Jesse Norman on Adam Smith and a letter to the FT
I suspect the UK has still the most literate politicians of the Western world. While the days of William Gladstone reading more than 20,000 books in his lifetime and musing on such subjects like Homer and Christianity are long gone, and I assume there is nobody in the Commons whose “early life” could be narrated as well as Winston Churchill did with his, there are quite a few writers in politics. One of them is Jesse Norman, who has just published a new biography of Adam Smith.
I haven’t read the book yet (though I ordered my copy) but it has been received very well. Apparently, Norman is making the case Smith was not a “laissez-faire ideologue,” which certainly he wasn’t (wasn’t an ideologue, period). In a review for the Daily Telegraph, Oliver Letwin points out that, in so doing, Norman “enlists Adam Smith as an ally in a series of causes very foreign to the naive proponents of laissez faire”.
As Norman persuasively argues, his Adam Smith would have been on the side of George Osborne’s Banking Commission, not on the side of President Trump, when dealing with issues of financial regulation. In direct support of such regulations, Norman’s Smith accepts that they “may, no doubt, be considered as in some respect a violation of natural liberty” but adds (in stark contrast to President Trump and in line with the Banking Commission) that “those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society are, and ought to be, restrained by the laws of all governments… The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed”.
This is a complex and dangerous exercise, and I appreciate Letwin clarifying that this is “his” (Norman’s) Adam Smith. Many scholarly works have been published to “rescue” Adam Smith from what some people consider his free trade caricature, yet trying to divine his views on contemporary policies requires a certain boldness.
That same boldness emerged from an excerpt of the book Norman published on the Financial Times. The piece was entitled “How Adam Smith would fix capitalism”. I sent a letter to the FT arguing that
Jesse Norman’s biographical sketch of Adam Smith (Life & Arts, June 23) was somewhat improperly headlined on FT.com as “How Adam Smith would fix capitalism”; hardly Smithian, for “fix” implies the idea of a machine that can somehow be rebooted and made to work properly, which it isn’t.
But the great insight of Smith and his contemporary Scottish colleagues was precisely that to have “order” it is not necessary to have a plan or a designer. This is a quantum leap in our understanding of reality: nobody is in charge and this is not necessarily bad. Indeed, that resources aren’t allocated according to a grand plan doesn’t mean they are allocated poorly – which is, quite the contrary, very often the outcome of ex-ante benevolent planning.
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