HK as a force in Humanities
HK and the World - The Adam Smith Link
Between Oxford, London, US and Hong Kong and all Humanities; Between The Firms and the Market and the Firms’ ESG duties Between “universal opulence” and the society with “justice” and “virtue” Between HK companies and their recognition in the global capital markets
The Under-appreciated insights of Adam Smith and what he sees as attainable for Human Societies..
“the world indeed is ruled by little else…”
“ The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else.. .I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.. Sooner or later, it is ideas, not vested interests , which are dangerous for good or evil…”
-The General Theory of Employment, Interest, and Money, John M. Keynes
“ The voice of the intellect is a soft one, but it does not rest until it has gained a hearing. Ultimately, after endless rebuffs, it succeeds. It is one of the few points in which one may be still optimistic about the future of mankind and that such force can exist signifies not a little.”
-“The Future of an Illusion” , Sigmund Freund
The “under-appreciated” insights of Adam Smith ...
“ We think Adam Smith is NOT the apologist of the kind of Capitalist System many have in mind which is quite a misguided and over-simplistic conception to begin with.
Indeed, one may argue that one of the main motive behind “An Enquiry into the Nature and Causes of the Wealth of Nations “ (or the Wealth of Nations) could well be Smith’s deep concern on how practically one could “lift the poor in the world out of poverty”, as James Otteson has suggested…
And we think it would be doubly more inspiring and illuminating if we can come to see the Wealth of Nations as really the sequel to The Theory of Moral Sentiments and the great message from these two masterpieces plus Smith’s other thoughts and deeds could well be that, a human society with “universal opulence” and yet exhibiting also “virtues”, “prudence” , “justice” and “beneficence” is entirely conceivable and attainable.
In this sense, one may argue that Smith’s concerns about the poor and the working class is not any less than Karl Marx, and his passion about a better human society may not be any less than Plato.
It is our view that the true Adam Smith is far from being understood and herein may lie one main potential contribution Hong Kong and HK companies could make to Humanities, which then could well help to lift Hong Kong from a city of negligible importance to one with some and lasting importance to the global capital markets and the world at large.”
– The HKH Research House
The under-appreciated profound Vision of Adam Smith..
“..it is entirely possible that our society could evolve and develop into a stage with “all ranks in society” reaching “opulence” but still exhibiting “virtues” , with elements of “prudence” to restrain the individuals’ excesses; elements of “justice” to prevent us harming others; and elements of “beneficence” to promote the happiness of others.
And such society may well not be obsessed with merely the chasing of material wealth or symbols of wealth. Instead, it may well be focusing on the pursuit of all the three components of “Happiness” as highlighted in The Theory of Moral Sentiments: “material provision, social engagement and the tranquility that comes from acting virtuously..”
Adam Smith*
*This is an interpretation of the thoughts of Adam Smith made by HKH Research House but the words in quote are all from the words from Adam Smith in his two masterpieces “ The Theory of Moral Sentiments” and “An inquiry into the Nature and Causes of the Wealth of Nations.”
The Two Sides of Human Nature as observed by Adam Smith..
We think Adam Smith’s life time endeavour can be characterized by a passionate attempt made by a “man of letters” to tell his fellow citizens of the world and the posterity an alternative “intellectual structure” to theorize the world as he saw it which was very different from the old mercantilist semi-feudal order which saw the world as largely a zero-sum game and which Adam Smith believed was misguided and that his perspective would represent a much smarter way of looking at the world.
We think Adam Smith’s life time is NOT the apologist for the kind of capitalist system most have in mind. We think Adam Smith is a moral philosopher first and foremost and we think the Wealth of Nations should be seen as really a sequel to The Theory of Moral Sentiments and they should be read together as they really represent two dialectic sides of man which is at once a self-interest oriented specie but at the same time, also a social creature capable of virtue.
Society, therefore, is about making the most out of these two forces, but it appears that so far the world has focused mainly on just part of the first side and the subtlety and sophistications underpinning the free market capitalist society seemed to have been neglected. We think it is important not to overlook the other side of Human Nature and more importantly, the forces that could be unleashed by a virtuous cycle between these two sides of Human Nature.
From Adam Smith 0.5 to Adam Smith 3.0
“: …There comes a time, When we need a certain call. When the world must come together as one. We are the world. We are the children. We are the ones who makes a brighter day, just you and me…… .”
– Lyrics, We are the World,
We think the world is now at just version 0.5 in terms of understanding the full message of Adam Smith which is based on just about 50% (or less) of understanding of the Wealth of Nation, whose full name is “An inquiry into the Nature and Causes of the Wealth of Nations” and its motive is more about how practically one can lift the poor out of poverty rather than justifying and defending the capitalist system, in our view.
Adam Smith 1.0 is about a thorough understanding about the Wealth of Nations; while Adam Smith 2.0 is about seeing Wealth of Nations and the Theory of Moral Sentiments (TMS) as an integrated whole.
