Adam Smith’s Legacy Grows Alongside Threats to Free Economies

Adam Smith’s Legacy Grows Alongside Threats to Free Economies

David J. Teece

Two-and-a-half centuries ago, the legendary Adam Smith wrote a pair of seminal economic works that to this day echo through the global economy: The Theory of the Moral Sentiments (1759) and The Wealth of Nations (1776). Unfortunately, the ethical foundations of capitalism crafted by Smith and others are under fire, threatened in a world increasingly awash in mercantilist beggar-thy-neighbor policies, propagated by large and emerging economies alike.

Later this year, a group of concerned academics, business leaders and world citizens will gather at Smith’s private home in Scotland, Panmure House, and the nearby Balmoral Hotel, to reflect on what Smith saw as the moral and political underpinnings of capitalism; where economic theory and policy have gone in the intervening 250 years; and what we will need to do for democracy, society and the world economy to thrive over the next 250 years. Smith’s home was recently renovated by the Edinburgh Business School, so the gathering, in effect, will be the first international scholarly event held there.

Preserving Adam Smith’s Contribution to Economics Today

We’re calling the gathering “The New Enlightenment: Reshaping Capitalism and the Global Order in a Neo-Mercantilist World.” That might sound like a grandiose title, but I and other organizers believe it fits; our driving concern is that the ideas of the Scottish Enlightenment espoused by Smith and his friend David Hume are under threat from within and without. We will not gather just to fawn on Smith, but to take cues from him, as if he were there with us, and to articulate the economic problems that threaten the market system and liberal democracy. We will endeavor to find ways to shape a new future, bearing in mind the technological, institutional and political opportunities and threats confronting us. Not surprisingly, given the gravity of the current situation, the event’s central concerns are apparent all around the world.

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“The market system from which global prosperity has emerged over two centuries is now under attack from all sides, its basic legitimacy assailed from the right by critics of unfair competition and crony capitalism, from the left by campaigners against inequality and ‘market fundamentalism,’ ” Jesse Norman, a member of British Parliament, wrote last year in the Financial Times. “More than any other, the Scottish political economist and philosopher Adam Smith stands at the centre of this ideological battlefield, while around him clash competing views of economics, markets and societies.”

Honoring the Legacy of Adam Smith with a Gathering of Thinkers

In Smith’s time, Edinburgh was a “hotbed of geniuses” and the event’s organizers hope for something similar this summer, which will be the first major gathering of thinkers in Smith’s home since he died in 1790. The challenge attendees will face—while revisiting Smith’s groundbreaking ideas on free trade, enlightened self-interest, limited government, reliable currency and relatively unfettered markets—is to empower liberal democracies to out-innovate and outgrow autocracies.

If we don’t, our freedom is at risk—at home and abroad.


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