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How Adam Smith’s Kidnapping Shaped His Understanding of Society and Markets

  When he was only three years old, Adam Smith had a dangerous experience. He was kidnapped by a group of wandering gypsies, and it was only after an effort by his family that he was retrieved. John Ray once vividly told the story of Smith’s disappearance. “The child was stolen by a group of passing gypsies, and the mother could never find him. Suddenly a gentleman said that he had come across a gypsy woman carrying a poor child a few miles away. The patrolmen set off at once. . . . Slee Forest found the gypsy woman. The woman dropped the child and ran away as soon as she saw the patrolman, and finally the child was brought back to the mother.”
  In the eyes of many people, this is not only the adventures of Young Smith, but also modern thinking Adventures with Civilization. Dugald Stewart, a friend of Smith’s, raved about the rescue because it “saved for the world a genius who was destined to extend the frontiers of science and to bring new ideas to European commercial policy.” New enlightenment and reform”.
  However, for the British scholar Jesse Norman, the story is more like a fable. He rewrote Smith’s biography after the 2008 global financial crisis. His narration of Smith’s life started with his disappearance, as if to tell the world: Today, Smith was stolen again, and we need to launch a search and rescue operation again to find him back. It’s just that everyone who misunderstood Smith stole Smith this time.

  Before expounding on Adam Smith’s thoughts, Jesse Norman talked meaningfully about the statue of Smith standing on the streets of Edinburgh: “Today, if you walk along the Royal Mile in the old city of Edinburgh, you will see Adam Smith from outside the monk’s gate. Go up the former residence of Smith and walk in the direction of the Customs House, and you will pass two great statues. The first one is the statue of Adam Smith, which was built with donations from the public. It is tall and glorious and stands outside St. Giles Cathedral. Behind him is an old plow and beside him is a beehive, which symbolizes the transition from an agricultural society to a commercial society and a market economy. His left hand is pinching his robe, suggesting that he devotes most of his time to academic life. His right hand is not very Prominent, also known as the ‘invisible hand,’ resting on a globe, euphemistically reminding viewers of his intellectual ambitions and worldwide reputation.” Another “great statue” is that of philosopher David Hume statue. They are both works by British contemporary artist Alexander Stoddart. Stoddart, of course, never met Smith, and had no way of knowing what Smith really looked like, because Smith did not leave any portraits. He can only create according to the figure of Smith in the world’s imagination, and portray Smith in people’s minds. Therefore, this statue is a projection of contemporary people’s minds, presenting people’s understanding of Smith today. Jesse Norman explains the metaphors represented by the robe, the globe, the old-fashioned plow and the beehive: these symbols allude to his philosopher status, his world reputation, and his background. The hidden right hand symbolizes his philosophical thinking-this is an “invisible hand”. In fact, if we remove all other symbols and only keep this “invisible hand”, we can recognize him. For modern people, the “invisible hand” is not just a rhetoric, it has even become a belief or ideology.
  Jesse Norman tries to tell us that Stoddart’s statue shows the situation of Smith and his teachings in today’s world: he is highly symbolized, and the real face of his thought is obscured and blurred. Due to the high reputation of “The Wealth of Nations”, Smith was widely quoted and used. “Nearly every great economist of the past two centuries has claimed to have been influenced by Smith; nearly every major branch of modern economics, from neoclassical to Austrian, Marxist, and most recently institutional economics economics, development economics, and behavioral economics all go back to Smith.” In Jesse Norman’s view, such references are merely a rhetorical device designed to use Smith to “glorify and embellish oneself.” beliefs or arguments” (p. 155). Scholars of various schools reinterpret Smith in their own ways from their own standpoints, but seldom understand Smith authentically. Therefore, in the process of thought reproduction for more than two centuries, people have created many “myths” about Smith. These “myths” weave into a huge dust net, covering the true nature of Smith’s thinking, and making us more and more far away from and misunderstand Adam Smith.
  Jesse Norman summarizes five myths: Adam Smith’s conundrum, Adam Smith advocates selfishness, Adam Smith speaks for the rich, Adam Smith opposes the government, economists are Adam Smith primary identity. In fact, these five myths are internally consistent. It can be summarized as a myth, that is, the “invisible hand” myth. It speaks to what the world believes, or stereotypes, about Smith: that he was an economist who defended free markets and opposed government intervention. Even in this free market, where actors follow the principle of self-interest, compete to pursue wealth and create extreme inequality, Smith still has to defend the economic order of the free market. Along with it, people also believed that the logical basis of the ideology of the free market economy was the “invisible hand”, and Smith’s greatest contribution was to clarify the function of this hand for the world. Therefore, the world’s belief in Smith is also the belief in the “invisible hand”. Therefore, people believe that the “invisible hand” can turn decay into magic and guide selfish individuals to achieve order and public interest in a free market. Of course, Smith’s critics shared the same stereotype, seeing him as “the originator of market fundamentalism.” For Adam Smith, his disciples and enemies share the same myth, the same symbolic understanding.

