Most economists consider Adam Smith to be the genius who singlehandedly create the economics discipline. In the words of one of his most popular followers, Robert Heilbroner,
"Perhaps no economist will ever again so utterly encompass his age as Adam Smith. Certainly none was ever so serene, so devoid of contumacy, so penetratingly critical without rancor, and so optimistic without being utopian. To be sure, he shared the belief of his day; in fact he helped to forge them. It was an age of humanism and reason. But while both could be perverted for the cruelest and most violent purposes, Smith was never chauvinist, apologist, or compromiser. “For to what purpose,” he wrote in the “Theory of Moral Sentiments”, “is all the toil and bustle of this world? What is the end of avarice and ambition, of the pursuit of wealth, of power, and pre-eminence?” The Wealth of Nations provides his answer: all the grubby scrabbling for wealth and glory has its ultimate justification in the welfare of the common man." (Entry on Adam Smith, Encyclopedia Britannica, 2008)
After reading his books, and the ideas espoused by his followers, economists of every variety, I have come to the opposite conclusion—from that of Heilroner’s. I would describe Adam Smith as a petty and conceited writer, who, using his prestige as a professor of moral philosophy, established the law of the jungle in modern society. I submit that Adam Smith purposefully obliterated the then existing economic ideas and substituted them with a multitude of fallacies including that of the social benefits of selfish behavior. He killed the old understanding of the economy, and started the dark age of economics we are living in today.
I would like to hear, from the followers and sympathizers of Adam Smith, at least one of his important ideas that have survived the test of time.
Perhaps economists are beginning to awake from their Adam Smith- induced trance with the advent of a more anthropocentric economics propagated as behavioral economics. Every economist of repute has a metaphor they are known for. It is no different with Adam Smith. Think Adam Smith, think "invisible hand", and like it or not, the "invisible hand" is still a valid metaphor whether one subscribes to catallactics or economics. Also like Adam Smith before them, many economist were/are philosophers (moral philosophy?) at heart, hence Robert Heilbroner's tome with the title: "The worldly philosophers". In fact they are many of Adam Smith's intellectual progeny around these days who confess to their secret love of philosophy (e.g.Nicholas Nassim Taleb & George Soros). The public seem to hold to the belief that philosophers are a more noble bunch and the economists are the rascals. But what if a true economist is both?
I guess I was not specific enough. When I said ‘important idea’, I had in mind some realistic principle which is still applicable to understand the economic phenomenon.
But the second point you raised, “many economist were/are philosophers” brings to mind what I recently wrote in a Q&A about 'Why are we all so forgetful? Is the crisis of economics over?':
“I believe that the problem of knowledge is not a philosophical problem, but an organic, or biological problem. How can any individual perceive an objective reality? I do not believe he can. The best we can perceive is a ‘subjective’ reality. There are certainly simple aspects of reality—the sun, the moon, the mountains, etc—of which we have a common perceptions, and we are close to an objective reality; but it took humanity thousands of years to ‘perceive’—to feel—and to ‘know’ that the Earth spins, and rotates around the Sun, rather than the other way around; and still today, an uneducated person would laugh at you if you were to tell him that the ground on which he is standing is in fact moving at over a thousand miles per hour— Eppur si muove!.” [Actually, this never got posted …]
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