ADAM SMITH IS INNOCENT OF MODERN LIBELS ON HIS MORAL REPUTATION

Tamara Burke posts  (5 August) in Stowe Reporter HERE 

“Adam Smith’s “invisible hand” does not lead to equilibrium, but to chaos and extremes. What capitalism and the free market do extremely well is to provide solutions to human problems. What they do abysmally poorly is serve, or protect, the common good.

But it is the replacement of ethics with economics, with a focus on profitability as measured by the accumulation of wealth, that dehumanizes people, devalues resources and destabilizes society. Under Smith and Keynes, money is an end unto itself, instead of what it should be: a means.

People, not money, have intrinsic value. Likewise. natural resources, other sentient beings, the environment itself has value. Money holds value, but the only reason it has value is that we, as a society, have decided to give economics primacy over ethics based on a theory postulated over 250 years ago. A theory its creator recognized stripped ethics from economic activity, creating a system that rewarded antisocial behavior and gave greater value to a paper artifice, the corporation, than to the humans it is supposed to serve.”

Comment

It appears that Tamara Burke suffers from poor economics teaching at Stirling which since Paul Samuelson’s 1948 publication of his highly successful (in marketing and money terms) Economics McGraw-Hill text book (19 editions to 2010 and 5 millions gross sales - plus the second-hand market -dominated first year world-wide economic’s courses (numerous translations too).

Samuelson single-handedly set off the falsehood that Adam Smith’s use of the ‘invisible hand’ rmetaphor referred to the ‘selfish’ motives of consumers and producers enhancing the ‘public’ good. 

This infamous error on Samuelson’s part captured the imagination of generations of innocent students who took economics classes throughout the 1960s to today’s generations.  A glance at how Lost Legacy has tracked this spurious nonsense since 2005 across all media and even the articles and scholarly papers of Nobel Prize Winners, plus nowadays everyday journalism in the media.

Money was never an “end in itself” in anything Adam Smith wrote in Wealth of Nations (1766), nor in his earlier book, Moral Sentiments (1759). I have no idea where this idea came from in Tamara’s reading - she clearly has not read either of Smith’s books anb neither, I suspect, did her economics lecturers at Sitrling. 

I too was taught in the 1960s from Samuelson’s Economics but grew out of its false claims while teaching/researching economics as a Professor years later. 

Setting aside modesty for a moment, I refer Tamara Burke to one of my own articles in which I highlight Paul Samuelson’s craven error: “Paul Samuelson and the Invention of the Modern Economic of the Invisible hand”,  2010. History of Economic Ideas”, Vol. xviii, part 3.

Adam Smith taught ‘over 250 years ago’ that the wealth of nations did not come from mere money (gold, silver and such) but from the real output of real goods and services consumed and produced by the population.

I do not speak for Keynes nor for modern economists. But I do insist in respect of Adam Smith that his ideas be treated as his authentic ideas and not the ill-informed babble of people who have never read his Works but expound factual nonsense to successive generations of innocent modern students and readers.