Fantastic! That's what I thought when I heard that Bank of England governor Mervyn King had decided to put Adam Smith's image on the reverse of the new £20 note. In celebration here are a few quotes from the great man:
The wonder of free markets: “Every individual... generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
The benefits of self-interest: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
The preconditions for wealth: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
Monopolistic behavioiur: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Relative poverty matters: "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. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them.”
Man is a social being - not just an economic calculator: "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it."
The Scots have their own money. Can we look forward to a picture of an Englisman on theirs at any time in the future?
If Gordon Brown wanted to replace Elgar, it should have been with the Englishman, William Wilberforce. A very apt figure for this, the 200th anniversary of the abolition of the slave trade. Still, at least Brown is making it clear that he expects English money to serve Scotland's (and the Not Labour Party) wants and expectations from the English taxpayer.
Don't be surprised when you start finding these Scottish notes with Celtgeld written across Smith's face.
Posted by: Henry | March 14, 2007 at 08:49
Henry:The Scots have their own money. Can we look forward to a picture of an Englisman on theirs at any time in the future?
Edward I? Oops - really a Frenchman. Butcher Cumberland? Hmm, German.
It's got to be Maggie.
Posted by: William Norton | March 14, 2007 at 08:59
This year is the 150th Anniversary of the birth of Sir Edward Elgar...what better year for Brown to have a Scotsman appear on Bank of England notes...a Scotsman who dropped out of Balliol Colege, Oxford to return to Glasgow but whose father had been a Customs Officer.
Why is Adam Smith the rage ? Mandeville's Fable of the bees predates it.
Why not John Locke on the banknote ?
Why not William Tyndale ?
Why not Joseph Swan, Joseph Whitworth, Humphrey Davy, Clerk Maxwell, Frank Whittle, Henry Royce,
Posted by: TomTom | March 14, 2007 at 09:07
Edward I? Oops - really a Frenchman. Butcher Cumberland? Hmm, German.
It's got to be Maggie.
Posted by: William Norton
Low IQ? Which bit of William Wilberforce didn't you understand? I'll spell it out for you
W I L L I AM W I L B E R F O R C E
Celtgeld aka Barnett Formula
Posted by: Henry | March 14, 2007 at 09:16
I was wondering whether you were going to broach the subject or not. This Smith is the only Scottish Smith that I could countenance one one of our banknotes, shame the rest of the populus appear to be ignorant!
Posted by: Curly | March 14, 2007 at 09:26
Wasn't there some bother about Brown and the Adam Smith institute a few weeks ago, which I saw on Iain Dale's blog?
Adam Smith, wasn't he the one who indirectly caused the Irish famine, with his free market philosophy?
I want a Scot on an English banknote about as much as I want a Scot in an English Parliament - which is not very much.
Being English these days means that while in England one gets "Britishness" rammed down one's throat, yet the moment one crosses a national border out of England into Scotland or Wales, one gets one's Englishness rammed down one's throat.
Yes Celtgelt is an excellent name for the Barnett Bribe.
Posted by: Stephen Gash | March 14, 2007 at 10:01
very soon new labour will drop the name of bank of England for the bank of britain,any bets?
Posted by: tally | March 14, 2007 at 10:05
The invisible hand was an essential device for explaining the economic benefits to be derived from business activity in the 18th century. Only God could be claimed to be good at that time. Hence the British cultural slant ever since that businessmen are purely selfish and interested in their own gain. It all began with Adam Smith.
This emphasis has deprived us of much dynamism, consigning the creativity, generosity and imaginative aspects of our business lives a tiny space, granting all the big slots to money, desire, ambition and greed.
Ironically, the very moment that Adam Smith has finally become politically correct in all camps, is the one when he should be being substantially revised. Business and its part in human life needs to encapsulate the good in man, and see the broad scope of his motivations, not be limited to the grubby and negative, as would of course appeal to Gordon Brown all the way to his tax tank.
Businessmen and their employees and customers should demand a more benign profile for their activities and ideas. It is they who will develop the new technologies that will save the planet - not some oaf of a Chancellor with an enlarged ego and a need to belittle the efforts of those who have to fund his barmy schemes.
