Celebrating Adam Smith

From HES member, Anthony Brewer, this note was posted to the HES list yesterday.

Members of this list may like to know that Adam Smith's picture will in future appear on the Bank of England twenty pound note, replacing EdwardElgar (the composer, not the publisher). He is apparently the firstScotsman (and perhaps the first economist?) to appear on a Bank of Englandnote. He is already pictured on a Scottish note.

See

 

http://news.bbc.co.uk/1/hi/business/6096938.stm

http://www.bankofengland.co.uk/publications/news/2006/097.htm

Stumbling and Mumbling argues we shouldn't celebrate such "stupidity".  Adam Smith's Lost Legacy responds.  I would add that relying overly on the pin factory example -- which Smith tells us is a "trifling" example -- gives a distorted notion of the division of labour in Smith.  Instead of serving to isolate men in narrowly-defined menial tasks, in the main the division of labour is a phenomenon of cooperation and innovation.   

 

Comments

[Gavin Kennedy]

What an excellent way of putting it. Smith's outline of the inter-sectoral division of labour in the matter of the day labourer's woolen coat certainly is about'division of labour [a]s a phenomenon of cooperation and innovation.'

This gives a less narrow perspective on the 'stunting' effects of labour through his rhetoric that he uses in Book V for quite different ends. Smith knew his upper classes and how they thought and what might motivate them to support an expansion of education to the children of the poor.

[John Konop]

Economists Are Destroying America

Economists, politicians, and executives from both parties have promised American families that “free” trade policies like NAFTA, CAFTA, and WTO/CHINA would accomplish three things:

• Increase wages
• Create trade surpluses (for the US)
• Reduce illegal immigration

Well, their trade policies have been in effect for about 15 years. Let’s review the results:

• Declining real wages for 80% of working Americans (while healthcare, education, and childcare costs skyrocket)
• A record-high 46 million Americans who don’t have health insurance (due in part to declining wages and benefits)
• Illegal immigration out of control
• Soaring trade deficits, much with countries that use slave and child labor
• Personal and national debt both out-of-control
• Global environments threatened by lax trade deal enforcement

Economists Keep Advocating Policies That Aren’t Working

Upon seeing incontrovertible evidence of these negative trade agreement results, economists continue with Pollyannish blather. Some say, “Cheer up! GDP is up and the stock market’s doing fine.” Others say, “Be patient. Stay the course. Free trade will raise all ships.”

Even those economists who acknowledge problems with trade agreements offer us only half-measures—adjusting exchange rates, improving safety nets, and providing better job retraining. None of these will close the wage gap in America—and economists know it.

Why Aren’t American Economists Shouting From Street Corners?

America needs trade deals that support American families and businesses in terms of wage, environmental, and intellectual property abuses. Why aren’t economists demanding renegotiation of our trade deals? There are three primary reasons:

• Economists are too beholden to corporations and special interests that provide them with research grants.
• Economists believe—but refuse to admit—that sacrificing the American middle class is necessary and appropriate to generate gains in third world economies.
• Economists refuse to admit they make mistakes.

Economic Ambulance Chasers

Now more than ever, Americans need their economists to speak truth and stand up to their big business clients. Instead, economists sound like lawyers caught chasing ambulances: they claim they’re “doing it for our benefit”.