  In a sense, people’s symbolic cognition of Smith also reflects their abstract understanding of the economic world. Jesse Norman quotes Nobel laureate Milton Friedman at least twice, aiming to show that contemporary economics misunderstands Smith, as well as the self-enclosed economic theory and disregard for concrete reality . Friedman worked to shape economics as a science. In Methodology of Positive Economics, published in 1953, he challenged his critics: “The relevant question to ask about a theory’s ‘assumptions’ is not whether these assumptions are descriptively ‘realistic’ enough, Because they are never realistic, but whether these assumptions provide a good approximation to the goal at hand. And the answer to this question can only be found in whether the theory is valid, that is, whether it can produce sufficiently accurate predictions ’” Friedman emphasized that for economic theory, the efficacy of “accurate predictions” is more important than an accurate description of reality. He certainly believed that economics was a separate field that could be isolated from other things: the economy had its own laws, it could be the object of science, and therefore economics should also be a science. Such scientific efforts tend to overlook important factors in social reality. Jesse Norman commented with emotion: “Friedman’s challenge expresses his grand expectations for economics…but It also has the effect of diverting attention away from the specifics of the market that needs to be studied.” The
  scientificization of economics is turning itself into a closed and abstract theoretical system. Another phenomenon closely related to it is people’s idealized cognition of the market. In economic theory, the “efficient market hypothesis” has far-reaching influence. The “Efficient Market Hypothesis” regards the financial market as a perfect example of the market mechanism and fully demonstrates the market ideal of economics. It is the belief that, given enough freedom, the market can breed a sufficiently rich, healthy, and strong economy. At its origin, the scientific goal of economics and its market ideal are based on the belief in the “invisible hand”. When thinking blindly follows the “invisible hand”, theory tends to close itself, ignore and distance itself from reality. Blind obedience in thought will lead to blind obedience in policy, and blind obedience in policy may lead to social crisis and disaster.

  Jesse Norman believes that, at its root, the 2008 financial crisis was a crisis of ideas and knowledge. “There is a logical chain that deregulation is possible because there is effective competition in the banking sector, and that deregulation may have economic and social value, which forms the key intellectual background of the 2008 financial crisis. In retrospect, that What was striking about the crisis was not even the outrageously greedy self-interest of the banking system in the decade preceding it, nor the specific failures of related policies, laws, and implementation, but that the language of the free market had reached a consensus on almost everything. thought control, even though the reality is often very different.” Friedman and the “efficient market hypothesis” both trace their theoretical origins to Adam Smith. Therefore, after the financial crisis in 2008, Adam Smith inevitably became the object of public anger. Jesse Norman couldn’t help complaining about Smith: People’s “myths” about Smith were far from their real ideas, and even distorted and betrayed his thoughts and spiritual essence.
  Jesse Norman repeatedly emphasized the empiricism of Smith’s theory, highlighting its realistic vision. For the market, Smith also adopted a very pragmatic attitude, never harboring dogmatic utopian beliefs. “A theorist who is pragmatic rather than theoretical, concrete rather than utopian, inductive rather than universal, concerned with specific remedies rather than the biggest and smallest problems, Nor did he pursue a one-size-fits-all approach. He was deeply interested in the question of how markets go wrong.” Indeed, Adam Smith had a profound insight into the limits of markets, as shown in his famous critique of mercantilism : The merchant class has an innate tendency to monopolize, has knowledge advantages, and has insight into production and trade. Businessmen have the ability to deceive and capture state power. Therefore, if the market is allowed to be free, “crony capitalism” will prevail, businessmen will dominate national legislation, use policies to create monopoly, and win huge profits. Society will fall into injustice. As a result, the gap between the rich and the poor will intensify, class conflicts will intensify, and society will tend to split and decline. Therefore, the “system of natural liberty” that Smith favored is not the same as laissez-faire, nor does it allow people to do whatever they want. It puts forward moral normative requirements for market actors and natural justice normative requirements for government legislation.
  In response to the financial crisis of 2008, Jesse Norman cited “The Wealth of Nations” analysis of the bankruptcy of the Ayr Bank in 1772. There, Smith emphasized the risks inherent in financial markets, and the importance of prudent banking policy. Concerning radical laissez-faire claims, Smith observes: “Restraining, so to speak, private persons from accepting bankers’ bills at their own will, be they large or small; , these restrictions are artificial violations of natural liberty. The law’s vocation should be to support people’s liberty, not to infringe upon it… But if the exercise of natural liberty rights by a few may endanger the safety of society as a whole, then all of them should Restricted by law, this restriction has nothing to do with whether the government is free or despotic. It is as much a violation of natural liberty as building a firewall to prevent fire. It is the same here about the regulation of banking.” Jay Xi Norman can’t help feeling sorry: Smith’s disciples betrayed Smith, and until 2008, the financial industry did not build its own “firewall”, and policymakers even lost the sense of reality of building a “firewall”.

