Delicious
Digg
StumbleUpon
Newsvine
Facebook
Google
Yahoo
TechnoratiWho Owns Adam Smith?
Adam Smith is widely regarded as the patron saint of capitalism. His 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations is still widely and justly celebrated.This wasn't his only accomplishment. He was part of a larger intellectual movement known as the Scottish Enlightenment, along with such thinkers as David Hume and Frances Hutcheson. They were fascinated with questions that would later be taken up by the social sciences. Smith also wrote on the subject of jurisprudence and moral philosophy, or what we might call political science and psychology today.
His views on sympathy as the basis for morality, as developed in his "Theory of Moral Sentiments," actually hold up pretty well in the light of recent research in biology, psychology and brain research.
Smith's enemy in Wealth of Nations was mercantilist economic theory, which held that the health of a national economy depended on the accumulation of precious metals and a favorable balance of trade. Mercantilism was often supported by powerful economic interests allied with the state and enjoying monopolies and special privileges. In opposition to this policy, Smith favored a system of free trade and open, competitive markets.
The system he describes and advocates in his most famous work is one of small proprietors, artisans and traders, each of whom, in pursuit of self-interest, promotes the public good.
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest," he wrote. "We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages." In doing so under conditions of true competition, the public good is often promoted as if by "an invisible hand."
Smith died in 1790, before the industrial revolution, mechanization, and the rise of large-scale businesses, let alone the government-sanctioned corporations, trusts, and giant global industrial or financial organizations that were light years from his world of small-scale competition. These often distort outcomes and result in what economists call market failures, such as monopolies, oligopolies and externalities that can cause a lot of damage to individuals and the public but don't show up on a corporation's bottom line.
One problem with becoming an icon is that people often honor and remember the symbol rather than the real person. Such was the case with Adam Smith, who said some things that might surprise people.
First, while he celebrated truly competitive capitalism, he didn't trust capitalists very much. Consider these quotes:
· "All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
· "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
Second, he believed that workers deserve a living wage:
· "It is but equity ... that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerable well fed, clothed and lodged."
Third - and here's a real shocker - he believed that the wealthy should pay more in taxes:
"The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state."
Fourth, he believed in the necessity of public investments in infrastructure and public goods. He spoke of the duty of government to support "public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain."
If he were alive today, he would probably consider education and health care as examples of this kind of public goods.
Smith and his Scottish Enlightenment allies were not ideologues and were better psychologists than those today who view humans as organic calculating machines. They were pretty, well, enlightened. They recognized that a good society and a healthy capitalist economy depended on a shared prosperity.
As his dear friend the philosopher David Hume put it in 1752, "Every person, if possible, ought to enjoy the fruits of his labour, in a full possession of all the necessaries, and many of the conveniences of life. No one can doubt, but such an equality is most suitable to human nature, and diminishes much less from the happiness of the rich than it adds to that of the poor."
I suggest we unleash some of that.
Wilson is director of the American Friends Service Committee's WV Economic Justice Project and publishes The Goat Rope, a daily public affairs blog: www.goatrope.blogspot.com.
© Copyright 1996-2007 The Charleston Gazette
53 Comments so far
Show AllGreat posts Enterik,
I didn't know you were still here. A most delightful conversation for me, thanks.
Where do you go when you're not "sharpening you claws?" I'd love to surf over to it.... or is it by invitation only?
Cheers,
pac
Atelios, I agree that the invisible hand is not so even handed, that outcomes are not the result of free market competition, that the best product doesn't always win the competition (betamax WAS better than VHS). There are a whole host of problems with the market that ensure it will not behave as Adam Smith intended for it is not sufficiently moral and not suffciently local. The electric car is a good example, even if I don't praticularly favor continued organization of life around ones car. For instance, all of those plugged in cars need to get their energy from somewhere, in most cases coal-fired and nuclear plants. My ideal would be for solar panel covered parking lots that you could plug in to charge up at your destination. Not only would it charge during the day, for a nominal parking fee, it would expand solar markets and circumvent the need for new power plants, and it would also reduce cooling cost by providing shade, and excess capacity isn't lost either. Win-win.
