Gavin Kennedy, in his blog, Adam Smith’s Lost Legacy criticizes my by recent blog post Unshackling Adam Smith’s invisible hand – Carbon Credits, entitling his post, How to Start World War III & IV. Does he really believe that tying trade policies to energy consumption or environmental policies would start World War III & IV?

NAFTA's explicit inclusion of environmental issues in dispute settlement jurisdiction didn’t start a World War. Why would they in other trade agreements? It appears as if Kennedy is just being a polemicist, not seriously interested in thinking seriously about how trade policies affect our world.

Kennedy asserts that “Smith didn’t ‘believe in a local marketplace’ as a preference”. However, David Korten, in When Corporations Rule the World, says,

Smith, on the other hand, opposed any form of economic concentration on the ground that it distorts the market's natural ability to establish a price that provides a fair return on land, labor, and capital; to produce a satisfactory outcome for both buyers and sellers; and to optimally allocate society's resources.
…
the benefits the trade theories predict assume the local or national ownership of capital by persons directly engaged in its management. Indeed, these same conditions are fundamental to Adam Smith's famous assertion in The Wealth of Nations that the invisible hand of the market translates the pursuit of self-interest into a public benefit.

Kennedy goes on to suggest that the idea of tying trade policies to environmental polices “amounts to a statement that all trade must be suspended until every country has exactly the same policies in place”. I have no idea where Kennedy gets such an absurd idea. It is either more extreme polemics, like his comments about starting world wars, or it reflects a profound lack of understanding about how international trade policies work.

Kennedy ends off taking a pot shot at the phrase maximize human happiness, which is how Helen Joyce describes the invisible hand.

Smith was profoundly religious, and saw the "invisible hand" as the mechanism by which a benevolent God administered a universe in which human happiness was maximised. He made it clear in his writings that quite considerable structure was required in society before the invisible hand mechanism could work efficiently.

So while I appreciate that Kennedy has written about my blog entry over on his blog, I am disappointed that he didn’t stop over here to talk more seriously about how we can understand Adam Smith in today’s world.