A Case For "Fact Checkers"

Scott S. Smith, in Investor's Business Daily HERE

“Adam Smith Invented Modern Free-Market Economics”

“Adam Smith's "Wealth of Nations" was published in 1776.

Good timing.

[Fortuitous perhaps, but his book was ready in 1773 and he went to London to supervise it publication. While there he got caught up in “zealous” debates with MPs and Ministers about events in the British colonies of North America.   His advice was not accepted (see the very last paragraph in Wealth Of Nations for a hint at his advice). Friends  (David Hume and the Duke of Buccleugh) advised him to desist and publish his book.  He did so in March, 1776; it had been printed in December 1775.  The ‘timing’ was accidental, not planned]

Coming out the same year as the Declaration of Independence, the book sparked its own revolution.

It showed that the best way to expand an economy was for government to get out of the way of entrepreneurs. 

[Gross exaggeration; Wealth Of Nations was mainly about how “merchants and manufacturers”, who lobbied for tariffs and prohibitions, and domestic monopolies who were “in the way” of free markets; of government he advised them to desist from listening to such lobbying and stop acting as if they knew what was good for consumers.]

"He got most of it right, and for the past two centuries economists have been filling in the details," Tim Taylor, author of Teaching Co.'s audio course "Legacies of the Great Economists," told IBD. "If you disagree with him, you probably need to re-examine your ideas."

Smith (1723-90) was born in Scotland to a civil servant who died two months later.

[Adam Smith’s father died in January 1723 and he was born in June 1723]

His mother encouraged his interest in learning and enrolled him in one of the best secondary schools, giving him a solid foundation in the Latin classics, history, writing and spelling.  [He attended Kirkcaldy Borough school, a couple of hundred yards from his mother’s house - I have walked the distance between the site where his mother's house stood until demolished.   It happened to be an excellent school due to his teacher, David Millar.]

At 14, he entered the University of Glasgow and studied moral philosophy, developing a passion for reason, free speech and liberty.

Three years later he received a scholarship to Oxford University, but found the professors uninterested in teaching or new ideas, so he spent his time outside class reading widely in the library.

Unhappy, he left in 1746 before his scholarship was up.

Soon he was hired to give lectures at the University of Edinburgh.

[Adam Smith was never hired to lecture by Edinburgh University.  He gave private lectures, in effect competing with the university, in a hired hall off-campus to fee payers, sponsored by Henry Home, later Lord Kames, and James Oswald, MP.  Many students of law or Divinity, plus members of the public voluntarily attended.  We have no definite records of their contents, other than his lectures on Rhetoric.]

Many of the themes involved his thoughts on the relationship of morality, freedom and prosperity.

In 1751 he earned a professorship at Glasgow University teaching logic and stayed in that post 12 years.

[Smith taught Logic for one year only, and then switched to the chair of Moral philosophy until 1764.]

Production

All the while, he put down his thoughts — and in 1759 he came out with his first book, "The Theory of Moral Sentiments." In it, he showed how morality depended on sympathy between individuals.

"He explored the processes by which we acquire the senses of propriety, justice, political obligation and beauty on which our skills in the arts of social intercourse and our character depend," Nicholas Phillipson wrote in his new biography, "Adam Smith: An Enlightened Life." "In doing so, he introduced into his analysis a simple observation about the principles of human nature that had been ignored by modern philosophy, that man's natural indigence had somehow gone hand in hand with a love of improvement which he would exercise whenever he felt secure enough to do so."

The book attracted students from all over Europe. Smith inspired them by extending his thinking about the human tendency toward betterment — even economically.

Comment

If Scot Smith had read closely Nicholas Phillipson’s excellent  ‘Enlightened Life’ he would not have got the above facts so wrong.   I trust that Investor’s Business Daily employs fact-checkers for ensuring that their financial advice reaches a higher standard than their author’s knowledge of Adam Smith.

Incidentally, neither Adam Smith, nor any individual, ever “invented modern free markets”.  No society is “invented” by an individual or by designers (attempts to do always disappoint the designers or those affected by the design).  Societies and changes within them emerge by evolution as nameless individuals discover that what they try seems to work in an existing social context in which they live with others.  Free-markets emerged “spontaneously” and evolved over many centuries prior to 1776, and, of course, unsurprisingly, have continued to evolve in unpredictable ways since 1776.

Adam Smith observed that evolutionary process and in doing so he noticed several important features of commercial society that help us understand something of its dynamics.  He made modest pragmatic proposals that were practicable that could improve how commercial society mightd work better but he never made predictions about whether his suggestions would be adopted.