Roddy Gow
Well, good afternoon. Or good morning, depending on where you are everybody, I'm Roddy Gow from the Asia Scotland Institute, and I'm delighted to welcome you all to this very timely webinar looking at the thinking and writings of Adam Smith under the subject of From Copy Cat to Innovator The Moral Foundations of Entrepreneurship.
Just before we get going, it's to say we are using the the Zoom platform as a webinar, which means you're you can't be seen, the panelists can and you can't be heard. But if you would use the Q&A or chat functions to write down any questions that you may have, and we will come to those after we've dealt with the body of the the discussion here.
So we're very lucky indeed to have two extremely relevant panelists looking at Adam Smith's perspective on moral philosophy and exploring the fundamental tenets of his views on ethics, morality and their influence on economic practices. This is the 300th anniversary of Adam Smith's birth, and so very timely to be doing talks about him. Dr. Raymond Butler is director of the Adam Smith Institute, which he founded after studying at St Andrew's and then later spending time in the United States where he worked on pensions and welfare issues for the US House of Representatives and talk philosophy in Hillsdale College, Michigan.
Before returning to the UK to help fund the Adam Smith Institute. Russell Dalgleish, who is a member of the Scottish Institute board, is the founder of Scottish Business Network. I like to describe him as a serial entrepreneur. He has started very many businesses and helped a large number of people develop their own businesses and so has plenty of experience of working in markets both in the UK, the US and throughout Asia.
And so he will be in conversation with Eamon as this webinar progresses. Webinar is being recorded and will be shown on YouTube in due course so that you can see it again and the others not able to join us will be able to watch it. So and I wonder if I could ask you to share with us your thoughts on Adam Smith and his relevance in today's markets under the title that we have for this webinar.
Thank you.
Eamonn Butler
Yeah, thank you very well. I think everybody is familiar with Adam Smith's economic writing. He was, after all, the the father of modern economics. He wasn't the first economist, but he was the first to systematize the subject of economics. And he turned economics into something which is recognizably modern today. Just read the first page of The Wealth of Nations, his great economic book, and you discover, he says, that, well, the wealth of a nation isn't a gold and silver, but what it is, is the productive capacity of its people.
00:17:14:14 - 00:17:37:14
Eamonn Butler
And you think, gosh, there we are. In the first paragraph, he's invented the idea of gross domestic product, gross national product, which is something we still use today. And then in the second paragraph and he says, well, of course, you know, some countries are rich because they they've got more people than you think. That's interesting. He's not talking about GDP per capita.
00:17:37:14 - 00:18:12:04
Eamonn Butler
This is another idea. And then he goes on to say, well, you know, some people aren't working at all because they're older or they're or they're too young or they're ill. And then you think, oh, right. So he's got the idea of productivity here. So just in the first page, he's introduced all these concepts which are a modern and he introduces the idea of the division of labor, how if individuals and countries specialize, there's a huge gain in productivity, a staggering gain in productivity.
00:18:12:06 - 00:18:43:18
Eamonn Butler
So he promotes that and it promotes trade and markets and says that interference with markets is damaging to human prosperity and that actually, if you let people do pretty much what they want to do, then there's a spontaneous order. It's like an invisible hand which will actually benefit the entire community. You don't need to run these things, so you don't need a huge state to run an economy.
00:18:43:22 - 00:19:12:21
Eamonn Butler
It pretty well runs itself. So I think people are familiar with all of that. But interestingly, the book that made Adam Smith famous was Not The Wealth of Nations. It came a decade and a half earlier. It was the Theory of Moral Sentiments. It was a book about ethics, about moral philosophy. And you think, well, you know, what's what's an 18th century view of moral philosophy got to do with us today?
00:19:12:23 - 00:19:30:15
Eamonn Butler
But I think Adam Smith, when he was writing that book, he had it in the back of his mind that he might do a book on economics. I always say he was really a social psychologist, not an economist, not a philosopher, social psychology. He was interested in the whole of the human mind and part of that is economics.
00:19:30:15 - 00:20:11:22
Eamonn Butler
Part of it is morality. So he was he'd already got these things in the back of his mind. And I think that many of the things that he says about moral life are important to business life as well. So I'd be fascinated to hear Russell's take on these things. But for example, he talks about the importance of virtues, and the virtues to him are prudence, which means looking at your own long term interests, not trying to make a quick buck, but trying to build up a reputation so that people will trust you and do business with you.
00:20:11:22 - 00:20:38:11
Eamonn Butler
That seems to me quite important for business justice, treating people fairly and equally, not discriminating against them. Again, I think in business that's that's extremely important. You've got to treat your customers and individuals not as if they're members of good of groups that you either like or don't like. And the same is true of your workers and you and your suppliers.
00:20:38:13 - 00:21:01:11
Eamonn Butler
Beneficence He talks about doing good if you can, if it's not going to be convenient to you. And he talks about self command is another virtue. And again I think that's absolutely crucial in business. I mean if you're going to set up a business and run it effectively, you've got to be in charge of your own mind and your own your own psychology.
