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Who's Afraid of Adam Smith?

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Who's Afraid of Adam Smith?

How the Market Got Its Soul

Wiley,

15 min read
10 take-aways
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What's inside?

Discover how today's economists are reconciling Adam Smith's long-overlooked moral philosophy with his economics.

Editorial Rating

8

Qualities

  • Innovative
  • Well Structured
  • Background

Recommendation

Peter J. Dougherty has written a breezy tour of modern economics, concentrating on attempts to reconnect the dismal science with its roots in civil studies and moral philosophy. Although he is not an economist, he displays an easy familiarity with economics’ big ideas and their authors, and communicates them with style and wit. Dougherty’s knowledge of the field is broad, thanks to his decades of experience as an economics editor, but thankfully he does not bog readers down in the technical details. His book stresses the importance of social capital as well as the profit motive, and of strong civic institutions and communities as well as corporations. He offers a refreshing perspective in an era of corporate scandals and cautionary tales of greed. This slim volume contains no specific lessons that can be applied by individuals, but rather a dose of hope that capitalism can indeed encourage the best in people and companies, when institutions and incentives are properly designed by a democratic society. getAbstract.com suggests this book to non-economists who want a quick course in the economic and social potential of democratic capitalism.

Summary

Adam Smith, Economist and Philosopher

Many people, even intellectuals, think of economics as a dry discipline, overburdened with statistics and divorced from reality. In fact, economics is fundamental to our modern world. Economists have contributed substantially to the developed world's fantastic growth in living standards and income, yet these contributions have long gone unacknowledged. The story of the economists begins with Adam Smith (1723-1790), the Scottish Enlightenment thinker whose groundbreaking book, The Wealth of Nations, laid out the basics of capitalism. His volume of moral philosophy, The Theory of Moral Sentiments, is less well-known but just as important. These works unified his economic theories with his ideas about civil society.

Smith famously cites the division of labor as a building block of capitalism, but it is also a social invention. He showed that production — and hence profits — would increase if specialist workers each contributed a small part or skill to manufacturing a product. The principle works just as well for companies and countries. Other social inventions that Smith envisioned include contracts, insurance...

About the Author

Peter J. Dougherty is publisher and senior economics editor of Princeton University Press. His occasional writings have appeared in the Los Angeles Times, the Journal of Economic Literature, Economics and Portfolio Strategy, the Chronicle of Higher Education and The American Sociologist.

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