Friday, September 15, 2006

More Praise for James Buchan's Book on Adam Smith

From The New York Times, 15 September, another highly deserved and splendid review of James Buchan’s, ‘The Authentic Adam Smith’ (US title) or 'Adam Smith and the Pursuit of Perfect Liberty' (UK title), written by William Grimes:

“Wealth of Notions: Adam Smith’s True Legacy”:

“Great books can obscure their creators. A prime example is “The Wealth of Nations,” a work whose influence can be measured by the extent to which modern-day readers, and nonreaders, have distorted its meaning and reinvented its author, Adam Smith. As the title suggests, “The Authentic Adam Smith,” James Buchan’s concise, literate introduction to the man and his work, tries to undo the damage, “to draw Smith out of the mystifications of the economists and the simplifications of politicians and place him in view of the public.”
... Or should we? Mr. Buchan begins with a highly amusing account of last year’s annual Adam Smith powwow in Kirkcaldy, Scotland. ...
Gordon Brown, Britain’s chancellor of the Exchequer, made a case for Smith as a proto-socialist who believed as much in “the helping hand” (a phrase Smith never used) as the invisible hand (a phrase that Smith famously used, but only three times).

Smith was neither the one nor the other, Mr. Buchan argues. The great theorist of foot-to-the-floor capitalism never once used the term “laissez-faire,” supported all manner of limitations on free trade, and slept through the only lecture on political economy that he ever attended. At the same time he would have loathed the intricate state interventions beloved of Mr. Brown, the sort of top-down tinkering Smith dismissed as “systems of preference and restraint.” He was not, Mr. Buchan writes, a “brash Liberal with a large ‘L,’ ” but a “cautious, voluminous, virtuous, qualified, liberal with a small ‘l.’ ”

… He also happened to be one of the century’s towering geniuses, with a restless mind, a powerful imagination and the desire, widespread in the age of the French Encyclopedia, to bring order and system to all branches of human knowledge. His first philosophical essay dealt with astronomy, and his two great works, “The Theory of Moral Sentiments” and “The Wealth of Nations,” were intended as mere installments in a series of disquisitions on law, politics, science and the arts.

Mr. Buchan loves “The Theory of Moral Sentiments,” which he regards as a great work of economics as well as philosophy. The sentiments come first, as Smith explains the way that sympathy allows human beings to make judgments about what is right and wrong.
The economics come later, in a section dealing with luxury, a subject of obsessive philosophical interest in the 18th century. In it Mr. Smith touches on the strange way in which the rich, pursuing their own selfish interests, inadvertently share their wealth with the poor in the form of wages and social improvements. It is here that the invisible hand makes an appearance and points the way toward “The Wealth of Nations.”

Mr. Buchan offers an admirably clear and well-organized account of Mr. Smith’s masterwork, starting with his theory of the division of labor, expressed in the famous example of a pin factory, and moving along to specie-flow theory, circulating and fixed capital, protection of markets and taxation.

… Mr. Buchan is not shy about zeroing in on the weaknesses in Smith’s theory, noting “the unsound commercial anthropology” and “the disdain for mere fact.” Among other shortcomings, “The Wealth of Nations” fails to address the economic effects of population change, unemployment or entrepreneurship.

… The astonishing thing is not that Smith failed to envision 21st-century capitalism in all its particulars, but the immediate and permanent influence of his ideas, and the imagination behind them. In Mr. Buchan’s able hands, Smith and his words come across as they should, in all their lucidity and elegance

Absolutely spot on target. Read the book, now. It will enlighten you without tears, or a temptation to skip bits, and you cannot say that about many books on economics, or indeed about many books. I thoroughly recommend it.


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