BY BUSINESS WRITER KENNY KEMP

 A PROFESSOR'S JOURNEY WITH ADAM SMITH

On a late April morning, a hard-hat and hi-vis-vest tour of Panmure House was undertaken by Professor Neil Kay, of Edinburgh Business School, and conservators and experts in the works of Adam Smith from the National Library of Scotland. One of the special visitors joining this tour was Professor Keith Lumsden, the visionary behind the regeneration of Adam Smith’s home.
 
“It really is something to see how Adam Smith’s home is being brought back to life and how it will becme a fitting place to mark his legacy to the modern world of political theory and economics,” he said, gazing out from the freshly painted library towards Smith’s burial place in nearby Canongate kirkyard.Panmure House is the only surviving home of that pantheon of philosophers who made the Scottish Enlightenment. It’s an intimate space; the house runs to 4,000 sq ft, its centrepiece being the two main rooms where Smith gathered people together to eat and drink and discourse about the issues of the day. Yet the ambience that emanates from the elegant library, where Smith edited his final editions of The Wealth of Nations, is certain to inspire future generations of thinkers. In May 2018, the contractors working on the project were in the process of handing Panmure House over to Edinburgh Business School in preparation for a series of opening events and private fundraising dinners. The re-emergence of Panmure House is a significant event for Professor Lumsden, for Edinburgh Business School and for Heriot- Watt University. It has been a long, personal journey for Professor Lumsden, now in his early 80s. The project has taken time to come to fruition, with all the challenges that come with renovating a building of this age and heritage. However, dogged determination, imagination and the generosity of donors have helped overcome these hurdles and allowed Panmure House to emerge as an intimate and historic addition to Edinburgh’s – and Scotland’s – intellectual landscape.
 
“In 1976, the University of Glasgow celebrated 200 years since The Wealth of Nations. They had a seminar and invited the Nobel Prize laureate in Economics, George Stigler, from the University of Chicago, who opened his speech by saying that Adam Smith was alive and well and living in Chicago. I would like to say that Adam Smith is alive and well and we’re bringing him back to Edinburgh,” said the Professor. The seeds of this remarkable regeneration go back many years. After graduating from the University of Edinburgh, Professor Lumsden went to Stanford University in California on a scholarship in 1959. He stayed in the US to complete a PhD and became immersed in how economics was being taught. “I enjoyed Stanford; it was a great place. One of my favourite tutors was Kenneth Arrow, who won the Nobel Prize for Economic Sciences with John Hicks in 1972. I went to his first class in public finance and he was talking about the rights of minorities and he quoted Rousseau. I put my hand up and politely said he had obviously not read Rousseau’s recantation of the rights of minorities. I was asked to see Professor Arrow after class and I told him about the political philosophy course I had undertaken in Edinburgh.”
 
It was this Edinburgh course that introduced Lumsden to the work and importance of Adam Smith and spawned a lifelong appreciation and study of the Scottish economist. Arrow befriended Lumsden, who was then asked to teach quantitative methods at Stanford Business School on a short-term contract. “What was interesting was the classes were held in the law school because the business school, even then one of the major institutions in the world, did not have its own building at the time. Now a third of the Stanford campus is the business school.”
 
Ernest Arbuckle, who was dean of Stanford Graduate School of Business and chairman of Wells Fargo, offered Lumsden a job teaching economics. Under Arbuckle’s tenure, the school attained top-tier status as one of the best in the US. After several years, the then Dr Lumsden, still inspired by The Wealth of Nations and its mission to explain using practical examples of commerce, became involved in improving the performance of economics teaching. Lumsden was soon at the forefront of teaching innovation aimed at enhancing learning and understanding.
 
Increasingly, Stanford ran successful 10-week executive leadership courses during the summer attended by top-flight business people. In 1961, Lumsden met a psychologist called Allen Calvin, who was working with Arthur Sullivan, a producer of reading aids for children. Calvin asked if Lumsden could write an economics textbook for schools. It was to be the start of a successful
career authoring textbooks and “programmed learning” materials. Lumsden described economics as “the social science which studies how society uses scarce productive resources to produce the goods and services society wants”.
 
