[Paleopsych] The Scotsman: Let's re-examine what Adam Smith really said

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Let's re-examine what Adam Smith really said
http://news.scotsman.com/print.cfm?id=280242005&referringtemplate=http%3A%2F%2Fnews%2Escotsman%2Ecom%2Farchive%2Ecfm&referringquerystring=id%3D280242005
    Tue 15 Mar 2005
    GAVIN KENNEDY

    WILL THE real Adam Smith stand up, please? There certainly are plenty
    of phoney versions on parade whenever his name is mentioned.

    Some on the Right brazenly saw in Smith's name an authority against
    much of what he opposed on moral grounds. He was cited to oppose
    shorter working hours, to continue employing women and children in
    coal mines and dark satanic mills, even in defence of slavery. Smith
    allegedly advised against interference in the business of business.

    The cries went up - Laissez faire! Leave the mine and mill owners
    alone! They know best. The invisible hand will come right in the end.
    It's all in Smith's Wealth of Nations. Interfere at your peril.

    Some on the Left naively saw Smith as a compelling authority in favour
    of state intervention. Wilberforce quoted him against slavery, a
    practice Smith opposed on moral and economic grounds. Others quoted
    his support for the government to fund a school in every village so
    that each child would become literate and numerate. But they did not
    like his moral sentiments or his political economy.

    The distortions of Smith's views have conquered popular discourse.
    Libertarians on the Right vie with voices on the Left and sling
    quotations out of context - they long since gave up reading his books.

    The distortions began shortly after Smith died in 1790. The bloody
    excesses of French Terror in 1793 rocked the British establishment.
    Ten years earlier, the Americans had forced Britain out of its 13
    colonies. While the American Republic was far away, the French version
    was only a few miles from Dover.

    A panicky state investigated Smith's friends, searching for evidence
    that his books were likely to incite British mobs to follow the French
    example. For his friends it was too close for comfort. Leaders of mobs
    got 14 years' transportation and there was no assurance Smith's
    supporters would fair better, for social ostracism in their world was
    as serious as a voyage to Botany Bay.

    Adam Smith was a moral philosopher who also wrote about political
    economy. Over the years economics has become a branch of applied
    mathematics. Smithian moral sentiments were dumped, along with his
    political economy. His Wealth of Nations adorns the shelves of
    academe, safely unread by those who should know better. Like his grave
    just off the High Street in Edinburgh, his legacy is neglected. Worse,
    it has been purloined.

    Smith never wrote a word about "capitalism", yet he is hailed as the
    "high priest of capitalism". He is the "father of modern economics"
    though he would find much in today's economics unrecognisable as his
    progeny . He is alleged to be an advocate of "Laissez Faire" though he
    never used these words and claims that he used English equivalents are
    tenuous. He did not believe it advisable to leave merchants and
    manufacturers alone, because they were likely to form monopolies,
    restrict supply and raise prices.

    Smith took the long view of society's development. He was never in
    favour of quick fixes. He considered stability in society more
    important than correcting even serious deficiencies too quickly. He
    took a historical view and his books are full of references to
    classical Greece and Rome and what they taught about government, moral
    conduct and economic growth, and the need for natural liberty and
    justice.

    The "new" economy he discussed in Wealth of Nations was not new to
    him. He saw a growing commercial society as a revival of the commerce
    of western Europe that had been overrun by barbarian hordes. His
    inquiry into the wealth of nations was like a one-man Royal
    commission, a tour de force, drawing on evidence over the millennia
    since the fall of Rome and from contemporary evidence he analysed in
    painstaking detail.

    Commerce was a revival, not a new revolution. From commerce,
    established on a prosperous and improved agricultural base, opulence
    would spread deep into society, itself poverty-stricken to a degree we
    cannot imagine today. Scotland was a backward, ignorant and fractious
    country; England was slightly better. But both would rise out of their
    stagnation if commerce was unburdened from the mercantile politics
    lasting since the Middle Ages.

    Smith disapproved of colonies as expensive ways to buy what could be
    bought in markets. Unnecessary wars to revenge slights on the King's
    ministers rather than matters of substance were on a scale of
    prodigality he railed against. He preferred investment and jobs in
    productive activity that increased wealth. Not that he was a pacifist.
    Defence was the "first duty of the government" to protect society from
    barbaric neighbours.

    He saw society as becoming naturally harmonious through the intense
    dependence of each person on the labour of every other person and
    taught that the propensity to "truck, barter and exchange" led to
    people serving their own interests best by serving the interests of
    others from whom they needed daily necessities.

    That is his true legacy, the melding of his moral sentiments with
    liberty, justice and his economics. It is time his legacy was claimed
    back.

    o Gavin Kennedy is a professor at Edinburgh Business School and author
    of Adam Smith's Lost Legacy, published today by Palgrave Macmillan.