"Jeremy Bentham’s ‘Letters’ to Adam Smith (1787, 1790)
In August 1785 Jeremy Bentham set out from England to join his younger brother Samuel, the naval architect and engineer, whose projects in Russia included helping to develop Prince Potëmkin’s estate at Krichëv. Travelling via France, Italy, Smyrna, and Bucharest, Jeremy Bentham reached White Russia in February 1786 and settled himself on a farm at Zadobrast on the Sozh, near Krichëv, to live in seclusion and write. In August the brothers entertained an English M.P., Sir Richard Worsley, who reported that the British Government intended to restrict the rate of interest. Writing in December to George Wilson, a Lincoln’s Inn barrister of Scottish extraction, Bentham mentioned his reaction to this report: ‘Sir R.W. has a notion that Pitt means to reduce the rate of interest from five to four. Tell me what you hear about it; were it true I should like to give him a piece of my mind first. I have arguments against it ready cut and dry: the former epithet you may have some doubt about; the latter you will not dispute. You know that it is an old maxim of mine, that interest, as love and religion, and so many other pretty things, should be free.’
Adam Smith (1723-1790) is commonly regarded as the first modern economist with the publication in 1776 of The Wealth of Nations. He wrote in a wide range of disciplines: moral philosophy, jurisprudence, rhetoric and literature, and the history of science. He was one of the leading figures in the Scottish Enlightenment. Smith also studied the social forces giving rise to competition, trade, and markets. While professor of logic, and later professor of moral philosophy at Glasgow University, he also had the opportunity to travel to France, where he met François Quesnay and the physiocrats; he had friends in business and the government, and drew broadly on his observations of life as well as careful statistical work summarizing his findings in tabular form. He is viewed as the founder of modern economic thought, and his work inspires economists to this day. The economic phrase for which he is most famous, the “invisible hand” of economic incentives, was only one of his many contributions to the modern-day teaching of economics.