00:21:01:11 - 00:21:46:07
Eamonn Butler
And you you can't let it waver. So I think all of those things are important to business and I think that also Adam Smith's view that business is not an immoral activity with so many people these days think that, oh, well, you people are only in it for for profit. And then that's that's not moral. But in fact, Adam Smith knew that business is a long term relationship between people and it it you need to develop those relationships and you know that it's a moral activity because if your customers carry on coming back to you, you know that you're supplying something that they want and need and they know that you're not trying to cheat
00:21:46:07 - 00:22:18:14
Eamonn Butler
them. So I say I think all of these things are very important. And I was in Korea recently just a couple of months ago, and it's very interesting to see that economy and it is trying to move from being a catch up copycat economy. When you look at what is happening in developed countries and you just try to do more of it, so you make cars and you make washing machines and things like that, but you do it better and cheaper.
00:22:18:16 - 00:22:44:01
Eamonn Butler
They're trying to move from that to being a more innovative entrepreneurial economy so that they're actually leading business rather than following it. And it seems to me that Adam Smith's views are incredibly relevant to that because entrepreneurial businesses, well, then you they tend to be smaller. They tend to depend very much more on people rather than machines and plant and equipment.
00:22:44:03 - 00:23:12:23
Eamonn Butler
So you've got to know how to treat people as you've got to understand human psychology. So I think all of these things that we find in Adam Smith are actually quite important to to business, and they're particularly important to entrepreneurial business. And that, I think, is why it's so very interesting for Asian economies that are really trying to turn themselves into entrepreneurial, inventive, human based economies.
00:23:13:00 - 00:23:21:02
Roddy Gow
I know that he he wrote about China. What would he make of the US-China challenges at the moment?
00:23:21:04 - 00:23:43:09
Eamonn Butler
Well, of course, he was very much in favor of free trade. But, you know, he did understand that countries do use trade as a as a political weapon as well. And so he errs on the side of free trade and, you know, keep trade open because he thinks that that promotes peace and certainly promotes value to both sides.
00:23:43:11 - 00:24:11:17
Eamonn Butler
But at the same time, he he does understand that sometimes you have to put your foot down and say, no, you know, we're not playing ball on this one because you are you're cheating, you're protecting your own industry or subsidizing your own industry or whatever. But but he says do be conscious that that might then simply lead to riposte retaliation, and then you're down a slippery slope and eventually you end up not trading with each other at all.
00:24:11:17 - 00:24:14:13
Eamonn Butler
So I think he'd be very alarmed at the current situation.
00:24:14:15 - 00:24:19:03
Roddy Gow
And what would his view be on global supply chains?
00:24:19:05 - 00:24:46:09
Eamonn Butler
Well, it's very hard to to put a 21st century idea into the mind of an 18th century person. I think that he was he certainly believes that trade should be as wide as possible. And he writes about opening up the streets of Medellin and opening up the Cape of Good Hope and how those things transformed trade. You know, even just before his lifetime.
00:24:46:11 - 00:25:08:07
Eamonn Butler
And so I think he would want to keep trade links open all or all around the planet as far as possible. And of course, in his famous example of trade, he takes he says, you know, how much how much labor is gone in, how many people have been involved in producing the the ordinary woolen coat of an ordinary worker.
00:25:08:09 - 00:25:32:05
Eamonn Butler
And he said thousands. You know, there are the wool has to be raised and the wool has to be cut and the wool has to be dyed. And that means you've got to take dye in from offers from foreign countries and introduce it and bind it up and, and circular wool in it. And then you've got to transport all the equipment and somebody has got to make the shoes that you share the sheep with.
00:25:32:07 - 00:25:58:20
Eamonn Butler
So these are enormously complex supply trade chains. And he did understand that very fully and he reveled in the, in the wonderful complexity of it. How are these things all come together through the price system? Because people get paid for doing these things. So so it all works together and it produces this simple product, but thousands of people are involved in it.
00:25:58:20 - 00:26:03:18
Eamonn Butler
So I think he would definitely want to keep the supply chains as open as possible.
00:26:03:20 - 00:26:12:04
Roddy Gow
Does anyone thinks that's very interesting. So, Russell, you've had a chance to think about some of Amy's comments. Over to you.
00:26:12:06 - 00:26:43:08
Russell Dalgleish
Thank you so much. And I really intrigued by your mention of Korea. So I was in Seoul last year and it was my first visit to Korea in 18 years, and I was stunned by the change in the city. And that time, I think 18 years ago, my memory is of businesses run by men, everyone in suits and ties, very conformist, very structured.
00:26:43:10 - 00:27:10:00
Russell Dalgleish
And when I was there, as I'm sure you saw it when you were there, it was like California as people in jeans, running companies. Astonishing change. And I wonder what what you feel the opportunity is for the UK, etc. in Asia with the fact that this dynamism is changing in these countries and it's changing in a structure that we as devotees of other stuff would understand?
00:27:10:02 - 00:27:35:12
Eamonn Butler
Well, I don't I'm not sure quite sure your view of Korea. I think that, yes, you're right. Yes, there is a lot more dynamism, dynamism and individualism around than there were. And yes, absolutely, the country has changed incredibly over the last. Well, I've been going on and off for 25 years and more and so, for example, it's just a completely different city.