I'm probably too late for this to be seen by anyone. But one thing I wanted to add is this -> Have you seen the movie "Who Killed the Electric Car")? That movie convinced me of something about capitalism. They talk about the invisible hand of the free-market system. I DO believe there is this type of thing happening, there IS something you could call an invisible hand directing certain things to take place. But after watching that movie, what I realized is that (and the reason I am stating it here is because I don't remember ever hearing anyone mention it) our capitalistic system seems to have an invisible hand keeping our society in a state of turbulence and chaos. Just think, what would happen if everyone had free health care. What would happen if everyone was pretty much taken care of and had what they wanted for a comfortable life. Wouldn't our economic system come to a screeching halt? Isn't it incumbent upon our economic system that things always are not quite settled that people are always in a state of anxiety or at odds with a state of being they would prefer to be in? What I am saying is, we've got to come up with a system that ENCOURAGES the taking care of problems, rather than DISCOURAGES it. I think with the knowledge and technology we have today, we could probably take care of pretty much everyone's needs easily. But I think the SYSTEM does not want that. We could all be driving around in electric cars, charging them up every night at home. And rarely have to take them in for service. But see, this would put lots and lots of people out of work. So our SYSTEM makes sure things like this don't happen. Because our SYSTEM depends on most people working to make money to spend on other things. If things were set up so everyone had what they need, there is no money circulating. The SYSTEM somehow must prevent this type of thing from happening. THAT is the invisible hand, or at least one of the things the invisible hand, is doing, in my opinion.
Ken, I specifically chose that language to echo the PNAC quote "absent some catastrophic and catalyzing event, like another Pearl Harbor..." to highlight that something which may seem unlikely now, may come to pass. So unless the central banks of the world start to dump dollars or we reach peak oil or an asteroid strikes, it is not in the interests of the powerful elite to stop the gravy train.
And yes this is by modern American reckoning. I fully expect that the first two of those things will come to pass in my lifetime, so by "any time soon", I am figuring 20 or 30 years until the gradual changes force more dramatic changes. I also realize that in comparison to Chinese history that is a blink of an eye. And I am reminded of the fate of Manchu Qing dynasty that ruled the Han for a scant 300 years...
Enterik says above (within 2 stars):
** Absent some worldwide economic/energy collapse we will not be returning to the salad days of the Yeoman farmer any time soon. Therefore, much of what the anti-federalists opposed seem well beyond the reach of their modern day counterparts**
Enterik, you dismiss the possibility of a "worldwide economic/energy collapse"? First of all - what is your time frame. Second of all. The country of the US of A is so young. China has been around for millenia and even if some country thought they captured China (or India or really even Iraq or Iran), they would be sadly mistaken.
Lets all acknowledge that global trade has not been of benefit for the People. Perhaps for a few, but that is it. The People ought demand better. We need to.
Peace,
Ken Hausle
pacplyer: I very much enjoy your comments. It is clear you have a dynamic intellect and I enjoy your contrarian style. It puts an engaging nature to what might otherwise be stark depressing subject matter. I learn something every time I read your posts.
ENTERIK: Well, thanks again for the compliment and taking the time to respond in kind.
pacplyer: Now I don't mean to be condescending, but I'm not sure if you recognize the technique of misspelling profanity so that automated profanity filters which are used by many sites won't delete all you posts or possibly ban you due to TOS violation. "Dam" and "Azzhole bush" will make it through since one holds water and the filter can't distinguish between the two, and the latter example is unrecognizable by the software.
ENTERIK: No offense taken. I was going for a silent correction for your benefit but somehow capitalized the N and bolded the phrase to emphasize a point I decided not to make.
pacplyer: Common dreams may not use that software or they may not delete your very intelligent posts as punishment now…. on the other hand if someone complains, which happens at yahoo, they go back and wipe out everything you ever wrote. Unlike Bush's presidential library, I would hope that your insights would be preserved throughout time…. who knows? Maybe in the future this site will be an example of how you parse the deficient mind of a modern despot. Wouldn't that be nice?
