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Forum on Economic
Reform In recent
decades the alliance of neoclassical economics and neoliberalism
has hijacked the term “economic reform”.
By presenting political choices as market necessities, they have
subverted public debate about what economic policy changes are possible and
are or are not desirable. This venue
promotes discussion of economic reform that is not limited to the one
ideological point of view. Adam Smith - the Father
of Post-Autistic Economics?:
A reply to Edney
Andrew Sayer (Lancaster University,
U.K.) © Copyright: Andrew Sayer In his article on Greed (Part 1, PAE Review, issue no. 31), Julian Edney
recycles, with a radical twist, a common myth about Adam Smith’s work that
has long been propagated in mainstream economics. According to this myth,
Smith saw people as wholly self-interested: “Adam Smith’s contribution was
a step further, to give happiness a mercantile slant. In the new philosophy
there is no conspicuous concern with sympathy, compassion, honesty, courage,
grace, altruism, charity, beauty, purity, love, care nor honor.
It accepts that humans are fundamentally selfish and egoistic and that they
don’t care about society-as-a-whole. . . . He simply declared that the
selfishness of each man [sic] and the good of society go together. The
general welfare is best served by letting each person pursue his own
interests.” (Edney, 2005) Edney goes on to treat Smith as a utilitarian
theorist, and accuses him of dispensing with justice. Is this the same Adam Smith
that wrote about “the remarkable distinction between justice and all the
other social virtues . . . that we feel ourselves to be under a stricter
obligation to act according to justice, than agreeably to friendship,
charity, or generosity; that the practice of these last mentioned virtues
seems to be left in some measure to our own choice, but that, somehow or
other, we feel ourselves to be in a peculiar manner tied, bound, and obliged
to the observation of justice.”? (Smith, 1759; II.ii.1.5). The myth is based on an extraordinarily
selective reading of just a few short passages from The Wealth of Nations regarding the invisible hand and motivation
in market exchange, taken out of context. Some versions of the myth
acknowledge that before The Wealth of
Nations (1776), Smith wrote The
Theory of Moral Sentiments (1759) but assume that the latter’s deep
analysis of moral sentiments, which include but go beyond self-interest, was
abandoned for a concept of motivation based on narrow self interest. However,
the main arguments of The Wealth of
Nations were included in Smith’s lectures even before The Theory of Moral Sentiments was
published, and the latter was not only his first book, but his last, the
final revised (sixth) edition being published in 1790, a year after the final
(fifth) edition of The Wealth of
Nations. It is inconceivable that Smith could have regarded them as
incompatible, and indeed there is now a large literature arguing that they
are compatible, so that there was, in effect, only one Adam Smith, and that
he bears little resemblance to the caricature recycled by Edney. The last 30 years of Smith scholarship
demonstrates Smith’s lifelong attachment to a thoroughly social conception of
individuals, as beings who are psychologically dependent on the approval of
others, capable of (and indeed requiring) fellow-feeling, concerned for
others in themselves and not merely in relation to their own self-interest,
hence capable of benevolence and compassion as well as selfishness,
susceptible to shame as well as vanity, and as having a sense of justice.
Smith was not Mandeville or Hobbes and his whole philosophy and social theory
was utterly at odds with what we now term the autistic model of individuals
assumed by contemporary economics. It would be a tragic irony indeed if the
post-autistics movement were to overlook this. Here are a few references from
this literature, though a careful reading of both the The Theory of Moral Sentiments and The Wealth of Nations is indispensable. References Evensky, J.
1993, 'Ethics and the Invisible Hand', Journal
of Economic Perspectives 7 (2) pp.197-205. Fitzgibbon, A. 1995, Adam Smith's
System of Liberty, Wealth and Virtue, London: Clarendon
Press. Griswold, C.L.
Jr., 1999, Adam
Smith and the Virtues of Enlightenment, Cambridge: Cambridge University Press Lubasz, H. 1998, 'Adam Smith and the Invisible Hand - of the
market?’, in R.Dilthey (ed.)
Contesting Markets,
Edinburgh: Edinburgh University Press, pp. 37-55. Nieli, R. 1986
‘Spheres of intimacy and the Adam Smith problem’, Journal of the History
of Ideas, XLVII, pp.611-24 Otteson, J.R. 2002 Adam Smith’s Marketplace of Life,
Cambridge: Cambridge University Press Sen, A.
1987, On Ethics and Economics, Oxford: Blackwell Smith, A. 1759:1984, The
Theory of Moral Sentiments, Indianapolis: Liberty Fund Smith, A. 1776:1976, An
Inquiry into the Nature and Causes of the Wealth of Nations, ed. by E.Cannan,
Chicago: University of Chicago Press Tabb, W. K. 1999, Reconstructing Political Economy, London: Routledge Weinstein, J. R. 2001, On Adam Smith, Belmont: CA: Wadsworth,
2001; Winch, D. 1978 Adam Smith's Politics, Cambridge: Cambridge University Press Winch, D. 1996 Riches and Poverty; An Intellectual
History of Political Economy in Britain, 1750-1834
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