Friday, March 20, 2015


Peter Foster writes on Financial Post (18 March) HERE a somewhat mixed piece on Adam Smith and Gordon Brown (former UK Prime Minister):
“Peter Foster: Saving Adam Smith from leftist fans”
“Mr. Brown is a prominent promoter of the Adam Smith Global Foundation and of its attempts to raise Smith’s profile and make him a local tourist attraction. These include a new heritage centre and “Merchants Quarter,” plus walking tours and numerous government initiatives.
Mr. Brown, who was born in Kirkcaldy, the son of a local minister, has long sought to recruit Smith as the father of the welfare state, repeatedly suggesting that Smith was not only the author of the Invisible Hand but also the “helping hand.”
Gordon Brown’s participation and ‘heavy hand’ on the initiatives of the Global Foundation are to be praised rather than traduced. 

Peter Foster also needs a fact checker because Gordon Brown was born in Glasgow, not Kirkcaldy, and was taken to Kirkcaldy by his parents as a baby, when his father became a local Minister of St Brides and served there throughout his life, where Gordon was brought-up, educated and later became Kirkcaldy’s MP.
I have attended several of of the annual Adam Smith lectures in Kirkcaldy which are well-attended by locals and also people from all over Scotland, including senior academics. I attended Michael Sandel’s packed lecture on themes from “What Money Can’t Buy: The Moral Limits of Markets”, and while I was and remain critical of some of its themes, I was impressed by his teaching style and, from the participation he encouraged from members of the audience and in Sandel’s invitations of inter-actions with his listeners. It was more like a senior post-graduate seminar than a ‘talk and chalk’ monologue, so often imposed on listeners I would partly agree with Foster that “Sandel’s examples of markets’ corrupting influence are trivial, marginal or ridiculous” but not out of place, if Sandel holds those views - which, of course, he is entitled to do and to express them. Meanwhile, a couple of contributions from the floor challenged him. Judging from comments among those near to where I was sitting, not everyone agreed with his soft theme about the monetisation of everything as a trait of markets.
I have raised Smith’s reference to “perhaps the most famous passage from The Wealth of Nations that “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” [WN I.ii.2:p. 2] on Lost Legacy several times, often in criticism of modern rightist economists, who express it incorrectly or incompletely as Foster does.
Foster, for example, expresses it half right: “What he was saying was that the main drivers of markets were self-interest and the universal desire to “better our condition” which is a correct representation of Smith's economics, but no so correct when he adds: “guided and regulated by competition and the Invisible Hand. This is what provided a broad social good that was “no part of our intention,” which again did not mean that we were robbed of the desire to do deliberate “good.”
The customers of ‘butchers, brewers, and bakers’ enter into bilateral relationships based, not on pure self-interest, as expressed by rightist theorists of Homo economicus, but, as Adam Smith expressed it, in a bargaining process that mediates the purist self-interests of the partners to their transaction, :
But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages .” (WN I.ii.2: pp. 26-7).
Each bargaining partner attempts to persuade the other to buy/sell by making converging conditional propositions: “I you give me what I want, I shall give this that you want”. When such a conditional proposition emerges acceptable to both partners, they make their exchange, bearing in mind that Smith argued that human exchange was one of the original principles in human nature, and that persuasion in bargaining  “propensity” was the necessary consequence of the “propensity to truck, barter and exchange one thing for another” (WN I.II.1” p.25).
Simply demanding that our self-interests are met without dilution of our opening offers is not reflected in the real world. If I had been able to speak at Sandell’s seminar (I was not physically able to do so on that occasion), I would have opened a discussion on Adam Smith's ideas on the moralities of bargaining, which were not reflected in Sandel's lecture. 
Nevertheless, I considered the seminar a worthwhile contribution as an event, even though I had disagreements with the Professor’s lines of argument, but which were likely to benefit the audience by hearing Sandel's interpretation of them, many of whom were inclined to agree with his sentiments, after all we were in Kirkcaldy, Gordon Brown’s political territory. (Gordon Brown is well aware of my political sentiments - we have known each other since our student days, and seldom agreed politically, but on a personal level, we have friendly respect for each other). Brown's active work on siting Adam Smith's connections with Kirkcaldy is worthy of our support. 

I recommend that if Peter Foster wishes to influence his readers he should refrain from gratuitous insults, such as: “What he [Professor Sandel] never acknowledges – or perhaps just doesn’t know – is that the revival of interest in markets followed so many disastrous experiments in trying to eliminate or improve them.” Critique a person’s ideas, but not the person, for when you do that, you lose your case and the willingness of onlookers to respect your conduct.
Peter Foster is the author of "Why We Bite the Invisible Hand; the psychology of anti-capitalism". (2014) Pleasaunce Press. Toronto. It's a good read on the working of real world markets but somewhat wayward by endorsing standard orthodoxy in misunderstanding Smith's use of the 'invisible hand' metaphor. Smith, as a pragmatist, favoured markets where possible, state action where necessary. He was neither leftist nor rightist.


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