00:27:35:12 - 00:27:59:08
Eamonn Butler
It's just it's just completely different. And there's building going on everywhere and all the rest of it. But at the same time, it's very difficult to break a sort of cultural way of doing things. So, yes, you're right. I mean, I went to events and there were many more women, for example, than you would than you would see five years ago, even ten years ago.
00:27:59:10 - 00:28:26:19
Eamonn Butler
And that must be good. But at the same time, there is still a run of those sort of is still a rather differential culture and it's still a rather hierarchical culture. I think it's very difficult to break these things, really. I think what breaks it is, is business. It's doing business and and realizing you should be employing people because they're good at their job, not because they're male or female or they're old or young.
00:28:26:23 - 00:28:34:09
Eamonn Butler
Oh, So eventually it does break down. But I think I think it can take quite a long time to do so.
00:28:34:11 - 00:29:01:17
Russell Dalgleish
It's just a lot of my time in my trip because I would, of course, be the oldest person at every meeting. And it was quite definitely everyone was very deferential to me. And I also saw the example of Korean entrepreneurial companies and other Asian countries coming to the UK and really struggling with the business culture here, nor the fact that the culture and someone like Korea is conformist.
00:29:01:19 - 00:29:20:14
Russell Dalgleish
And there are particular ways. And this idea about know coming to the UK and just reaching out to someone on LinkedIn and going off a meeting with them that was something very different. But these are things that for four 300 years and the way that's been the way we've done business, we have to find new people to do to do business with.
00:29:20:16 - 00:29:34:14
Russell Dalgleish
And do you think that there's a direct link back from where we are today to what Adam Smith wrote about 300 years ago that's actually defining our society today in terms of business culture.
00:29:34:14 - 00:30:01:04
Eamonn Butler
That's an interesting one. And I think you are right. I mean, Adam Smith himself, although he was an academic, he mixed with all these people and business people. And you get the impression that this was a very easy society in the 18th century, that people have different professions, different walks of life, stations of life, that they did they did meet together.
00:30:01:06 - 00:30:31:06
Eamonn Butler
And of course, I think recently, certainly in the UK and in the United States and Canada and so on, we see that writ large because young people, you know, people in their teens are starting businesses and making themselves $1,000,000 and $10 million and $100 million. And you think, gosh, right. I mean, anybody can do this. And I think that is that is actually an extremely important thing that anybody can do that.
00:30:31:06 - 00:30:52:22
Eamonn Butler
And it's it's vital, I think, that we keep opportunities open to anybody from whatever walk of life they come from and whatever age they might be that they can they can start a business and and make themselves money. And the important thing is not to be envious of that, but to rejoice in is very difficult for older people.
00:30:52:24 - 00:31:03:18
Eamonn Butler
We see younger folk driving around in their sports cars. You think, what have they done to a match? Well, presumably they've satisfied lots of customers.
00:31:03:20 - 00:31:31:06
Russell Dalgleish
And thank you for that. And you've talked about the book, The Theory of Moral Sentiments, and I'm quite intrigued by our relationship today as a society with the business and commerce community. And there seems to be an antagonism developing. But whenever we look at examples, it tends to be that the the business community of the greed has taken over.
00:31:31:08 - 00:31:57:16
Russell Dalgleish
And these sentiments, such as prudence, trust, the justice, have been set aside in order to accumulate wealth. Whereas in Scotland, for example, we have a burgeoning and social enterprise culture where people are creating companies not to generate commercial value but to generate social change. And I wondered how that fitted in with some of the thinking from Adam Smith.
00:31:57:18 - 00:32:29:24
Eamonn Butler
Yes, I had a friend at University of St Andrews who did precisely that sort of a social enterprise very successfully, and I certainly don't think that Adam Smith would be against any of that. I mean, he was one of the virtues that he cites is beneficence that you should do good. He's not saying you should sacrifice yourself to other people, but he's saying that if you've got the opportunity, you should do what you think is going to be beneficial for for other people.
00:32:30:03 - 00:33:01:00
Eamonn Butler
So that's just fine. I think he's he was you know, people these days think of Adam Smith as only the arch capitalist. You know, he was he was a defender of the capitalism, red in tooth and claw and greed and competition and all of these things. No, that's not true at all. Because, you know, he famously writes of, you know, people of the same trade never, never get together even for merriment or diversion.
00:33:01:02 - 00:33:24:14
Eamonn Butler
But the conversation turns to a conspiracy against it's public and business people get together, they start fixing prices and doing things like that. He then goes on to say, you know, is it actually it's state regulation that tends to bring them together like that so that they've got to meet together and discuss these regulations and how they're enforced and all the rest of it.
00:33:24:16 - 00:33:51:13
Eamonn Butler
So, you know, he thinks the state is the problem, but he's no he's no apologies for the business people. In fact, he's extremely critical of business people. And he says when you look at demands for new regulations, they usually come from business people. They usually come from established businesses, and they're designed basically to keep out the competition and keep the trade to themselves.
00:33:51:13 - 00:34:21:10
Eamonn Butler
So he says we should we should be very suspicious. His word of calls for regulation that come from the business community. So, you know, he's he realizes that this is people will try to hog the market if they possibly can. But he also realizes that with good institutions, you can put push business in beneficial directions rather than harmful directions.
