Friday, August 31, 2012

Eric Schliesser on Smith's Four Ages

Eric  Schliesser posts a Weekly Philo of Economics HERE  This week it is on “Adam Smith, David Hume, and the Hebrew Bible on Shepherding”

“Early in Genesis we encounter the story of Cain (a farmer), who kills his brother, Abel (a shepherd), because he is jealous over God's favouring Abel's sacrifice). In his The Philosophy of Hebrew Scripture (CUP, 2012).
“Yoram Hazony, reminds us that we in addition to being a farmer, (mysterious) unwillingness to accept his sacrifice (while accepting Cain also founds a city; cities are viewed negatively because of their tendency toward despotic-imperialism in the Hebrew Bible. In Hazony's hands the Biblical (archetype) life of a shepherd (think also of Abraham, Moses, Jacob, David) stands for an anarchic "life of dissent and initiative" (108) away from the polity. While the life of the farmer (think of Noah, Isaac, and Joseph) stands for "pious submission, obeying in gratitude the custom that has been handed down, which alone provides bread so that man may live" (108). According to Hazony, The History of Israel (basically Genesis through Kings), favors the shepherding life, but as the story unfolds comes to recognize that anarchy is not self-sustaining. Hazony reads the Hebrew Bible as a search for a politics grounded in ethics--one that makes the state "limited in its aspirations" (153-4). 
Implicit in this reconstruction of the Hebrew Bible is a kind of genealogy of civilization: first, in the Garden of Eden we are gatherers (maybe hunters, too); then, second, humanity splits in between mutually antagonistic shepherds and farmers, from which city-governments with an impulse toward territorial (and other) ambitions spring. As Hazoney notes  (308 n. 26), Jean-Jacques Rousseau certainly read the Bible this way (see his posthumous Essay on the Origins of the Languages, written about the time of the second Discourse) and sides with the anarchic impulse of the "author of Genesis."
Cain founded a city only after his murder of Abel and his own expulsion from Eden, Genesis 4.16.  Rather suddenly, if in Cain's subsequent lifetime, the world was heavily populated by more than the Adam/Eve family in the Eden Garden. 
Overall there is much interesting material in this long essay – too long to include on Lost Legacy.  Those interested in seeing a most fruitful scholar at work may follow the link and read it all.  You could bookmark the series too.

News About Panmure House

Edinburgh Business School, Heriot-Watt University, has announced that there is now a total of 17 Nobel Laureates in Economic Science who have lent their support to the Panmure House campaign.
Their enthusiasm for this great project is a vivid demonstration of the value of Adam Smith’s insights
across the world. These Laureates are:
• Prof Dale T Mortensen, Northwestern University
• Prof Christopher A Pissarides, London School of Economics
• Prof Oliver E Williamson, California – Berkeley
• Prof Eric S Maskin, Harvard University
• Prof Edmund S Phelps, Columbia University
• Prof Finn E Kydland, University of California – Santa Barbara
• Prof Edward C Prescott, Arizona State University
• Prof Vernon L Smith, Chapman University
• Prof Amartya Sen, Harvard University
• Prof Sir James A Mirrlees, University of Cambridge
• Prof Robert M Solow, Massachusetts Institute of Technology
• Prof Robert C Merton, Massachusetts Institute of Technology
• Prof Myron S Scholes, Stanford Graduate School ofBusiness
• Prof Robert E Lucas Jr, University of Chicago
• Prof A Michael Spence, New York University
• Prof Roger B Myerson, University of Chicago
• Prof Gary S Becker, University ofChicago
I am pleased that the restoration of Panmure House in Edinburgh, Adam Smith’s home from 1778-1790,  which he shared with his Mother, Margaret Douglas Smith and his cousin, Janet Douglas, is making progress, at last.

