These remarks help us appreciate what Smith meant by “the system of natural liberty”–a phrase that recurs throughout Wealth of Nations. By “natural liberty,” Smith meant how humans will typically act in furthering their own desires when they are not hindered by unnecessary laws and regulations, and so may pursue their own interests as they see fit. The principle of self‐​interest is analogous to Newton’s law of gravitation. It serves the same explanatory function in the human sciences, which study human action in its various aspects, that the law of gravitation serves in the natural sciences. The egoistic principle serves as a bridge or invisible chain that enables us to integrate complex phenomena into a comprehensive explanatory scheme. This is the epistemological foundation of spontaneous order theory and a fundamental task of philosophy.

What role did spontaneous order theory play in Smith’s overall approach? This question was addressed by Dugald Stewart, who, after studying under Smith at the University of Glasgow, went on to become one of Britain’s most influential philosophers. In his Account of the Life and Writings of Adam Smith, Stewart claims that Smith shed new light on the evolution of social institutions, many of which were the unintended consequences of egoistic actions and not the result of design. As Stewart put it, Smith showed that such institutions “took their rise, not from any general scheme of policy, but from the private interests and prejudices of particular orders of men.”

Smith, Stewart explains, was animated by a desire to explain the progressive development of social institutions. How is it that language has evolved from its primitive beginnings to its present complexity and “systematical beauty”? How can we explain the progress of science and the arts from their rudimentary beginnings to their present state of refinement? How can we account for the emergence of sophisticated economic institutions, such as money, from their primitive origins?

Stewart contends that history alone is unable to provide satisfactory answers to such questions, because many of the important steps in social and intellectual progress had already occurred before humans were able to keep records of their activities. He then pinpoints the valuable role that spontaneous order theory can play in filling the gaps of our historical knowledge: “In examining the history of mankind, as well as in examining the phenomena of the material world, when we cannot trace the process by which an event has been produced, it is often of importance to be able to show how it may have been produced by natural causes.”

Stewart calls this approach “theoretical” or “conjectural” history. This kind of history, which becomes necessary when our historical data is woefully incomplete or nonexistent, cannot establish its conclusions with certainty; but it can render probable conjectures, based on our knowledge of human nature and social interaction. For example, we don’t know for certain the early steps by which a particular language was formed, since written records presuppose that a given language has already developed to a fairly sophisticated level. But “if we can show, from the known principles of human nature, how all its various parts might gradually have arisen, the mind is not only to a certain degree satisfied, but a check is given to that indolent philosophy, which refers to a miracle, whatever appearances, both in the natural and moral worlds, it is unable to explain.”

Here Stewart was probably thinking of the biblical story of the Tower of Babel, which attributes the origin of different languages to an act of God. Such miraculous accounts, which were still widely believed during the eighteenth century, are what Stewart meant by “that indolent philosophy” that posits a miracle whenever it cannot explain something by rational means. Stewart credits the French philosopher Montesquieu with being among the first to provide a naturalistic explanation of social institutions. In Spirit of the Laws (1748), Montesquieu repudiated the traditional “great man” theory of law that attributed legal institutions to single lawgivers, such as Lycurgus, Solon, and Romulus. “The advances made in this line of inquiry since Montesquieu’s time have been great.” Indeed, naturalistic, evolutionary explanations of social phenomena were a hallmark of the Scottish Enlightenment, as exemplified in the writings of Adam Ferguson, Lord Kames, and John Millar, and they are indispensable if we wish to understand Adam Smith’s overall approach.