Wednesday, March 18, 2015



Adam Smith: address by Professor Kennedy in the Raeburn Room, University of Edinburgh, 15 March 2005, for the book launch of “Adam Smith’s Lost Legacy” (Palgrave-Macmillan).

“Adam Smith could not foresee that 215 years after his death in 1790, it would be necessary to welcome a book defending his intellectual legacy in the splendid setting of the Raeburn Room, with its portraits of Professors Robertson and Ferguson, of whom he made sour assessments.

I approached my task as the author of Adam Smith’s Lost legacy with a high degree of humility, though, I must confess, not a little indignation. In it, I criticise distinguished members of my discipline and for that I was angered: how could so many of them get Smith so wrong?

Reading Adam Smith many years after graduating in economics, I was struck by the uplifting nature of his thinking in Moral Sentiments, and how striking and rich was the Wealth of Nations, compared to what they have been reduced to since 1776.

Of his Moral Sentiments, the profession, with few exceptions, ignored it altogether. In the process, the legatees of a Moral Philosopher became, first, Professors of Political Economy, then Professors of Economics, and finally today, in all but name, devotees of a sub-branch of applied mathematics. What happened to moral sentiments? What happened to Natural Liberty? What happened to the Adam Smith Chair of Political Economy?

Smith warned against arranging people as if they were wooden pieces on a chess board, moved at will by theorists (and fanatics), who forgot that every single person moved through life entirely under their own volition. Modern economists have substituted the arguments of their equations for the very essence of real societies peopled by real individuals.

Smith took the long historical view. That is why Wealth of Nations is so long. Many find it ‘hard going’ and itch to reduce it to a few, albeit, elegant equations. I think of it as a one-man Royal Commission, reporting evidence and conclusions drawn from two thousand years of classical history and from the thousand years it took Europe to recover from the fall of Rome.

This is where the Moral Philosopher, the Constitutional Lawyer and the Political Economist should begin their quest to understand what Smith was about. The growing commercial societies of the 17th and 18th centuries were not something ‘new’ to Smith – they were, and remain, new only to those unversed in the Smithian Long view. For Smith, the ‘new’ commerce was a rebirth of the very old commerce that featured in classical Rome and Greece, and continued in India and China in his day, while, as John Locke expressed it, all of the rest of the world was ‘like the Americas’: savage, primitive, and without even farming or flocks.

Smith knew nothing of ‘capitalism’ (a word not invented until the 19th century);
he did not favour laissez faire; he was suspicious of ‘merchants and manufacturers’;
he held landlords in contempt; he knew nothing of the industrial revolution;
and he raged against the prodigality of governments that fought wars over trifles and passed laws on behalf of special interests that inhibited the growth of the real wealth of nations.

The despoilers of Smith’s legacy have taken bits of his ideas and applied them as if they automatically translated into prescriptions for modern capitalist economies, of which he knew nothing. They dropped everything else in his legacy, which for Smith was an indivisible whole.

Moral Sentiments is about the propensity to the harmonisation of personal relations in society, first within families, then among friends and acquaintances and finally to complete strangers. As the spheres of influence of individual overlap – those who are strangers to each of us are themselves the family and friends of other strangers whose families and friends eventually overlap with ours. The Impartial Spectator within us all sets boundaries to wilful immoral and amoral disorders, and through which we share the ‘gift to gie us, to see ourselves as ithers see us.’

Jurisprudence – from his lectures at the University of Glasgow – is about the emergence of law and personal liberty over many millennia to protect property from the depredations of others through an independent system of justice, monitored by the Impartial Jurist, under the rule of law, Habeas Corpus and representative government.

Wealth of Nations is about the propensity for humans to ‘truck, barter and exchange’ and the benefits that flow in abundance whenever conditions are conducive. Ensuring that conditions are conducive to trade is the key to the growth in wealth and to the spread of opulence to all levels of society, especially those of the labouring poor, the main victims of poverty in 18th century Britain.

For wealth to flourish, you need Impartial Competition, free of monopoly, price rigging, barriers to trade and restrictive practices. Those who read that admonition as a cry for laissez-faire, free of all restraint, no matter how dangerous their processes, nor how they exploit those unable to protect themselves, waste Smith’s legacy.

For wealth to flourish in the long run you need State intervention, paid for either by its beneficiaries (tolls; dare I say from ‘congestion charges’?) or by taxation; local taxes for street lighting, and national taxes for defence, education and health. But be clear. He did not have much faith in the government managing anything other than the collection of the taxes, and he left the issue of who shall manage – public commissioners or private entrepreneurs? – subject only to the Principle of Utility, i.e., whichever system worked best. Those who demand state funded state employment only and whatever the state dictates, waste Smith’s legacy.

It remains to correct an unforgivable lapse in my acknowledgements in the book. That Professor Sir Alan Peacock played a large role in the gestation of my book is well known. I also mention my grateful thanks to Professors Lumsden, Main, O’Farrell, Scott, Skinner, Simpson, Thompson, and, even, to an anonymous referee.

But what I did not do is acknowledge my debts in time and stress to my wife, the real sufferer from life with a grumpy author. So please permit me to make amends here and now by saying that all my books, including this one, like I am, are dedicated to Patricia.”

Gavin Kennedy
(15 March, 2005)

Postscript: I was looking through Lost Legacy's files for 2005 and noticed a draft of my speech at the launch of my book, "Adam Smith's Lost Legacy" (Palgrave). Reading it again I was struck by how my stated aims in both Lost Legacy the book and Lost Legacy the Blog have not deviated much in the 10 years since our celebration in the much celebrated Raeburn Room in the Old Quad building of Edinburgh University. 
In those 10 years, I have posted over 3,250 posts on Lost Legacy covering many examples  of the atrocities done to Adam Smith's reputation and to his life's work by scholars who should have known better from their readings of his works and by the larger number of scholars who do not know better because they have never read him in the first place and simply accepted what they were taught by his epigones.
There are some weak signs that wider reading of Smith is slowly gaining pace and that dissenting voices are appearing that are encouraging. I am working on a new book on Adam Smith at present that I hope (intend) to find new numbers of readers willing to re-consider their current stances and thereafter appreciate how the authentic Adam Smith could improve their thinking and teaching of modern problems in economics.
GK (17 March, 2015)


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