Thursday, August 30, 2012

An Important Sentence by Adam Smith from Moral Sentiments

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.
"– from The Theory of Moral Sentiments by Adam Smith, "the father of capitalism".
"Says Leon Wieseltier at The New Republic:
“That is the least Galt-like, least Rand-like, least Ryan-like sentence ever written… If there is anything that Adam Smith stands for, it is the reconcilability of capitalism with fellow feeling, of market economics with social decency...”
Adam Smith was not “the father of capitalism”.  He was a moral philosopher who wrote about the commercial society that had existed since the 15th century - and for millennia before the fall of Rome in the 5th century.  I dropped Leon Wieselier's last remark about Paul Ryan (follow the link to read it) because I have no wish to enter US political controversies nor to purvey personal attacks on anybody. The two quotes are OK as representative of Smith and fair comment.  The opening sentence of Smith’s Moral Sentiments deserves wide circulation. 

Absolute and Comparative Advantage

H. J. Huneycutt writes in Seeking Alpha HERE Shrinking U.S. Trade Gap No Fluke; Weakening Asian Export Subsidies The Reason
“The shrinking US trade gap is no fluke. You don't need a magical crystal ball or training in the "psychic arts" to have seen it coming. Rather, when Adam Smith penned The Wealth of Nations 236 years ago, this is exactly the type of result he might have predicted.
As most of you are aware, Smith's thesis was that free trade benefited all nations. If we all exported the products and services we produced most efficiently, and we imported the ones that others produced more efficiently, we'd all have greater wealth. It's a concept called comparative advantage and the logic behind it is difficult to counter.”
Mostly correct, except that Adam Smith’s argument was about what we call “absolute advantage”; the richer theory of “comparative advantage” came much later from David Ricardo’s ‘Principle of Political Economy’, 1819.

Wednesday, August 29, 2012

Hayek's Lost Legacy?

Adam Davidson writes in The New York Times HER Prime Time for Paul Ryan’s Guru (the One Who’s Not Ayn Rand)
The following caught my eye on Hayek and the Republican Candidates for the US Presidency and Vice Presidency which strike a chord.  However, I comment on Hayek’s ideas.  Please note that I will not breach my Cromwellian “Self-Denying Ordinance” not to comment on any country’s politics except of the country I vote in (i.e., Scotland):
“In actuality, Ryan is like a lot of politicians who merely cherry-pick Hayek to promote neoclassical policies, says Peter Boettke, an economist at George Mason University and editor of The Review of Austrian Economics. “What Hayek has become, to a lot of people, is an iconic figure representing something that he didn’t believe at all,” Boettke says. For example, despite his complete lack of faith in the ability of politicians to affect the economy, Hayek, who is frequently cited in attacks on entitlement programs, believed that the state should provide a base income to all poor citizens.
To be truly Hayekian, Boettke says, Ryan would need to embrace one of his central ideas, known as the “generality norm.” This is Hayek’s belief that any government program that helps one group must be available to all. If applied, Boettke says, a Hayekian government would eliminate all corporate and agricultural subsidies and government housing programs, and it would get rid of Medicare and Medicaid or expand them to cover all citizens. (Hayek had no problem with a national health care program.) Hayek also believed that the government should not have a monopoly on any service it provides; instead, private companies should compete by offering an alternative Postal Service, road system, even, perhaps, a private fire department.
…Bruce Caldwell, the author of the intellectual biography “Hayek’s Challenge,” said he hoped that we were experiencing, partly through Ryan’s ascendancy, the first stage of a slow but steady embrace of Hayek’s philosophy. …
Caldwell corrects people when they refer to Hayek as a conservative. Hayek didn’t want to conserve anything. And while that’s exactly what the most radical may want, it’s probably not the easiest policy to build a party around.”
Reading the excellent Peter Boettke, the sentence: “What Hayek has become, to a lot of people, is an iconic figure representing something that he didn’t believe at all”  struck me as similar to Adam Smith’s fate with regard to most things he actually believed and wrote about, in which modern representations of him are wildly at variance to his actual views.   That such a fate seems to have caught Hayek, as well, a much more recent figure in the 20th century than Adam Smith.
If Hayek is to become a 21st icon of US politics, for and against, we are about to be treated to wildly variant views of his works.    I have a collection of volumes of Hayek’s writings in my French library from Routledge.   On my next visit in a couple of months, all being well on the health front, I shall bring them back to Edinburgh for comparison with what both Left and Right (and the SM -sensible middle) say about Hayek on this and that.
Bruce Caldwell’s comment on Hayek’s so-called conservatism looks  a prime candidate for the usual distortions.  I remember reading in the 1970s an essay in the Hayek Collection entitled: “Why I am not a conservative”.  Might be worth looking up again.
PS.  I have little time for the odious ideas on selfishness of Ayn Rand, whom I read in my mid-20s.

