AS A historian, James Young (Letters, March 21) should be able to distinguish between the kind of claims that are made about Adam Smith by his latter-day admirers (of both left and right) and what the man himself actually believed. When Young asserts that Smith was "a pioneer of the vicious, anti-humanist economics of capitalism", he is simply repeating the conventional wisdom of the age. The only difference is that, unlike most of the people who want to sign Smith up for the neo-liberal agenda, Young is opposed to capitalism, but inaccuracies are not corrected merely by reversing their value judgments.

Smith has to be understood historically, in the context of his time, which is not our era of global capitalism, but a world of feudal barbarism from which Scotland was only beginning to emerge.

When Smith attacks unproductive labour, he is not making some timeless critique of state employees, but thinking quite specifically about Highland feudal retainers. When he attacks monopolies, he was not issuing a crystal-ball warning against the emergence of nationalised industry in the twentieth century, but criticising those companies of his own time which relied for their market position on the possession of exclusive royal charters.

Above all, unlike his modern admirers, he did not see the market as quasi-mystical institution that should be made to penetrate every aspect of human life, but a limited economic mechanism for liberating human potential from absolutist stagnation - otherwise his consistent support for state education is quite incomprehensible.

We know now that the market has not resulted in the realisation of human freedom, but in poverty, gross inequalities and the possibility of environmental collapse, but Smith was not to know this.

In any case, neither he nor the other Scottish Enlightenment thinkers ever talked about "capitalism" - the word did not pass into common usage until the 1830s - but to the "stage of subsistence" which they called "commercial society", which is not the same. And even Smith's attitude to "commercial society" is much more complex than Young allows.

It is not simply his deep distrust of businessmen (an aspect of The Wealth of Nations which Young, of course, completely ignores); he intuited, long before industrialisation really took off, that it would lead to a massive degradation in the condition of labourers and their reduction to mere "hands". It is this nightmarish (and deadly accurate) anticipation, which he shared with Adam Ferguson and John Millar, that later informed Hegel's conception of alienation, and through him, that of Marx.

Understood in the context of the Scottish Enlightenment conception of human potential, the description of pin manufacture at the beginning of The Wealth of Nations is not only a primer in the joys of the division of labour: it is a vision of Hell.

None of this is to suggest that Smith was a socialist - indeed, he could not have been, since socialism could only emerge once capitalism had made it a historical possibility. Smith was, however, a radical intellectual at a time when capitalism was still a revolutionary movement with some interest in developing a scientific understanding of the world.

Given current debates over the abolition of slavery, it is worth noting that Smith opposed it (as did Hume, despite the racism of which Young rightly reminds us), and not simply on grounds of economic efficiency. There is now a growing literature on Smith that presents a more complex picture than the lazy caricatures recycled by Young, notably recent works by James Buchan and Iain Maclean, and the forthcoming book by Turkish scholar Dogan Goecman on The Adam Smith Problem.

No doubt Young and I share the ambition of seeing John Maclean and James Connolly on a £20 note, but until the happy day arrives when working-class revolutionaries are celebrated on our currency, the image of this great bourgeois revolutionary should at least inspire us to treat him as seriously, and with as much respect, as Marx himself did.

Neil Davidson, Department of Geography and Sociology, University of Strathclyde, Glasgow.