  The economic ideology about Smith closed the minds of the world, even if we misunderstood Smith, it also prevented us from understanding the reality correctly. Now that “Smith Myths” have become an ideological force that influences policies and shapes the real world, breaking down myths and understanding Smith authentically is not only a topic of intellectual history, but also an act of rebuilding order.
  The first step in action is to recover the background of Smith’s thought and return to the basic framework of his moral philosophy. This ideological background and basic framework is “human science”. Jesse Norman emphasized that Smith was the spiritual descendant of Bacon and Newton, and his theory also had strong empiricism. “Adam Smith built his ‘science of man’ for some forty years, drawing on many of Bacon’s fundamental assumptions. Like Bacon, Smith wished to construct a naturalistic, empirical theory. In fact, his ambition seems to be to provide a unified general account of the major aspects of human life, including morality, society, art, politics, and commerce.” “Science of Man” goes far beyond economics, Involves major aspects of human life. On the face of it, Smith’s two works belong to different fields (one is ethics, the other is economics). But in fact, they belong to the same theoretical system and are connected by the same logical chain. According to Smith’s own narration, the moral philosophy he devoted himself to elucidating included two branches, ethics and natural jurisprudence, and natural jurisprudence covered legal objects such as policy, revenue, and armaments. “The Wealth of Nations” is an elucidation of Smith’s “Science of the Legislator”, which partially fulfills Smith’s promise of writing natural jurisprudence. The question of justice connects The Theory of Moral Sentiments with The Wealth of Nations. The moral psychological mechanism of “sympathy” also endows its ethics and jurisprudence (including political economy) with a common human foundation. Therefore, in Smith’s theoretical system, economics is not an isolated and closed field of its own accord, but is attached to jurisprudence and moral philosophy. In Smith’s view, economic issues must be understood in combination with moral norms, international situations, national laws, and even the laws of civilization.
  Therefore, economics must step out of completely abstract theoretical contemplation and enter the real world of life. Smith’s theoretical thinking has always maintained a strong color of realism. At the same time, Smith had a unique insight, able to see the eternal foundation of order from the real disputes, and maintained confidence in morality and civilization. Smith did not escape the conflicts and wars in the real society. His mind was fully open and concerned about the real world, and he did not ignore the selfishness and evil in human nature. But, he also saw that no matter how selfish people are, we can break out of ourselves and empathize with the pain and joy of others. This “compassion” and compassion is the foundation of morality and civilization. He is committed to explaining the real history and society, analyzing the real emotions of human beings in detail, discovering the eternal moral laws, and showing the world the mechanism of order and civilization. Therefore, his moral and civilized beliefs are tested by reality, and therefore have great strength.
  Smith’s biography by Jesse Norman places particular emphasis on rebellions, wars, or revolutions in Smith’s life. In Jesse Norman’s pen, Smith’s life was accompanied by the nation-building and colonial expansion of the “United Kingdom” (the union of England and Scotland). The nascent United Kingdom only consolidated its regime after wars, and “accidentally gained the whole world” through competition. Therefore, the world Smith saw was a world full of wars and disputes. The imagery of war will inevitably infiltrate his theoretical thinking and become a major challenge that his moral philosophy must answer. Therefore, Smith modified Francis Hutcheson’s theory of sociality and made armament and defense one of the most important legal problems.
  Jesse Norman divides Smith’s life into five periods. At almost every stage of Smith’s life, England experienced major wars. From 1723 to 1746, Adam Smith grew from a “Kirkcaldy boy” to an Oxford graduate and completed his university education. During this period, the Scottish economy was full of “chaos and uncertainty”, and there were many disputes between England and Scotland. In 1745-1746, the United Kingdom was also hit by the last Jacobite rebellion. The brutal Battle of Culloden took place here, and the king’s army slaughtered the rebels.

