Adam Smith in Washington

Last week we took Adam Smith's Panmure House to Washington, DC for an evening of debate and dialogue at the British Embassy, with support from The Scottish Government's representation in the USA. In this year, the 300th anniversary of Smith’s birth, there is much to learn from Smith’s insight into human behaviour and political economy. While Smith’s time was very different to our own, there is much from his work that we can use to lead discussion on the challenges we face today.

I had the pleasure of introducing Panmure House to an audience that included diplomats, think-tankers, and World Bank staff, among others. The highlight of the evening was moderating a panel discussion with Branko Milanovic, Glory Liu, and Paul Rennie. Each was asked to bring a quote from Adam Smith. 

Paul Rennie OBE, Head of the Global Economy Group at the British Embassy, kicked off our discussion with a well-known quote from the Wealth of Nations:

"Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal, by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that." Wealth of Nations, I:II, p26.

For Paul this quote emphasises that all decisions entail trade-offs. Having returned the day before from Climate Week and the UN General Assembly in New York, Paul used this quote to discuss the challenges with finding policy solutions to climate change. Glory Liu expressed also that this quote is an example of Smith’s emphasis on the importance of persuasion. Smith never gave easy answers. He was always aware of trade-offs.

Glory Liu, Assistant Director for the Center for Economy and Society and Assistant Research Professor at the SNF Agora Institute at Johns Hopkins, and author of the excellent book Adam Smith’s America, continued our discussion with a quote from Smith’s equally important but far less known Theory of Moral Sentiments.

“This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments.” The Theory of Moral Sentiments I:III, 3.1.

Glory chose this quote because it's disarming to someone who isn't familiar with Smith, or only knows the "invisible hand Smith". Indeed, Smith for some is an icon of laissez-faire and no-nonsense capitalism. But a closer reading of Smith shows a much more nuanced picture. Smith was concerned about inequality and how it feeds the concentration of economic and political power.

Our discussion on this led nicely to a quote from the Wealth of Nations that Branko Milanovic, research professor at the City University of New York,  former head of research at the World Bank, and author of the new book Visions of Inequality.

“At the particular time when these discoveries were made, the superiority of force happened to be so great on the side of the Europeans that they were enabled to commit with impunity every sort of injustice...Hereafter, perhaps, the natives of those countries may grow stronger...and the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another” Wealth of Nations, IV: VII, p626.

Branko chose this quote because it perfectly matches the current world situation, while illustrating Smith's global thinking. The quote establishes a logical chain that goes from free trade and globalization which improve economic power of countries to natural political equilibrium which emerges from that equality. For Branko, this quote shows that global or inter-national equality is a prerequisite for stability as is within-national equality a prerequisite for domestic stability.

The evening continued with further drinks and discussion. We were delighted to have a whisky tasting provided by Aberfeldy. The 18-year single malt was quite a treat.

We hope this will be one of the many global activities we do at Adam Smith's Panmure House in the years to come. Although we want to bring the world to Adam Smith's home in Edinburgh, we want to bring to the world the legacy of Adam Smith and the continued relevance of his thinking to contemporary problems and challenges.

Adam Smith's Panmure House

Caroline Howitt

Edinburgh Business School

Heriott-Watt University

#AdamSmith300

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