Saturday, December 25, 2010

Brief Thoughts on Adam Smith (1723-1790)

In my last blog post I mentioned recent reading of parts of Adam Smith’s The Theory of Moral Sentiments and The Wealth of Nations plus all of Nicholas Phillipson’s biography Adam Smith: An Enlightened Life. The biography, published this year, was a great help in organizing my thoughts based on the earlier reading of Smith’s profound works.  

Smith was very clear that The Theory of Moral Sentiments was a far more important production than The Wealth of Nations.  The latter is idolized by American businessmen and conservative economists today, although I doubt that many of them have cracked the book.  Smith focused on the necessity of free and open markets to promote the division of labor and specialization which would drive the creation of wealth or opulence as he called it.  He was dead set against protectionism, mercantilism and the exploitation of colonies.  He likewise abhorred the role of businessmen in government for they would have no concern for the public good but only for the protection and advantage of their own enterprise.  For this reason he opposed royally chartered business such as the East India Company (or Freddie or Fannie) which used their privileged position to promote monopoly leading to diminished supply and higher prices. Smith seemed to favor a paper-based monetary system and independent banks that would carefully extend credit to borrowers based on collateral and the guarantees of men of property.  He saw the hoarding of gold to back currency as likely impeding free trade and the division of labor.

Smith understood the role of capital and the banking system in the economy, but he considered them only the necessary lubrication for the systems of production and trade in a free market.  He would not have supported government bailouts of banks or manufacturers.  And he would have been aghast at the size of the financial sector in today’s economy.

Thursday, December 16, 2010

Oh, to be in England now that 1750’s there!

Apologies to Robert Browning as this isn’t England and it isn’t 1750.  But over the last few years I have done so much enjoyable reading about English history that I want to share some of it with you.

First I finished off Neal Stephenson’s three volume Baroque Cycle a 2000+ page historical novel set mostly in 17th and 18th century England and featuring Isaac Newton, William of Orange, Benjamin Franklin, King Louis XIV, Gottfried Leibniz and Samuel Pepys as well as some colorful fictional characters.  I moved on to a biography Samuel Pepys: A Life by Stephen Coote.  I read a number of passages from The Theory of Moral Sentiments and from The Wealth of Nations, both by Adam Smith but could never get organized to go straight through either.  2009 was the 150th anniversary of the publication of Charles Darwin’s On the Origin of Species as well as the 200th anniversary of Darwin’s birth.  I read as much as I could of the torrent of new magazine and journal writing about Darwin and his impact on biological science.

This year I started with Wolf Hall by Hilary Mantel, a historical novel about Thomas (not Oliver) Cromwell (1485-1540), for many years the chief minister to Henry VIII. I also slogged through The Cousins’ Wars by Kevin Phillips which traces how the religious, cultural and class differences that drove the English Civil War (1642-1651) reached across the Atlantic and influenced the French and Indian War, the American Revolution and the Civil War. Finally, I have just finished Nicholas Phillipson’s biography Adam Smith: An Enlightened Life (1723-1790).  The biography of Smith was a great help in organizing my thoughts based on the earlier reading of Smith’s profound works.

When I reflect on this reading a number of related topics come to mind:
History--Yes, of course the books are about history, not about something that is dead and gone but something that is playing out in our lives today, something that is vital and connected.
Threads--There are particular threads or themes of history that are uniquely relevant to each of us. Tapping into those threads can add great significance to one’s life.
Memes--A term first used by the British biologist Richard Dawkins and meaning a cultural item that is transmitted by repetition in a manner similar to the biological transmission of genes.  Although I had come across the term meme earlier, the concept of a gene like transmission of culture first hit me during some of the reading about Darwin.  A powerful idea, but some of the social science folks may be pushing too far with the analogy to genetics.
Relationships--Adam Smith built his whole theory of ethics on the idea that people naturally have a certain sympathy for others, that this sympathy was the foundation for sociability, for getting along together.  From that point people could exchange ideas and merchandise and human welfare would gradually advance.  I wonder if the two political tribes that are at war in Washington DC have thought about these ideas and about how lasting relationships are built?  About the notions of sympathy and empathy?  About the perspective that comes with walking in another's shoes rather than giving them an arrogant kick?
Objects--Our history and culture is conveyed not only in literature but in stuff, objects, and during 2010 BBC and the British Museum collaborated on A History of the World in 100 Objects.  The project took the form of an exhibition of the 100 at the museum, a book and a great web site.  After you have explored the site, take another look around your home or your parents’ attic.  Not in hopes of finding an overlooked Rembrandt that great grandfather brought back from Europe at the end of WWI but to find how some of your objects embody and bring to life the threads of history that are important to your family.
Nostalgia--Not a substitute for thinking about and learning from history.

Have a joyous holiday season