Wednesday, September 07, 2005

Let's Do Better When Reporting on Adam Smith

In the Heritage section of The Scotsman, Edinburgh (Scotland’s leading national newspaper) a short briefing note on Adam Smith is published. It has a number of (correctable) shortcomings and I sent the following letter to the Editor with my suggestions. To read the article (I cannot publish it in full for copyright reasons) go to: (registration:

The Editor:
The Scotsman
I read the Heritage article: “Adam Smith: founder of modern economic theory”, with concern because of the number of a) factual mistakes or important omissions in it, and b) debateable opinions expressed by the author, Will Springer.

Scotland’s National Newspaper, published in Edinburgh, where Smith lived for many years should publish accurate accounts of one of its most famous inhabitants.

I quote below and I either correct the factual error or omission, or the debateable opinion.

1 Omission:
“Smith was born in 1723 in Kirkcaldy, Fife. Bright for his age, he attended the University of Glasgow at 14.”

Add after ‘14’: ‘and the University of Oxford from 1740-6’

Errors: “In 1746, aged 23, he was giving lectures on rhetoric in Edinburgh and five years later returned to Glasgow to teach university courses in both logic and moral philosophy.”

Corrections: “In 1748, aged 25,…” “and three years later” [i.e., in 1751]

3 Errors:
His greatest contribution to society was An Inquiry into the Nature and Causes of the Wealth of Nations, a breakthrough book that covered for the first time the role of self-interest and a better use of labour; the forces of supply and demand; the advantages of competitive business; and the implications of the laissez-faire economy.”

3.1 Corrections: delete “for the first time”

(‘self-interest’ was a well known concept related to what we now call economics in the early 18th century: Mandeville, 1724; Francis Hutcheson, 1737; Hume passim, etc.)
3.2 delete: “laissez faire”; replace with ‘competitive’

(Adam Smith never taught ‘laissez faire’ economics, nor mentioned it in “Wealth of Nations”, nor agreed with it – it was popular with some French economists. Smith suspected the idea of letting ‘merchants and manufacturers’ completely alone to do what they wished because of their nefarious tendencies to monopoly and conspiracies to raise prices).

4 Error:

“Smith described the principle of the “invisible hand” in which every individual is being led by an invisible force toward his or her own self good and that interference from government is a hindrance to success.”

Correction: delete or rewrite
(Smith mentioned Shakespeare’s [Macbeth: 3.2: ‘thy bloody and invisible hand’] metaphor of the invisible hand only three times in his lifetime: the first in ‘History of Astronomy’ [1743-49], posthumously published in 1795, referred to the ‘invisible hand of Jupiter’ in respect of pagan religions believing in invisible gods and devils; the second in “Moral Sentiments” (1759) was about feudal lords distributing food, shelter, etc., to their retainers and serfs in ‘nearly the same’ proportion as they would have produced for themselves if the land had been equally divided among them; and for the third and last time in “Wealth of Nations” (1776) he referred to traders preferring to watch over their business locally rather than set up in foreign countries (risk aversion), which benefited National Income.

In none of the three cases did Smith link the invisible hand metaphor to markets, nor did he generalise it to mean “every individual is being led by an invisible force toward his or her own self good”. The metaphor is about the unintended consequences of human motivation, which could have benign as well as malign outcomes. We are not always led to the former outcome: pollution, reduction in National Income, unemployment, poverty and so on. Smith gives many examples in “Wealth of Nations” of malign outcomes from adopting the wrong economic policies, many adopted with the best of intentions and of people acting in ways that benefit them but harm society.)

5 Error and doubtful opinion:
“and later his exposure to leading thinkers in France while he travelled the Continent as a personal tutor to the young Duke of Buccleuch.”

Correction: delete ‘later’

(Smith travelled to France with the Duke of Buccleugh in 1764-6; it was on his return in 1766 that he began “Wealth of Nations” – he claimed he had started writing a book during the trip to pass away the time but does not mention which book it was or how he had got with it. The subject of the influence of the French economists on him is controversial because most of the ideas in “Wealth of Nations” were formed by him in the years 1746-1763; note also his contact with Hume was limited during these years because he stayed in Kirkcaldy with his mother for most of it).

6 Doubtful opinion:

“Although widely accepted by Smith’s intellectual peers, Wealth of Nations drew sharp criticism, most notably in Scotland by cotton and tobacco merchants fighting to save their once-profitable businesses.”

Correction: ‘drew sharp criticism, most notably in Scotland by cotton and tobacco merchants’? This is news to me; I would be grateful to have a note of the references for this opinion? From 1776, when Wealth of Nations was published, to 1783, Britain was at war with the American colonists and it was this that hit the America-Scotland trade and not anything published in it! Smith spent some years prior to publication – holding it back in fact – while advising the British government in person to find an amicable solution to the quarrel. His support for the Union with England was precisely based on the benefits it brought to Scotland in trade. How he could help or hinder their ‘once profitable businesses’ is not at all obvious.

7 Error:

“Arguably Smith’s greatest followers were his countless students who learned first-hand about the complexities of political economics and moral philosophy and who put those beliefs into play.”

Correction: delete:

(His students were not ‘countless’ who ‘learned first hand’, presumably in his lectures at Glasgow [1751-63], and they are eminently countable – the matriculation rolls of Glasgow University are available: approximately 100 per year for 11 years is about 1,100! Whether they put his ‘beliefs into’ play is also doubtful; many became lawyers or Ministers of the Church or inherited aristocratic titles; government ministers who listened to his advice did not always take it. Many Glasgow merchants did take his advice, and he benefited from their experience. It was in the next century, after Ricardo and others, that free international trade became an agenda item; also John Stuart Mill, 1749.)

Yours sincerely

Gavin Kennedy


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