Silly Saturday Stories on Adam Smith: no. 4

“Saving the environment requires re-writing Economics itself” by Susan Chan, writing in The Canadian (‘Canada’s new socially progressive and cross-cultural national newspaper’ (8 August, Toronto):

‘Western industrial civilization has basically bought into the models of "economic prosperity", which have been taught in economics classrooms. The prevailing models of economics which emphasize the virtues of "market growth", irrespective of social and environmental costs, was substantively developed in the nineteenth century.
Today's economics, was developed in the era of Adam Smith, and other great scholars at the time, and which in the post World War II societal milieu, was further engineered to serve the interests of large corporate enterprises (by implicitly giving the 'rights of individuals' to the entities). The University of Chicago School which embraced the exploitative economic doctrine of "Human Capital", was at the forefront of the corporate oriented manipulation of economics.’

And Susan Chan’s answer to the problem she identifies:

“Saving the environment, requires the replacement of the current model of "market"-biased economics with a revitalized people-driven economics. In such a context, social and environmental considerations would not be an afterthought. In such a rejuvenated "New Economics", social and environmental consideration would be at the core of all societal decision-making processes, as well as implemented public policies.”

Comment
How did Adam Smith get into her conflation of 230-years of economics? I suspect only because Susan Chan has heard of his name and has not read 'Wealth Of Nations', or 'Moral Sentiments', and not even 'Lectures On Jurisprudence'. If she had she would not write what she has on this occasion.

Adam Smith has no connection with the economics of Chicago University, a town that did not exist when Smith was alive, other than Chicago faculty from the 1930s quoted his name as some kind of blessing of neoclassical economics and, as its graduate spread across the US and Canada, the ‘connection’ became established by repetition.

Smith analysed the benefits of markets in creating surplus output each year over a previous year, and from this surplus (the content of growth), consumption was able to rise (the majority of people were desperately poor) and also investment of raw materials and people’s labour from additional employment in infra-structure (better housing compared to the hovels they lived in, and which many poor people still live in, though not perhaps in Toronto), education on a national scale, health facilities, knowledge and systems of justice.

Susan Chan disregards the process of economic growth as if it is disposable without returning humanity to the living conditions and life spans of the past in the ‘West’ and the same conditions that still operated in much of the undeveloped, and non-developing, countries a long way from Toronto.

Well meaning, comfortably off and educated citizens in Canada, unintentionally I am sure, should take a close look at the history of growth since Adam Smith’s days (though, let's be clear, what happened in the economies of Britain, parts of Europe, and in the newly created ex-British colonies that became the United States, was not a direct result of Adam Smith's writings - it would have happened anyway).

Of course, there are problems still. It is by no means perfect – whenever was it? - but it is an enormous improvement on the Malthusian ages that preceded it.

A ‘revitalised people-driven economics’ sounds just great in weather-proof, centrally heated and air conditioned, sanitary facilitated and IT connected homes in Toronto. How it will play in the rest of the world is another matter.

Going back to age of subsistence is a certain death sentence for some, including those who will never be born, and shorter-lives of perpetual, but, ‘revitalised’ and ignorant subsistence for those that survive. There is absolutely no guarantees that any civilisation will not regress. Ill-thought out tinkering is not a safe policy.