Adam Smith is well out of date - not because he ran the risk of incurring the wrath of the 18th century church by pointing out the good in business, but because he refused to see that it is the goodness in the intentions of those minded to build organisations and support others, which is just as vital a part of how our society works, as the selfish aspect. We need a new economic theory based on a desire in all humans to create contentment. In fact a reversion to the John Locke original form that Smith derived his ideas from.
The modern world needs a more positive view of itself. It's time for change as David Cameron is saying. Trust Gordon Brown and the rest to get it wrong.
Posted by: Tapestry | March 14, 2007 at 10:19
Stephen Gash wrote: "Adam Smith, wasn't he the one who indirectly caused the Irish famine, with his free market philosophy?"
_________________________________________
May we have more precision here please?
Adam Smith, wasn't he the SCOT who indirectly caused the Irish famine, with his free market philosophy?
Credit, where credit is due, and by Heaven don't they take it, but debit the English!
Posted by: Edward Longshanks | March 14, 2007 at 10:19
What a horrible, tacky sight.
Posted by: Edward | March 14, 2007 at 10:53
The Celtgelt Formula strikes again, Scottish nurses - full pay rise.
English Nurses - a wee bit now and a wee bit a wee bit later.
Another item to add to the list of why England should have her own Parliament.
"another 20 quid for Scotland" that's my message whenever I see Smith's face.
Posted by: Patrick Harris | March 14, 2007 at 10:59
So Adam Smith caused the Irish famine. That's a new one.
I could have sworn that potato blight had something to do with it. It also bears mentioning that there was massive humanitarian intervention from Ulster and the British mainland, to try to relieve suffering in the face of this massive naturally occurring catastrophe. It is absolutely disgusting to read on this site claims of the type seen above.
Adam Smith was a great man whose principles have stood the test of time. At a time when we are being taxed out of existence to pay for non-jobs in the state sector, as well as drowning in Euro-regulation, Adam Smith's market-based philosophy is more relevant now than at any time since 1979.
George Osborne should read "Wealth of Nations" as a matter of urgency, and act on it in his policy formulations.
Posted by: Chris Williams | March 14, 2007 at 11:19
Stephen Gash: Adam Smith, wasn't he the one who indirectly caused the Irish famine, with his free market philosophy?
You mean it wasn't David Cameron?
Posted by: William Norton | March 14, 2007 at 11:25
I am really rather stunned! Don’t we believe in free markets anymore?
So Adam Smith was a Scot (at least partly educated here). I am far more interested in ideas and his ideology than I am in reflecting today’s bickering upon historical figures – that is the sort of thing the left does.
To all those who are objecting, would they prefer to see Keynes? Gordon Brown has certainly taken us through a Kensyain boom, so it would be appropriate, but better to celebrate him than Smith?
Posted by: James Sproule | March 14, 2007 at 11:26
To all those who are objecting, would they prefer to see Keynes?
YES PLEASE ! the author of The Treatise on Money, The General Theory, The Economic Consequences of the Peace, together with works on Probability, and on the insurance Industry
Oh yes - emphatically so since Keynes brought Classical Economics OFF the Marxist track it had been shunted onto.
Adam Smith like David Ricardo believed in Labour Theory Of Value which is the fundamental basis of Das Kapital and Marxist Economics
Posted by: ToMTom | March 14, 2007 at 11:54
Good news, and a rare but pleasing instance of the free market being rightly celebrated.
I'm assuming the notes themselves don't look quite so monopoly money-ish as the specimen, though...
Posted by: Mark Wallace | March 14, 2007 at 13:03
Yes Sir Dudley North (and many others) wrote in defence of free trade and limited government long before Adam Smith.
Also "The Theory of Moral Sentiments" is a better book than "The Wealth of Nations" (there are a lot of errors in the inquiry into the causes of the W. of N. - if you compare it to say Turgot's work or even to Smith's own early work). Such errors as the Labour Theory of Value (which sent economics into a blind ally for a long time) are partly due to Adam Smith.
