March 2005

Adam is innocent

 

"Those who misappropriate Adam Smith's legacy legitimise their errors by the sheer weight of repetition. Falsehood strides round the world in seven-leagued boots (so we are told) while truth is still tying its laces, so recovering Smith's lost legacy awaits an almighty effort to make it succeed. Is it worth it? I believe it is, because the purloining of Smith's message on natural liberty and justice to replace it with irresponsible policies of laissez faire is an injustice to the memory of a moral philosopher. Let the proponents of laissez faire put their own names to their philosophy and leave Adam Smith's out of it."

SNEAKY LAISSEZ FAIRE TYPES are among several targets for Professor Gavin Kennedy, of Heriot-Watt University's Edinburgh Business School, in his new book, Adam Smith's Lost Legacy.

Indeed, proponents of an ultra-free market come in for the fiercest criticism, but Malthusian doom-mongers and lazy historians get a severe reprimand too. Adam Smith, it is argued, is misrepresented by just about everybody.

Smith's The Wealth of Nations, published in 1776, is generally regarded as the first serious work of political economy. Its treatise on the rightful functions of state and the developing character of commerce in the eighteenth century has been uniquely influential since its publication.

The extent of this influence is reflected in the range of interpretations afforded to all aspects of the author's work and life. With evident zeal, Kennedy methodically tackles a multitude of the criticisms and misinterpretations that he feels betray the legacy of the great Scot.

These include ‘das Adam Smith problem' as the Germans put it, which suggests that his early work Moral Sentiments and The Wealth of Nations contradict each other on the nature of human benevolence. Then there is the question of whether he was actually aware of a rather important event – the impending industrial revolution – when he wrote his seminal work. These issues, Kennedy argues, are largely misrepresented by those who would have Smith, in the words of Alan Greenspan, as the original "high priest of capitalism".

The Smith we encounter in Kennedy's book has become unjustly labelled as an exponent of what he did not himself recognise. Capitalism is arguably the ‘fifth stage' of commerce, when Smith only counts to four. Smith also spends a great deal more time advocating certain forms of state intervention than many of his subsequent ‘followers' might have us believe. Kennedy feels strongly about his subject's reputation, often because he is certain that Smith was far more compassionate than the systems which his name is often used to justify.

Unfortunately, Kennedy's exasperation sometimes manifests itself in poor rhetorical style. Frequent chunks of text are constructed by citing questions critical of Smith and following them with exclamatory dismissals (in brackets!). It is sometimes as though he is addressing an audience of confused and inattentive children, and has resorted to an arsenal of exclamation marks to keep it exciting for them.

His dismissal of certain modern interpretations of Smithian models – specifically those to do with possible limits on the expansion of economies – is also troublesome. He posits that because Smith could not have foreseen the enormous technological breakthroughs to come, his worries for future collapse should be seen as a gloomy aberration, and one not much worth worrying about.

The notion that technological advance may have merely delayed those underlying limits, not magically done away with them, is neglected. This is a shame for a book that has the admirable ambition of setting the records straight.

 

Charlie Peverett

 

Adam Smith's Lost Legacy by Gavin Kennedy is published by Palgrave Macmillan.