He was told to expand this into 30 pages to explain what it meant, and leading publisher McGraw-Hill published the first programmed learning text in economics in 1961. The three major university textbooks at that time were by Paul Samuelson, Campbell McConnell (both published by McGraw-Hill) and George Leland (Lee) Bach. Lumsden was approached by Samuelson and MIT to create a programmed learning version of his bestselling textbook; instead he took up an offer by Lee Bach to join him in writing and editing Microeconomics and Macroeconomics, the first two programmed learning textbooks for college students, with his colleague Richard Attiyeh.
 
“These were all early elements that led to the MBA. Universities would send our textbooks out to students to read prior to starting their course, so the students would be ready and the courses could then be more applied with the use of case studies.”Stanford Business School’s research ethos was “publish or perish”. Lumsden chose to undertake research in economics education and pedagogy because he felt there was work to be done on understanding how students actually learned. “It was an untouched field. There was something wrong with the way we went about it.”
 
It became a mission for Lumsden to use programmed learning to teach, developing relevant business case studies to test a learner’s capabilities. It was also at this time that computers were being used more in teaching and for analysis. Stanford was involved in building one of the first computer simulations of the US economy. This allowed students to role play with monitoring fiscal policy to see what the outcomes might be in terms of employment and industrial output. Then an opportunity to return to Edinburgh arose, and Professor Lumsden moved to Heriot-Watt University, where he harboured an ambition to create a distance-learning MBA. Simultaneously, Heriot-Watt had been building a reputation for its own executive learning programme, working with the likes of ScottishPower, Hewlett-Packard and Reckitt & Colman. Lumsden commissioned various experts and teachers to produce distance-learning materials, based on first explaining the “concept” and then illustrating it by means of an “example”. By 1990, three courses (finance, quantitative methods and accountancy) had been developed, which were then published by Pitman. Professor Gavin Kennedy, the well-known Scottish economist, added a book on negotiation.
 
The rest of the MBA modules soon followed, and within five years the Financial Times had named Heriot-Watt University the biggest producer of MBAs in the world. This helped seal the University’s success in the business learning market, giving it the financial muscle and international kudos needed to establish the Business Executive Centre and build the Esmée Fairbairn Research Centre on the campus, and then the building that now houses Edinburgh Business School.
 
It was around this time that Professor Lumsden began to see the opportunity to take on Adam Smith’s Edinburgh home. The house was a vacant A-listed property in the heart of Edinburgh’s World Heritage Site. It was in a parlous state and had suffered decades of neglect. It took a number of years to set the wheels in motion, but Heriot-Watt’s Vice-Chancellor at the time, Anton Muscatelli, now head of the University of Glasgow, was an economist and encouraged the idea.
 
In 2008, Edinburgh Business School was granted permission by the University’s court to purchase the building. It needed full-scale refurbishment, including the raising of floors and repairs to roofs and ceilings, as well as the excavation of the basement to allow for the building to be connected to all major services.
 
Fundraising commenced in earnest and by 2014 the exterior walls, roof and windows had been renovated. But the project then slowed down, and it was only after the appointment of Heriot-Watt’s current Vice-Chancellor, Professor Richard Williams, in 2015, and of the new Executive Dean of Edinburgh Business School, Professor Heather McGregor, that it was revived. Contractors were appointed in 2016, by which time Professor Lumsden had retired from the Business School, although he remained a strong supporter of the project.
 
“To support the transition we were delighted Prof Lumsden was able to take up a three-year post as Master of Panmure House in recognition of his contribution,’’ said Prof McGregor.
 
The Stanford University connection with Heriot-Watt, a door opened by Lumsden, was cemented in April 2017, when Scotland’s First Minister Nicola Sturgeon visited Stanford and announced a research partnership with five Scottish universities, and in particular plans for Heriot-Watt’s economic postgraduate scholarship, which will be based at Panmure House. When Keith Lumsden retired from Edinburgh Business School, he retained a deep and passionate interest in this project. His hi-vis tour in April gave him a satisfying sense that his original idea to restore the house in order to honour Adam Smith is almost complete.

KENNY KEMP is an award-winning business writer. He is currently writing the 150th-anniversary history of Baxters Food Group, the iconic Scottish jam and preserves business set up in 1868 in Fochabers and still going strong.