Friday, November 30, 2007

Stanford Review Mentions Lost Legacy

Lost legacy is mentioned in the current issue of The Stanford Review (30 November, Vol XXXIX, issue 5 (here):

“A Book Review Saga: ‘Professor David Kennedy Takes on Paul Krugman’ by Paul Craft (Features Editor)

Another comment came from Gavin Kennedy (no relation) who maintains a blog about economic history titled “Adam Smith’s Lost Legacy.” Responding to DeLong’s post and Kennedy’s review, he concludes that Kennedy’s “anti-economist” diagnosis was off the mark. He particularly criticizes Kennedy for mentioning “Adam Smith’s fabled ‘invisible hand’” by claiming that the whole metaphor is not a direct legacy of Smith. He even accuses Kennedy, as DeLong did, of not having ever read Smith. Finally, he concludes that “a historian (should) . . . at least be interested in this . . .” He seems to be playing Kennedy’s own game against him.”

Lost Legacy is always grateful for mentions, positive or negative, on other publications and Blogs. So thank you Paul Craft and Stanford Review.

From the site statistics for Lost Legacy, I know that the largest percentage of our readers each day live in California. I don't know anything else about them but this fits in with the largest number of visitors each day are in the USA.

My Blog Post in Question (21 October) went as follows:

"Is David Kennedy 'the Stupidist Man Alive'?

There are several comments on economics Blogs on the review of Paul Krugman’s book, ‘The Conscience of a Liberal’ (W. W. Norton, October 2007, $25.95 or $15.57 from Amazon), by David Kennedy (positively no relation!), who is the Donald J. McLachlan Professor of History at Stanford University.

Brad Delong, doyen among economist bloggers (here), reviews Kennedy’s NYT's review without mercy:

‘Stanford's David M. Kennedy reveals that he is a serious contender for the "Stupidest Man Alive".’

"Brad quotes Kennedy’s review of Krugman:

“Paul Krugman is a justly renowned professor of economics and international affairs at Princeton University. His abundant accolades include the John Bates Clark Medal... a distinction... perhaps even more prestigious than... the Nobel.... [Y]et maybe Krugman is not really an economist — at least not according to the definition offered more than a century ago by Francis Amasa Walker, the first president of the American Economic Association, who wrote that laissez-faire “was... used to decide whether a man were an economist at all.” Most modern economists continue to celebrate Walker’s orthodoxy, and behind it, the classical doctrines of Adam Smith, whose fabled “invisible hand” regularly works wonders of production, distribution, innovation and efficiency, provided it is kept free of the meddlesome “nanny state.”... Krugman [is] the anti-economist...”

Brad concludes:

“David Kennedy thus demonstrates that he (a) has never read Adam Smith, and (b) has little acquaintance with modern American economists--who are (like Adam Smith) much more interested in prescribing how the nanny state should meddle to be effective than in protecting the naked market from interference.”

First, a clarification on my part: I am not familiar with the ‘politics’ of the personalities who populate American academe and this includes where Paul Krugman stands on the continuum of ‘left – right’, ‘classical – neoclassical’ or ‘seriously competent – wildly not so’, and I cannot judge the accuracy of Brad Delong’s assertion, though as it is Brad’s assertion I am inclined to go along with it.

I treat what David Kennedy has written as they stand. That he quotes Francis Amasa Walker (1840 – 1897!) for his criterion of what constitutes and economist in 2007 suggests he is seriously out of touch, and that he associates Adam Smith with laissez faire supports this conclusion.

Adam Smith was not the author of what passes today as ‘classical doctrines’ (an impossibly broad tent covering Malthus, Ricardo and Marx, from among which I would snatch Adam Smith).

The sentence including, “Adam Smith, whose fabled “invisible hand”, gives the game away. David Kennedy, a professor of American history, refers to the ‘fable’ of the invisible hand, but it wasn’t a fable of Adam Smith’s making; for Smith it was merely a handy metaphor when explaining why opening a domestic market to foreign goods for consumption would lead to higher domestic investment, partly by the foreign products competing with domestic products and partly by the risk avoidance of local merchants preferring to invest their capital locally. As the arithmetical whole is the sum of its parts, if local merchants invest locally instead of abroad, domestic capital formation will be higher than otherwise.

For 18th-century readers of Wealth Of Nations (Book IV.ii.9: p456), who were not economists – more likely to be legislators and people who influence them – he summed this process after clearly explaining it by using a common 17th-18th-century literary metaphor of the invisible hand (see Shakespeare’s ‘Macbeth’, Defoe’s ‘Moll Flanders’ or ‘Colonel Jack’, or Voltaire’s Oedipe: 'Tremble, unfortunate King, an invisible hand suspends above your head’; and ‘an invisible hand pushed away my presents’, etc.,).

The fable of the invisible hand has passed through the string of tenuous development, first as a ‘concept’, then as a ‘theory’, and finally, and banally, a ‘paradigm’!

Its origins are located in the environs of 51st Street, Chicago, and which has been propagated all over American academe, via its graduates and the media, until the fable is now regarded as the reality in all expositions of neoclassical general equilibrium theory (after Samuelson and Debreu) and sanctified by Nobel Prize winners from the Bank of Sweden.

I would expect an historian to know this, or at least to be interested in it.

David Kennedy’s review has received attention (scathingly) from ‘Angry Bear’ and Mark Thoma."


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