ENTERIK: I see the Yahoo! wipe as a lost resource, although I suspect the information still exists, I hold out no hope it will return nor the fora that supported it. Like these Commondreams boards it was a useful scratching post to sharpen my claws.
pacplyer: Now this is not to say that my spelling is not atrocious, it is. I'm a product of the substandard neocon education system.
ENTERIK: Recent NCLB figures show an miniscule increases in reading and math scores at 4th and 8th grade. Of course this was obtained by dead-ending difficult students and relaxing standards relative to prior years, but if the Neocons determine the metric of the standard technically the education cannot be termed substandard, at least not in the aggregate :-P
---
ENTERIK: If you're truly an anti-federalist…get off the internet and the road, it's a matter of principle :-P
pacplyer: I'm not sure if you recall what the anti-federalist party represented. They were in no way opposed to transportation or mail carriage (the internet of the day), quite the contrary, in fact those complex public systems were built and administered by many Anti-Federalist prior to the rise of party. Anti-Federalist championed a weak central government, and the deference of any unnamed powers to the states (a position championed and then horribly betrayed by George w. bush the Inferior.)
ENTERIK: More like a rhetorical tack Bush the lesser coopted and discarded once it's usefulness was spent. Anyways, my point, tongue in cheek, was that much of what many take for granted these days has sprung from the auspices of a strong central government, a federal judiciary and a federal reserve. The Federal system has grown for many decades and is interwoven through the very fabric of American life and literally set the pattern for much of the world as it is today. Absent some worldwide economic/energy collapse we will not be returning to the salad days of the Yeoman farmer any time soon. Therefore, much of what the anti-federalists opposed seem well beyond the reach of their modern day counterparts. That is not to say that the spirit of individualism and autonomy have no place in modern life or that there should not be limits on expansion of the federal systems purview. So the idealogy has it's place in the public forum even if not ultimately adopted, especially with regard to the Hamiltonian notion that debt is good...
ENTERIK: I am not a big fan of the Fed but one can argue that neo-merchantile policy supporting the Fed enabled the very cushy existAnce (spelling? - ed) we enjoy today. [ENTERIK: Pac, Would you accept existenz?]
pacplyer: Yes, I see that viewpoint. It could also be argued that while an specific individual may enjoy a very cushy existence, the same cannot be said for most Americans. Sure, we have all the wicker baskets and cheap chinese junk we could ever want from costco and walmart, but real wealth: land, financial independence, large ticket items are outside the grasp of most citizens.Even vehicles are now ten times what my father paid for them when I was a boy. Wages have not nearly doubled in most professions in that time period. Cost of living is out of sight while buying power has dropped. Energy expense alone eat up all D.I. for most people in a month.
ENTERIK: I didn't say wealthy or secure, I said cushy, meaning complacently comfortable. Too many are distracted by the ephemera of consumerism to stir from their indolence. For still too many have basic necessities out of reach. Too many are wage slaves. Too many stew under the persistant stress of imminent homelessness. There are many ills in our society, every society has them, as did the states under the Articles of Confederation. I suspect we will agree on many of the problems and few of the solutions. Consider the possibility that the anti-federalist and libertarian ideals you promote are suborned by the already wealthy for the purposes of further wealth concentration and that the practical consequence of your boostering will be their continued enrichment to the detriment of the rest.
pacplyer: The constant mantra for increased productivity has destroyed the quality of life for most workers; they pull two jobs to make ends meet and many are unhappy. What's worse is that this global village is unsustainable in the amount of transport emissions necessary for globalization to go forth. At some point, skin cancer and pathogens from millions standing in the water coughing just won't be worth it. Never mind bird flu vector transmission, there are 747's full of migrant workers coughing their way across the ocean. What is the economic cost of a pandemic?
ENTERIK: Those are externalities :rolleyes: Seriously, I agree with all the problems you have forecast and while we seem to disagree on the eventual solution to be employed, such plans may not be mutually exclusive. As a self-defined progressive, I seek to balance the benefits of my individual autonomy and our ccoperative investment. I believe, as you seem to, that the relentless profit maximizing impulse that spurs growth, extraction and externalization of costs generates most of our societal ills. I believe that growth needs to be restrained by long term considerations for the human habitat and species. The longer we wait, the worse it will be.
pacplyer: I suppose on the upside, just like the dark ages, the survivors will find themselves quite wealthy.