00:34:21:12 - 00:34:58:18
Eamonn Butler
And I think this is really our challenge today that too often I think I think business people are even more in with even more crony with the politicians than they were in Adam Smith's lifetime. And politicians have far more power now. So it's worth having a big department that will sidle up to politicians and take them out to lunch and dinner and and try to get them to see your point of view and indeed to promote regulations that will benefit your business.
00:34:58:20 - 00:35:16:15
Eamonn Butler
That's why the lobbying industry is so large. But the problem really is, is that I don't recognize the over large state that is a problem when you've got a government that's very big and very powerful and lots of money at its disposal, it's not surprising that people are going to throw themselves at it.
00:35:16:16 - 00:35:38:05
Russell Dalgleish
And it's quite interesting as well, because as someone who works with entrepreneurs, what I see is the more early stage entrepreneurs are locked out of opportunity because it's the large multinationals who can have the staff to assume those roles that I'm sure they wouldn't call it lobbying, but they're there in their account managing these government departments.
00:35:38:07 - 00:36:01:13
Eamonn Butler
Yes. Yeah. Oh, I've seen it so often. I mean, I've seen go to meetings in the House of Commons and you've got business people and you've got members of Parliament and the business people are saying, Oh, Minister, you know, this these regulations are working really well, but they'd be so much better if we just tweak this one is, oh, tweet that and we'll have all the business that all these entrepreneurs will never get through the front door.
00:36:01:15 - 00:36:27:08
Eamonn Butler
So I think it is vital that we're aware of that and that politicians are aware of that and that they actually protect themselves against that and don't fall for it. And, you know, again, if we're looking at Eastern economies, the cronyism there can be quite large and in many places even more so than than we have in places like the United Kingdom.
00:36:27:10 - 00:36:37:21
Eamonn Butler
And so then that is something which has to be fought and resisted so that individuals with new ideas can come forward.
00:36:37:23 - 00:37:05:06
Roddy Gow
And I've noticed, have visitors from Asia beat a path to Adam Smith's grave in the Canongate Kirk churchyard. And obviously in that part of the world, he is held, it seems, in very high esteem. But to what extent, going back to some of the things that Russell mentioned, to what extent are his ideas being implemented in some of the places like Vietnam and Singapore.
00:37:05:08 - 00:37:39:24
Eamonn Butler
And I think that much of the development in in those sorts of places and even in China and so on is actually come by accident. I don't think it was necessarily planned. I think it was just individuals doing their own thing and finding space to do their own thing. And, you know, upheaval in Vietnam, for example, it left an opportunity for people with the new ideas and energetic people to to come forward and develop new businesses.
00:37:39:24 - 00:38:10:11
Eamonn Butler
And that's a very active place. Even in Cambodia, I was in Cambodia a couple years ago, and it's very much of a communist run, communist led economy and country. But at the same time, if you don't get the wrong side of the politicians, you actually have this actually an amazing amount of entrepreneurship around. And I think that's always been true.
00:38:10:11 - 00:38:47:20
Eamonn Butler
I remember when Eastern Europe opened up to to the world that, you know, we saw huge numbers of individuals just setting up little businesses or they'd already set up little businesses that were overlooked by the socialist governments and they were doing their own thing. And this sort of entrepreneurship and Adam Smith called it the the drive to better your condition and the condition of your your family and your friends that that is fundamental in human beings.
00:38:47:20 - 00:39:08:16
Eamonn Butler
And what you've got to do is just stand out of the way and let that let that flourish. I I'm always reminded of the Greek philosopher Diogenes, who lived in a barrel and issued all the old will worldly wealth and so on. And he was visited by Alexander the Great, who conquered the East at the age of 32.
00:39:08:18 - 00:39:26:24
Eamonn Butler
And Alexander said to me, You know, Doge needs great Diogenes, What can I Alexander With all my wealth and armies, what can I do for you and doge. And he said, Just stand out of the sunlight. And I think, you know, Adam Smith understood that governments have to stand out of the sun and let entrepreneurship grow.
00:39:26:24 - 00:39:52:03
Russell Dalgleish
And blue light is such a brilliant light. I love that if I could a someone who has spent so much time studying. Adam Smith Can I ask you this question? There are very few authors born 300 years ago whose work is still held in regard today, particularly when these are not easy books to read that are quite an effort to read.
00:39:52:05 - 00:39:59:08
Russell Dalgleish
How can you sort of indicate as to why? Why is why is Adam Smith, I mean, popular?
00:39:59:10 - 00:40:10:19
Eamonn Butler
I think he's I think he remains popular really through his economic ideas. I'm not sure people I mean, I think that the Theory of Moral Sentiments, his book on ethics is a better book.
00:40:10:24 - 00:40:11:14
Russell Dalgleish
Yeah.
00:40:11:16 - 00:40:36:07
Eamonn Butler
But it is very difficult to read and it's full of references to 18th century debates and so on and so on. The Wealth of Nations. Yes. Still written in 18th century, flowery, 18th century style. Some of it is actually quite funny. Is it? You know, is it you has a dry wit which does come through and it's just full of facts.
