Mark Thoma links to Amartya Sen’s “The economist manifesto” in the New Statesman. The key point:
The spirited attempt to see Smith as an advocate of pure capitalism, with complete reliance on the market mechanism guided by pure profit motive, is altogether misconceived. Smith never used the term “capitalism” (I have certainly not found an instance). More importantly, he was not aiming to be the great champion of the profit-based market mechanism, nor was he arguing against the importance of economic institutions other than the markets.
Smith was convinced of the necessity of a well-functioning market economy, but not of its sufficiency…
I like this bit as well:
He emphasised the class-related neglect of human talents through the lack of education and the unimaginative nature of the work that many members of the working classes are forced to do by economic circumstances. Class divisions, Smith argued, reflect this inequality of opportunity, rather than indicating differences of inborn talents and abilities.
And to conclude:
Smith’s analyses and explorations are of critical importance for any society in the world in which issues of morals, politics and economics receive attention. The Theory of Moral Sentiments is a global manifesto of profound significance to the interdependent world in which we live.
Sen’s breakdown passes Gavin Kennedy’s eye test, which is good enough for me as to whether Sen “got Smith right.”
It should be read by all readers of Lost Legacy (Follow the link).
Amartya Sen presents the authentic Adam Smith and corrects the mistaken views of many modern economists and their interpretations of his moral philosophy and political economy.
Sen certainly does an excellent job laying to waste uncritical mis-readings of Smith’s work. However, he does not venture into deeper critiques of the theory of value underlying Smith’s economic philosophy- one might rightly argue that this was not the point of this particular article. Nevertheless, I find it interesting that Sen points out the even more oft-ignored discussion of class in Smith, but does not raise the Marxian specter. Smith’s discussion of class divisions can be seen as a starting point, but it’s Marx who uses class as a basis for his entire theory. There is surely some value to be added here from bringing in Marx’s theory of class and of value.
Unfortunately, I’m not going to be the one to add that value right now. Perhaps Kasey or David can jump in in the next couple of days, since I’m tired and lazy and have another post I reeeeally need to write.