Monday, July 06, 2009

Amartya Sen: Exponent of Adam Smith's True Legacy

An editorial in the Times of India is worth reading in full ">HERE:

“In an article, 'Capitalism beyond the Crisis', Amartya Sen has argued that the present economic crisis demands a new understanding of older ideas, such as those of Adam Smith and Arthur Cecil Pigou. He draws attention to the fact that, while Smith showed the market economy's usefulness, his analysis went beyond leaving everything to the market's invisible hand. He viewed the usefulness of capital and markets within their own sphere and at the same time saw, contrary to the popular perception, the need for other institutions, such as sound mechanisms for financial regulations. He was aware, for example, of the need for state regulation to protect citizens from what he called "prodigals and projectors" who took excessive risks in their pursuit of profit.”

Comment
Amartya Sen is always worth reading and I recommend that you follow the link and see how Sen develops his argument by bringing Max Weber into play:

In the last pages of The Protestant Ethic, he notes: "The idea of duty in one's calling prowls about in our lives like the ghost of dead religious beliefs." He adds: "In the field of its highest development, in the United States, the pursuit of wealth, stripped of its religious and ethical meaning, tends to become associated with truly mundane passions, which often actually gives it the character of sport."

Sen writes with surprising agility and deep commitment to social changes within markets where possible and with public funding where necessary.

There is no call to protect Adam Smith’s legacy from economists like Amartya Sen. He embodies Smith’s true legacy in everything he writes.

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Monday, April 06, 2009

Smith in Glasgow '09 Conference Report

This was a stimulating conference (with only one or two duller bits) with about 70 participants (I was surprised at this attendance, as I envisaged it being packed). The format was conventional in that Plenary Lectures were interspersed with concurrent seminar sessions, which worked well in the two adjacent buildings (converted churches with imaginative use of space, easy flow for people and comfortable arrangements – Spartan, if functional).

First up was a concurrent seminar session that I chaired. Jeffrey Young of St Lawrence University presented ‘Justice, Property & Markets: economics as moral philosophy’. No surprise that I agreed with Jeffrey’s approach because it covered ground that I have addressed in my paper on the ‘Pre-history of Bargaining: multi-disciplinary treatment, Part I’ HERE.

Then Nerio Naldi (University of Rome La Sapienza) presented 'Rhetorical Influences on Adam Smith’s Analysis of Value and Prices in Wealth Of Nations'. He also announced that this is his last paper from a seven-year project and he has now switched to work on Samuel Pufendorf (who had enormous influence on the teaching of moral philosophy in Scotland in the 18th century). ‘Tis a pity because Nerio’s ideas on Smith’s value and prices were tantalising for me.

The first Plenary session was addressed by Nick Phillipson from the University of Edinburgh, whose final version of his intellectual biography of Adam Smith, he assured me, is almost off to the publisher for publication. Many people await Nick’s book, of which parts have been ‘trailed’ over the years (I last heard him lecture impressively on Smith in 2006 at Columbia University, New York). He too mentioned the influence of Pufendorf on Hutcheson and his student, Adam Smith, and how through Professor Robert Simson at Glasgow (Prof of mathematics) and his work of modern geometry, the Scottish moral philosophers ‘invaded’ territory normally ‘dominated of Christian theologians’.

Of note for me were Nick’s emphasis on Smith’s theory of language essay, which he included in editions 3, 4, 5, and 6 of Moral Sentiments, though dropped, ‘inexplicably’ by the Glasgow editors for the definitive bicentennial 1976 edition. As David Raphael, one of the editors of the Glasgow edition was present, I missed a serious opportunity to ask him the reasons for this omission, though we spoke several times during the conference.