00:40:36:07 - 00:41:10:02
Eamonn Butler
It's just overfull of facts. I mean, it's just one facts. I don't know how many. And but but he uses those to to draw lessons about entrepreneurship and about the role of the governments and all these other things and the the invisible hand, the spontaneous order as we would call it today. So I think it's I think that's really the reason why he's he's still he's still read and still respected.
00:41:10:04 - 00:41:21:02
Eamonn Butler
I keep telling people look don't read the wealth of nations and don't read moral sentiments what you should do is you should read my condensed for free online and.
00:41:21:04 - 00:41:22:21
Russell Dalgleish
That's what I did.
00:41:22:23 - 00:41:25:05
Eamonn Butler
Oh, there you are.
00:41:25:07 - 00:41:49:00
Russell Dalgleish
I have one final question for Rodney comes back in again. So I in addition to being on the board, the Asian Scotland Institute, I chair Scottish Business Network, which is our business diaspora. And I wonder when you travel around the world, it's a recognition of Adam Smith as being Scottish. And is that important?
00:41:49:02 - 00:42:22:05
Eamonn Butler
Ooh, Well, I think he is recognized as being Scottish, yes. Is it important? Hmm. Well, I see what you mean. I think he's some extent it is important because I think the Scots, rather like the Dutch, have always been known as a great trading nation and of course, a trade with America, tobacco and sugar and things like that, much of which was was loaded in Glasgow.
00:42:22:07 - 00:42:53:09
Eamonn Butler
And these were important industries in the in the 18th century. So I think people are aware that the Scots I mean, cynics say that, well, you know, Scotland is such a terrible place that you have to get out of it. So you have to go explore the rest of the world and trade. But at the same time, I don't know what it is about Scotland, but it has always been I mean, partly because it's a seafaring nation, very large coast and all the rest of it.
00:42:53:11 - 00:43:14:11
Eamonn Butler
So perhaps, you know, it's more inclined to to trade and then other places. But yes, I think that that's the Scottish propensity to to trade I think is is very important. And that's one of the reasons why Adam Smith is important, talking about the the need to keep trade open and free.
00:43:14:13 - 00:43:31:15
Russell Dalgleish
Yeah. And I believe that we should we as Scotland should make try to make much more or to recognize that fact that Adam Smith who's recognized globally and we should tie that to part of Scotland but maybe another discussion.
00:43:31:17 - 00:43:41:07
Eamonn Butler
Well yeah, it is a great, great brand like, you know, Scottish Dogs. No, but yeah, but, but, but, but better than that.
00:43:41:09 - 00:44:04:10
Roddy Gow
Russell thing anyway. And I think you've made a very good point too, comparing the Scots to the Dutch as trading nations. We've been talking about Asia but Adam Adam Smith and his thinking in the United States, which you know very well, as I said when I introduced you at the start of this, in the States, people criticize the power of big corporations to influence everything really in particularly politics.
00:44:04:12 - 00:44:21:15
Roddy Gow
And there is this concept of massive donations to political figures to, you know, to back their campaigns. What do you think of that? And what would Adam Smith have thought of that as his idea being somewhat corrupted in that respect?
00:44:21:17 - 00:44:52:04
Eamonn Butler
I don't know. I think the people who throw money at politicians are wasting their money. Honestly, there's very little evidence, if any, and certainly none that I know of that political campaigns make political donations make the slightest difference to electoral outcomes. So why bother? I think that the reason that people bother is and you are right, that it is a large business can throw money at a politician won't make any difference to the outcome.
00:44:52:04 - 00:45:23:08
Eamonn Butler
But if they do happen to be elected, then they will remember that. And so when the chief executive turns up and says, Oh, can I have lunch with the congressman, there's something very urgent I want to talk to to him or her about, then, yeah, the the Congress, the representative says, yes, absolutely. Of course, anything you like. So I think it is a way of getting your foot in the door of politicians.
00:45:23:10 - 00:45:49:05
Eamonn Butler
And so so that's not good. And I think that Adam Smith would would certainly not not welcome that. I think he would be quite horrified that the way that that is turned out in the United States, where lobbying is a really really, really big industry. I mean, I, I saw it myself in Washington all those years ago, and I don't think I ever bought lunch or I was just a junior researcher in an office.
00:45:49:05 - 00:46:15:09
Eamonn Butler
And I don't think I bought lunch know dinner in a in a whole year because there were lots of free events you could go to paid for by businesses. And that's that's a sign that something is unhealthy there that there is too much interplay between the politicians and the business people. The business people should stick to their knitting and the the politicians should stick to to what they do.
00:46:15:11 - 00:46:40:23
Eamonn Butler
But, you know, in fact, we're we're doing almost the opposite with trying to positive to trying to make businesses into, if you like, civic institutions by saying, well, they don't have all this certain responsibilities and so on that they've got to undertake and they've got to promote local activities and community affairs and all the rest of it. That's not what a business is for.
00:46:40:23 - 00:47:11:05
Eamonn Butler
Business is there to to to make money for its shareholders. And it does that by producing really good services and goods that customers keep coming back because they're so good. That's that's, that's what that's the most useful thing that a business can do for society, you know, So forget all this social responsibility stuff. Just let businesses be business and you will find your society is much better off.
