A myth is a traditional story consisting of events that are ostensibly historical, though often supernatural, explaining the origins of a cultural practice or natural phenomenon.

Adam Smith without myths (Smith 4/4)

Nick Samoylov
5 min readDec 2, 2020


This week I have finished reading Wealth Without Nations by Gwydion Williams.

To tell you the truth, I was not able to read everything in it very closely because, for one, there are so many details (Gwydion knows a lot!) very far removed from my area of knowledge, so I concentrated on the paragraphs where the author made the point and browsed the rest.

The second reason, I just did not have time for closer study. So, I trusted that Gwydion knew what he was talking about and did not try to validate this assumption. Besides, on a few occasions when I could verify the story told, it turned to be in accordance with what I knew from other sources or from my own experience. So, I felt comfortable to just trust that all the supporting material was solid.

And the book has a lot of information — so much that I will not even try to relate most of it. In this newsletter, I will just mention a few interesting or new for me facts and bring everything to the conclusion. So, here are the facts and observations in no particular order:

1) There is no solid direct evidence (his own statements or something), but plenty of indirect ones that Smith was not a religious person and probably even an atheist with some indication of being even an enemy of religion. That might explain an additional motivation for him pushing a rational idea of an individual who acts out of self-interest but beneficially for society. There are reasons to believe that he — may be even not consciously — tried to give the role played by the central figure of a supreme deity (in the contemporary worldview dominated by Puritan enthusiasm) to the natural force of human greed. As Gwydion puts it, “it may be that Smith was privately delighted at the prospect of those Puritan social values being chewed up and obliterated by the asocial forces of money.”

2) Despite us knowing Smith as “the founder of capitalism”, he fully appreciated the negative aspects of those “asocial forces of money”. In my previous articles of the Smith series, I have provided many quotes from Smith’s The Wealth of Nations that show how in the same breath he praises new commercial society for its effectiveness and warns about its dangers for the society members. Even more striking is the contrast between views he expressed in two of his major works — The Theory of Moral Sentiments (1759) and The Wealth of Nations (1776). And we are not talking about changing the views over time because Smith edited and republished The Theory of Moral Sentiments later. He just kept both his views as true. As Gwydion puts it, “The first of these builds a model of the familiar world on the basis of sympathy. The second proceeds on the assumption of pure commercial greed with no sympathy at all. … His [Smith] methods were those of a skilled barrister, who could argue either side of any case and make the argument convincing.” By the way, Smith’s father was a successful lawyer, which might explain Adam’s tendency to select facts in support of the proposed premise only, without ever bringing up the facts that do not fit — very unscientific method indeed.

3) Many of those who were executed during the French Revolution were rationalists — the devoted students of the Enlightenment. Meanwhile, the revolution itself was the product and the crown achievement (in its declaration and language at least) of the same Enlightenment. Gwydion comments: “Though everyone knows this as a fact, it has never previously been dignified as a ‘fact of history’, simply because it makes no sense to most of historians.” Similarly, while living in the USSR, we could not make sense of Stalin’s purges, when the most dedicated and self-sacrificing Communists were killed. Only after the Soviet archives started leaking, we understood that the blacklists were composed and approved primarily for one reason only — the power struggle for personal survival. It was a pure rational goal. It was anti-human the same way as the bottom line of a modern corporation is anti those who work for it. Ruthless capitalism is effective, but, if not tempered by human empathy, ruins the society that nurtured it. It reminds me a story (I’ve read it somewhere) of a perfectly built and tuned robot that produced paperclips so effectively that filled the Earth with its product and, by doing that, killed everything else.

4) I enjoyed this phrase by Gwydion: “A world divided into the dejected ordinary and the neurotically successful is hardly a sane outcome.”

5) Gwydion: “Most people nowadays assume that ‘industrial revolution’ and ‘large-scale capitalism’ are synonymous. Yet there is no automatic connection between the two.” Also, “And it was shown in the USSR that industrialisation could also occur in a society where capitalism had been deliberately suppressed.”

6) Gwydion: “A market is an impersonal system that can sometimes operate in direct opposition to the desires of those taking part in it, just so long as they hang on to capitalist rules. Of course it is nihilistic. Fire burns. Water wets. Capitalism in its pure form dissolves all social structures not directly tied to the growth of capital.”

7) Gwydion: “It is very flattering for businessmen who accumulated large fortunes within a complex society when they are told by AdamSmithites that they had done it all by themselves. But in the modern world, very few people do any serious work all by themselves.”

8) Gwydion: “Back in the 1940s, 1950s and 1960s, when the Soviet alternative was vigorous and popular, the owners of capital easily understood that they had to be nice to the rest of society.” Not anymore. And we see that the uncontrolled concentration of the national wealth in the hands of a few has accelerated exactly after the ideological competition had weakened in the 1990s and continues to weaken today.

9) Gwydion: “New Right economics stands on the shoulders of Smith. And Smith, as I have shown in detail, stands on nothing at all. Just a mass of faulty logic and unproven assertions.”

My conclusion: Invisible Hand is a myth. Either it does not exist in reality or we have no idea why something changes and indicate it by the word “invisible” (as a synonym of “I have no idea what it is”). There is some logic behind the market forces based on supply and demand, but in our complex society, it is much too simplistic a model and, thus, dangerous to rely upon for making any serious decision.



Nick Samoylov

Born in Moscow, lived in Crimea, now lives in the US. Used to be physicist and rock climber, now programmer and writer.