Nicholas Phillipson’s new biography of Adam Smith would have deserved all the praise it has received, if slavery had not been such a fundamental contributor to the wealth that Smith, Glasgow, and Scotland enjoyed. Philliipson’s omission of the role of slavery in early capitalism, however, continues the legacy of an economics of dissociation that began with Smith’s The Wealth of Nations. It is time to tell the whole truth, or at least those elements that could actually promote the integrity of economics. See my review of Phillipson’s book, Adam Smith: An Enlightened Life, in the August issue of the Review of Social Economics
The last city on my recent trip to Ireland and Scotland was Glasgow; a city whose early wealth depended on the labor of African slaves in the British colonies. If there were one city in Europe that should be obligated to pay reparations for African slavery, it would be Glasgow.
Sometimes a picture is worth a thousand words, or almost a thousand. As I demonstrate in Civilizing the Economy, Adam Smith knew that the slave-based tobacco trade was a major source of wealth in Scotland and especially in Glasgow, where he lived when collecting material for The Wealth of Nations. Instead of telling us this, he tells us about the invisible hand, a good illustration of what we can call the economics of dissociation: a process of splitting off the misery of the real providers of wealth and then feeling optimistic about market dynamics.
One of the key ideas in modern economics is the idea of scarcity. In fact, sometimes economics is defined as the “allocation of resources in the context of scarcity.”
Scarcity means that there is not enough to go around. If everyone had access to everything they desire, there would be no economics. There would be no need to determine how to allocate resources. At least that is one view of the field of economics. This notion of scarcity, however, is a bit more complicated than it might appear.
