Adam Smith for our troubled times

An old joke is that a classical book is one that everyone cites, but no-one reads. By this measure, each of the two books that Adam Smith wrote are classics. If his followers today took time to read then, they would disagree with much of what he wrote.

The British Tory politician Jesse Norman has written an essay for this weekend’s Financial Times that I would have liked to have written. Adam Smith invented economics, and if he were alive today I am convinced, like Mr Norman, that he would be dismayed by how his ‘science’ has evolved.

Smith would no doubt also be upset with the Adam Smith Institute, a neoliberal (formerly libertarian) research cum lobbyist group established 41 years ago in the UK.

For many on the right of politics, the author of The Wealth of Nations is a founding figure of the modern era: … an eloquent advocate of laissez-faire, free markets, … and the liberty of the individual; and the staunch enemy of state intervention ….

For many on the left, Smith is something very different: the true source and origin of “market fundamentalism” …; the prime mover of a materialist ideology …; an apologist for wealth and inequality and human selfishness ….

Which, then, is the real Adam Smith? In fact, both these views are hopeless caricatures. ….

He did not think selfishness was a virtue …; far from originating the idea of “market fundamentalism”, he would have opposed it ….

The real Adam Smith is a vastly wiser and more subtle thinker. ….

Smith’s two great published works, The Theory of Moral Sentiments and The Wealth of Nations, are at first glance very different. The first is about moral psychology, the second about political economy; the first was long ignored, the second is probably the most influential and widely quoted work of social science ever written; and neither is read today even by the vast majority of those who quote them. ….

[W]e live in a time when politics across Europe and the US is being hollowed out by populist ideologies of left and right. …. Smith shows us a way forward — a new narrative through which we can start to reconstruct the centre ground.

Jesse Norman, “How Adam Smith would fix capitalism“, Financial Times, 23 June 2018 (gated paywall).

There is much, much more in this excellent essay.

Alexander Jesse Norman (born 1962) is a Conservative MP identified as a politician with potential to become leader of the British party. He has co-written, with Janan Ganesh, Compassionate Conservatism (2006) and has authored other books on his own, most notably Compassionate Economics (2008) and Edmund Burke: The First Conservative (2013). His latest book, Adam Smith: What He Thought, and Why it Matters will be published next month by Allen Lane.

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