Keynote Address

Uses and Abuses of Adam Smith

Amartya Sen

1 When Adam Smith died in Edinburgh in July 1790, the reputation of the Scottish philosopher and economist was more secure in France than it was in England. Smiths ideas were often invoked by revolutionary authors across the Channel (such as the Marquis de Condorcet), and there can be little doubt that he was a very established figure in French intellec tual circles. To be sure, Smiths writings were well known in England as well, and even his first book, The Theory of Moral Sentiments, published in 1759, had been widely read there, and indeed as David Hume wrote to Smith from London shortly after the publication of the book, The Public seem disposed to applaud [your book] extremely (quoted in Raphael and Macfie 1976, 25). However, while the French admirers of Smiths radical thoughts were already in some kind of an equilibrium about what his views were, the English image, which would emerge later, of a deeply conserva tive Smith, a mouthpiece for the unalloyed virtues of the market (allegedly articulated in his second book, The Wealth of Nations, published in 1776), had hardly been initiated. That image would emerge and become the stan dard view of Smith only in the decades following Smiths death.
It is a great privilege for me to have the opportunity of speaking in celebration of Craufurd Goodwins remarkable leadership over four decades in editing the History of Political Economy and in making it such an admirable academic journal. History of Political Economy 43:2 DOI 10.1215/00182702-1257388 Copyright 2011 by Duke University Press

258

History of Political Economy 43:2 (2011)

Even in 1787, only three years before Smiths death, Jeremy Bentham grumbled about Smiths inability to see all the virtues of the market econ omy, and he took Smith to task in a long letter he wrote to the father of modern economics, arguing that the Glaswegian should leave the market alone rather than criticize it for its inability to control those whom Smith called prodigals and projectors and that Smith should give up support ing state regulation of financial transactions.1 Bentham may have missed the force of Smiths reasoning on this subject (indeed I believe he certainly did that), but his diagnosis that Smith was skeptical of the pure market economy was not mistaken. Before long, however, Smith would emerge in the image in which he is mostly seen in standard views today, as a politi cal spokesperson for simple slogansmostly freemarket slogansrather than as one of the finest authors of sophisticated theories of societies and economies, whose skepticism about markets was as firmly based as his insistence on the recognition of those good things that the markets do and markets alone can do. What Bentham had failed to do through arguing with Smiththat is, making Smith an uncomplicated champion of pure marketbased capitalismwould be achieved in the world of imagination in the centu ries to follow through faulty analysis of Smiths works, including severely selective citations. That distorted image of Smith, which has been the source of so much abuse of Smiths ideas, would solidify in the century after Smiths death, and it came to be canonized in the twentieth century. It remains the standard understanding of Smith today in mainstream eco nomic textbooks and in daily newspapers (despite protests from serious Smith scholars). 2 Abuses of Adam Smith are at least as prevalent today as the uses of his balanced argument for supporting a society with multiple institutions in which the market would play its part, without being hostile to the impor tant roles of other institutions, including those of the state. In Smiths analysis those othernonmarketinstitutions can, in turn, play their part
1. Bentham included this letter in the second of the two prefaces he wrote for the second edition of his combative defense of the market economy against regulations that restrain usury: Defence of Usury.