Tuesday, August 28, 2012

So Right About Adam Smith's Economics, So Wrong about the IH Metaphor

Anthony Brewer, 2007. “Let us Now Praise Famous Men: Assessments of Adam Smith’s economics”, Adam Smith Review, ed. Vivien Brown, No. 3, pp 171-86.
In his otherwise excellent account of Adam Smith’s economics, Brewer presents a comprehensive survey of Smith’s writings on economics, primarily in Wealth Of Nations, accompanied by the views of modern commentators, spread across books and journal articles.   It would provide anybody who wants to understand Smith’s economics a good starting grounding in the main topics with which Smith dealt.
However, Brewer’s understanding of Smith’s use of the “invisible hand” metaphor ends up disappointing.  He opens with quoting from Jerry Evensky (1993, 197) who makes the remarkable claim that the invisible hand ‘reflects our admiration for the elegant and smooth functioning of the market system as a co-ordinator of autonomous individual choices in an interdependent world’ (‘Retrospectives: ethics and the invisible hand’, Journal of Economic Perspective, 7: 197-205). 
Briefly, the second part of the sentence about the ‘market system as a co-ordinator’ had absolutely nothing to do with Adam Smith’s use of the IH metaphor; it may well be true that co-ordination is a function of the market system, but Smith did not use the IH metaphor in connection with markets.
Brewer next makes the assertion that William Gramp and Peter Minowitz were “wrong” to say that the “invisible hand” related ‘only to external trade”.  Now whatever Grampp claims it was about (“national defence”) or Minowitz went to say about it, which may have been wrong, Smith related the IH metaphor to the preference of some, but not all, merchants for “domestick trade” because of their felt insecurity with the “foreign trade of consumption”.  That is beyond any doubt (WN IV.ii.9:456).  In that specific case, Grampp and Minowotz were absolutely right to say that Smith was referring to the consequences of the decision to avoid foreign trade, always bearing in mind that many merchants at the time (and ours) engaged in the “foreign trade of consumption”, including “shipping”, and Smith considered it to be appropriate that they did so.
Brewer quotes from the same paragraph and misses Smith’s point.  He acknowledges that “the home investment is more secure” (some merchants agreed) and asserts that “some people invest in a way that maximises revenue, and net revenue” and that that this will “ensure that the general gain … will accrue to the home country” (172).  But what Brewer does not do is follow Smith’s use of the IH metaphor, namely such merchants whose insecurity is the motive that leads them: “they are led by an invisible hand to promote an end which was no part of [their] intention” and that in so doing, from “pursuing his own interest [his security] he frequently promotes that of the society” (WN IV.ii.9: 456).
His insecurity promotes a course of action – avoid foreign trade – and his capital when invested locally adds to annual “revenue and employment” as a consequence – the whole of domestic investment is the sum of it contributory parts.  It is a pure, indeed lowly, arithmetic relationship.  Nothing else! There is nothing about markets, co-ordination, general equilibrium, or such like.  The IH metaphor was about some, but not all, merchants being “led” by their insecurity to unintentionally cause higher “annual revenue and employment”, and the unintended consequential rise in annual revenue would promote growth in employment and real wages, as Smith noted elsewhere.  These were public benefits.
It was not an argument for restricting foreign trade, as some modern commentators would have it.                                  Smith supported tariff free trade, without protectionist and prohibition-type restrictions.   Buying from abroad exchanged domestic for international goods, and at lower prices than they could be manufactured or grown domestically, this released capital stock and employment for investment in those domestic trades where a country had an absolute advantage over foreign countries (ideas of comparative advantage were due to Ricardo, 1819). Given Britain’s dependence on foreign trade, it required a strong Royal Navy to keep its trade routes open, and Smith supported the highly trade restrictive Navigation Acts for that reason – ‘defence is more important than opulence’, he wrote).

