Adam Smith's Edinburgh Home is Bought By Edinburgh Business School

The Principal of Heriot-Watt University, Professor Anton Muscatelli, has anounced the purchase of Panmure House, the home of Adam Smith from 1788 to 1790, by its Edinburgh Business School.

This means the restoration work can begin as soon as the funds are available and restoration architects have concluded the proposed work, keeping as close as possible to its 18th century character.

Those heritage vandals who flippantly suggested that it be demolished and turned into a McDonalds, and only marginally less silly, were those Bloggers - economists all - who invoked Adam Smith's mythical persona and called for the 'highest bidder' (by which I assmue they meant money) to 'win' the bid, betraying their lack of knowledge of how sealed bid auctions are conducted in Scotland. The seller is not obliged to accept any bid of the 'highest'.

The highest 'clean bid' is not necessarily the highest money bid and this was the case in the sale of Panmure House. The other bid was 'subject to structural survey', which for a 17th-century building (1690) could have delayed the exchange of missives (contracts) and also delayed the Council getting its money, plus the inevitable negotiations to reduce the bid price to take account of anything revealed in the survey.

The bid from Edinburgh Business School was 'unconditional' - removing the risk from the current owners to the University - and did not involve any public money or subsidy. Its public benefit criteria was to restore Panmure House as a post-graduate research centre of international standing for education in Scotland and internationally.

Panmure House is the last building standing that is associated intimately with Adam Smith and leading figures of the Scottish Enlightenment (many of whom met and dined with Adam Smith at his regular Sunday dinners) and where he died in 1790. His grave is about 100 yards away in the Canongate Churchyard.

There is a lot of work to do now at Panmure House; I shall play my modest part in that restoration work, as well as my work at Lost Legacy to restore his contributions to moral philosophy and political economy from the depredations of the epigones.

A Libertarian Supports Purchase of Panmure House

David Farrar writes in his Blog: Freedom and Whisky (‘A libertarian returns to Scotland’) on the continuing debate on Panmure House:

‘Responding to Alex:

Alex Massie has picked up on the sale of Adam Smith's house:
“They chose the £800,000 bid over a higher offer, on the grounds that the University would make the building more accessible to the public. The University plans to restore the house to promote the study of economics. Hmmm. Wouldn't it have been more appropriate to sell to the highest bidder?”

In one of the comments Gavin Kennedy writes:

The difference in the bid was £150,000, a rather small amount which will be more than covered quickly by the commercial operations of Adam Smith's former home (1788-90) in pursuit of academic excellence in economics.
This is also a public benefit, which was lauded by Adam Smith.
“I'd like to enlarge on that observation with a nod in the direction of the Austrian School of Economics.

Values are subjective. We each have our own unique scale of values and if that weren't so no trade would be possible at all. Let's imagine that I'm in the market for a property. I might be happy to pay £250,000 for a flat in central Edinburgh but another person might well prefer to spend the same amount of money on a sizeable house in rural Fife. And I might be willing to spend a bit extra on a place in Edinburgh simply because it had once been owned by Adam Smith! Others wouldn't. Values aren't limited to monetary considerations.

So I would argue that the City Council hasn't necessarily sold the Smith abode to a low bidder. It all depends on the Council's scale of values and those values can include a keenness for a particular future use of the property. From its point of view the Council has sold to the highest bidder. For once, in this case the Council's scale of values is not unlike mine!”

Comment
Some commentators to the various Blogs that have remarked about the sale of Panmure House demonstrate their philistine nature by simply demanding that the City of Edinburgh Council sell to the ‘highest bidder’, or demolish Panmure House and turn it into a MacDonalds, or some such atrocity.

I am pleased to see that a Libertarian takes a more intelligent stance.