However, "give the man a break" - he was generally pro free markets. Even if did make some gestures in favour of government intervention (such as his support for the Bank of England which almost makes his face on the notes understanable, although he would not have supported the present fiat money system, - unlike the face of President Andrew Jackson on American money, a man who hated central banking and paper money with a passion, putting his face on the Federal Reserve notes shows that some people in power had a sense of humour).
As for "Adam Smith" or "free markets" being in the cause of the Irish mass death in the 1840's - simply not true.
Not only was massive government help in the 1840's (the first time a Irish mass death event had ever attracted such help and there had been many in the past, some of which back fired - for example by bringing Irish people together in "road to nowhere" projects that left them open to the spread of sickness). The peasant plot agricultural system was caused by prior government interventions.
Namely the land confiscations of the 17th century and the web of statutes in the 18th century that made sure that the Roman Catholics (the great majority of the population) were reduced to peasant plots. And the web of laws that hit Irish trade and (therefore) prevented an industrial revolution in Ireland.
The statutes were gone by the 1840's - but they had done their evil work, they left Ireland "an accident waiting to happen".
Posted by: Paul Marks | March 14, 2007 at 13:48
Murray Rothbard, the Austrian School economist, accused Adam Smith of plagiarising from the work of Richard Cantillon. Click here to read the article on the Ludwig von Mises Institute's website. Rothbard also explains Smith's influence on Karl Marx.
Posted by: thatcherite | March 14, 2007 at 15:20
Adam Smith, wasn't he the one who indirectly caused the Irish famine, with his free market philosophy?"
Well, I think's that an original point of view. I'm not aware that it's ever occurred to any historian of the Irish Famine.
Posted by: Sean Fear | March 14, 2007 at 15:21
Why does it matter that Adam Smith was Scottish? I support an English parliament, but objecting to his image on bank notes simply because of where he was born is petty. Surely, what he achieved is more important.
If we put Milton Friedman image on there - a man whose economic ideas shaped Thatcherism and thus saved this nation, would we complain because he was American?
Posted by: Jon White | March 14, 2007 at 15:40
What an ugly design. I can't help but notice the similarities with the €20 note either - the colour, the big white band down the right-hand side, that really horrible pound sign in the middle which isn't too dissimilar to the euro sign if inverted...
They really missed a trick with their subliminal messages by not including a picture of Roy Jenkins instead of Adam Smith. (Before the usual jingoistic Celtophobic bleating starts about him being Welsh, not English, I would like to point out that 'Bank of England' currency is the legal tender of both nations and actually issued from Llantrisant in south Wales...)
Posted by: Daniel VA | March 14, 2007 at 16:18
Daniel VA; "I can't help but notice the similarities with the €20 note either - the colour, the big white band down the right-hand side, that really horrible pound sign in the middle which isn't too dissimilar to the euro sign if inverted..."
The first thing I said when I saw this was how much it looked like a Euro note. Just like the £2 coin with the silver and gold parts, not unlike 1 and 2 Euro coins.
They're taking over...
Posted by: Chris Heathcote | March 14, 2007 at 16:46
A pity he flirted with the labour theory of value.
Posted by: Richard | March 14, 2007 at 17:22
"Oh yes - emphatically so since Keynes brought Classical Economics OFF the Marxist track it had been shunted onto."
I thought Carl Menger and co did that? Or was their influence not strong enough?
Posted by: Richard | March 14, 2007 at 17:24
Richard is right about Carl Menger and co (presumably other Austrians such as Shumpeter.)
It was Hayek, rather than Friedman, who influenced Lady Thatcher. Hayek was also a major influence on Churchill. Ronald Reagan was a devotee of Hayek's mentor, Ludwig Von Mises.
Posted by: thatcherite | March 14, 2007 at 18:32
Richard is right about Carl Menger and co (presumably other Austrians such as Shumpeter.)
It was Hayek, rather than Friedman, who influenced Lady Thatcher. Hayek was also a major influence on Churchill. Ronald Reagan was a devotee of Hayek's mentor, Ludwig Von Mises.
