Liberty Discussion on ‘How Adam Smith Would Fix Capitalism’ by Jesse Norman.

On 26 July 2019, the members of Liberty Discussion Group sat down at Gaia Restaurant and Coffee Shop to discuss the article ‘How Adam Smith Would Fix Capitalism’ by Jesse Norman.

The author in the article ‘How Adam Smith Would Fix Capitalism’ published in the Financial Times explains that the ideas of Adam Smith popularly published in his book The Wealth of Nations have been falsely interpreted and distorted by the followers of not only the socialist ideology but also by the proponents of the capitalist ideology who believe in the idea of free market. The author while elaborating on the nature of Adam Smith as a person goes to the extent that Adam Smith himself was not even the proposer of Laissez-faire and efficient market hypothesis as the common man and even the academia would believe it to be. The author, Jesse Norman who has also authored the book “Adam Smith: What he thought, and why it matters?” even argued that Adam Smith did not oppose state intervention in all markets to readers’ surprise. 

In plucking out the unconventional claim by the author that Adam Smith; far from originating the idea of “market fundamentalism” would have even opposed the idea of efficient market hypothesis, a participant complained that the author attempted to destroy the foundation upon which the supporters of liberal market viewpoint as himself stood on by disconnecting the central ideology of free market system from its originator. The participant further argued that just because the idea of freely trading markets and autonomous corporations arrived two generations after the death of Adam Smith, it does not disconnect Adam Smith from the very inventions. In fact, he argued that the thoughts and ideas of Adam Smith could have sustained and developed for two generations to finally culminate to such marvellous inventions. Subsequently, an opposing participant argued that the criticizing participant was defending the connection between Adam Smith and market centrism mostly by his own calculations, and he himself as a follower of the free market principle and efficient market hypothesis would like to observe evidential arguments that can defend the connection between Adam Smith and Efficient Market principle. 

A third participant after observing the ongoing debate argued that there is possibility that the author has not or is unable to fully dissociate free market principle from Adam Smith as he offers a perplexing argument when he states that The Wealth of Nations is a work of genius not because it provides central intellectual tools of political economy as division of labour, the idea of market equilibrium and the benefits of free trade but because Smith was the first person to put markets at the centre of economics itself. According to her, coining central intellectual tool as division of labour and idea of market equilibrium is actually how Smith placed market at the centre of economics, and therefore the author is only confusing readers by providing abstract arguments that do not form a suitable logic.

As time was limited, members could not discuss more on these issues even though they desired to. But as always, members can always continue their discussion on the Facebook group.