PROFESSOR Gavin Kennedy, who has died at the age of 79, was the pioneer of a Nationalist outlook on Scottish economics, a subject which today has moved to the forefront of debate on the nation’s future. But this by no means exhausted his contribution to public affairs. Tolerant and generous, his mind was capable of pursuing quite unexpected enthusiasms. His main focus always lay on humanity rather than on theory.

He was born in Yorkshire, of Scottish descent, and not till he reached his 20s did he get back to his ancestral homeland to study economics at Strathclyde University, graduating with a BA in 1965 and then studying for an MSc. After taking his PhD at Brunel University in London, he returned to Strathclyde as a senior lecturer in 1973.

A student of his at that time, Dr Jim Walker, now of Hong Kong, calls him “one of the most gifted, inspiring academics I have ever encountered … There was standing room only at the 9am lecture (that was about 350 people). He repeated it at 4pm the same day to another 100 – the ones who couldn’t get up in the morning. If you hadn’t fallen in love with economics by the time you had listened to Gavin Kennedy there was something seriously wrong with you.”

But it was not with the increasingly abstruse mathematical school of orthodox modern economics that he beguiled his students. He took, right from this start of his career, a close interest in the theory and practice of negotiation, which then scarcely counted as an academic subject at all. Early on, he sallied forth from his classroom to learn first-hand how negotiations were carried on in major corporations such as Shell in London or Scottish & Newcastle in Edinburgh. He worked out a theory that all shared a common process with four phases: prepare, debate, propose, bargain.

In 1980 he left Strathclyde for a professorial chair at Heriot-Watt University, and in 1986 he founded a company, Negotiate, to commercialise what he was teaching. In the end he would train thousands of managers in the techniques he had identified. They are still part of the curriculum at Edinburgh Business School. In his second home city he became as personally popular as he had been in the first one. During lavish parties at his big house in Morningside, the Tory Secretary of State, Malcolm Rifkind, might rub shoulders with the leader of the Labour opposition, John Smith.

Not that Gavin was in any way politically neutral. He felt inspired by the reawakening of Scottish nationhood, and at first belonged to the left wing of the SNP. He became active, along with the youthful Alex Salmond, in the ’79 Group, which called for a “Scottish socialist republic”. Yet in time both men mellowed, along with most of their colleagues. Gavin was elected a member of the party’s national executive. He wrote sensibly on the touchy subject of defence and even more moderately on the chance that both Scotland and England could continue in membership of the EU as “good but independent neighbours”. In the General Election of 1979 he was the SNP candidate in Edinburgh Central but, like his fellows in the city’s other constituencies, came bottom of the poll.

In the following decade of Thatcherism, the name of Adam Smith was frequently evoked to justify the UK Government’s policies. Gavin would have none of it. He devoted himself to detailed study of the text of The Wealth of Nations and Smith’s other works, which was eventually to bear fruit in two books of his own. Gavin summed up his conclusions: “Adam Smith is often hailed as a leading figure in the development of economic theories, but modern presentations of his works do not reflect Smith’s actual ideas or influence during his lifetime … Smith’s name and legacy were often appropriated or made into myths in the 19th and 20th centuries, with many misconceptions persisting today.”

These labours took up a great deal of Gavin’s time and energy, but it was easy to follow the development of his thinking because he became one of the earliest and most prolific bloggers, under the title Adam Smith’s Lost Legacy. In the blog he worked through many knotty problems in lively exchanges with his readers. He wrote the last entry a year ago, reporting the serious problems he was now suffering with his health. He also said he had started on a further book about Smith bringing in a historical perspective on free markets. He left his papers to the National Library of Scotland. He is survived by his wife Patricia and their five children.

David Simpson, a professorial colleague from Strathclyde, paid tribute to Gavin as “a very kind, gentle man, of great breadth of interests and enormous energies”.