Adam Smith 3.0 is about adapting Adam Smith 2.0 to the modern world and after incorporating the insights of Keynes, Hayek, Fisher, Coase, the “New Institutional Economics” and others to achieve what Adam Smith has thought to be attainable, which is letting the “invisible hand” and the “impartial spectator” converting “the private interest and passions of men” into a better world for all.
Hong Kong and the World – The Five Adam Smith Link..
The Five “Adam Smith Links” between HK and the world.
1)Hong Kong can be seen as another bran-child of Adam Smith’s ideas along with the US, London, and Oxford & University as a social institution.
2)Hong Kong and the University of HK have been important components of The Firms and the Market Paradigm of the School of New Institutional Economics which is really trying to bring Economics back to its roots in the Adam Smith days;
3)Hong Kong and HK companies could be the global pioneers in terms of adopting an alternative ESG standards developed as an extension of Adam Smith’s ideas and the Firms and Market Paradigm, which could well evolve into a world standard
4)Hong Kong could well become the city to illustrate that the four elements of Smithian ideals are conceivable and attainable and HK could become one of the driving forces to spread the ideas of Adam Smith to the rest of the world;
5)That Hong Kong companies and the ways they interact with the Market can be seen as illustrations of the Adam Smith’s ideas about the Firms and the Market; and that HK‘s Capital Market could become the capital market to be associated with for all the Firms and individuals adopting Adam Smith ideas about The Firms and the Free Market, which then can could help Hong Kong companies to be transformed from negligible components to an asset class to be reckoned with and respected of in the global capital markets and the investing world at large.
I. Hong Kong as another brainchild of ideas from Adam Smith, alongside with US, London, Oxford
Hong Kong has been arguably a political economy experiment based on the ideas of Adam Smith
“If you want to see how the free market works, this <Hong Kong> is the place to come. “
– Milton Friedman
We think it is arguable that John Cowperthwaite has tried a great political experiment in Hong Kong and has laid the foundation of the political economy structure of Hong Kong in the 1960s based considerably on the ideas of Adam Smith.
Hong Kong’s experience over the last few decades has demonstrated the power of the first side of Human Nature Adam Smith has observed. We think, in many ways, free market forces are still alive and working in Hong Kong and we see Hong Kong as a place which can help to demonstrate the potential power of both the first and the second side of Human Nature Adam Smith has observed and the power that can be unleashed through engendering a virtuous cycle between these two forces. We therefor would see all institutions in Hong Kong as potential stakeholders and supporters of our planned endeavours.
Is the US Constitution “Smithian” in Nature and how much influence Adam Smith has had on the US Founding Fathers?
“Certainly one thing you can learn by looking at Jefferson’s library is the pervasiveness of Enlightenment philosophy, and intellectual conversation that plays throughout the creation of the American government. In fact you could claim that Jefferson’s book collection brings the enlightenment to America….”
– Mark Dimunation
“. It makes a good deal of sense that these people who were founding a new country would look over to the best work in the Enlightenment…”
– Sam Fleischhacker
We shall leave it to the historians to assess to what extent is the Constitution of the US is Smithian, but we think the US Founding Fathers’ conception about the US society, with individuals being endowed with “unalienable rights” and being free to the “pursuit of Happiness” in their own ways really fit well into what Adam Smith’s intellectual structure would prescribe.
Is the resilience and vitality shown by London an illustration of Smith’s ideas?
“ London is a world by itself….”
– Thomas Brown
Despite the damages from the1665-1666 Great Plague and the 1666 Great Fire, London has successfully re-invented itself and become the world’s largest and most important market and international financial centre throughout the 18th and 19th century, over-taking Amsterdam, Paris and many others. How much was this caused by London’s adoption of Adam Smith’s ideas on the merits of free markets?
Despite all the challenges and issues faced by the UK economy, London’s financial sector has been to keep developing especially after the “Big Bang” in the late 1980s and now remains an important component of the current global financial architecture and capital market despite
Brexit and many other challenges.
London is currently the most globalised city in the world and remains one of the world’s largest markets in the realm of finance, real estate, art, culture and many other things.
How much is the importance of Oxford and the University as an social institution a reflection of Adam Smith’s ideas?
“ Let us think of education as the means of developing our greatest abilities, because in each of us there is a private hope or dream which, fulfilled, can be translated into benefit for everyone….”
– John F. Kennedy
While Adam Smith’s seven years spent at Oxford may not be the happiest period in his life, we think it is arguable that there exist considerable links between Adam Smith and the Oxford University in the following ways:
i)Adam Smith has spent 7 years at Oxford and it was during this period that he formulated his views about Human nature and came to know David Hume, his life-long friend and whose thoughts and whose idea of “A Science of Man” have significant influences on those of Adam Smith;
ii)A considerable part of Adam Smith’s life is associated with universities and this social institution has provided Adam Smith with the environment and resources to develop his ideas and Oxford is the oldest University in the English-speaking world;
iii)Adam Smith’s intellectual achievements accomplished during his University years has earned him the travelling tutorship with the Duke of Buccleuch which has provided him with the financial resources to freely pursuit any subjects which interest him and to do it in the ways he prefers.