Sen / Uses and Abuses of Adam Smith

259

in, for example, providing public goods like basic education and offering economic support for the poor, in addition to doing something to regu late the market to the extent that it requires regulation. The three lessons that are drawn by the champions of profit-based mar ket capitalism from their reading of Smith are, first, the self-sufficiency and the selfregulatory natureof the market economy; second, the ade quacy of the profit motive as the basis of rational behavior; and third, the adequacy of selfinterest as socially productive behavior. Arguments can, of course, be presented in favor of each of these claims, and what is impor tant herein the context of the subject of this lectureis not so much to note that these arguments are hard to sustain (although that is indeed the case), but to recognize that those arguments are not Smiths. Let me con sider each of these wrong attributions in turn. Adam Smith never used the expression capitalism, as far as I have been able to find, but more importantly there is nothing in his writings that would indicate that he believed in the self-sufficiency of the market econ omy. It is certainly true that Smith showed the usefulness and dynamism of the market economy in The Wealth of Nations in a way that had not been done by anyone earlier, and he explained why and how that dynamism worked. Smiths causal investigation provided an illuminating diagnosis of the rationale of the market economy just when a much extended market system and its evident vitality were powerfully emerging, and the contri bution that The Wealth of Nations made to the understanding of this part of economics, among others, was absolutely monumental. Smith showed how the freeing of trade can very often be extremely successful in gener ating overall economic prosperity through specialization in production and division of labor and in making good use of economies of large scale. Those lessons remain deeply relevant even today. The economic analyses that followed those early expositions of markets and capitals in the eigh teenth century have succeeded in solidly establishing a good understand ing of the rationale of the market system in the corpus of mainstream economics. To acknowledge this achievement has to be a part of the rec ognition of the great use that Smiths ideas continue to haveeven in the contemporary world. However, even as the positive contributions of capitalism through mar ket processes and the profit motive were being clarified and explicated, its negative sides were also becoming clearto Adam Smith himself. While a number of socialist critics, most notably Karl Marx, would present later

260

History of Political Economy 43:2 (2011)

on the case for censuring and ultimately supplanting capitalism, even to Adam Smiththe trailblazing exponent of the rationale of the market economythe huge limitations of relying entirely on the market economy and only on the profit motive were absolutely clear. I should note here, as a matter of some historical interest, that Marx was a deep admirer of Smith and saw himself as someone who followed and further developed the analysis that Smith had started. Given that con viction, it is perhaps not surprising that Marx was very dismissive when John Stuart Mill, of whom Marx thought rather little, claimed to be a fol lower of Smith. Marx (1992, 221 n. 33) wrote bitingly against what he saw as Mills pretensions: John Stuart Mill, with his usual eclectic logic, understands how to hold at the same time the view of his father, James Mill [a close follower of Jeremy Bentham], and the opposite view. On a comparison of the text of his compendium, Principles of Political Economy, with his preface to the first edition, in which preface he announces himself as the Adam Smith of his daywe do not know whether to admire more the simplic ity of the man, or that of the public, who took him in good faith, for the Adam Smith he announced himself to be, although he bears almost as much resemblance to Adam Smith as say General Williams, of Kars [who failed to defend his fortress when it was attacked by the Russians in 1855], to the Duke of Wellington. The revolutionary Marxs claim to be the true disciple of the allegedly conservative Smith does, of course, call for critical scrutiny, and yet given Smiths skepticism of the market it is not as incredible a thought as it would appear today to those reared in the contemporary mischaracteri zation of Smith as a great believer in nononsense capitalism. Consider Smiths analysis of the promoters of excessive risk in search of profits, whom he called prodigals and projectors. This, by the way, is quite a good description of the dodgy entrepreneurs of credit swap insur ances and subprime mortgages in the recent economic crisis. Smiths use of these terms was entirely pejorative. For example, by projector Smith did not mean those who form a project, but meant it specifically in its derogatory sense, apparently common from 1616 (so I gather from the Shorter Oxford English Dictionary), meaning, among other things, a promoter of bubble companies; a speculator; a cheat. Indeed, Jonathan Swifts unflattering portrayal of projectors in Gullivers Travels, pub

