Chinese PM reveals policy enlightened by works of Adam Smith

Published on Monday 2 February 2009 21:06

FEW may have been surprised if Wen Jiabao, as China's prime minister, were to carry around a copy of Chairman Mao's little red book.

But on a visit to the UK, it has emerged that the premier is, in fact, just as comfortable with one of the great theorists of modern capitalism, Scottish economist Adam Smith.

At a press conference yesterday, Gordon Brown, the Prime Minister, described Mr Wen as an "expert on the Scottish Enlightenment" and revealed he had invited the Chinese leader to visit Edinburgh at the "earliest opportunity".

Renowned for being an "eclectic reader", Mr Wen is said to travel the world with a copy of Smith's The Theory of Moral Sentiments, which lays out the moral underpinnings for governing societies and market economies.

So taken is he with Scottish Enlightenment thinking that he recently referred to two of Smith's main works in an interview with the CNN news network. Critics say Mr Wen sees no contradiction between running a 21st-century dictatorship and espousing the work of a Scottish liberal philosopher.

He has argued that China combines a market economy and macroeconomic guidance by government, and he outlined his argument by referring two of Smith's main works.

The Wealth Of Nations highlighted the need for the invisible hand of the market, while The Theory Of Moral Sentiments showed the need for the visible hand of government, in the interests of social equality.

However, one Scottish academic said Smith would be shocked if he knew his philosophy was being used by a Communist dictatorship.

Alexander Broadie, a professor of logic at Glasgow University – a post once held by Smith – said the work of Smith and his fellow Enlightenment philosophers had nothing in common with Communist China.

"I think Smith would spend much of his time spinning in his grave," said Prof Broadie. "What you get in Adam Smith is a theory about morality.

"These were liberal values. Smith was dead set against political dictatorships and believed ideas flourished best in an open society."

Known to be a workaholic and blessed with an almost photographic memory, Mr Wen rose quietly through China's political hierarchy.

Formerly a number-crunching chief of staff, he served the country's top leaders for two decades before taking over as premier in 2003.

His election by the National People's Congress gave him day-to-day command of China's economy and its 100 million strong bureaucracy.

Since he became prime minister, Mr Wen has won considerable support. The son of rural teachers, he has shown a populist touch, spending Chinese New Year in poor agricultural areas and often being photographed visiting hospitals or schools.

In the interview, he said: "If you are familiar with the classical works of Adam Smith, you will know there are two famous works of his. One is The Wealth of Nations; the other is the book on the morality and ethics.

"The Wealth of Nations deals more with the invisible hand that are the market forces. And the other book deals with social equity and justice."

Mr Wen borrows much from Smith's philosophy that government has a "regulatory role" in distributing wealth.

He added: "If most of the wealth in a country is concentrated in the hands of the few, then this country can hardly witness harmony and stability.

"The same approach applies to the current US economy."