00:47:11:07 - 00:47:38:04
Roddy Gow
Well, we're going to bring in the people who are listening once they start sending us questions, a lot of Q&A or chat function. But I wondered if you had any view on what's been going on in Ukraine with Russia, this weaponization of food and food supply. You just had a view on that and whether also rustled it.
00:47:38:06 - 00:48:06:24
Eamonn Butler
Well, that always happens in war and it always has done. You know, one of the in the 18th century, I mean, in Adam Smith's own time. And just just afterwards I mean, just afterwards, you had the Napoleonic wars, wars with France and Britain. And it just it greatly changed the the economic landscape. There were things that you simply couldn't do because you couldn't trade efficiently.
00:48:06:24 - 00:49:00:19
Eamonn Butler
And the French used to trade with the Americas and the UK and Great Britain intervened. And so and that spelt the end of a number of French industries like that. I mean they had a a large cotton for example, but that was really killed off by it by the embargoes during the Napoleonic Wars. So these things have a prodigious effect and they do have a digital effect, which is very widespread because, you know, as Adam Smith knew it, it's a very interconnected world, as I say, with the woolen coat of the work workmen, the ordinary workman, he says you can have dye and and materials coming from India to the UK across the world.
00:49:00:21 - 00:49:29:23
Eamonn Butler
And so it's a very interconnected world. And so when something like that happens and you are making it difficult for people to ordinary people, ordinary business people to to bring grain in and out of the Ukraine, for example, then it has a worldwide effect. And that is that is a a great misfortune. So I wish that we could resolve these things, but from time to time we can't.
00:49:30:00 - 00:49:33:16
Roddy Gow
You know, Russell, any comment on that?
00:49:33:18 - 00:50:11:17
Russell Dalgleish
And I think what I've witnessed I work with a couple of Ukrainian tech companies, but I've come over to the UK under the accelerated visa process. And I think what we're witnessing is this movement of incredible talent out of Ukraine. And I think where we can probably help is once the fighting does eventually stop, is to help that repatriation back to Ukraine and how can we use our skills and our capability to ensure that we're open to trade with those individuals?
00:50:11:19 - 00:50:39:19
Russell Dalgleish
Because it's quite interesting that when I speak to Ukrainian companies, particularly at the start of the war, it wasn't that the physical damage of the wall that affected their business, it was the large number of customers that canceled their contracts. So global operations around the world outside Ukraine while there's a war there. So we're going to cancel that order with your company, whereby I think if we continue trading, that's where we can actually help the people on the ground.
00:50:39:21 - 00:50:57:23
Roddy Gow
Yeah, there's a there's a question here I just wanted to mention someone has written what would your Adam Smith's thoughts be on manufacturing in Scotland to boost our local economy versus elsewhere, purely based on cost? This person says, I'm planning to do both.
00:50:57:23 - 00:51:26:21
Eamonn Butler
Incidentally, as this famously wrote that by means of hotbeds, hot walls and glass houses, you can very good grapes could be grown in Scotland and very good wine could be made of them, but at 30 times the expense of growing it in France. So you do have to be careful about that. And I think Scotland has many advantages going for it.
00:51:26:23 - 00:52:05:23
Eamonn Butler
But you know, it's maritime nature and its landscape and so on. But you've got to make sure that the business is right for where you're putting it. And it is a big world and people do move around and you can put a business almost anywhere. And one of the one of the key things that does affect business location is things like taxation and regulation, that if people look at a country and they say, well, I mean like looking at the UK now and they look at corporation tax and they say, If I make a profit, you're going to charge me how much?
00:52:06:00 - 00:52:34:17
Eamonn Butler
And I think that absolutely the creation of new businesses, because when you start a business, you're taking a risk. You're probably you don't know whether your product is going to work or not. So is it going to work or not? You probably are borrowing money from the bank or you're probably borrowing it from friends and family or maybe mortgaging your home.
00:52:34:19 - 00:53:03:06
Eamonn Butler
So you're taking a big risk. And then if the government is saying, Oh, well, that's that's nice, you know, take the risk and if you're successful, will charge you fabulous amount of money in taxation, what do you think? Well. Well, why should I do that? It's just increasing the risk of a new venture. And so there are studies which which suggest that taxation is hugely important for people starting new businesses.
00:53:03:06 - 00:53:26:22
Eamonn Butler
And it's a huge depressant on new businesses. So very pleased your questioner is is trying to start a new business. And I wish them well. I think they need they need to look carefully at where they are locating their business because as I say, it it is a big world and you can locate anywhere. But yeah, I would certainly like to see more entrepreneurial spirit alive and well in Scotland.
00:53:26:22 - 00:53:32:03
Eamonn Butler
I think it could use a good dose of it, quite frankly.
00:53:32:05 - 00:53:52:10
Roddy Gow
Yes. Another question for you. Thank you for this conversation. The person says, I live in Texas and witnessed the negative impact of migration. What was Adam Smith's view on immigration? What do you conclude? Population growth to be a positive on GDP per capita, regardless of how it happens?
00:53:52:12 - 00:54:27:06
Eamonn Butler
Hmm. I don't think he wrote very much about immigration. He did, of course, talk about movements of people across across different countries and how some populations had grown and others shrunk. I think he he generally saw that as being the result of economic activity rather than something which which led to economic activity that if you lived in a prosperous country, then your population would naturally grow.