Sen / Uses and Abuses of Adam Smith

261

lished in 1726 (fifty years before The Wealth of Nations), corresponds closely enough to Smiths deployment of that word.2 In arguing against Smiths critique of the market economy, Bentham maintained, among other things, that those whom Smith called projec tors were also the innovators and pioneers of economic progress. As it happened, Bentham did not manage to persuade Smith to change his mind on this indictment, even though Bentham kept on hoping to do just that, and on one occasion convinced himself, with little evidence, that Smiths views on this had become at present the same as mine. Smith knew the distinction between innovating and projecting well enough, and he gave no real evidence of changing his mind on this subject. Now more than two centuries later, the distinction remains sadly relevant as we try to understand the nature and causation of the crisis that has hit the world of finance. Unwavering faith in the wisdom of the stand-alone market economy, which is largely responsible for the removal of the established regulations in the United States, tended to assume away the activities of prodigals and projectors in a way that would have shocked the pioneering exponent of the rationale of the market economy. As Smith ([1776] 1976, 35657) warned, relying entirely on an unregulated market economy can easily pave the way for a great part of the capital of the country being kept out of the hands which were most likely to make a profitable and advanta geous use of it, and thrown into those which were most likely to waste and destroy it.3 3 There is, furthermore, much more in Smiths analysis on the role of the state in regulating markets. Smith saw the task of political economy as the pursuit of two distinct objects: first, to provide a plentiful reve nue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the pub lick services (428).4 Smith saw the role of the state to include adequate
2. I draw here on Professor Giorgio Basevis work on these parallels. 3. Vol. 1, bk. 2, chap. 4, paras. 1415. 4. Vol. 1, bk. 4, introduction, para. 1.

262

History of Political Economy 43:2 (2011)

provision of public services, such as free education, and to arrange poverty relief. Unlike Malthus, Smith did not reject the rationale of the Poor Laws. Rather, he thought the Poor Laws needed reform, in particu lar through allowing greater freedom, particularly of locational move ment for the indigent who receive support, than the rather punitive Poor Laws provided. Going beyond his investigation of the demands of a well functioning market system, Smith was deeply concerned about the ine quality and poverty that might survive in an otherwise successful market economy. Indeed, even in dealing with regulations that restrain the markets, Smith saw the case for interventions in the interest of the poor and the underdogs of society. At one stage he gives a formula of disarming simplicity: When the regulation, therefore, is in favour of the workmen, it is always just and equitable, but it is sometimes otherwise when in favour of the masters. (35657)5 Underlying the plural institutional structure that Smith proposes is not only Smiths skepticism of the reach of the market, but his attempt to marry state intervention with the pursuit of the interests of the poor. 4 I turn now to the second issuethe misinterpretation of Smiths view on the demands of rationality in human behavior. Smith did not, of course, argue that rational thinking is the basis of all our actions, and he did give much room for emotions and sentiments in the narrower sense (although perhaps not as much as David Hume did). But he did think that even our instinctive reactions to particular conduct cannot but rely if only implicitlyon our reasoned understanding of causal connec tions between conduct and consequences in a vast variety of instances. Furthermore, first perceptions may also change in response to critical examination, for example on the basis of causal empirical investigation that may show, Smith ([1790] 2009, 377) noted, that a certain object is the means of obtaining some other. And in the pursuit of reasoning (and this is the central issue here), a great deal more than self-interest and selfish ness canand doescomes into Smiths investigation.6
5. Vol. 1, bk. 1, chap. 10, pt. 2, para. 61. 6. See Rothschild 2001.

Sen / Uses and Abuses of Adam Smith

263

Misinterpretation of Smiths analysis of reasons for action has been a rampant feature of twentiethcentury economics. For example, in two wellknown and forcefully argued papers, the famous Chicago economist George Stigler has presented his selfinterest theory (including the belief that selfinterest dominates the majority of men) as being on Smithian lines.7 Stigler was not really alone or idiosyncratic in that diagnosisthis is indeed the standard view of Smith that has been powerfully promoted by many writers who constantly invoke Smith to support their belief in the unique rationality of the profit motive. A great many economists were and some still areevidently quite enchanted by something that has come to be called rational choice theory in which rationality is identified with intelligently pursuing only ones self-interest. If you do something for any one else, this can be rational, in this theory, only if you get something from it yourself. Following that odd presumption in modern economics, the alleged views of Smith, even though entirely implanted, have invaded neighboring disciplines as well, and a whole generation of rational choice political analysts and of experts in socalled law and economics have been cheerfully practicing the same narrow art. There is no room in this as if Smith for generosity, or social commitment, or public spiritvalues the reasonableness of which Smith discussed in considerable detail in The Theory of Moral Sentiments. I have argued elsewhere that while some men are born small and some achieve smallness, it is clear that Adam Smith has had much smallness thrust upon him.8 The Theory of Moral Sentiments opens, in fact, with the following sentence: 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 ([1759] 2010, 13). Smiths analy sis is further developed as the book proceeds, and he makes particular use of his thoughtexperiment of the impartial spectator as a device for reasoned selfscrutiny, of which, he thought, reasoning human beings are perfectly capable. As Smith ([1759] 2010, 133) put it: We can never survey our own sentiments and motives, we can never form any judgment concerning them; unless we remove ourselves, as it were, from our own natural station, and endeavour to view them as at a certain distance from us. But we can do this in no other way than
7. See Stigler [1971] 1975, esp. 237, and Stigler 1981, esp. 176. 8. This issue of misinterpretation is more fully discussed in Sen 1986, 1987, and 2010a.

