Smith's work as 'fresh' as ever

KIRKCALDY - The free-market ideals of 18th-century economist and philosopher Adam Smith were hailed by Federal Reserve chairman Alan Greenspan, who told a packed Scottish church they remained fresh today.

British Chancellor of the Exchequer Gordon Brown was listening as the Fed chief spoke of the blessings of rational self-interest at the Adam Smith memorial lecture, using the pulpit Brown's father preached from.

"The short list of intellectuals who have materially advanced the betterment of civilisation unquestionably includes Adam Smith," said Greenspan, 78.

"Most of Smith's free-market paradigm remains applicable to this day," he said in a speech that did not address monetary policy, but praised Smith's work, The Wealth of Nations, published in 1776.

Brown, who hosted Greenspan overnight at his home, earlier welcomed the chief at Edinburgh airport - a day after wrapping up a two-day meeting of the finance ministers from the Group of Seven richest countries.

A deal struck by Brown and the G7 to cancel up to 100 per cent of debt owed by the poorest nations overshadowed the usual focus on currencies.

While Greenspan lauded the dramatic rise in standards of living since Smith's time he also said in the address, which received a half-minute standing ovation, that "regrettably, much of the developing world would appear familiar to our forebears".

"Pestilence is present in the form of Aids and, as a consequence, life expectancy in much of Africa is not much different from what it was in most of the world two centuries ago."

The Fed chairman, who was knighted in Scotland three years ago, was made an honorary member of the Royal Society of Edinburgh, shared by Smith.

Greenspan was to receive an honorary degree from the University of Edinburgh yesterday.

- REUTERS