Editor Fareed Zakaria‘s interview of Chinese Premier, Wen Jiabao on CNN.
In response to a question from Zakaria about the role of free markets in China, Wen said (roughly) that it’s the policy of the Chinese government to give full play to market forces, under the careful regulation of the government. That is, he says, the Chinese government wants to give full play to both the visible and the invisible hand.
For authority, he reminds viewers that Adam Smith wrote not just one, but two books. The first, he says — The Wealth of Nations — deals with the invisible hand, with market forces. The other — which he doesn’t name, but which is Smith’s Theory of Moral Sentiments — is about morality & ethics. According to Wen, the latter deals with social equity and justice, and the important regulatory role of the government, and its role in distributing wealth among people.
I won’t engage Wen’s Smith scholarship. But it’s pretty cool not just to see an important world leader citing the philosopher who is the great-grand-daddy of modern economics, but to see one who is aware that Smith wrote not just one, but two great works.
Theory of Moral Sentiments was published in 1759 and The Wealth of Nations in 1776 – the latter considered the first work in Economics. Reading the latter without understanding thinking in the former has resulted in major distortions in interpretation of Smith’s intellectual contribution, particularly with respect to the neoclassical economic paradigm. An example of limitations of the artifact of analysis (cognitive processing of one topic at a time).