264

History of Political Economy 43:2 (2011)

by endeavouring to view them with the eyes of other people, or as other people are likely to view them. Smith distinguishes with great sophistication the different kinds of rea sons people have in taking an interest in the lives of others, separating out sympathy, generosity, public spirit, and other motivations, each of which differs from the others, and yet all of which have the implication of taking people away from selfish pursuit of their own interests. He dis cusses how reasoning, which is at the heart of rationality, has a big role in preventing us from being consciously selfcentered or unconsciously uncaring. There is nothing much in common between Adam Smith and the champions of rational choice theorists, despite their inclination to invoke Smith as their guru. However, the mistaken interpretation of Smith is so common now that even those who argue against modeling human beings on the lines of rational choice theory often describe their enterprise as a rejection of Smithian understanding of human reasoning and choice. It is not only that this is a false attribution, but the critics of the narrowness of rational choice theory can add to the force of their arguments through making use of the subtle distinctions that Smith makes of the different kinds of motivations that can influence human reasoning and move peoples choices and deci sions away from the singleminded pursuit of selfinterest. 5 I turn now to the third issue: does this kind of broadening exercise help in building a good society, including a wellfunctioning market economy? And here we run into a further misinterpretation of Smith about human behavior, in particular about the kind of behavior that is needed for a flourishing market economy, and going beyond that, for making the soci ety good or acceptable. The question that remains is this: how could Smiths unambiguous emphasis on the need for going beyond selfinterest and what he called selflove have been so comprehensively neglected in a large number of economic treatises and textbooks? One reason for this neglect is a confusion between seeing the adequacy of selfinterest in explaining a very narrow phenomenonwhat motivates trade and peoples inclination to participate in exchangeand in providing an understand ing of the broader problem of what is needed for a good society, including proper functioning of the market economy.

Sen / Uses and Abuses of Adam Smith

265

In answer to the firstand the very limitedquestion about the rea sons for seeking trade, Smith famously observed that to explain the moti vation for economic exchange in the market we do not have to invoke any objective other than the pursuit of self-interest. In his most famous and widely quoted passage from The Wealth of Nations (very widely cited in mainstream economics as well as in law and economics, and in ratio nal choice politics), Smith ([1776] 1976, 2627) wrote: 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. We address ourselves, not to their humanity but to their selflove.9 The butcher, the brewer, and the baker want to get our money in exchange for the meat, the beer, and the bread they make, and wethe consumers want their meat, beer, and bread and are ready to pay for them with our money. The exchange benefits us all, and we do not have to be committed altruists to find reasons to seek such exchange. This is a fine point about motivation for tradeinteresting in itselfbut it is not a claim about the adequacy of selfseeking for the success of a society or even of the market economy. In the rest of Smiths writings there are extensive discussions of the constructive role of other motivations that influence human action and behavior. For example, in the Moral Sentiments, Smith ([1759] 2010, 221) argues that while prudence is of all virtues that which is most helpful to the individual, humanity, justice, generosity, and public spirit, are the qualities most useful to others. The working of a society goes much beyond the motivation for seeking trade, and even the successful operation of the market economy demands more than selflove. The nature of the present economic crisis illustrates very clearly the need for departures from unmitigated and unrestrained selfseeking in order to have a decent society: even John McCain, the most recent Repub lican presidential candidate in the United States, complained constantly of the greed of Wall Street in his campaign speeches in the summer of 2008. Indeed, there is much evidence that has emerged powerfully in recent years in that direction, in addition to what we already knew from past studies of the adversity of motivational narrowness. Successful mar ket economies demand a variety of values, including mutual trust and confidence.
9. Vol. 1, bk. 1, chap. 2, para. 2.

