Sunday, November 09, 2014

Redefining Adam Smith

I'm a big fan of philosopher and the father of modern economics Adam Smith, I have three copies of his seminal Wealth of Nations, including a rather interesting Depression Era edition.  So I was rather annoyed to read this "reinterpretation" of Smith by a Harvard researcher named Jonathan Schlefer. H/T Don Boudreaux at Cafe Hayek.


Adam Smith, often called the father of classical economics, told a very different story. Smith believed that each society sets a living wage to cover “whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.”

Except, as Boudreaux points out, Smith isn't referring to a "living wage", not even parenthetically,but about social customs and what are considered luxury goods. Here is the sentence in context.


Consumable commodities are either necessaries or luxuries
 V.2.148
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.

I don't suppose they teach academic ethics at Harvard, do they?

No comments: