blair and the Reverend William Douglas. Jefferson, even when he was ambassador to Paris, spoke French with a strong Scottish accent because he’d been taught French by his Scottish tutors.

The Declaration of Independence itself is often seen as reflecting the influence of Francis Hutcheson, the Moral Philosopher of Glasgow University and, long before that, Scotland’s 14th century Declaration of Arbroath.

Recognising all of those links, in 1998 the US Senate passed a resolution declaring that today – 6 April – is Tartan Day. The opening of the resolution stated that “April 6 has a special significance for all Americans, and especially those Americans of Scottish descent, because the Declaration of Arbroath, the Scottish Declaration of Independence, was signed on April 6, 1320 and the American Declaration of Independence was modelled on that inspirational document.”

None of this says, of course, that the Declaration of Independence and the constitution are Scottish documents; they’re not, they’re the product of American genius and were the response to specific American circumstance, as well as being statements of universal value. But the extent of influence, the Scottish influence, demonstrates the depth of the shared ties between our nations. It also shows that the trade between the United States and Scotland has always been one primarily of ideas as well as goods and that we’re bound by values as well as by history.

Today is therefore the best day possible for celebrating that shared history and those shared values. It is a fitting day to be here at Princeton. And it is an especially appropriate day for celebrating that great Scottish American, James Witherspoon.

Three months before Witherspoon joined 55 others to sign the US Declaration of Independence, Adam Smith’s “Wealth of Nations” was published.

Both Witherspoon and Smith were products of the Scottish Enlightenment. For example both were deeply influenced by Francis Hutchison – who had taught Witherspoon – and by David Hume – who was a close friend of Smith.

Scholars have also detected links between Witherspoon’s lectures on eloquence here at Princeton, and Smith’s “Consideration on the First Formation of Languages.”

Today, therefore, at the close of this seminar on the wealth and wellbeing of nations, I want to speak about the enduring relevance of Adam Smith in instructing the affairs of nations.

At the close of the speech I am going to present the University with this digitalised document from the Scottish Records – a copy of a letter sent by Adam Smith to David Hume on 5th July 1764.

Smith was in Toulouse, Hume was in Paris. Smith was acting as tutor to the young Duke of Buccleuch who may have been attentive to French but not necessarily in an academic direction. He writes rather carefully “the Duke is acquainted with no Frenchman whatsoever”

Anyway, and here I paraphrase, Smith says to his friend: “I am bored out of my mind and therefore have begun to write another book”. That book became the “Enquiry into the Nature and Causes of the Wealth of Nations.”

But I don’t want to consider “The Wealth of Nations” alone. I want to consider it alongside Smith’s earlier – and to my mind, equally significant – work, “The Theory of Moral Sentiments.”

I am hardly the first person to make this point.  President Wilson when Professor of Jurisprudence at this university once noted that “The Wealth of Nations”: “was not meant to stand alone as the exposition of a complete system , it was only a supplement to ‘The Theory of Moral Sentiments’.”

But there is still an aspect why Smith needs to be rescued – or perhaps reclaimed – from those who cite his work in a moral vacuum, who have never read “The Theory of Moral Sentiments” and perhaps only managed the penguin edition of “The Wealth of Nations”!

Some of you might remember the 1960 film “Inherit the Wind”, starring Spencer Tracey and Frederic March. It’s based on the 1925 Scopes Trial, when Clarence Darrow – the character based on him is played by Spencer Tracey in the film – clashed with William Jennings Bryan over whether John Scopes was allowed to teach the theory of evolution in Tennessee schools.

At the end of that film, Spencer Tracy is alone in the court room. The two books at the centre of the trial are on the bench. Tracy picks up “The Origin of Species” in his left hand, and weighs it, and then picks up the bible in his right hand. He balances the two against each other together; pauses; gathers them both; and then strides out of the courtroom carrying both books under his right arm.

The message of that sequence is that two books which were seen as contradicting each other actually complement each other. They balance.

My contention this afternoon is that “The Theory of Moral Sentiments” and “The Wealth of Nations” are like that. Taken together, the moral philosophy of the first, and the science of economics of the second, provide the balanced outlook that the world needs to confront the major challenges of today.

That view is now being expressed in some surprising places.