266

History of Political Economy 43:2 (2011)

In The Wealth of Nations, Smith illustrated his point with various exam ples. For example, he argued: When the people of any particular country has such confidence in the fortune, probity, and prudence of a particular banker, as to believe he is always ready to pay upon demand such of his promissory notes as are likely to be at any time presented to him; those notes come to have the same currency as gold and silver money, from the confidence that such money can at any time be had for them. ([1776] 1976, 292)10 Smith discussed why such confidence need not always exist. Even though the champions of the bakerbrewerbutcher reading of Smith, enshrined in many economic books, may be at a loss about how to understand the pres ent economic crisis (since peopleeven bakers, brewers, and butchers still have excellent reason to seek more trade even today [out of their selflove], but have far less opportunity to sell their wares), the devastat ing consequences of mistrust and mutual confidence would not have appeared puzzling to Adam Smith. And going beyond just the smooth working of the market economy, Smith also discussed the need for various institutions that can do what the markets may not be able to achieve. He was deeply concerned about the incidence of poverty, illiteracy, and relative deprivation that might remain despite a well-functioning market economy. Our determination to do something about these failures demands more than the pursuit of selfinterest and even of selfcentered prudence. Smith wanted institu tional diversity and motivational varietynot monolithic markets and the singular dominance of the profit motive. 6 I turn, finally, to a particular use of Smiths reasoning that has been, I believe, unfairly neglected in the literature of moral and political phi losophy. The relevance of Smiths ideas for the theory of justice, I have argued in a recent book, The Idea of Justice (2009), goes well beyond the model of the social contract, pioneered by Thomas Hobbes in the sev enteenth century, which lies today behind most of the mainstream theories of justice in contemporary political philosophy, including the dominant contributions of John Rawls (1971) to what he calls justice as fairness.
10. Vol. 1, bk. 2, chap. 2, para. 28.

Sen / Uses and Abuses of Adam Smith

267

Unlike the social contract approach, Smith did not concentrate on defining just institutions, but paid extensive attention to the removal of injustice in the lives that people are actually able to lead, influenced by institutions, behaviors, and other factors. Furthermore, unlike the contractarian theories of justice, Smiths atten tion is not confined only to what happens within a sovereign state, and it extends to global concerns. Adam Smiths invoking of the impartial spectator, to which I referred earlier, accommodates views coming from far as well as near, and this differs substantially from the admissible points of view on which social contract theories tend to concentrate, to wit the views of the people within a polity in which the contract is being made. Even though in John Rawlss discussion of moral reasoning, particularly for what he calls a reflective equilibrium, distant perspectives can be invoked, in his structured theory of justice as fairness, the relevant points of view are from the perspectives of only those of the inhabitants of the society in which the socalled original position is being considered. Smiths device of the impartial spectator leans toward an open impartial ity in contrast with what can be called the closed impartiality of the social contract tradition, with its confinement to the views of the parties to the social contract in a sovereign state and therefore to fellow citizens of that particular sovereign state. The internal discussion among the participants in the Rawlsian origi nal position would appear to Smith to be inadequately scrutinized, since we have to look beyond people in the same society who are engaged in making the social contract, and ask how the proposed contract would look to people outside this particular sovereign state. As Smith ([1759] 2010, 133) argued in words worth quoting again: We can never survey our own sentiments and motives, we can never form any judgment concerning them; unless we remove ourselves, as it were, from our own natural station, and endeavour to view them as at a certain distance from us. But we can do this in no other way than by endeavouring to view them with the eyes of other people, or as other people are likely to view them. Rawlss focus in his beautifully developed and yet limited approach of justice as fairness is on removing biases of a kind that is related to vested interests and personal slants within a given society, and it abstains from invoking the scrutiny of (in Smiths language) the eyes of the rest of mankind. Something more than an identity blackout within the

