Monday, March 28, 2005

Adam Smith's Lost Legacy is picked up on other Blogs!

Truck and Barter is an active Blog (www.truckandbarter.com), roughly in the smithian tradition.
First the comments from Turck and Barter, then mine:

March 26, 2005
Truck, Barter
By Kevin
Much of what I have read lately references the words of Adam Smith that inspired this blog's name.
THIS division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.
Adam Smith - An Enquiry into the Nature and Causes of the Wealth of Nations. 1776. Book I, Chapter 2
In his 1964 SEA address, What Should Economists Do? ($) James Buchanan quotes Smith's text, and get's right to it:
Somewhat surprisingly, it seems to me, the relevance and the significance of this "propensity to truck, barter, and exchange" has been overlooked in most of the exegetical treatments of Smith's work. But surely here is his answer to what economics or political economy is all about.
Economists "should" concentrate their attention on a particular form of human activity, and upon the various institutional arrangements that arise as a result of this form of activity. Man's behaviour in the market relationship, reflecting the propensity to truck and barter, and the manifold variations in structure that this relationship can take; these are the proper subjects for the economist's study.
In other words, study what people do to make economic activity successful. Notice that Buchanan cuts off "exchange" for rhetorical effect. I've noticed that many others routinely do this.
Via AL Daily, we now find Gavin Kennedy using the phrase to describe what Adam Smith really meant:
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.
As I wrote last year, I still think a closer, scholarly look at why Smith uses all three words is warranted.

My comments:

I welcome the challenge to incite a scholarly look at this famous passage, and I wondered why you clipped Smith's words for your Blog. Interpretations of this passage feature strongly in my book, "Adam Smith's Lost Legacy", chapters 22-24, (Palgrave Macmillan, 2005).

Exchange does not require an equality in an exchange transaction and nor should it imply a fraud by either party. We negotiate because at the moment of the transaction both parties value the items in exchange differently. Inter-personal comparisons of utility are neither possible nor necessary. Each person offers in exchange that which is valued less for what is valued more. Your gain is not my loss; my gain is not your loss.
This is central to Smith's legacy.

Gavin Kennedy 27 March 2005

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