Cox Discusses Misrepresentation
of Adam Smith's Writings
By Chantelle WallaceScholars have “highly misrepresented” 18th century economist Adam Smith’s views, said Marketing Professor Eli Cox at the Oct. 17 Faculty Research Presentation Speaker Series.
Cox has read all 3,900 pages of Smith’s published writings, as well as 10,000 pages about Smith and the subject of economics. “What I discovered was the Adam Smith I read about had very little bearing on the real Adam Smith—what he really said and believed,” Cox said.
Video: Watch Prof. Cox discuss Adam Smith and the nature of higher education in the 18th century. (wmv)
Smith’s most famous book, “Wealth
of Nations,” (1776)discussed virtue, prudence, selfishness and greed,
acknowledging the role self-interest plays in economics and human
relations. Interpretations of this work have blurred the lines among
these four traits, which Cox said “perverts” Smith’s original meaning
that prudence
—defined as “control of ourselves”—is the foundation upon which
the wealth of nation is built.
Incorrect interpretations of Smith’s work center around the tenet that if we all act greedily everything “comes out well in the wash—the invisible hand cleans up the mess.” Cox said this essentially amounts to believing that “public virtue comes from private vice,” with which Smith would not agree.
Cox believes economics should not be ethically neutral, but should follow a model that gauges ethical consequences. A descriptive model of economics describes phenomena without passing judgment while a normative model judges the existing circumstances by a standard of right and wrong. “Economists need to speak up more loudly about the ethical consequences of what they’re talking about,” Cox said.
Some economists posit a “faulty dichotomy” between personal and corporate ethics, which Cox said need to be integrated. “I have a stack of pages that represent all of my retirement saving, and I’m relying on hundreds of thousands of people to be honest for that paper to be worth anything more than paper,” Cox said. “Trust is vital and the law is not adequate to impose trust.”
Acknowledging that white-collar criminals often remain undiscovered, Cox said such unethical actions are always destructive. “I think Enron and WorldCom did much more damage to the fabric of society than September 11 because when we can’t trust each other, that’s the end of it.”
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
Video: Watch Prof. Cox discuss Adam Smith and the nature of higher
education in the 18th century. (wmv)
See upcoming and past speakers at the school.