ENTERIK: Many emerged from the middle ages in a state of serfdom. They survived and were not the better for it. The wealthier will undoubtedly find themselves wealthier still. There is a striking simlarity to the tide of family farm failures in my lifetime, where the yeoman farmer has lost his stake and entered into the employment of agribusiness. In many aspects he is a serf.
pacplyer: Is this then the Capitalists' Dream? It has nothing to do with the relative Utopia my father and grandfather enjoyed.
ENTERIK: If it were, who would be brave enough to call himself a capitalist? A sociopath but not a smart one...
pacplyer: (I realize most of my observations go far past the scope of your comments.)
ENTERIK: That's how conversations evolve...
Enterik:
Now that I posted this, I noticed I didn't attribute your quotes properly (snips etc) and somehow your smiley inflection got cut off. I did not mean to take your quotes out of context. My apologies. Readers please reference Enterik's original post three above this.
Cheers,
pacplyer
Enterik,
I very much enjoy your comments. It is clear you have a dynamic intellect and I enjoy your contrarian style. It puts an engaging nature to what might otherwise be stark depressing subject matter. I learn something every time I read your posts.
Now I don't mean to be condescending, but I'm not sure if you recognize the technique of misspelling profanity so that automated profanity filters which are used by many sites won't delete all you posts or possibly ban you due to TOS violation. "Dam" and "Azzhole bush" will make it through since one holds water and the filter can't distinguish between the two, and the latter example is unrecognizable by the software. Common dreams may not use that software or they may not delete your very intelligent posts as punishment now.... on the other hand if someone complains, which happens at yahoo, they go back and wipe out everything you ever wrote. Unlike Bush's presidential library, I would hope that your insights would be preserved throughout time.... who knows? ;) Maybe in the future this site will be an example of how you parse the deficient mind of a modern despot. Wouldn't that be nice?
Now this is not to say that my spelling is not atrocious, it is. I'm a product of the substandard neocon education system.
ENTERIK: If you're truly an anti-federalist…get off the internet and the road, it's a matter of principle
Pac: I'm not sure if you recall what the anti-federalist party represented. They were in no way opposed to transportation or mail carriage (the internet of the day), quite the contrary, in fact those complex public systems were built and administered by many Anti-Federalist prior to the rise of party. Anti-Federalist championed a weak central government, and the deference of any unnamed powers to the states (a position championed and then horribly betrayed by George w. bush the Inferior.)
ENTERIK: I am not a big fan of the Fed but one can argue that neo-merchantile policy supporting the Fed enabled the very cushy existAnce (spelling? - ed) we enjoy today.
Pac: Yes, I see that viewpoint. It could also be argued that while an specific individual may enjoy a very cushy existence, the same cannot be said for most Americans. Sure, we have all the wicker baskets and cheap chinese junk we could ever want from costco and walmart, but real wealth: land, financial independence, large ticket items are outside the grasp of most citizens. Even vehicles are now ten times what my father paid for them when I was a boy. Wages have not nearly doubled in most professions in that time period. Cost of living is out of sight while buying power has dropped. Energy expense alone eat up all D.I. for most people in a month. The constant mantra for increased productivity has destroyed the quality of life for most workers; they pull two jobs to make ends meet and many are unhappy. What's worse is that this global village is unsustainable in the amount of transport emissions necessary for globalization to go forth. At some point, skin cancer and pathogens from millions standing in the water coughing just won't be worth it. Never mind bird flu vector transmission, there are 747's full of migrant workers coughing their way across the ocean. What is the economic cost of a pandemic?
I suppose on the upside, just like the dark ages, the survivors will find themselves quite wealthy.
Is this then the Capitalists' Dream? It has nothing to do with the relative Utopia my father and grandfather enjoyed.
