Friday, March 23, 2007

The Real '300' - Not in Wars that Kill but a War of Words that Educates

Scotland's Herald (23 March) continues with one of the best informed discussions of the brilliant article by Ian Bell on the authemtic message form Adam Smith (discussed on Lost Legacy this week) that any press anywhere in the world has published this year (I see most of them; many are less than worthy of the label 'discussion').

The Herald's editorial team should be congratulated for their commissioning of Ian Bell for the original article and for publishing the daily letters from interesting correspondents, particularly as it has brought the considered judgement of Dr Eamonn Butler, of the Adam Smith Institute, the premier source of advocacy for the application of Adam Smith's political economy to address 21st century problems and opportunities.

I commented on a minor quibble with Dr Butler's presentation of Adam Smith's in The Guardian newspaer yesterday. Today I am taking the unusual step of publishing Dr Butler's 342-word letter below (apologies to The Herald for any breach of its copyright but this is a non-commercial site and we have been mentioning The Herald all week and the world wide publicity for the Herald should be a worthy recompence for not asking for prior permission):

NEIL Davidson (Letters, March 22) is quite right that we cannot press-gang an eighteenth-century thinker such as Adam Smith into being a 21st-century politician. He wrote before the Industrial Revolution changed everything, before trade unions, before state health or pensions, and when the idea of a government spending more than 40% of the nation's wealth would have seemed the greatest tyranny.

Davidson is right also that Smith did not promote some caricature of capitalism, red in tooth and claw. Rather, he supported markets - free and competitive markets - as the best way to create and spread wealth, particularly to the poor.

Free markets do not cause poverty, inequality and environmental problems, as Davidson suggests: it is the lack of them which does that. Indeed, Smith knew that free markets must be husbanded. Traders, who love monopoly, were quite willing to use the political system to extinguish free markets and limit their competition. So he did not advocate laissez-faire, but saw a vital role for the law in keeping markets open, honest and free. And markets, a form of mutual co-operation through voluntary exchange, are actually central to Adam Smith's view of humanity. We trade for our own benefit, of course; but then we act morally in order to spare ourselves the resentment of others. There is no "problem" of conflict between Smith's "economics" and his "ethics" - Adam Smith is, in fact, a social psychologist, and his social psychology is entirely consistent.

Davidson tries to downplay Smith's belief in markets by citing his "consistent" support of state education. It was anything but. Smith suggested some state spending on buildings, but felt that if teachers were to have any incentive to perform well, they should be paid by their pupils rather than by the government. "Public services," he wrote, "are never better performed than where their reward comes only in consequence of their being performed, and is proportioned to the diligence employed in performing them." He had a point."

Eamonn Butler, Adam Smith Institute, 23 Great Smith Street, London

This letter is a great winner of the Lost Legacy Monthly prize for demonstrating outstanding understanding of what Adam Smith was about.

You should read the whole week's correspondence to see what Dr Butler was up against in the misunderstandings of some other correspondents. Plus read the original article by Ian bell (details on my postings through the week).

The Herald is published in Glasgow not far from where the University of Glasgow was originally sited and where Adam Smith lectured (see his Lectures in Jurisprudence, Liberty Fund, 1982), where he wrote The Theory of Moral Sentiments (1759) and from where he wrote the Early Draft of the Wealth of Nations (1763).

[Read the letter by Eamonn Butler at:]


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