Posted by: thatcherite | March 14, 2007 at 18:32
The Scots have their own money. Can we look forward to a picture of an Englisman on theirs at any time in the future
Not only was the Bank of England (like the fraudulent Bank of France) founded by a Scot; the only notes that are legal tender in Scotland are B of E notes. You aren't legally obliged to accept notes issued by Scottish banks in Scotland any more than you are obliged to accept them in England.
I am distraught, having missed by 10 minutes my chance to contribute to the Heath thread. However it's good to see that CH is now attracting so many staunch patriots.
Posted by: Alex Forsyth | March 14, 2007 at 18:48
"Yes Sir Dudley North (and many others) wrote in defence of free trade and limited government long before Adam Smith"
Dudley North died in 1691 and said all these things long before Adam Smith , who died in 1790 -Smith relied upon North's ideas for some of his writing .
But North made on great mistake you see - he was English . Therefore , all reference to him must be expunged from the record and his very existence airbrushed away by the Scottish dominated British state .
I would put North on English notes - he needs to be resurrected .
The Scots can put Smith on their own notes if they like .
Posted by: John | March 15, 2007 at 11:08
I see what you mean, John. Some will not be happy with this, though. And check out the Telegraph today.
Sir Dudley North (May 10, 1641 – December 31, 1691), English economist, was 4th son of Dudley, 4th Lord North, who published, besides other things, Passages relating to the Long Parliament, of which he had himself been a member.
In his early years he was carried off by Gypsies and recovered with some difficulty by his family--an incident curiously similar to that which befell Adam Smith in his infancy. He engaged in foreign trade, especially with Turkey, and spent a number of years at Constantinople and Smyrna. Some notices of the manners and customs of the east were printed from his papers by his brother.
Having returned to London with a considerable fortune, he continued to prosecute trade with the Levant. His ability and knowledge of commerce attracted the attention of the government, and he was further recommended by the influence of his brother Lord Guilford. During the Tory reaction under Charles II he was one of the sheriffs forced on the city of London with an express view to securing verdicts for the crown in state trials. He was knighted, and was appointed a commissioner of customs, afterwards of the treasury, and again of the customs. Having been elected a member of parliament under James II, he took, says Roger North, the place of manager for the crown in all matters of revenue. After the Revolution he was called to account for his alleged unconstitutional proceedings in his office of sheriff.
His tract entitled Discourses upon Trade, principally directed to the cases of the interest, coinage, clipping and increase of money, was published anonymously in 1691, and was edited in 1856 by JR McCulloch in the Select Collection of Early English Tracts on Commerce printed by the Political Economy Club of London. In this thorough-going and emphatic assertion of the free-trade doctrine against the system of prohibitions which had gained strength by the Revolution, North shows that wealth may exist independently of gold or silver, its source being human industry, applied either to the cultivation of the soil or to manufactures. It is a mistake to suppose that stagnation of trade arises from want of money; it must arise either from a glut of the home market, or from a disturbance of foreign commerce, or from diminished consumption caused by poverty. The export of money in the course of traffic, instead of diminishing, increases the national wealth, trade being only an exchange of superfluities. Nations are related to the world just in the same way as cities to the state or as families to the city. North emphasizes more than his predecessors the value of the home trade.
With respect to the interest of capital, he maintains that it depends, like the price of any commodity, on the proportion of supply and demand, and that a low rate is a result of the relative increase of capital, and cannot be brought about by arbitrary regulations, as had been proposed by Sir Josiah Child and others. In arguing the question of free trade, he urges that every advantage given to one interest over another is injurious to the public. No trade is unprofitable to the public; if it were, it would be given up; when trades thrive, so does the public, of which they form a part. Prices must determine themselves, and cannot be fixed by law; and all forcible interference with them does harm instead of good. No people can become rich by state regulations, only by peace, industry, freedom and unimpeded economic activity. It will be seen how closely North's view of things approach to that embodied some eighty years, later in Adam Smith's great work. North is named by Wilhelm Roscher as one of that great triumvirate which in the 17th century raised the English school of economists to the foremost place in Europe, the other members of the group being Locke and Petty.
Posted by: Henry | March 15, 2007 at 12:37