(I realize most of my observations go far past the scope of your comments.)
pacplyer
My speculation is that the "fear" is out of the hands of the "fed". If there is going to be an economic breakdown, it will merely reflect the undeniable breakdown of the earth's "humanity-supporting" ecosystems that we are all now witnessing. "Business as usual" is not sustainable. Not anymore.
Anyhow, maybe if the fed wants to minimize the disruption, they should just start being totally honest and frank with US. How refreshing would that be????? Also, i could be wrong but i think Adam Smith was all about keeping the vast preponderance of commerce very local and regional. This is what is best for the community.
Peace,
Ken Hausle
pacplyer: Great comments by everybody. I dare say, as good as the article.
ENTERIK: Let me be the first to accept your compliment :-P
pacplyer: It seems to me that pure capitalism or pure communism is a utopian fantasy. Neither system, in the presence of a large central government is worth a damN. And through the history of a nation, the degree to which variation occurs can adversely affect the intent of it's original proponents. Marx's manifesto may read good in theory, but once the red party gets hold of it, the ideals it championed are no where to be seen.
ENTERIK: The same can be said for Adam Smith's highly moral (from a modern perspective) manifesto on the Wealth of Nations.
pacplyer: Adam Smith's core principles require the presence of a free market to function properly. Wide use of no-bid contracts, however are something adverse to meaningful market mechanism.
ENTERIK: It is not merely the presence of no-bid contracts that prevent the idealized market from being realized, nor is it the litany of corporate and neo-merchantile excesses you go on to detail below. No, at it's very core, the market is a moral construct of the society which implements it, there is no natural or free state that can be pointed to, as such the market should be formulated with the general welfare as a cynosure with which to navigate upon market currents.
pacplyer: Adam Smith's free market ideas require the presence of competition to even have a basic chance of functioning as he intended them to.
ENTERIK: An important frequently overlooked factor in the general failure of Smith's market conception is that competition is not rational, consumers are not utility maximizers nor expenditure minimizers and that they suffer from an information imbalance. And there's more...
pacplyer: But the wild merger and acquisition of the last few decades has destroyed any hope of meaningful competition in many markets. [NOTE: I snipped out your examples]
ENTERIK: Competition is now global, neat trick huh?!, we must stand United if we are to increase our global market share by competing effectively, surely this is a pareto efficient outcome :-P In this frame, competition has rendered the most internationally competitive entity, by definition.[please note sarcastic tone]
pacplyer: I really like wild rose's anti-federalist party ideas. It's a shame Hamilton and his crowd so aggressively opposed that movement.
ENTERIK: If you're truely an anti-federalist...get off the internet and the road, it's a matter of principle :-P
pacplyer: The federal bank was a horrible idea, and can it stop massive bank failures as in 1929? Buckle your seat belts, I think we're going to find out soon…..
ENTERIK: I am not a big fan of the Fed but one can argue that neo-merchantile policy supporting the Fed enabled the very cushy existance we enjoy today. Currently, the Fed, with the help of Central Banks around the world is trying to do just that, tamp down the securitized subprime mortgage crisis here in the US before it breeds FEAR and spreads further than it has. Time will tell if the extrordinary injections of liquidity can do the job while the dulcet tones of Fed economists, past and present, lull the bewildered herd back into economic grass munching.
Great comments by everybody.
I dare say, as good as the article.
It seems to me that pure capitalism or pure communism is a utopian fantasy. Neither system, in the presence of a large central government is worth a dam. And through the history of a nation, the degree to which variation occurs can adversely affect the intent of it's original proponents. Marx's manifesto may read good in theory, but once the red party gets hold of it, the ideals it championed are no where to be seen.
Adam Smith's core principles require the presence of a free market to function properly. Wide use of no-bid contracts, however are something adverse to meaningful market mechanism.
Adam Smith's free market ideas require the presence of competition to even have a basic chance of functioning as he intended them to.
But the wild merger and acquisition of the last few decades has destroyed any hope of meaningful competition in many markets. For example: Microsoft. It's not just a oligopoly. It's a near-monopoly since it's only competitors sneak around in the shadows hoping not to get squashed.