Saturday, August 25, 2012

On China's Earthquake Once Again

Edward Carr is the editorial director of Intelligent Life and foreign editor of The Economist.  He writes HERE 
Adam Smith, the great thinker of the Scottish enlightenment, once speculated on how a European “man of humanity” would treat the news that China had been swallowed by an earthquake. He would express his sorrow, offer some judicious remarks on the damage to trade and reflect on the precariousness of human existence, before turning back to his own affairs. “If he was to lose his little finger to-morrow,” Smith went on, “he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren.”
But Smith goes on to present a quite different account leading his readers to a wholly different conclusion to that portrayed in the first part of the passage, by Edward Carr which is all that is usually quoted as being Smith’s point.  It wasn’t. 
Smith goes on to say:
To prevent, therefore, this paltry misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred millions of his brethren, provided he had never seen them? Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others? It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self–love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who, whenever we are about to act so as to affect the happiness of others, calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment, abhorrence, and execration. It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters.” (TMS III.3.4” 136-7; OUP ed.)
Edward Carr, presuming he has read Moral Sentiment to the end of the paragraph from which he quotes, presents an entirely different slant about the “little finger” test that Adam Smith posed to his students in his lectures and to his readers in their written form in Moral Sentiments.  I am not impressed by treatment of this issue by the editor of Intelligent Life and a former editor of The Economist.

As an exercise to hammer Smith’s point home, I invite readers, and Edward Carr, to read the rest of Smith’s paragraph 4 and the next three paragraphs too.  They are enlightening about Smith’s moral standards for humans.

The Myth of Adam Smith's "Infamous Hand"

“As so many people continue to blindly pursue their own self-interests, I start to wonder if Adam Smith’s infamous ‘Invisible Hand’ continues to improve the living standards and benefits for all members of society? Who is actually looking out for the ‘common wealth’ these days?
“I wish people who robotically and extravagantly praise unfettered capitalism would spend some time reading The Theory of Moral Sentiments by Adam Smith (of which the term ‘invisible hand’ is first used). By doing so they would gain insight and understanding of his intent (to be decided by themselves of course) for those members within a community who had excess. They were obligated by their humanity and moral compass to distribute their unnecessary excess, which in turn would benefit all members of society.
“The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.”
The quotation is from Moral Sentiments (1759) (TMS IV.1.10:184).  Keith has truncated it somewhat before and after the piece he quotes, and neither does he explain to what Adam Smith was referring, which may give the casual reader a misleading impression and prevent her “gain[ing] insight and understanding of his intent (to be decided by themselves of course) for those members within a community who had excess’.
I applaud Keith’s broad intention, of course, but we must be accurate too.  Smith developed his parable of the “poor man’s son, whom heaven in its anger has visited with ambition” to emulate the rich and the awesome consequences for him.  The desire for emulation was a curse, for which his body and spirit paid in due course.   Such emulation was a “deception”, but it was “this deception which rouses and keeps in motion the industry of mankind” (183).  He adds that the earth by mankind’s labour has “redoubled her natural fertility” and “maintains a greater number of inhabitants”.
Note that this time period, that we know now since agriculture appeared about 11,000 years ago, near the modern Syria-Turkey border, has covered a multitude of regimes, all of them with a “rich” leading segment and an overwhelmingly larger labouring poor segment.  This is where the “proud and unfeeling landlord views his extensive fields, and without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them”. 
Now it is “the rest [which] he is obliged to distribute among” the “thousands whom he employs”. And this is the key sentence to what follows, which Keith Armstrong quotes in full and draws misleading impressions.  Why is the landlord “obliged” and why have all his predecessor rulers of mankind been so “obliged” too, right through to the 18th century?
Adam Smith uses the metaphor of “an invisible hand” to describe its object “in a more striking and interesting manner” (See: Adam Smith on the role of metaphors in his “Lectures on Rhetoric and Belles Lettres", ([1762], p. 29), specifically, in this case to describe what was beyond doubt, a necessary object of this metaphor, namely his total dependence upon his labourers, servants, overseers and retainers who labour in his fields, and palaces.    The dependence was mutual: the “thousands whom he employed” had to be fed from the product of his fields, because without food – even for a few weeks – they could not labour, and conversely, without their labour there could be no “heap” of anything for anyone to draw from: ‘no labour, no food; no food, no labour”.  That necessity was what "led" him; not an actual "invisible hand" - metaphors do not exist, they are not alive and neither do they have a "conscience"!
Smith also specifies the “necessaries of life”, which were part of the annual produce of the “necessaries and conveniences” and “amusements (luxuries) of life (Wealth Of Nations).  By definition, human kind had managed to consume the “necessaries” (food, primarily, but also shelter and other basic utilities) since their ancestors were in the forests.  Those necessaries were basic, absolutely so in times of dearth.   No “proud and unfeeling landlords” shared the “conveniences” of life with the “thousands whom they employed”, except perhaps occasional cast off with family favourites, and certainly no “amusements” – their wife’s luxury cloths, trinkets, and such like.
The basic diet of necessities was more or less what their ancestors had drawn in the forests.  The growth of “wealth”, miniscule as it may have been compared to the average possessions of even the poorer in Europe (post war) and the USA today, were not “shared” with the labouring poor, as can still be seen in large swathes of the world today.  Keith may be drawing erroneous conclusions from comparing the alleged “humanity” of Smith’s “proud and unfeeling landlords” as being somehow more “humane” than what he calls today’s ‘top 1 per cent’.   Scale wise, it was more of the same, only the size of the wealth baskets have changed, I suggest.
Incidentally, I am not known for “robotically and extravagantly prais[ing] unfettered capitalism”, and I have spent a number of years “ reading and studying The Theory of Moral Sentiments, and the rest of Adam Smith’s Works.

