Wednesday, January 21, 2009

A Conservative MP is Correct

Julian Brazier MP contributes to The Cornerstone Group Blog (HERE)

Financial integrity key to stability’

“I’d like to make another point, however. How did we ever allow ourselves to get to a position where bankers could legally bet the house on risky deals? Answering that question is likely to take a long time and solutions may be slow coming, but part of the answer has to be moral. Adam Smith wrote a book about the importance of personal ethics before he wrote the Wealth of Nations. If we continue with the cult of celebrity, where megabucks are worshipped and integrity is sidelined, we will not find our way back to the kind of stability which earlier generations took for granted

Julian Brazier is right, of course. That was Adam Smith's intention when he published Moral Sentiments in 1759 and Wealth Of Nations in 1776. This were publsihed separately but they do not contain separate content.

Smith also lectured on ethics and jurisprudence, which happened to contain large parts of what became Moral Sentiments and Wealth Of Nations (sometimes verbatim). He taught to the same materials to the same students in his same classes at Glasgow University from 1751-64.

The view that Wealth Of Nations was a later construction than Moral Sentiments is not true (see his Lectures in Jurisprudence [1762-63] 1978, Liberty Press, Indianapolis). I discuss this in my: Adam Smith: a moral philosopher and his political economy, Palgrave Macmillan, 2008 and in numerous posts of Lost Legacy.

Smith didn’t change his mind when composing Wealth Of Nations (1764-76), nor did he ‘forget’ what he had published in Moral Sentiments; he didn’t take morality out of political economy.

That incorrectnotion was accomplished by some 19th-century German authors (the so-called “Das Adam Smith problem” – more accurately called ‘Das Deutsch Problem’), and was spread by modern US economists, who hadn’t bothered to read either his Lectures or Moral Sentiments, or, in the latter case if had they read it, they clearly didn’t really understood it, or Adam Smith's philosophy.



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