Amartya Sen: Adam Smith Wasn't a Free-Market Fundamentalist
[Amartya Sen won the Nobel Prize in Economics in 1998. He is the Thomas W Lamont University Professor and professor of economics and philosophy at Harvard University. His latest book is "The Idea of Justice" (Allen Lane, £25).“The Theory of Moral Sentiments" by Adam Smith is published by Penguin (£10.99)]
The 18th-century philosopher Adam Smith wasn’t the free-market fundamentalist he is thought to have been. It’s time we realised the relevance of his ideas to today’s financial crisis.
The Theory of Moral Sentiments, Adam Smith's first book, was published in early 1759. Smith, then a young professor at the University of Glasgow, had some understandable anxiety about the public reception of the book, which was based on his quite progressive lectures. On 12 April, Smith heard from his friend David Hume in London about how the book was doing. If Smith was, Hume told him, prepared for "the worst", then he must now be given "the melancholy news" that unfortunately "the public seem disposed to applaud [your book] extremely". "It was looked for by the foolish people with some impatience; and the mob of literati are beginning already to be very loud in its praises." This light-hearted intimation of the early success of Smith's first book was followed by serious critical acclaim for what is one of the truly outstanding books in the intellectual history of the world.
After its immediate success, Moral Sentiments went into something of an eclipse from the beginning of the 19th century, and Smith was increasingly seen almost exclusively as the author of his second book, An Inquiry into the Nature and Causes of the Wealth of Nations, which, published in 1776, transformed the subject of economics. The neglect of Moral Sentiments, which lasted through the 19th and 20th centuries, has had two rather unfortunate effects.
First, even though Smith was in many ways the pioneering analyst of the need for impartiality and universality in ethics (Moral Sentiments preceded the better-known and much more influential contributions of Immanuel Kant, who refers to Smith generously), he has been fairly comprehensively ignored in contemporary ethics and philosophy.
Second, since the ideas presented in The Wealth of Nations have been interpreted largely without reference to the framework already developed in Moral Sentiments (on which Smith draws substantially in the later book), the typical understanding of The Wealth of Nations has been constrained, to the detriment of economics as a subject. The neglect applies, among other issues, to the appreciation of the demands of rationality, the need for recognising the plurality of human motivations, the connections between ethics and economics, and the codependent rather than free-standing role of institutions in general, and free markets in particular, in the functioning of the economy....
Read entire article at New Statesman
The 18th-century philosopher Adam Smith wasn’t the free-market fundamentalist he is thought to have been. It’s time we realised the relevance of his ideas to today’s financial crisis.
The Theory of Moral Sentiments, Adam Smith's first book, was published in early 1759. Smith, then a young professor at the University of Glasgow, had some understandable anxiety about the public reception of the book, which was based on his quite progressive lectures. On 12 April, Smith heard from his friend David Hume in London about how the book was doing. If Smith was, Hume told him, prepared for "the worst", then he must now be given "the melancholy news" that unfortunately "the public seem disposed to applaud [your book] extremely". "It was looked for by the foolish people with some impatience; and the mob of literati are beginning already to be very loud in its praises." This light-hearted intimation of the early success of Smith's first book was followed by serious critical acclaim for what is one of the truly outstanding books in the intellectual history of the world.
After its immediate success, Moral Sentiments went into something of an eclipse from the beginning of the 19th century, and Smith was increasingly seen almost exclusively as the author of his second book, An Inquiry into the Nature and Causes of the Wealth of Nations, which, published in 1776, transformed the subject of economics. The neglect of Moral Sentiments, which lasted through the 19th and 20th centuries, has had two rather unfortunate effects.
First, even though Smith was in many ways the pioneering analyst of the need for impartiality and universality in ethics (Moral Sentiments preceded the better-known and much more influential contributions of Immanuel Kant, who refers to Smith generously), he has been fairly comprehensively ignored in contemporary ethics and philosophy.
Second, since the ideas presented in The Wealth of Nations have been interpreted largely without reference to the framework already developed in Moral Sentiments (on which Smith draws substantially in the later book), the typical understanding of The Wealth of Nations has been constrained, to the detriment of economics as a subject. The neglect applies, among other issues, to the appreciation of the demands of rationality, the need for recognising the plurality of human motivations, the connections between ethics and economics, and the codependent rather than free-standing role of institutions in general, and free markets in particular, in the functioning of the economy....