5th June Is Adam Smith Day

Today is the 287th birth anniversary of Adam Smith. He was named after the first man and he was the first man as far as "political economy" in the English language is concerned. He was a lover of Liberty and he stood firmly for both religious as well as commercial freedom, for strict curtailment of the arbitrary powers of the King; he was Whig in his politics. The quintessential absent-minded professor, his life is a story of humble origins and great achievements. He was a Scot - and Scotland in his time was a backward, poor province where the people did not speak very good English (a major disability). He studied in Glasgow University at a time when this small university led the "Scottish Enlightenment." Later he spent six years in Oxford on a scholarship - Oxford then was a richly endowed but dead university. There is much inspiration to be gained from the story of this man's life.

I heartily recommend John Rae's Life of Adam Smith, which can be ordered in India here. After you have read this wonderful book, you may consider reading his Theory of Moral Sentiments (I recommend the 6th edition), followed by the 4th edition of the book he is famous for - An Inquiry into the Nature and Causes of the Wealth of Nations.

Adam Smith founded classical political economy. As a Professor of Moral Philosophy he began by expounding on the moral virtues of the free market. Later, he went on to show how the selfish interests of each economic actor are harmoniously intertwined and, although no one intends it, the whole of society benefits as though by an "invisible hand." He therefore proved that the rightly understood long-term interests of all individuals lie in a free market - a great finding indeed for his time, some 300 years ago.

The great Murray Rothbard scored an "own goal" by rubbishing Adam Smith in the first volume of his history of economic thought. It is interesting that Rothbard acknowledges the fact that it was at Mark Skousen's behest that he undertook to write his history. Yet, Skousen's own history of economic thought, which appeared later, begins and ends with Adam Smith, and is an excellent resource for all young students. You can order this book here. I attended Skousen's lecture in New Delhi at the launch of this book - and he had a bust of Adam Smith on the lectern. Skousen recommends a piece of classical music to go with each thinker: for Adam Smith he chose "Fanfare for the Common Man." Adam Smith truly sang this song. His books are full of disparagements of the high and mighty, and full of praise for the ordinary man. Indeed, in the 6th edition of Moral Sentiments he has a chapter on the "corruption of our moral sentiments": how we tend to admire the rich and highborn, neglecting the moral virtues of the humble butchers, bakers and brewers who provide us our lunch.

May these words of Adam Smith be immortal:

It is not from the benevolence of the butcher, the baker, or the brewer, that we expect our lunch, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

In other words: Shubh Laabh.

So today, here in Goa, I am having an "Adam Smith Lunch" to celebrate this great day. I will buy a leg of mutton from the local butcher, some bread from the local paowallah, and King's beer, the local brew. I will play the ROCK version of "Fanfare for the Common Man" by Emerson, Lake & Palmer real loud. I wish you could all be here for the party. However, wherever you are, you can do the same. May this day, the 5th of June, always be Adam Smith Day. Do not let the environmentalists (ugh!) steal this great day away.