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Supporters and critics of the eighteenth century economist Adam
Smith are operating under false impressions of the arguments he
espoused, according to the author of a new analysis of his life
and work.
In his book ‘Adam Smith’s lost
legacy’, Professor Gavin Kennedy, of Heriot-Watt University’s
Edinburgh Business School, argues that the man described by Alan
Greenspan as ‘the high priest of capitalism’, wouldn’t even
have recognised the word, and that the interpreters of his moral
philosophy erred by placing it in the context of an economic
system which didn’t exist until a century after it was written.
Moreover, he adds, laissez faire economics as understood by 21st
century economists would have been an anathema to Adam Smith’s
beliefs about society and the requirement for government to
provide infrastructural support for individual endeavour.
Professor
Kennedy believes that a re-examination of Adam Smith’s
actual writing would come as a considerable surprise to economists
who think they know what he stood for. “The
image we have today of Adam Smith’s
intellectual legacy is largely based on interpretations of his
seminal work the Wealth of Nations by 19th and 20th century
economists who were pursuing different agendas to create ideas and
policies which Smith himself did not advocate.
“An example is
nineteenth century mill-owners or mine-owners faced with a
movement to prevent the use of women and children as cheap labour.
They began to quote Adam smith’s
arguments against ‘interference’
in manufacture, but that’s
simply not the context in which Smith had made his argument. In
fact he argued strongly in favour of protecting the weakest
members of society. He simply didn’t believe in laissez
faire economics in that context.”
Once
that sort of misinterpretation of Adam Smith’s
work had been established, says Professor Kennedy, it became
mainstream belief and is still followed today by people who, he
believes, should know better. “Smith
is widely and misleadingly quoted out of context by people who
simply haven’t taken the time and
trouble to read his work themselves. I hope that this new look at
his works in the context in which they were actually written will
shed new light on what he was saying and its links to the
political economy and to jurisprudence. I believe it also explains
some of the main mysteries about his later life.”
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