Wednesday, June 15, 2005

No contradictions between Smith's two Books

A central theme of Adam Smith's philosophy and economics in my book, "Adam Smith's Lost Legacy" (Palgrave Macmillan, March 2005) and also on my companion web site, www.adamsmithslostlegacy.com, is a criticsm of the alleged concentration of Smith on self interest in “Wealth of Nations”

Chapters 22-25 of “Lost Legacy” approach the ‘self love’/self-interest issue from a different perspective to most economists and others who claim they speak with the authority of people who have actually read his books right through and are not just relaying isolated quotations or what their lecturers told them.

Smithian markets are not based on unrestrained self-interest: what he said in fact is that people serve their self interests best by serving the interests of others. I too came at this conclusion from my work since 1972 as an educator of negotiators (and as a negotiation consultant) . It seemed to me that many commentators on Book 1, Chapter 2 of “Wealth of Nations” completely misread Smith on the ‘propensity in human nature … to truck, barter and exchange’.

I call it the 'fundamental error' in the exposition of what Smith was about. I also put this down to them not having studied or practised negotiation to any conscious extent. I will not rehearse all the arguments for this view here, but you may be sure that they endorse what is in “Wealth of Nations”.

Professor Otteson’s book, “Adam Smith’s Market Place of Life” (Cambridge University Press, 2002, ISBN 0-521-01656-8) , linking of a market place to the derivation of morals is absolutely brilliant. Only Hector MacPherson’s unpretentious little book, “Adam Smith” (1899) correctly stated Smith’s principle in ‘truck, barter and exchange’ before Professor Otteson.

In one small snippet (Chapter 24 of “Lost legacy”), I link the exchanges between the person and the impartial spectator (“Moral Sentiments” I.i.4.9-10) to the negotiation exchange and show the connection between the themes of his two books. I regard these three expositions as extremely encouraging for those who wish to restore Smith’s legacy to its proper status.

On a related point, some correspondents ask why Smith did not mention benevolence in “Wealth of Nations” (except in the famous quote about the ‘butcher, the brewer and the baker’) and the impartial spectator, when he mentions benevolence and the impartial spectator in “Jurisprudence”. Is this evidence supporting the allegation (the 19th century so-called ‘Das Adam Smith Problem’) that his two books are contradictory? Not at all!

Perhaps there is a simple reason for their omission. If we remember that “Jurisprudence” consists of verbatim notes of his live lectures compiled by anonymous students at the University of Glasgow in 1763-4, their inclusion may have been a teaching device to remind his young students of the themes in his lectures in “Moral Sentiments” that he was giving in the same students each week.

I am sure we have all done this when lecturing to overlapping groups of students – while speaking, analogies occur to us from things we have been talking about elsewhere or they have been reading (supposedly), or from things happening in the wider world – and verbatim notes would capture these ‘fillers’.

But when it came to writing “Wealth of Nations”, his likely audience had shifted from the closed environment of the University class to the wider world audience to whom such references would mean little and to stop and explain the connections he would have had to extend an already long book. I think judicious editing was at work here in “Wealth of Nations” written from his lectures, not from verbatim records.

Unfortunately, we do not have his written ms of what he intended to place in “Jurisprudence” to confirm that my supposition is correct that he dropped his extempore lecturing references. The "Jurisprudence" ms was burned on his instructions just before he died in 1790. The students’ notes surfaced again over a 100 years after he had died.

I believe this possoible explanation for his not linking the themes in the two books directly is credible and plausible, and those reading into the omissions a deeper meaning are probably misled to their conclusions

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