I was at Aberdeen University recently, to hear a lecture by Professor Lai Desheng of Beijing Normal University. He summarised the new Chinese Government’s approach to economic development with a slide showing the covers of the Chinese translations of “The Wealth of Nations” and “The Theory of Moral Sentiments”.

He argued that China’s aspiration was to “make the moral man have a sense of economy, and to let the economic man have a sense of the moral”. That’s perhaps why former Premier Wen Jiabao of China carried a copy of “The Theory of Moral Sentiments” with him wherever he went.

Former Premier Wen is not alone in having a Scots book at bedtime. On my way to New York I watched the Daniel Day Lewis portrayal of Abraham Lincoln. It is an astonishing film, powerful and moving.

Lincoln had a copy of the collected works of Robert Burns by his bedside and often called on his sons to recite from it as an after dinner party piece at the White House. Lincoln once declined an invitation to toast at a Burns event by saying that no words of his could adequately sum up the generous heart of Robert Burns.

So can we build the case that far from being contradictory the analysis of sympathy in “The Theory of Moral Sentiments” is a necessary complement to understanding the analysis of self-interest in “The Wealth of Nations”.

Smith’s expression of the benefits of self-interest in “The Wealth of Nations” is justly famous - “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their self-interest.”

However it is often misused. Self-interest, in that passage, is entirely compatible with feelings of benevolence and sympathy. What Smith consistently appeals to is what should be called an enlightened self-interest.

For example, later in “The Wealth of Nations”, he points out that “What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can be flourishing and happy, of which the far greater part of the members are poor and miserable.”

That balance is made even clearer if we look at Smith’s views in “The Theory of Moral Sentiments”. I want to quote one passage in particular.

"As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation. Though our brother is on the rack, as long as we ourselves are at our ease, our senses will never inform us of what he suffers. They never did, and never can, carry us beyond our own person, and it is by the imagination only that we can form any conception of what are his sensations."

There are two things about that. First, it’s a compelling way of saying - use your imagination to understand the suffering of others.

Secondly, it’s a phrase with enduring relevance. I’d like to compare it to words spoken by President Obama seven years ago, before he became President.

He said: “People talk about the budget deficit. I think we should talk more about our empathy deficit — the ability to put ourselves in someone else’s shoes; to see the world through those who are different from us — the child who’s hungry, the laid-off steelworker, the immigrant woman cleaning your dorm room.

“As you go on in life, cultivating this quality of empathy will become harder, not easier. There’s no community service requirement in the real world; no one forcing you to care… Not only that — we live in a culture that discourages empathy… A culture where those in power too often encourage these selfish impulses.”

Although he uses the more modern word “empathy” instead of “sympathy”, President Obama’s argument is essentially the same as Smith’s. From imagination comes empathy and compassion. From those comes the will to benevolent action.

Researchers at the University of Chicago two years ago found that given the choice, rats will free other rats from cages even when there is no reward in it for them, they will even choose freedom for other rats over cheese for themselves!

If rats can show empathy, then surely humans can show a bit more.

At all levels, as individuals, as national governments, as citizens of the world - we need the ability to put ourselves in other people’s shoes.

Self-interest without sympathy serves no interest.

I want to give two examples of that today. One relates to domestic politics in Scotland; the other to global affairs.

The first is the growth in inequality in some Western societies. The United Kingdom is now one of the ten least equal societies in the Organisation for Economic Co-operation and Development. Scotland on its own fares slightly better, but far too many people in Scotland suffer the consequences of inequality - reduced educational attainment, poor health outcomes and shorter life expectancy.

This inequality fails to meet the interests of our economy or our society. It is actually hindering economic recovery – it is curbing the spending power of the majority of families and individuals, and if left unchecked in the longer term, it will further debilitate the ability of low-income families to contribute their talents, their skills and their innovations to society.

Secondly, this toleration of inequality demonstrates the empathy gap. Too many leaders – not just in politics, although certainly in that field – have lost the ability to consider how life really feels for the most vulnerable.

To give just one topical example, out of many, in order to reduce welfare spending, the UK Government at the start of this week imposed what is called a bedroom tax. It reduced housing benefit payments for people who are assessed to have a spare, or unnecessary, bedroom.

