Economic failure or failure of economics?
Sir Angus Deaton, Professor of Economics and International Affairs at Princeton University, presented the second talk of the Tercentenary Week Hunter Lecture Series.
Sir Angus, who won the Nobel Prize in Economic Science in 2015 for his analysis of consumption, poverty and welfare, said:
"Economic systems should help people prosper and flourish, but today’s capitalism is failing this basic test. Progress has come to a halt for many, not just material progress, but also progress in health and wellbeing."
Referring to worsening life expectancy rates in both the US and Scotland, Sir Angus noted that "mortality rates are going in opposite directions for the more and less educated". He emphasised the devastating impact that social change, corporate power and regulatory capture are having on humanity, including an increase in 'deaths of despair' which are often due to self-inflicted causes such as drug addiction and suicide.
"Government in the age of greed is bad government," he stated. He also observed that that social media has become a tool for profit-making.
In identifying the part played by economics and economists in this failure, Sir Angus asked whether Adam Smith’s economics were part of the problem, or could the trouble be placed with the way he has been interpreted. He concluded that regardless of this debate, there is much in Smith’s writings that can help economics.
Sir Angus Deaton is a Professor of Economics and International Affairs at Princeton University.
He won the Nobel Prize in Economic Science in 2015 for his analysis of consumption, poverty and welfare. As a citizen of both Britain and America, he is a member of the National Academy of Sciences, a Corresponding Fellow of the British Academy and an Honorary Fellow of the Royal Society of Edinburgh.
His recent book with Professor Anne Case - Deaths of Despair and the Future of Capitalism - explores how flaws in our economic system can have devastating implications for people's lives and livelihoods.
Image credit: © Princeton University
The Hunter Foundation lecture series
The Hunter Foundation Lecture Series form part of the University of Glasgow's Adam Smith Tercentenary celebrations which mark the 300th anniversary of one of our most famous alumni, whose pioneering work has had a lasting impact on the way the world considers economics, politics and society.
The events in the series touch on what Adam Smith would say about the state of globalisation.
Sir Tom Hunter, entrepreneur, philanthropist and founder of The Hunter Foundation has noted:
"As the founding father of modern economics, it's important we celebrate Smith’s role in the Enlightenment and learn from his legacy. It is our hope in supporting the University of Glasgow’s Adam Smith 300 lecture series, that we as a nation reassess business creation and its role in supporting the public services we all rely upon. Without the economic growth business delivers, those services, as we are already seeing, diminish and those least well off in our society suffer the most."