00:54:27:06 - 00:54:55:00
Eamonn Butler
If you lived in as it was at the time, a very poor China, then your population which would shrink. So I don't know the I don't know that he wrote very much on that subject. So I don't I don't think I can really quite enlighten you or your question a very much about that is not something which I think he was terribly, terribly concerned about.
00:54:55:02 - 00:55:21:21
Eamonn Butler
You know, he wrote about empire and colonialism and things like that. But I think he generally felt that countries should be left alone. And it was a different age, of course, where people could move much more freely than they can move now. But you didn't have passports and things like that in many places. In fact, you didn't have passports in many places until really the 20th century.
00:55:21:23 - 00:55:47:13
Eamonn Butler
So movement was legally much easier, although logistically it would be very much more expensive, of course, than it is now. So I think, you know, part of our issues today is that migration is very much cheaper than it was. And therefore, people look around and they say, well, you know, I could I could easily live somewhere else and I'd be much better off.
00:55:47:15 - 00:55:55:19
Eamonn Butler
And of course they're right, if you want to, to make a poor person rich, put them in a rich country and they'll become rich.
00:55:55:21 - 00:55:59:13
Roddy Gow
Russell, your thoughts on that?
00:55:59:15 - 00:56:32:12
Russell Dalgleish
Well, one of the major challenges in the UK that we're facing at the present moment is access to talent. And I think that that's probably quite a common belief is the thought that we need to attract more talented people to the UK. So I think from that stage immigration would be a good thing. But I also recognize that we're seeing huge changes in the world, just things like climate change which is going to result in this migration of people.
00:56:32:14 - 00:56:45:23
Russell Dalgleish
So I think, you know, if the politicians are looking for subjects to focus on that, I would encourage this one rather than the, you know, perhaps the focus on business and introducing more legislation.
00:56:46:00 - 00:57:11:11
Eamonn Butler
You know, what I would say on this subject is it's got nothing to do with Adam Smith. But it seems to me that if individuals move in dribs and drabs or one or two at a time, there's no problem at all. I mean, here in Scotland, my my wife's family were Italians that came over in the early 20th century and indeed the west of Scotland and indeed Scotland are full of Italian Scots.
00:57:11:13 - 00:57:49:19
Eamonn Butler
And they came over one at a time. One would come over and then they would bring family over and the cousins and aunts would say, Oh yes, let's go and join the league and in Glasgow and then you can manage. The problem is when you have things like wars or disasters of one sort and another, which lead to huge numbers of people leaving, or you have a government which did have restrictions on a particular place suddenly allows people to travel.
00:57:49:19 - 00:58:14:10
Eamonn Butler
I mean, that was the case in Eastern Europe where millions of Eastern Europeans then suddenly came into the into the West. And I agree with you. I think that's a good thing. I mean, you know, give people opportunities, but it's the numbers that are sort of the issue. And people find themselves so overwhelmed by people who are quite their culture and so on.
00:58:14:12 - 00:58:41:01
Eamonn Butler
So but when you look at those things, it's mostly governments that cause these problems. It's governments that tend to spark off wars, not individuals. Individuals don't want wars, and business people in particular don't want wars. You know, despite all this talk about how business makes money out of war, no war is extremely damaging for business because the uncertainty of it is is incredibly damaging.
00:58:41:01 - 00:59:13:06
Eamonn Butler
If you're if you're trying to make a business and plan for the future. So, you know, governments have a huge responsibility for the problems that we see in immigration, where people are objecting to immigration because of the huge numbers of people that are coming in in a very short space of time. And I'm very much in favor of a free migration as a as a a principle that's always making it work.
00:59:13:08 - 00:59:19:18
Roddy Gow
This was an issue in Germany, wasn't it? Angela merkel was. It was accused of allowing too many people in.
00:59:19:20 - 00:59:28:19
Eamonn Butler
Right. In many places in Western Europe, in the EU and in Sweden and so on. Yes, absolutely.
00:59:28:21 - 00:59:45:06
Roddy Gow
There's a question from Ewen Grant, who says that he thinks our conversation is going very well. It says Where does the Scottish academic community stand on Adam Smith's The Ukraine, he says, and long links, not least Adam Smith's contemporary.
00:59:45:10 - 01:00:17:13
Eamonn Butler
Samuel Gregg Well, I think that the academic community are not in favor of Adam Smith or Adam Smith's ideas and that has to be said that it's very interesting when you do surveys of the political leanings of of academics is how many of them are actually on the left of the spectrum, much more so than the rest of the population.
01:00:17:13 - 01:00:46:03
Eamonn Butler
And it's not because the academics are intelligent and other intelligent people are split 5050 left and right. So there's something going either in the recruitment of academics or whatever. And I'm reminded to just take this back to Adam Smith when Adam Smith won a scholarship to go to Oxford, he he went there and it took him a month on horseback to get there from Scotland.
01:00:46:05 - 01:01:09:10
Eamonn Butler
And he went to. Neil discovered that the professors in Oxford got paid, whether they taught their students or not. So he said the greater part of the professors have given up. He said altogether even the pretense of teaching and the students would go to a lecture if it was known that if they knew that, they would get value from it.
