Saturday, November 04, 2017

MORE MYTHS ABOUT ADAM SMITH

"Adam Smith (Critical Lives) by Jonathan Conlin
Overview: Universally acknowledged as the father of capitalism, the eighteenth-century Scottish thinker Adam Smith is best known for his "invisible hand" theory. This theory argued in favor of setting individuals free to pursue their self-interests for the good of all and has helped to make Smith's name synonymous with unfettered free market capitalism. In this book, Jonathan Conlin rescues Smith from the straight-jacket of economics, reattaching the "invisible hand" to Smith's philosophy of ethics.
As Conlin shows, Smith rooted our instincts to trade in human psychology. Analysing the contrasts he saw between the industrialising Scottish lowlands and the clan-based pastoralism of the Scottish highlands—as well as the contrasts between the ideas of contemporary thinkers such as Jean-Jacques Rousseau and David Hume—Smith advanced a system of ethics founded on sympathy. Weaving together Smith's life and ideas, Conlin shows how the latter anticipated much more recent developments surrounding behavioural economics, virtue ethics, and social inequality. Ultimately, Conlin argues, Adam Smith offers us a set of tools to face today's challenges and become better and happier human beings.
Genre: Non-Fiction, Biographies & Memoirs.HERE 
COMMENT 
From the blurb above I am inlcined, half seriously, to challenge Conlin’s inclusion of his book in the non-fiction category of recent publications.
Whatever Smith’s popular reputation - mainly made by ill-informed, non-readers of his Works - he was not the ‘father of capitalism’ (whatever that means), nor was he “best known” - by whom, on what basis? - for his so-called “invisible hand theory”. 
Adam Smith’s contemporaries said virtually nothing about his ultra-limited use of a literary metaphor of an ‘invisible hand’. 
Moreover, those political economists who published their major books on political economy, while discussing in great detail, Adam Smith’s two major Works, ‘Moral Sentimens’ (1759) and ‘Wealth of Nations” after he had died in 1790, said not a word about the ‘invisible hand’ throughout most of the 19th century. 
The modern image of Adam Smith and the romance of the ‘invisible hand’ is a purely 20th-21st century invention, led by Paul Samuelson, beginning in 1948 in his basic 101 Economics Text book, through 19 editions to 2010,  and 5 million plus sales. From Samuelson, a brilliant mathematical, Nobel Prize winnning economist, but a poor reader of Adam Smith, the romance of the Invisible Hand began and has spread across the discipline and thoughout the mass media.
Whatever, Conlin ‘weaved together’, they were not the ideas of Adam Smith, born in Kirkcaldy, Scotland in 1723, who died in Edinburgh in 1790. They appear to be ideas circulating across the mass media and the myths spread by literate publicists on University campuses, who should know better by checking their sources. 
Incidently, ‘capitalism’ is a word first used in print in th 1830s, 40 years after Smith died in 1790. Moreover, commercial markets began to appear centuries earlier in Europe and Asia, before Adam Smith was born in 1723. 
Seriously, if Smith had continued his Ordination studies at Balliol College and had become a Priest in the Church of England as was intended, we would never have heard of him. However, commerce would have continued to develop towards capitalism without the many blessings of Smiths genius, more or less exactly as it did, quite independently of Wealth of Nations

Just a thought…

2 Comments:

Blogger Rambling Madman said...

Taken together WN and TMS form a system for moral economy. I read both, and WN is my only formal "economic" training, first taken in 1986 and used in a very successful corporate development and licensing career. When you add TMS, which I read about 1998, you get a moral economy based on common moral frameworks. I think Smith knew exactly what he was doing, and as you mention in the Oxford Manual, he scrubbed the Bible only in the 6th edition of TMS. Smith believed in bottom up econ. He got commercial life right, we screwed it up. Interested to read this book, I'm working on something similar

9:56 pm  
Blogger Gavin Kennedy said...

Rambling Madman is a welcome contributor to Lost Legacy's debate on the merits or otherwise of the modern myth of Smith's sparse use of the 'invisible hand' metaphor. The 'invisible hand' industry today is rampant. Lost Legacy is dedicated to returning Smith's reputation to the solid ground of historical fact.
Our correspondent is a small, but welcome, step in that direction.
Gavin Kennedy

7:37 am  

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