Friday, August 24, 2012

Apologies and Explanation

I had a setback to my recovery programme on Wednesday night, necessitating a short sojourn overnight in hospital.  Now home, but I am feeling very tired and unsteady.   This event, hopefully not too serious, will slow me down a little.  
The first casualty of this situation looks likely to be my participation in the Annual Conference UK History of Economic thought at Keele University, England, on 3-5 September, at which I was to present my new paper:
“The Myth of the Invisible Hand – A View From The Trenches.”  
This is particularly disappointing for me because the participants are a cross section of European scholars interested in the history of ideas in economic thought, and while I would not necessarily agree with their criticism, they certainly test the robustness of ideas from their in-depth knowledge of various fields.
However, should any Lost Legacy readers be interested in reading my paper, I can send an email copy to you and would welcome your comments.
Meanwhile I shall get on with my recovery exercises, determined not to submit to irritating but I hope, temporary, difficulties.  One thing about hospitals is that you see very serious other cases, much further from recovery than ones self.

Tuesday, August 21, 2012

Loony Tunes no 63

Abbet Wong in Malaysia Star HERE 
It is a question I often ask myself, and I always find the answer serendipitously, as if an invisible hand is guiding me, helping me to embark on yet another joyous journey of page-thumbing the world.”
AZ Sarah Eberspacher HERE 
Sanford tilted her head back and looked skyward, grinning with no mirth, as if asking some invisible hand all the questions the Mercury have faced this season: How did that not go in? How did their lead get so big? How are we going to turn this season around?”
In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years.”
New Vision HERE 
You can almost see invisible hands prising his lips apart; a strangled cry explodes out of his lips and his eyes well with tears.” 

Sunday, August 19, 2012

A Debate on Adam Smith: “left” or “right”?

In the comments section of an earlier post: "Nick Gruen on New Thinking on Current Problems"some interesting ideas are exchanged and I think they may interest a wider readership.  I reproduce the original exchange, followed by my longer comments.  Feel free to join it but please remember it is an 'after-dinner' debate among reasonably convivial diners…
 Nicholas Gruen said...
Thanks for this Gavin, I thought for a while there, as I started reading your piece that you were going to take me to task for saying Adam Smith was this or that - in this case 'left wing'. 

Of course one requires the reader to use their interpretive intelligence when hearing or reading one's words, and I was relieved to see that you took the comment in the spirit it was offered. 

The other thing - which is an interesting thing I think - is that I was using Smith in the context of nevertheless being interested in conveying my thoughts on contemporary issues. Of course I don't want to misrepresent Smith, and I don't want to present some cardboard cutout of him - because then there'd be no real point in using him to deepen my argument or elaboration. But if one is using him to illustrate the present, the present is where one's focus is, so it's inevitable that one will not do justice to Smith. 

