Adam Smith

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 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

 

As part of the Adam Smith Tercentenary commemoration, The Hunter Foundation kindly supported a series of lectures which explored the grand economic challenges of our time. Over the year, we welcomed economists, social scientists, policymakers and students from around the world to the University of Glasgow. As part of these activities, we were joined by Sir Angus Deaton in June 2023 who delivered his keynote lecture, Economic Failure or Failure of Economics?. 

In this online conversation, recorded in October 2023, Professor Graeme Roy continues the discussion with Sir Angus Deaton and Dr Glory Liu. They explore issues around poverty, health, inequality and wellbeing, and discuss how mainstream economics and economists might bear some responsibility for the outcomes we see today. They go on to discuss how some of Adam Smith’s ideas, or interpretations of his ideas, have informed policy and our view of the economics profession, and what needs to change as we move to the future.