The rules are mainly the result of rising rental costs which are primarily a problem in London and south-east England. Yet in Scotland, 100,000 people will be penalised unless they move to single-room accommodation – despite the fact that there is only currently a supply of 20,000 single-roomed socially rented houses.

Even worse, a recent analysis for the Scottish Government shows that a substantial number of those who are affected by the bedroom tax have a disability. These people aren’t living in luxury – many of them need to use their additional room for equipment.

Can you imagine that any politician would make such a cut if they had applied Smith’s advice in “The Theory of Moral Sentiments”? If they had conceived how they would feel? If they had imagined what it would be like to be a disabled person forced to move? Or to be a single occupier facing a cut in benefits but without any viable choice of new accommodation?

We need empathy in tough economic times more than at any other time. It is what allows us to associate with each other’s struggles and challenges, to build a sense of solidarity and cohesion.

And my own view is that in Scotland, that sense of empathy will motivate us to take and use the powers we need to change the direction of the country.

The second example I’m going to use is an international one - climate change, and in particular climate justice.

President Obama, in his State of the Union Address argued that “We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science and act before it’s too late.”

President Obama’s words were true. But it is also true that despite the effects of climate change in the USA and in Europe, those who are today suffering most from its consequences are mainly vulnerable people in developing countries. Those who have benefitted and still benefit from emissions - in the form of on-going economic development and increased wealth, are mainly people in the industrialised countries of the west.

One of the difficulties with climate change is that its effects are often distant – in time and in location – from the actions which cause it. And so we have to imagine life for those worst affected.

Imagine you are a subsistence farmer who has worked hard to tend your crop, only to see the crop ruined by erratic heavy rains.

Imagine how it would feel when, because of that crop failure, you could no longer afford to send your daughter to school.

Imagine you are that young girl – instead of studying for a future, you now have to walk many extra miles every day to find water for your family.

Or imagine you are caught up in one of the vastly increasing number of climatic disasters – where the impact of climate change is quite literally a life or death situation.

It is difficult for us to think of ourselves in those situations – they are not our life experience.

In the developed world climate change is certainly causing substantial inconvenience and occasional tragedy, but we have the means to response. In the developing world it is causing enduring crisis and unremitting chaos, and they have no such means to respond.

People often see the lack of international agreement in addressing climate change as a failure of political will or initiative. It is. But it is also, surely, a failure of empathy – a failure of the fortunate to see, feel or imagine the consequences of inaction.

Climate justice is part of the solution. It is the ethical obligation to share our benefits from industrialisation with those affected by the climate change it has caused. And it has at its heart the concept of empathy, or sympathy – an appeal to enlightened self-interest.

Scotland has for several years attempted to set an example.

We have the most ambitious carbon reduction legislation in the world – committing us to a 42 per cent reduction in greenhouse gas emissions between 1990 and 2020. As part of that, we are championing renewable energy, and developing technologies which we hope can be applied worldwide, as we look to a more sustainable future.

But we have been increasingly aware that our actions cannot be confined to policies which will reduce the impact of climate change in the future.

We also need to help those who are suffering now as a result of the developed world’s carbon emissions.

That’s why the Scottish Government has established the world’s first ever climate justice fund. It is focussing initially on water projects - our first projects are helping communities affected by climate change in Malawi and Zambia.

The Scottish Fund is currently small in terms of the scale of the global challenge - tiny in fact - but it will make a real difference to people’s lives. It is a powerful commitment from a nation which wants to live up to the best traditions of its past, and play a constructive role on the world stage.

Ladies and gentlemen, Adam Smith, like John Witherspoon, shows the Scottish Enlightenment at its best. Questioning, thoughtful and rational in his methods, it is a grave misfortune that he has been wrongly claimed by so many whose lack of empathy would have repelled his moral philosophy. It is time to liberate the great man from this defamation.

Taken together, “The Wealth of Nations” and “The Theory of Moral Sentiments” provide the balance that we more than ever require to face the challenges of the modern world.

We need Smith’s science of economics to promote recovery and unleash the productive resources of our people.

But we also need his sympathy if we are to associate with each other’s struggles and challenges, and to build that sense of solidarity and cohesion which makes recovery sustainable and balanced.

Smith’s achievement, over his two masterpieces, was to show that self-interest and sympathy gang together. If we take that message to heart, it will do much to secure both the wealth, and the wellbeing, of nations.