Anyway, thanks for not pulling me up on my saying he was 'left wing'. This was just after I'd said in the interview that the terms 'left' and 'right' can still make sense as labels for the focus of one's sympathies, fears and hopes, even if we should subject all proposals for making the world a better place to analytical rather than ideological scrutiny.
philistus said...
I just cannot understand how anyone could put Adam Smith into the Left/Right paradigm, especially by the definition of Left/Right as established by the Left.

… Smith was as dismissive of "public spirited" endeavours and Utopian fantasy as he was of the corrupt mercantile system. Unfortunately (or fortunately for Smith depending on your perspective) Smith was a century and a half removed from Leftist social engineering experiments on any consequential or remark worthy scale.

… Smith seemed not only skeptical, but down right dismissive of any attempts at large scale social or economic engineering. 

 Gavin Kennedy said...
I didn't open a discussion on Adam Smith ' Left or Right'? as that was not my purpose in posting your interview on the SMH.
 These distinctions became identified at the end of Smith's life. He would not have known of them, any more than he knew the word "capitalism". 
I am not out to convert the world! 

 Your reference is to his piece on 'A man of system' in Part IV of Moral Sentiments - the invisible hand chapter, and his scepticism of utopia is in Wealth Of Nations.
 I agree with your general points.
 Nicholas Gruen said...
Yes … in all these things it depends on how one is using words. Despite our endless dismissals the idea of left and right continue to live on in our imaginations today - even in our denials of their relevance. I think we could all agree that they went through a period of reasonable clarity for a period, though of course bifurcating the world of political ideology into two poles does violence to pretty much everyone. 

It's also true that the terms arrived after Smith's writing. (Perhaps technically they existed in 1790, I guess they did by 1789, but they'd not become the juggernauts that they became later.)

But it seems to me that my definition of the residue of 'left and right' is a reasonable one - suggesting that it's one of sympathies and anxieties. By that definition Smith was left wing - he sympathised with the weak and poor more than the strong and wealthy and he felt that society could be made more free without falling apart. Both of these ideas are 'left' in the sense I'm using the term. 

Likewise, though the best education I ever got was in history and so I abhor silly anachronism, it is reasonable to suggest that such common sympathies have some correspondence through time. So while the term 'left wing' didn't exist, it isn't outlandish to describe Gerard Winstanley or the diggers in the English Civil War as 'left wing' in some sense. 

