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 and driving force 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 become 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 churchyard.
Panmure House is the only surviving home of that pantheon of philosophers who made the Scottish Enlightenment. It’s an intimate space with just two main rooms of any consequence. Yet the ambience that emanates from the elegant library, where Adam Smith edited his final volumes 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 feather in the bonnet for Professor Lumsden, for Edinburgh Business School and for Heriot-Watt University.
It has been a long and tortuous personal journey for Professor Lumsden, now in his early 80s. In darker times, it has been acrimonious: the project has been embroiled in delay, red tape and politics and was branded “Lumsden’s Vanity Project”. But dogged determination, imagination and donors’ generosity have helped overcome many hurdles as Panmure House emerges 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. It’s amazing how these things work out. 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 this smart-alec Scot, and he was asked to fill in by teaching 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, 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, 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 came up, 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, which brought in considerable funds. 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”. This was what was to be taught in class. By 1990, he had three courses (finance, quantitative methods and accountancy), which were then published by Pitman. Professor Gavin Kennedy, the well-known Scottish economist, was added, with his book on negotiation.
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 at Riccarton and then 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 years of neglect. It took a number of years to set the wheels in motion, but Heriot-Watt’s principal at the time, Anton Muscatelli, now head of the University of Glasgow, was an economist and supported the idea.
In July 2008, Edinburgh Business School was granted permission by the university’s court to purchase the building for £800,000. Panmure House was bought in September and surveyors were appointed to undertake the project management and development. Architects were chosen to work with structural engineers to make the building weathertight. Edinburgh Council agreed to grants for the external stonework. However, the home needed full-scale refurbishment, including the raising of floors and repairs to roofs and ceilings.
Professor Lumsden chaired a working group to look at fundraising and initial designs. The first scheme, which involved the construction of a large glass block containing a new access and emergency staircase, was greeted with consternation by several heritage organisations. The application was called in by Historic Scotland on the grounds that “the extension would radically change the appearance of the building, distracting from its proper understanding and harming its architectural integrity”.
A public inquiry in March 2011 granted listed building consent for a regeneration proposal, with Scottish ministers accepting the idea of development, but there were still issues to contend with. The cost of the works at this stage stood at £2.3 million, and so a fundraising committee was set up by Professor Lumsden, Professor Andy Walker and Alick Kitchin. Friends of Panmure House was also set up as a registered charity in the US, and Scotland has given £1 million towards the building.
“When we first came to see Panmure House, it was in a terrible state of decay. The original beams were in the roof but not a lot else remained. But it was an exciting project and we decided to go fundraising.”
Chris Watkins, a former head of major projects with Historic Scotland, was appointed by the School as in-house project director. He identified several shortcomings in the initial glass box design, primarily that the scheme required modification to gain more national support. A number of workshops, using Professor Lumsden’s “Living Memorial” theme as the starting point, set Panmure House on the path to becoming a “Home of Independent Thinking”. Adam Smith used his home to entertain key members of the Enlightenment, although it was not clear whether luminaries such as Robert Adam, David Hume, James Hutton or Joseph Black were among his guests.
Fundraising went on in the US and Far East, with great support from Hong Kong, Singapore and Japan, where Adam Smith remains a revered figure. An American Economic Association fundraising conference was held in San Diego, with several Nobel Prize laureates in Economic Sciences in attendance. At least 20 laureates have already backed the plan, and Professor Orley Ashenfelter of Princeton University, and former president of the American Economic Association, is chairman of the advisory board.
A target of £10 million was set for the regeneration and running costs: £4 million in capital funding for the repairs and £6 million for an endowment that will allow Panmure House to continue as an intellectual hub. When Keith Lumsden retired from Edinburgh Business School, he retained a deep interest in the project. Now it nears completion. His hi-vis tour in April gave him a satisfying sense that his mission to honour Adam Smith is almost complete.