The idea of the State being a sort of apotheosis of the People, their ultimate expression and good, was invented for the modern age by the German philosopher, Hegel, and both Karl Marx, the father of Communism, and Mussolini, the inventor of Fascism, got their fundamental philosophy of politics from Hegel.

In the middle of the last century there was comparatively little movement of workmen from place to place; but Adam Smith's fierce attack on the law of settlement shows that migration was on the increase. The world was, in fact, on the eve of an industrial revolution; and it is interesting to remember that the two men who did most to bring it about, Adam Smith and James Watt, met, as I have mentioned, in Glasgow, when one was dreaming of the book, and the other of the invention, which were to introduce a new industrial age.

[Adam Smith was] a higher above all genius (...) who had recognized some mistakes of the mercantile and physiocrats systems, put new principles of a theory called the industrial system, and directed minds for this road, on which they should necessarily advance

The true significance of the tormenting problem of poverty now stood revealed: economic society was subject to laws which were not human laws. The rift between Adam Smith and Townsend had broadened into a chasm; a dichotomy appeared which marked the birth of nineteenth-century consciousness. From this time onward naturalism haunted the science of man, and the reintegration of society into the human world became the persistently sought aim of the evolution of social thought. Marxian economics-in this line of argument was an essentially unsuccessful attempt to achieve that aim, a failure due to Marx's too close adherence to Ricardo and the traditions of liberal economics.

Although Adam Smith is today often regarded as a “conservative” figure, he in fact attacked some of the dominant ideas and interests of his own times. Moreover, the idea of a spontaneously self-equilibrating system — the market economy — first developed by the Physiocrats and later made part of the tradition of classical economics by Adam Smith, represented a radically new departure, not only in analysis of social causation but also in seeing a reduced role for political, intellectual, or other elites as guides or controllers of the masses.

Hegel’s theological discussion repeatedly asks what the true relation is between the individual man and a state that no longer satisfies his capacities but exists rather as an ‘estranged’ institution from which the active political interest of the citizens has disappeared. Hegel defined this state with almost the same categories as those of eighteenth century liberalism: the state rests on the consent of the individuals, it circumscribes their rights and duties and protects its members from those internal and external dangers that might threaten the perpetuation of the whole. P. 32

By having the self-confidence to apply the methods of scientific inquiry to human situations, they developed several new scholarly fields. In his magisterial study of the Enlightenment, Peter Gay states that Montesquieu invented sociology in The Spirit of Laws, that Edward Gibbon founded the modern writing of history with The History of the Decline and Fall of the Roman Empire, and that Adam Smith did the same for economics with The Wealth of Nations.57 (Xenophon’s Oeconomicus might from its title appear to claim to be a foundational document, but it really is about how to manage a household, which is what the word means in Greek.)58 Gay does not mention it, but Hume’s essay on “The Populousness of Ancient Nations” also was an early venture into creating the field of demography. Another Scot, James Hutton, came up with an astonishing new way to think about time, and so invented modern geology, a subject to which we will return. It is noteworthy that several of these innovative scholarly ventures — the ones by Montesquieu, Gibbon, and Hume — were rooted in the studies of the history of Rome.

Adam Smith is, of course, justly lauded for his advocacy of free markets and limited government. Particularly famous is his idea that each person’s pursuit of self-interest leads, as if by an invisible hand, to socially efficient outcomes.

But Adam Smith was a philosopher as well as well as an economist, famous in his time as much for his Theory of Moral Sentiments as for The Wealth of Nations. And as he understood so well, society is more than the sum of its individual parts.

The fathers of American Democracy had no exaggerated respect for the State, because they were pre-eminently men of reason and common sense. They never, for instance, identified the State with the People. They knew that the State is, by very definition, an instrument of oppression and coercion, and their idea was to make it strong enough to keep order and ward off enemies, and limit it otherwise very strictly.

To begin with, if man, since his origin, has always lived in societies, the State is but one of the forms of social life, quite recent as far as regards European societies. Men lived thousands of years before the first States were constituted; Greece and Rome existed for centuries before the Macedonian and Roman Empires were built up, and for us modern Europeans the centralized States date but from the sixteenth century. It was only then, after the defeat of the free mediæval Communes had been completed that the mutual insurance company between military, judicial, landlord, and capitalist authority which we call "State," could be fully established.

It may come as a surprise to discover that throughout most of the seventeenth, eighteenth, and early nineteenth centuries, leading bourgeois philosophers and economists understood and openly stated, as did John Locke in 1690 that “government was created for the protection of property,” and Adam Smith in 1776 that civil authority “is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”

The key to the period appeared to be that the mind had become aware of itself. Men grew reflective and intellectual. There was a new consciousness. The former generations acted under the belief that a shining social prosperity was the beatitude of man, and sacrificed uniformly the citizen to the State. The modern mind believed that the nation existed for the individual, for the guardianship and education of every man. This idea, roughly written in revolutions and national movements, in the mind of the philosopher had far more precision; the individual is the world. This perception is a sword such as was never drawn before. It divides and detaches bone and marrow, soul and body, yea, almost the man from himself. It is the age of severance, of dissociation, of freedom, of analysis, of detachment. Every man for himself. The public speaker disclaims speaking for any other; he answers only for himself. The social sentiments are weak; the sentiment of patriotism is weak; veneration is low; the natural affections feebler than they were. People grow philosophical about native land and parents and. relations. There is an universal resistance to ties rand ligaments once supposed essential to civil society. The new race is stiff, heady and rebellious; they are fanatics in freedom; they hate tolls, taxes, turnpikes, banks, hierarchies, governors, yea, almost laws. They have a neck of unspeakable tenderness; it winces at a hair. They rebel against theological as against political dogmas; against mediation, or saints, or any nobility in the unseen. The age tends to solitude. The association of the time is accidental and momentary and hypocritical, the detachment intrinsic and progressive. The association is for power, merely, — for means; the end being the enlargement and independency of the individual.

others, without further ceremony ascribing to the strongest an authority over the weakest, have immediately struck out government, without thinking of the time requisite for men to form any notion of the things signified by the words authority and government. All of them, in fine, constantly harping on wants, avidity, oppression, desires and pride, have transferred to the state of nature ideas picked up in the bosom of society. In speaking of savages they described citizens. Nay, few of our own writers seem to have so much as doubted, that a state of nature did once actually exit; though it plainly appears by Sacred History, that even the first man, immediately furnished as he was by God himself with both instructions and precepts, never lived in that state, and that, if we give to the books of Moses that credit which every Christian philosopher ought to give to them, we must deny that, even before the deluge, such a state ever existed among men, unless they fell into it by some extraordinary event: a paradox very difficult to maintain, and altogether impossible to prove.