268

History of Political Economy 43:2 (2011)

confines of the local focal group would be needed to address what is left out. And Smiths impartial spectator is a very illuminating way of meet ing this need. There are, in fact, two principal grounds for requiring that the encoun ter of public reasoning about justice should go beyond boundaries of a state or a region, and these are based respectively on (1) the relevance of other peoples interestsfar away from as well as near a given society for the sake of preventing unfairness to others who are not a party to the social contract for that society, and (2) the pertinence of other peoples perspectives to broaden our own investigation of relevant principles, for the sake of avoiding underscrutinized parochialism of values and pre sumptions in the local community. The first ground, related to the interdependence of interests, motivated Adam Smith to chastise the injustice of slavery anywhere in the world. Adam Smith made good use of the reach of global reasoning in many particular examples of diagnosable injustice across the world in each of his books. For example, the misdeeds of early British rule in India, includ ing the disastrous famine of 1770, engaged Smith greatly in The Wealth of Nations. When he concluded that the East India Company not only oppresses and domineers in the East Indies, but was altogether unfit to govern its territorial possessions, he was not drawing on any oddly devised social contract (it would have been very hard to fit the judgment in the contractarian framework), but on the kind of reach that the impar tial spectator allows, without confining judgments of justice within the limits of a sovereign state. In todays interdependent world, it is easy to appreciate the need to con sider the interdependence of interests. Whether we consider the challenges posed by terrorism, or by global warming, or by the world economic crisis that we are currently experiencing, confining our attention to national interest only cannot be the basis of understanding the demands of justice. Also AIDS and other epidemics move from country to country, and from continent to continent, and also, on the other side, the medicines devel oped and produced in some parts of the world are important for the lives and freedoms of people far away. Second, in addition to the global features of interdependent interests, there is a further groundthat of avoiding the trap of parochialismfor accepting the necessity of taking an open approach to examining the demands of impartiality. If the discussion of the demands of justice is con fined to a particular localitya country or even a larger region than that

Sen / Uses and Abuses of Adam Smith

269

there is a possible danger of ignoring or neglecting many challenging counterarguments that might not have come up in local political debates or been accommodated in the discourses confined to the local culture, but which are eminently worth considering, in an impartial perspective. Smith was particularly concerned about avoiding the grip of parochial ism in jurisprudence and moral and political reasoning. In a chapter titled On the Influence of Custom and Fashion upon the Sentiments of Moral Approbation and Disapprobation in The Theory of Moral Sentiments, Smith gives various examples of how discussions confined within a given society can easily be fatally limited by parochial understanding. He notes, for example, the fact that the murder of newborn infants was a prac tice allowed of in almost all the states of Greece, even among the polite and civilized Athenians. Even Plato and Aristotle supported this practice. He goes on to argue that uninterrupted custom had by this time so thor oughly authorized the practice, that not only the loose maxims of the world tolerated this barbarous prerogative, but even the doctrine of phi losophers, which ought to have been more just and accurate, was led away by the established custom, and upon this, as upon many other occasions, instead of censuring, supported the horrible abuse, by farfetched consid erations of public utility (24546). Scrutiny from a distance may be useful for practices as different as the stoning of adulterous women in the Talibans Afghanistan, selective abortion of female fetuses in China, Korea, and parts of India, and plen tiful use of capital punishment in China, or for that matter in the United States.11 The relevance of distant perspectives has a clear bearing on some current debates in the United States, for example that in the U.S. Supreme Court not long ago, on the appropriateness of the death sentence for crimes committed in a persons juvenile years. The demands of justice being seen to be done even in a country like the United States cannot entirely neglect the understanding that may be generated by asking questions about how the problem is assessed in other countries in the world, for example much of Europe and Latin America (which do not have capital punishment), and South Korea and India (which execute very rarely none have been executed in more than five years).
11. The United States executes more people each year than any other country in the world with the exception of China, Saudi Arabia, Iraq, and Iran, based on statistics for 2008 and 2009. See, for example, Amnesty Internationals Death Sentences and Executions in 2008 and Death Sentences and Executions in 2009, which may be found on the organizations website.

