ADAM SMITH'S LEGACY: LOST OR FOUND?
Ellis Thorpe wrote the following letter to “The Scotsman”, Edinburgh, 22 July:
“IT CAN’T be gainsaid most people will be “delighted” Adam Smith’s house refurbishment is nearing completion (Jim Tough, Letters. 18 July). However, it may be debated if Smith’s legacy, as the father of modern economics, is “beyond question”.
Would he have recognised much of today’s economics with its algebraic and mathematical models? Did the proclivity for this methodology obscure the “bigger picture” in the run-up to the global financial crisis?
Perhaps Adam Smith would be better described as a political economist, as economics was once called. Have today’s university degree courses in economics shed economic history and the history of economic thought?
Arguably, and perhaps somewhat heretically, political economy will be taken up again, or controversially even economic philosophy.”
The following is my response published in “The Scotsman’ (Edinburgh) on 23 July:
“Adam Smith’s Lost Legacy”
“Adam Smith’s lost legacy as represented by mainstream mathematically-inclined economists and their fantasies of ‘rational expectations theories’ have very little to do with anything written by him.
Practically everything claimed about Adam Smith is mythical, peversely misunderstood, or asserted merely to support ideologies for ‘laissez-faire’ versus state regulations and unfunded spending.
Smith was not the first nor the only 18th-century, political economist. He wrote just before what we call the ‘Industrial Revolution’. His focus was on history, not the future (he did not make predictions for the future; he tried to understand the past as a guide to the present).
Ellis Thorpe asks if universities have “shed economic history and the history of economic thought” and he answer is ‘Yes’, but there are happy signs of a revival of student interest in such courses.
Restoration of Panmure House, Smith’s last home, off the Royal Mile, may be part of that revival because economists certainly ought to examine the recent crises in US and EU economies to avoid repeating them.
(Prof) Gavin Kennedy (Edinburgh).