Bringing dead economists back to life: Adam Smith on the financial crisis

Posted: January 28, 2015 in economy
Tags: , ,

Quantitative easing? Bah humbug!
TIRED of lightweights bickering over the financial crisis and its aftermath? Of economic upheaval becoming merely fodder for intellectually dishonest political campaigns? Wonder what biggest thinkers might have to say? Our efforts to consult the giants of economist has been pre-empted by an unfortunate fact: many of the most important ones are not only dead, but dead long before governments and central banks began to concoct such unconventional policy tools such as quantitative easing. That explains their absence from the argument—so far.In an effort to cross over this divide notwithstanding the obstacles, your correspondent attended a lecture at the Harvard Club of New York on January 21st by James Otteson, a professor of political economy at Wake Forest University and editor of a new book, What Adam Smith Knew, Moral Lessons on Capitalism from its Greatest Champions and Fiercest Opponents. And he asked what the great Scottish economist might have to say about the most recent crisis.Mr Otteson was kind enough to channel Mr Smith in response by citing a string of illuminating passages. It is no surprise that the man who coined the terrm “invisible hand” would be no fan of overt government intervention. His dissent could be split into three intertwined categories: the temptation of governments to meddle at long-term cost to …

via Economic Crisis http://ift.tt/1ztolmn

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