270

History of Political Economy 43:2 (2011)

The majority judgment of the Court, as it happened, ruled against the use of the death sentencevery narrowly, by a 5 to 4 majorityfor a crime that was committed in ones juvenile years even though the execu tion, if allowed, would occur after the person reached adulthood. The verdict would have been different today, since the composition of the Supreme Court has changed since then. The new chief justice John Rob erts has made clear that he would have voted with the minority, and that more generally, American judges should not be influenced by arguments presented and legal judgments made elsewhere.12 Are outside judgments really dismissable? In denying the appropri ateness of capital punishment in this case, the majority in the Supreme Court did not simply defer to likeminded foreigners (as Justice Scalia, who was against the majority verdict, suggested). Scrutiny from a dis tance can be quite essential for reasons that Adam Smith analyzed, in order to arrive at grounded but nonparochial judgments, taking note of questions that consideration of nonlocal perspectives can help to bring to focus. 7 I must stop here. I have argued that while the usesindeed appropriate usesof Smiths ideas are quite widespread and have certainly enriched the understanding of economics in particular and the social sciences in general, there are still things to do. First, along with appropriate uses of Smith there are also a great many abuses that have not only led to a mis understanding of what the founder of modern economics really said, but have also helped to confound contemporary economic analysis, with far reaching consequences. This does need serious rectification. Second, I have also argued that there are additional uses to which Smiths ideas can be put that have been unduly neglected in the world of knowledge and understanding, particularly in moral, political, and legal philosophy. If avoidance of abuses is one necessity, further extension of fruitful uses of Smith is surely another. There is a great deal of life left in the thoughts of that remarkable thinker who published his first book as a young professor at the University of Glasgow just over a quarter of a mil lennium ago. The history of political economy includes, in this case, more than history.
12. On this, see Sen forthcoming, a shortened version of which appeared as Sen 2010b.

Sen / Uses and Abuses of Adam Smith

271

References
Marx, Karl. 1992. Capital. Vol. 1. London: Penguin. Raphael, D. D., and A. L. Macfie. 1976. Introduction to The Theory of Moral Sentiments, by Adam Smith. Oxford: Clarendon Press. Rawls, John. 1971. A Theory of Justice. Cambridge: Harvard University Press. Rothschild, Emma. 2001. Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment. Cambridge: Harvard University Press. Sen, Amartya. 1986. Adam Smiths Prudence. In Theory and Reality in Development, edited by S. Lall and F. Stewart. London: Macmillan. . 1987. On Ethics and Economics. Oxford: Blackwell. . 2009. The Idea of Justice. London: Penguin. . 2010a. Introduction to The Theory of Moral Sentiments. New York: Penguin. . 2010b. Rights, Words, and Laws. New Republic, 28 October. . Forthcoming. Rights, Laws, and Language. Oxford Journal of Legal Studies. Smith, Adam. [1776] 1976. An Inquiry into the Nature and Causes of the Wealth of Nations. 2 vols. Edited by R. H. Campbell and A. S. Skinner. Oxford: Clarendon Press. . [1759] 2010. The Theory of Moral Sentiments. New York: Penguin. Stigler, George. [1971] 1975. Smiths Travels on the Ship of State. In Essays on Adam Smith, edited by A. S. Skinner and T. Wilson. Oxford: Clarendon Press. . 1981. Economics or Ethics? In vol. 2 of Tanner Lectures on Human Values, edited by S. McMurrin. Cambridge: Cambridge University Press.

Theme 1 The Fine Arts