But if one uses left to mean 'tolerant of large scale social engineering' then I agree, Smith wasn't left. Then again, I can't see him voting for a guy like Paul Ryan! But then that's just (provocative) speculation!
These are fairly representative of what I would call “after dinner” chats, or, if you prefer, erudite seminars in the scholastic world.   Nothing wrong intrinsically with such venues, though they can become tiresome.
 I agree with Philustus to this extent “Smith was dismissive of "public spirited" endeavours and Utopian fantasy” and he chastised the “Man of System.   However, it is safer to put this in context to avoid too much reading into it evidence for Smith being ‘Left” or ‘Right in modern terms.  Here are the lines preceding the “man of system”:
 “The man whose public spirit is prompted altogether by humanity and benevolence, will respect the established powers and privileges even of individuals, and still more those of the great orders and societies, into which the state is divided. Though he should consider some of them as in some measure abusive, he will content himself with moderating, what he often cannot annihilate without great violence. When he cannot conquer the rooted prejudices of the people by reason and persuasion, he will not attempt to subdue them by force; but will religiously observe what, by Cicero, is justly called the divine maxim of Plato,7 never to use violence to his country no more than to his parents. He will accommodate, as well as he can, his public arrangements to the confirmed habits and prejudices of the people; and will remedy as well as he can, the inconveniencies which may flow from the want of those regulations which the people are averse to submit to. When he cannot establish the right, he will not disdain to ameliorate the wrong; but like Solon, when he cannot establish the best system of laws, he will endeavour to establish the best that the people can bear.
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess–board. He does not consider that the pieces upon the chess–board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess–board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder” (TMS VI.ii.2.16: 233-4).
 I take these as wise words, warning against “Left” and “Right” proposers of radical changes to the existing (and evolving) societies.  Nicholas suggests that it is reasonable to describe Gerard Winstanley as “left in some sense” which surely does no fit well with Winstanley’s role of favouring major, radical, and likely to be highly contested changes, in the midst of a bloody armed contests in the English Civil War.  Fortunately the army voted against the “diggers”, otherwise the existing disruption would have certainly gone on even more miserably and possibly more bloody.  Did this make Winstanley “Leftish”?  Cue another after-dinner debate, possibly linked to the mythology of the “diggers” in Australian history with voices raised, even at sedate seminars in local universities.
 On the other hand, I read Nick’s interview and had an idea of what he meant by applying more modern terms of “left” and “Right” to Adam Smith.  It isn’t a big deal or a ‘big issue”.  Within the terms of the interview and the likely knowledge of the readers, I took it as the expression of a plausible view, though I do not share it in detail. I certainly did not think it was worth contesting it knowing what I do of Nick’s understanding of Adam Smith philosophy.
 There is much wrong with polarizing the world into “left” and “right”, including seeing them as self-contained and uncontaminated ideas.  Any acquaintance with “left” and ‘right” thinkers, using the term loosely, would confuse anybody seeking clear water between them. Adding a vertical dimension marked enforced radical utopian and enforced accepted social order to the horizontal, would place people on the “left”–“right” axis in all four quadrants.
Smith above all was what we call a “pragmatist” – it was what worked than counted for him, not the purity of motives or theories.  General radical change usually didn’t work; and European experience of warfare was too recent and too personal for Smith to miss the often hidden consequences of violent rule.  “Rapine” was just a word, but its realities from Pre-Roman times through to the seven years war, and the Jacobite rebellion and its punitive local aftermath, were almost personal for him (they passed through Kirkcaldy in 1745).   Despite his firm political opposition to the Jacobites (dismissed as “4 or 5 thousand naked unarmed Highlanders took possession of the improved parts of” Scotland and “alarmed the whole nation” (Lectures in Jurisprudence”, 540), he made conciliatory gestures in, e.g., writing a forward to a Jacobite poet’s volume in exile.
For Australians, perhaps, bloody wars and their aftermath happened in other countries.  Only Britain invaded (1788) Australia in all the millennia of its history and the disruptions of civil war and dictatorships are, so far, unknown.  So (left?/socialism) and (right?/fascism) are sanitized abstractions from after-dinner debates. 
 The concerns of Philistus about “Leftist social engineering experiments” is also a trifle over the top.   But that is the problem; use words like “Left” and “Right” and they are vulnerable to immediate extentions of meaning.  Are and have Eugenics been advocated by Left or Right doctrines?  Yes, both!   This is how debates become messy.
Adam Smith did not vote under the existing franchise in Scotland.  And, like his sex life too, his politics are unknown and unknowable now.  He is claimed by today’s “Right” and “Left”.  I read a paper last year arguing that Smith favoured redistribution of income from rich to poor, quoting from WON and LOJ.  A closer reading did not support this claim.  The paper had confused “perfect” and “imperfect” rights.  See, it is so easy to make avoidable mistakes when assigning 20th-century ideas to an 18th-century philosopher.  (Incidentally, Nick events in 1789-90 were hardly likely to have affected Smith’s prior writings, and also, Smith was clearly dying by then and full focused on the preparing the 6th and final editions of TMS and WON, both published just before he died in mid-1790).  I have attended heated debates on whether the historical Jesus was a Protestant or a Catholic!
Smith wrote broadly and now well known sympathetic passages to the conditions of labourers and their families, especially those without work at all.  He argued strongly that the best remedy for the poor was employment.  The alternative to paid employment, even at or below subsistence, was Smith’s remedy, hence his passion for growth-inducing spending (his contempt for “prodigals” and praise for “frugality”) emerging for his somewhat confusing distinction between “productive” and “unproductive” labour.  Growth, the division of labour in longer supply lines, led towards opulence, the best chance the poor had of reaching and passing beyond mere subsistence.
Did this make him “caring left” or “unfeeling right”?
[I think its time for coffee and the After Eights” – “decaff, anyone?"].