Saturday, July 23, 2005

Good News from Lucknow, India

Surat Singh, President of the Harvard Club, India, addressing businessmen and women, makes a speech on leadership and losing. Among other things he makes a reference to Adam Smith that is both accurate and revealing. He clearly understands what Adam Smith was about (whereas most economists do not).

Reporting the speech, Rohit Joshi & Anuradha Banerji, summarise his words:

"Quoting Adam Smith, the famous economist, [Surat Singh] said every body is guided by self interest, but only enlightened people are guided by enlightened interest (in short, adopt a negociative and diplomatic approach in life)."

Note the tail-ender: "in short, adopt a negociative and diplomatic approach in life". What could be clearer? How is that Surat Singh correctly gets Smith's point, but so many others do no?

Adopting a "negociative and diplomatic approach to life" is precisely what "Moral Sentiments" and "Wealth of Nations" are about. These behaviours permit people to harmonise their disparate motives, wants and needs and to endure the total dependence each person has on others.

How different this is from the "red in tooth and claw" approach to market dependence? Those, like our Texan banker of some weeks back who saw "the market" as a massive demolition ball of iron smashing the opposition to pieces, are so wrong about Smithian markets, and worse do not realise how wrong they are.

The division of labour is mediated by negotiation ("truck, barter and exchange"), not by a cut throat, ruthless war of the big shots on the little shots. Surat Singh shames such people by contrast.


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