Adam Smith's Legacy: His Place in the Development of Modern Economics.

• Author: Hirsch, Abraham

This book originated in a conference held in Edinburgh in July, 1990, to mark the bicentenary of Adam Smith's death. Eleven laureates participated, "the largest number of Nobel laureates in economic science," we are told in the Foreword, brought together "since the prize was instituted in 1969." Not all eleven attended the conference. Paul Samuelson later sent in his paper, Sir Richard Stone's paper was read for him, and Jan Timburgen's paper was read by another laureate, James Mead, who did not offer a paper. Thus, of the ten papers printed in this volume, seven are by laureates who attended the conference and the eighth was read by a laureate who did not offer a paper. The editor of the volume, Michael Fry, was the organizing secretary of the Adam Smith Bicentenary.

We are told in the Foreword that participants were asked to prepare papers which had one of three objectives. The first was "to look again at The Wealth of Nations from today's perspective." Not surprisingly, none of the contributors tried to cover the whole of the great book but rather limited themselves to those segments which fall within the author's expertise. Thus, Paul Samuelson in his essay, "The Overdue Recovery of Adam Smith's Reputation as an Economic Theorist," argues that Smith has gotten a "bum rap" from his successors who have generally felt that David Ricardo was by far the better theorist. Samuelson's argument is that if we adopt the right premises and use the most up-to-date economic analysis Adam Smith's conclusions are shown to be more tenable than Ricardo's.

Laurence Klein, in "Smith's Use of Data", considers whether Smith is to be faulted for being unaware of the existence of business cycles and concludes both from historical studies which he cites as well as his own statistical analysis of the best data available that "there is little evidence that Adam Smith should have been able to observe business cycles in his lifetime." Maurice Allais, argues that "the fundamental concepts underlying the analysis of Adam Smith ... correspond to an underlying model, which is actually the one [Allais has] elaborated since 1943, the model of the economy of markets, founded on the general theory of surpluses."

Richard Stone considers Smith's views on economic policy, a subject that can be, and often is, politicized. In fact, the editor could not resist the temptation to relate Smith's views to Britain's imposition of a poll tax in recent times, even though Stone did not...