I chose to attend the concurrent seminar session where Craig Smith presented his paper, ‘Adam Smith and the Dedicated Follower of Fashion’ (yes, from the 1980s song). This proved to be tour de force of Moral Sentiments on that species in society, mocked by Smith while recognising the important stabilising role of attention to attention-seeking personages in his day (as in ours). The chairman took Maria Carrasco’s paper (‘From Psychological to Moral Sympathy’) right away, and many participants were still queuing to speak at the close of the session.

The Plenary Lecture was from Professor J. Chandler (University of Chicago) on ‘Smith the Critic’, for which I took no notes. He concentrated on Smith’s rather obscure, short notes on literature and the imitative arts, saved from burning in 1790 by Professors Black and Hutton, and first published in 1795 in Essays on Philosophical Subjects. I confess, the lecturer’s themes, content, and conclusions were somewhat beyond me, though several contributors to the discussion were highly complimentary, so my lack of appreciation is probably my fault out of my ignorance.

Thursday concurrent seminars began (for me) with two excellent papers presented by Eugene Heath (SUNY) ‘Adam Smith and Ambition’ and Spiros Tegos (University of Crete), ‘The Demigod and the Superstitious Worshiper: the two sources of corruption of moral sentiments in Adam Smith’. In the debate, I linked some of the statements by the presenters to certain important biographical details about Adam Smith that shed light, in my view, on the subtleties of Smith’s well-quoted statements.

The Plenary Lecture was delivered by Tom Campbell, one of Glasgow’s own and author of Adam Smith’s Science of Morals (1971). He was extremely lucid and well prepared, and used extracts from Moral Sentiments to great affect, to support his subject: Adam Smith: method, morals and financial markets. I was struck by his Smithian approach to justice as ‘impartial resentment’ and particularly when he spoke of Smith’s religiosity in terms that left room both for the conventional assessment of Smith’s alleged Deism and for a more detached view (such as my own) of Smith’s ‘post-Deistic morals’.

However, he also presented the conventional assessment of the invisible hand in Smith’s books and I sought an early intervention in the discussion period, which the chairman, Professor Brodie (holder of Smith’s original Glasgow chair in logic), graciously called me first. I presented, briefly I hope, my critique of the modern interpretation of the invisible hand in Moral Sentiments and Wealth Of Nations (apologising for ‘getting the dissent out of the way for what I considered to be a brilliant lecture on Moral Sentiments’). Tom replied fulsomely, but not rancorously, and afterwards in conversation he asked to see my paper because he had not considered the implications of my critique in any depth before.

The last of the concurrent seminar sessions I attended were from a trio of excellent presentors and common debate and responses. Richard Boyd (Georgetown): ‘Smith on nationalism’; Fona Forman-Barzilai (UofC, San Diego): ‘Smith’s Anti-cosmopolitanism’, and Maria Paganelli (Yeshiva University, New York): ‘The moralising role of distance in Adam Smith: Moral Sentiments as a possible praise of commerce’; were in complete command of their subjects, with the audience in close attention. As younger members of the profession, they showed it is in good hands.

The last Plenary Lecture was by Amartya Sen, of whom little else besides superlatives can be offered. I last heard him conduct a post-graduate seminar in 1971 at seminar at Brunel University, West London, with astonishing style, empathy with the students, and complete clarity of expression. Only a physical change can be reported; his mind and modes of discourse is still beyond comparison, and like all truly praiseworthy individuals he showed no arrogance of tone, nor airs of disapproval under close questioning by members of the audience.

His theme was poverty and inequality, ‘prodigals and projectors’ (Smith’s phrase) and the limitations of rational choice theories, to which he is acknowledged to be a major contributor in his career, though he expressed reservations about the operational value of rational choice theory in the real world. In this, he is closer to Adam Smith’s approach – which he presented without dogma or the certainties of a ‘man of system’. A line, discussing the limitations of grand visions: ‘Some are born small, others do small things, and some have smallness thrust upon them’, caused wry smiles around those in the audience I could see.

