![]() There are academic conventions governing the paraphrasing of others' writings, and an ethical scholar will follow those conventions. There is no ethical justification for either economists or capitalists presenting distorted versions of the writings of dead authorities such as Adam Smith. I would like to develop two ethical themes here. Unfortunately Smith's moral sentiments are not widely appreciated by the generation of economists who first learnt about Smith through Samuelson's textbook. His liberal writings have a powerful ethical dimension, as John Roughan certainly appreciates. Yet Smith's cynicism towards merchants coexisted with a sympathetic view of human beings as social beings. He despised the Netherlands (then a global superpower), a nation ruled by big business interests, believing their model of economic development was exploitative, monopolistic and unsustainable. neither are, nor ought to be, the rulers of mankind". Liberal economics has an ethical dimension which has been barely promoted".Īdam Smith, as a philosopher, had a somewhat bleak view of the nature of businessmen, who, "silent with regard to the pernicious effects of their own gains. It is from the Herald of November 6, where John Roughan says that socialists "may be right in their bleak view of human nature, but it is worth pitching higher for a while yet. The third quotation is about Adam Smith in all but name. Smith's invisible hand is actually an instinct towards patriotism the semi-conscious identification of our individual interests with the collective well-being of our nation. A modern example of Smith's invisible hand at work is our innate preference for New Zealand assets to be owned by New Zealanders. Like many others before him, Romulo uses Adam Smith to promote an international policy agenda which is the antithesis of Smith's own nationalism. The second reference to Smith's invisible hand was in a piece in the Business Herald (November 2) about "senior APEC figure" Roberto Romulo, "chairman of the Philippine Long Distance Telephone Company" who is seeking to "create an environment where globalism can move forward" by following "the invisible guiding hand of 18th-century free-trade economist Adam Smith". He believed that a nation's development depended on investment in local manufacturing and agriculture taking precedence over the international "carrying trade". Smith's (but not Samuelson's) invisible hand directed individuals to favour the domestic rather than the international economy, even on occasions when the profits to be gained from international trade were higher. In book 4 chapter 2 of The Wealth of Nations, Smith was arguing that foreign trade is the least beneficial form of economic activity. Smith actually wrote: "By preferring the support of domestic to that of foreign industry, intends only his own security and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." Smith's original text is twice as long as Samuelson's abridged version, so I'll just reproduce the key sentence here. By pursuing his own interest he frequently promotes that of the society more effectually than he really intends to promote it." And he is in this led by an invisible hand to promote an end which was no part of his intention. He intends only his own security, only his own gain. He generally neither intends to promote the public interest, nor knows how much he is promoting it. The version of Smith's text found in Samuelson's textbook is: "Every individual endeavours to employ his capital so that its produce may be of the greatest value. The passage that was taught to a whole generation of economists, including Easton, is in fact a parody of Smith's 1776 text, written in 1948 by reknown American economist Paul Samuelson. While reading Brian Easton's excellent book In Stormy Seas, which contains a discussion of Smith's economic philosophy, I checked out the authenticity of the popular version of Adam Smith's famous "Invisible Hand" metaphor. This month I have come across three quite different texts that relate to the economic philosophy of Adam Smith, the 18th century moral philosopher from Glasgow who is widely regarded as the father of modern economics, or at least the father of the most cherished myths associated with liberal economics. ![]() ![]() Adam Smith and the Ethics of Economic Liberalism ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |