July 5, 2018

“F**k business”.

That was the undiplomatic choice of words attributed to Boris Johnson, the minister who oversees Her Majesty’s diplomatic service. The appropriateness – or otherwise – of the two-word assault on a Brexit-sceptical manufacturer has been pontificated upon enough already.

I’m still reeling from the claims of a large number of Conservative big wigs that any slapdown of the merchant class by their party was somehow akin to a bishop abandoning the Bible, or a Labour leader attacking the NHS.

Adam Smith needed no encouragement to direct Johnsonian-type anger at business
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It’s one thing for the Left to to paint the Right as nothing more than the political wing of the accountancy trade. It’s much worse when the home team is reinforcing the view that centre-right political movements are, like Oscar Wilde’s cynic, conscious of the price of nearly everything but blind to the value of anything that is truly important.

One person who needed no encouragement to direct Johnsonian-type anger at business was Adam Smith. If the Scottish philosopher (and note that I didn’t write ‘economist’) were around today, I have no doubt he’d authoritatively be issuing his erudite equivalent of “f**k Lehmans and other banks for their recklessness that helped cause the 2008 crash!” He’d need little persuasion to add a “F**k VW!” for the way the German car giant cheated environmental standards’ or a “F**k property developers!” for the ways they conspire to keep house prices at levels suited to their profitability than to homebuyers’ means.

Jesse Norman’s book is a rescue job. It directs readers to the fullness of Smith’s writings, rather than the misrepresentations of them by certain contemporary think tanks and pundits
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We can be confident of such robustness because, throughout his writings Smith adopted uncompromising language about the tendency of traders and merchants to behave badly. “Clamour and sophistry”, “impertinent jealousy”, “mean rapacity”, “mean and malignant expedients”, “sneaking arts” and inclinations to “interested falsehood”, aren’t from a book by Marx or Engels or Jeremy Corbyn or Bernie Sanders. They’re from the 18th-century’s Mr Smith.

John Maynard Keynes (the runner-up to Smith as most notable economist to have emerged from Britain) warned that the theories of ancient scribblers or long dead economists tend to hold too much power over people of the current day. If, despite Keynes’ disappointment at us, we are to have a reverence for seminal writers and books from a long gone era, we should at least make an effort to ensure we have understood them correctly.

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And that is the importance of the, sadly very necessary, reintroduction to Adam Smith that has been written by Jesse Norman, a serving Conservative MP and a transport minister.

Adam Smith – What He Thought and Why It Matters is part a work of economic philosophy; part a manifesto for a decade after the crash; and part a biography of the ‘father of modern economics’, who neither married nor had children of his own. But it’s wholly a 308-page rescue job. Norman directs readers to the fullness of Smith’s writings, rather than the misrepresentations of them by certain contemporary think tanks and pundits who have adopted his intellectual works with a standard of care that would embarrass certain Dickensian workhouses.

Norman’s book demonstrates how Smith advocated important roles for government in curbing market excesses, undertaking public works and didn’t just worry about absolute poverty but inequality, too
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In addition to an acute awareness of business malpractice, Smith, Norman’s readers learn, advocated important roles for government in curbing market excesses, undertaking public works and didn’t just worry about absolute poverty but inequality, too. Pretty relevant, eh? And contrary to the regularly posed ‘Adam Smith problem’ the two key books he wrote – The Wealth of Nations and the earlier, lesser honoured Theory of Moral Sentiments – are not difficult to reconcile but wholly complementary.

Just as Smith was a friend and admirer of his contemporary Edmund Burke (a hero of more conservative types and the subject of a previous biography by Norman), Smith’s own writings were complementary too. “In contrast to modern practice, Smith did not compartmentalise politics and economics”, writes Norman within a particularly important section. I introduced Smith as a philosopher. But Norman notes a “science of man” throughout Smith’s writings, of a wide-ranging character. Scotland’s son understood that explanations of key economic or other phenomena, writes Norman, could only be partial if cut “away from politics, from psychology and sociology, and from ethics”.

Holistic thinkers like Smith are badly needed today. At a time when changes in technology, the nature of capitalism, democratic organisation, family structure and journalism are happening simultaneously and interactively, at the top of our societies we have tech giants who turn blind eyes to immoral uses of their products, economists who only count what is statistically counted, and journalists for ‘national’ newspapers who rarely leave London or Washington or Brussels. It’s not that surprising that these bunkered elites keep getting surprised by the world around them.

I suspect Smith would have scoffed at the attack on Norman from the London-based Adam Smith Institute. ‘With Jesse Norman as a Tory MP, why bother having a Labour Party’ was the title of a blog by Tim Worstall that accused him of being “drippingly wet”.

Norman’s crime was to question the ways in which global tech firms avoid making serious contributions to the tax takes of countries they operate in. The ASI’s Tim Worstall insists that businesses should do as Milton Friedman advised and focus solely on maximising profit and shareholder returns.

This clean, simplistic, unworldly idea is a good example of why libertarians are essential components of centre-right parties throughout the world (reminding more State-friendly conservative types to avoid over-regulation and over-taxation) but would be terrible leaders of any electoral enterprise. As Smith understood, there are cultural and patriotic understandings that business organisations neglect at their peril. If people of commerce don’t attempt to act as good citizens they will enjoy levels of public suspicion that make them vulnerable to politicians who’ll regulate them excessively.

There’s so much more to Adam Smith than markets good, governments bad, baa, baa, baa
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Smith’s evocative “invisible hand” phrase – coupled with his dictum that we should not expect our dinner from the baker, brewer and butcher because of their benevolence but because of their self-interest – helped people understand how self-serving behaviours can enrich the general population more effectively than centrally-planned and managed systems. But it was possibly too evocative. The temptation is focus on that aspect of his work, much like a preacher who has a few favourite Bible verses and neglects study of the longer Old and New Testament books which can appear too much like hard work or too uncomfortable to embrace. But there’s so much more to Smith than markets good, governments bad, baa, baa, baa.

While Smith was a man of the Enlightenment he also had drunk deeply of the Judaeo-Christian account of human nature and of our capacity to do both bad, ‘Fallen’ things as well as to ‘Create’ and accomplish. This takes us back to where we started. Smith opened the eyes of the world to the ways in which free markets were much more effective creators and distributors of wealth than any of the alternatives that ‘planned’ to do so.

Adam Smith knew men and women of business were as capable of sin and selfishness as any other human being or human enterprise
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But this didn’t make him an apologist for the men and women of business who he knew were as capable of sin and selfishness as any other human being or human enterprise. Checks on the tendencies of business, politicians, theocrats or any other entity that amasses power to abuse those powers should not be after thoughts in the formulation of public policy but central to them.

Or, as a Boris Johnson-Adam Smith hybrid might say: “F**k monopoly power!”, F**k cosy relations between big donors and politicians!”; “F**k tech giants who don’t clean up their own messes!”; F**k economists and academics and policymakers who know nothing outside of their area of partial expertise!”.

Oh, and f**k think tanks that claim to represent great thinkers but haven’t, seemingly, read the full works of those thinkers. A charge that could not begin to be levelled at Jesse Norman.

Further reading
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