The Discerning Texan

Hat tip to Greg Ransom over at PrestoPundit (the blogosphere's most prolific Economics spokesperson) for finding this excellent article in the Scotsman by Gavin Kennedy about the real legacy of Adam Smith, (as opposed to the watered-down version from the left):

Smith never wrote a word about "capitalism", yet he is hailed as the "high priest of capitalism". He is the "father of modern economics" though he would find much in today’s economics unrecognisable as his progeny . He is alleged to be an advocate of "Laissez Faire" though he never used these words and claims that he used English equivalents are tenuous. He did not believe it advisable to leave merchants and manufacturers alone, because they were likely to form monopolies, restrict supply and raise prices.

Smith took the long view of society’s development. He was never in favour of quick fixes. He considered stability in society more important than correcting even serious deficiencies too quickly. He took a historical view and his books are full of references to classical Greece and Rome and what they taught about government, moral conduct and economic growth, and the need for natural liberty and justice.

The "new" economy he discussed in Wealth of Nations was not new to him. He saw a growing commercial society as a revival of the commerce of western Europe that had been overrun by barbarian hordes. His inquiry into the wealth of nations was like a one-man Royal commission, a tour de force, drawing on evidence over the millennia since the fall of Rome and from contemporary evidence he analysed in painstaking detail.

Commerce was a revival, not a new revolution. From commerce, established on a prosperous and improved agricultural base, opulence would spread deep into society, itself poverty-stricken to a degree we cannot imagine today. Scotland was a backward, ignorant and fractious country; England was slightly better. But both would rise out of their stagnation if commerce was unburdened from the mercantile politics lasting since the Middle Ages.

Smith disapproved of colonies as expensive ways to buy what could be bought in markets. Unnecessary wars to revenge slights on the King’s ministers rather than matters of substance were on a scale of prodigality he railed against. He preferred investment and jobs in productive activity that increased wealth. Not that he was a pacifist. Defence was the "first duty of the government" to protect society from barbaric neighbours.

He saw society as becoming naturally harmonious through the intense dependence of each person on the labour of every other person and taught that the propensity to "truck, barter and exchange" led to people serving their own interests best by serving the interests of others from whom they needed daily necessities.

That is his true legacy, the melding of his moral sentiments with liberty, justice and his economics. It is time his legacy was claimed back.

Not a bad legacy at all...