  From 1746 to 1759, Smith returned to Scotland, where he first lectured on rhetoric and belles-lettres in Edinburgh, and later served as a professor of moral philosophy at the University of Glasgow, where he published A Theory of Moral Sentiments. From 1760 to 1773, Smith left the University of Glasgow to serve as the tutor of the Duke of Bucklew, and accompanied the Duke on a study tour in Europe. Since returning to England from Europe, Smith has been in close contact with the Duke of Bucklew, and visits the Duke every year in the city-state of Dalkeith in Edinburgh. In 1773, the Ayr Bank invested by the Duke of Bucklew collapsed. Smith helped the Duke deal with the aftermath, and analyzed the reasons for the bank’s failure in “The Wealth of Nations”, advocating that the bank should adopt a prudent and conservative lending policy. The Seven Years’ War (1756-1763) straddled these two phases, involving four European countries (Britain, France and their allies) and four continents. This war is of great significance and attracts worldwide attention, and Smith will certainly not remain indifferent.
  From 1773 to 1776, Smith lived in London, made friends with members of Dr. Johnson’s Club, and completed and published The Wealth of Nations. During this period, the conflict between London and the American colonies intensified. In 1775, the American War of Independence broke out. In 1776, the Declaration of Independence was signed. “The Wealth of Nations” was published in the same year, and used a lot of pen and ink to analyze the origin of the American colonies, the causes of the turmoil, and the countermeasures to resolve the imperial crisis.
  From 1776 to 1790, Smith bid farewell to his friend Hume and his mother Margaret, and finally passed away. During the last period of his life, Smith worked all the time. During this period he worked on the repeated revisions and reprints of The Moral Sentiments and The Wealth of Nations, and also took part in some customs affairs. In the past twelve years, Britain and Europe can hardly be called peaceful, and many major events have taken place. In February 1778, the United States achieved victory at Saratoga. In 1792, American officer John Paul Jones led a French squadron to destroy a British frigate and almost landed in Edinburgh. American independence sparked unrest in Ireland. The political situation in France is tense, and the Great Revolution is imminent. Smith, as always, followed these events and incorporated his latest thinking in revising his work. In this regard, Jesse Norman commented: “When attacking the mercantile system, “The Wealth of Nations” does not shy away from using current events in the American Revolutionary War as examples, and when reading the revised version of “Theory of Moral Sentiments”, we are very It’s hard not to think of the historical background of the Great Revolution.”
  Jesse Norman wants to tell readers that Smith’s theoretical thinking is rooted in his close attention and deep thinking about practical problems. Smith’s thoughts are strongly pragmatic, if we ignore his emphasis on real experience, we will misunderstand his theory. Moreover, Smith lived in an age of trade as well as of war. The “jealousy of trade” is raging, affecting people’s hearts and influencing national policies. When Smith criticized the “taboo of trade”, he must have a clear insight into it, and he would not naively think that trade would naturally create peace and order. For him, the “invisible hand” is a rhetoric, referring to the lowest natural order—the fundamental rationality that maintains social order. The “invisible hand” does exist, but it doesn’t work automatically. It needs the help of philosophers and the state: philosophers discover and elucidate “legislator science” through thinking about history and nature; sovereigns follow the requirements of “legislator science” to take actions to correct mistakes, resolve crises, and protect order. Smith has both the wisdom of a philosopher and the sensitivity of a historian, and his thoughts also have the characteristics of philosophy and history.
  We have misunderstood Smith, we have lost Smith, we have lost ourselves. In this post-crisis era, the political and economic world is like a huge maze, and Smith is the “Ariadne thread” that helps us get out of the maze smoothly. What guidance can Smith offer us? His works tell us: the market is complex and limited, the commercial society has its moral basis, and civilization and order require national wisdom. In addition, his life can also inspire us: his theoretical thinking has always been open to social reality, and he has never let himself fall into the quagmire of some utopian ideology. Jesse Norman seems to be calling us: get Smith back, return to his writings, and get his vision of reality. “Today, in a world of uncertainty, extremism, and misunderstanding, we need Adam Smith more than ever, and the wisdom to follow his ideas to the end.

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