01:01:09:12 - 01:01:21:04
Eamonn Butler
But there were precious few lectures around because the the the teachers couldn't couldn't be bothered to teaching. So I think I think academe has a lot to do to tidy up its own profession.
01:01:21:04 - 01:01:29:04
Roddy Gow
Quite interesting. Yeah. Russell, your view on the world of academia.
01:01:29:06 - 01:01:38:00
Russell Dalgleish
And I'm probably not one to comment on that since my world tends to be much more in the business community.
01:01:38:02 - 01:02:01:12
Roddy Gow
Yeah, but I would agree that academic institutions, particularly business schools, do have a responsibility to educate and enlighten their students about thinking and how to get on get on in life as entrepreneurs. So I want to know and about the title of your book. Well, Books, The Simplification of Love, Adam Smith.
01:02:01:14 - 01:02:04:12
Eamonn Butler
It's called The Condensed Wealth of Nations.
01:02:04:14 - 01:02:05:17
Roddy Gow
Right.
01:02:05:19 - 01:02:33:16
Eamonn Butler
And the subtitle is The Incredibly Condensed Theory of Moral Sentiments. So there you are. But I've I've also written a little primer on Adam Smith, which is called Adam Smith A Primer. And that, again, is available free online from the Institute of Economic Affairs. So, yep, that's my contribution to the to the blogosphere. Keep it simple and no long words very, very short.
01:02:33:19 - 01:02:40:24
Eamonn Butler
So and it's translated those books are translated into a number of languages. So if you look at some of them, you might be able to find them.
01:02:41:01 - 01:02:58:03
Roddy Gow
Wonderful. Good. Well, as we're approaching the end of this webinar, I want to give each of you a chance to sort of share your closing thoughts. And Russell, if we could start with you. Having heard the conversation and and spoken with with Amy as you have to give your views.
01:02:58:05 - 01:03:24:10
Russell Dalgleish
And I think I'm really inspired to look more at the Theory of Moral Sentiments on some of Adam Smith's thinking on that subject. Because I've written down these words prudence, trust, justice, doing good, if you can. And I think those are all things that I see very well reflected amongst these Scots around the world that I work with, you know, there's there's such a desire from them to contribute to help.
01:03:24:12 - 01:03:34:22
Russell Dalgleish
And it's done purely from a philanthropic perspective. So I think I'll have a look at that. So thank you for that. Emma Or at least I'll start with a primer.
01:03:34:24 - 01:04:02:12
Eamonn Butler
Yes, I think that that is very important in the Scottish psychology, the Scottish mentality. Somehow. I don't know why. I just, I just, I just do think that and I think it's part of the history and culture that it's like any and any place in the planet which has been largely there in Ireland culture or a very rural culture, you're very accommodating to other people and you, you, you welcome people in and all of those sorts of things.
01:04:02:12 - 01:04:25:00
Eamonn Butler
So it it's somehow it's very deep in, in the in the psychology. But I would I would just my closing thoughts simply that I think so many people just misinterpret business and they just think it's everybody out to make a quick buck and, you know, cheat the customer and make as much money as you can. And it isn't about that.
01:04:25:02 - 01:04:51:06
Eamonn Butler
It's about developing long term relationships. And on this, Adam Smith understood that. And that is why his moral thinking, it seems to me, is so important to you trying to move to an economy which is, you know, not based on on capital, not based on plant and equipment and heavy machinery and things like that, but is actually based on individuals, based on people's minds and based on people's thoughts and creativity.
01:04:51:08 - 01:05:18:20
Eamonn Butler
And you to understand how people work, you need to be able to have good relationships, relationships of trust, as you say, with businesses, with with with colleagues. And I think therefore, that, you know, people should indeed learn a little bit more about ethics in general and maybe the theory of Moral sentiments in particular.
01:05:18:22 - 01:05:41:08
Roddy Gow
David, thank you. And Russell, thank you, too. I think this has been a hugely interesting and helpful webinar. When people come to listen to the recording, I think they will pick up on these points in a mission at the Edge of Scotland Institute is to educate and inspire tomorrow's leaders particularly and to broaden their understanding of global markets and within global markets.
01:05:41:08 - 01:06:12:03
Roddy Gow
Pan Asia, with which of course many of their forebears had close connections. As has been said, next month, on September the 14th, we have Liz Martin from HSBC, an economist from the UK, coming and talking about the challenges that she sees within the UK economy. And then six days after that, on September the 20th, we've got a session on artificial intelligence, which we haven't spoken about on this webinar, but which is going to, I think, affect very many of our lives.
01:06:12:08 - 01:06:34:24
Roddy Gow
So those are things that are coming up. And to both of you, an enormous vote of thanks from the Asia Scotland Institute for leading us through this complex, but nevertheless very interesting and very important maze as we work to understand how people who are entrepreneurs can run and build our businesses. So thank you both very much indeed.
01:06:35:01 - 01:06:36:06
Russell Dalgleish
Thank you.
01:06:36:08 - 01:06:40:03
Roddy Gow
By the books, incidentally. So there we go.
01:06:40:05 - 01:06:43:09
Eamonn Butler
We get a free executive.
01:06:43:11 - 01:06:44:19
Roddy Gow
Thank you. Thank you so much.
