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The Business: Adam Smith: The Elephant In The Chancellor's Drawing-room.

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'Adam Smith: the elephant in the chancellor's drawing-room':


Smith today is largely associated with a belief in the "invisible hand" of the marketplace, the need for "easy taxes" and the power of self-interest in driving economic progress. He is the elephant in the Chancellor's Kirkcaldy drawing-room. His intellectual importance cannot be overlooked but the ideas he is known for sit uncomfortably with those of Gordon Brown.

But, never a man to leave a loophole unplugged, the Chancellor has embarked on a campaign to rebrand Smith as something different -- something more like a pioneering sort of Scottish socialist. And he has encouraged an array of academics and others to publish papers, give speeches and write books to promote this new view of his 18th-century neighbour.


...yet the effort to rebrand Smith as an early Scottish socialist rests not so much on a misinterpretation of Smith as on a misinterpretation of capitalism, self-interest and the other supposed vices that are alleged to have annexed Smith's reputation to themselves today. One argument is that Smith was certainly no defender of merchants and manufacturers, and in fact distrusted them. Which is, of course, quite true. "People of the same trade," he wrote, "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."

But then Smith distrusted governments and regulation too. The same quote (oh, why can people not read just a little further?) immediately goes on to list the sort of things that aid and abet such price-fixing assemblies: laws such as compulsory registration and the creation of self-regulatory bodies.

What Smith thought was that people should be able to trade freely, without ministers, officials, or indeed would-be monopolists trying to stop them. It is a view that I myself both admire and share: I hate all coercion, whether it comes from monopolists or governments. That makes me a liberal, not a socialist.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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