He spoke of ‘transcendental institutionalism’, considering getting institutions right (social justice, for instance) to be a major priority, while recognising there were no ‘perfect’ solutions. He spoke of his early experience as a male in the feminist movement, mostly in relation to feminism where its absence has appalling consequences – more serious for women in the poverty economies than, I suspect, among women in the opulent world – in life expectancy, life treatment (mutilation was particularly noted) and alienation.

In the debate he showed everything that is good about his intellectual standing – listening to each question or point and methodically answering them with empathy for the truth, not for being ‘smart’. He made a very positive impression on everybody and many went to the front to ask, but mainly to listen, to the informal discussions he incited.

Of the conference arrangements, I consider them to have been excellent (whatever the panics out-of-sight below water!) and the Glasgow Adam Smith Research Foundation, led by Professor Chris Berry, demonstrated how to manage an academic conference without ‘tears’ or ‘pain’, at least for the participants.

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Wednesday, March 11, 2009

Amartya Sen's Two Brilliant Essays on the Relevance of Adam Smith Today

Amartya Sen writes two great articles of current relevance on Adam Smith. The shorter one is in the Financial Times HERE and the longer one is in the New York Review of Books HERE.

I recommend them both to you (following correspondents asking if I had read them, and, presumably, looking for my comments on Lost Legacy). As I have been busy completing my paper on ‘Adam Smith’s Alleged Religiosity’, I chose not to post a comment last week, but to generate more publicity for an approach with which I agree and I am pleased now to recommend them and I provide links to the two articles and a very short extract:

‘Adam Smith’s market never stood alone’

“For example, the pioneering works of Adam Smith in the eighteenth century showed the usefulness and dynamism of the market economy, and why—and particularly how—that dynamism worked. Smith's investigation provided an illuminating diagnosis of the workings of the market just when that dynamism was powerfully emerging. The contribution that The Wealth of Nations, published in 1776, made to the understanding of what came to be called capitalism was monumental. Smith showed how the freeing of trade can very often be extremely helpful in generating economic prosperity through specialization in production and division of labor and in making good use of economies of large scale.

Those lessons remain deeply relevant even today (it is interesting that the impressive and highly sophisticated analytical work on international trade for which Paul Krugman received the latest Nobel award in economics was closely linked to Smith's far-reaching insights of more than 230 years ago). The economic analyses that followed those early expositions of markets and the use of capital in the eighteenth century have succeeded in solidly establishing the market system in the corpus of mainstream economics.

But Smith's defense of private trade only took the form of disputing the belief that stopping trade in food would reduce the burden of hunger. That does not deny in any way the need for state action to supplement the operations of the market by creating jobs and incomes (e.g., through work programs). If unemployment were to increase sharply thanks to bad economic circumstances or bad public policy, the market would not, on its own, recreate the incomes of those who have lost their jobs. The new unemployed, Smith wrote, "would either starve, or be driven to seek a subsistence either by begging, or by the perpetration perhaps of the greatest enormities," and "want, famine, and mortality would immediately prevail...."

Smith rejects interventions that exclude the market — but not interventions that include the market while aiming to do those important things that the market may leave undone.

Despite all Smith did to explain and defend the constructive role of the market, he was deeply concerned about the incidence of poverty, illiteracy and relative deprivation that might remain despite a well-functioning market economy. He wanted institutional diversity and motivational variety, not monolithic markets and singular dominance of the profit motive. Smith was not only a defender of the role of the state in doing things that the market might fail to do, such as universal education and poverty relief (he also wanted greater freedom for the state-supported indigent than the Poor Laws of his day provided); he argued, in general, for institutional choices to fit the problems that arise rather than anchoring institutions to some fixed formula, such as leaving things to the market.”

Amartya Sen received the 1998 Nobel Prize in economics; he teaches economics and philosophy at Harvard University and he has written an introduction for the anniversary edition of ‘The Theory of Moral Sentiments’ (Penguin Books, 2009) in which he discusses the contemporary relevance of Smith’s ideas.

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