For example: At&t. Didn't we just get done breaking this monster up? It now wants to finish owning most of the U.S. internet trunking and charge speed and bandwidth to the highest bidder (corps)
For example: Bank of America and Chase. Which one has more off-book mortgage loans? nobody knows but they have sucked up more small financial institutions than I can count.
For example: Boeing. You have one choice to buy an airliner now in the U.S, or to build most missile systems.
For example: Oil companies. Who did Exxon just merge with? They are colossal!
For example: Wal mart. How many mom and pop shops who carefully cared for their employees did this monster wipe out?
I could go on all day. None of these oligopolies are what Adam Smith intended!
I really like wild rose's anti-federalist party ideas. It's a shame Hamilton and his crowd so aggressively opposed that movement. The federal bank was a horrible idea, and can it stop massive bank failures as in 1929?
Buckle your seat belts, I think we're going to find out soon.....
pac
Well here is the main thing as far as i'm concerned with respect to this article. Adam Smith had some good ideas. Nobody owns these ideas, not even Adam Smith, but we would probably all benefit if the ideas were honestly studied and truthfully discussed with an "eye" towards finding solutions to the present difficulties.
I know this is easier said than done, but it will never be done until it first enters into the consciousness and there is an awareness that it is a real possibility (not just a myth.....)
Peace,
Ken Hausle
I thought you were going to say the "United" part was a myth...
Anyways, the Eye of Sauron is an allegory, at least in the sense I used it...
"The Eye [of Sauron]: that horrible growing sense of a hostile will that strove with great power to pierce all shadows of cloud, and earth, and flesh, and to see you: to pin you under its deadly gaze, naked, immovable." - The Two Towers
...I'll leave it to you to decide where Tower of Barad dur stands.
Enterik,
"Sauron" is some mythical character assuming your referencing Tolkein.
Similarly, the United States of America is rapidly becoming a myth. Or at least the "of america" part of it.
Peace,
Ken Hausle
I don't think Haiti is worthless either. I think Haiti is the prime candidate to tip the balance toward a more structured society where the depredations of free market idealogy can be limited. Predictably, their efforts to resist IMF austerity measures and privatization plans have drawn the gaze of Sauron toward Haiti. They will not throw off their shackles so easily this time, they have a much harsher, and closer, Master in the United States.
As always, the ideas of these "libertarians" seem to arise in some kind of fnatastical, utterly ahistorical model of the world that has no relation to the real historical world. The military industrial complex nothwistanding, huge corporations derive nearly all of their their power form the capitlist system - so get rid of the corporations and all that power would simply be in the hands of powerful physical persons as it did in the robber barron era - which was the last time your "libertarian" ideas were tried.
But as far as socialism, in most cases it failed because capitailst states, fearful that it just might work, waged cold war, hot war, or economic war gainst it whenever a state tried even it's mild social-democratic variant - Spain, Chile, Argentina, Nicaragua, El Salbvador, Cuba, Vietnam, the Soviet Union, Indonesia, East Timor... millions have been slaughtered - then, the blood soaked capitalists, with incredible cutzpah, say socialism failed all by itself!
Enterik - I don't think Haiti is "worthless", but perhaps the "capitalist bankers" are.
Peace,
Ken Hausle
Upon actually reading a lot of the posts in this forum, it seems to me most of the debate is fueled by the misguided notion that communism and capitalism are antithetical, which is certainly not true. One would be hard pressed to find a nation where free market forces and state control are not found coexisting in substantial proportions relative to one another. Surely, those national entities labelled as communist have come and gone, just as those favoring capitalist impulses have, the only difference is that the capitalist bankers of the world are always willing to give capitalism another chance as long as there is some resource/value to be extracted, even worthless Haiti has a pool of cheap labor that can be abused.
I don't think anyone "owns" Adam Smith, but i sure think he had some good ideas. I particularly like the ideas about keeping commerce local, no trade secrets, and sellers being responsible for ALL of the cost of the goods they are selling.
Much of what he envisioned then might be just what we need now.
Peace,
Ken Hausle
I also believe Adam Smith's assertion of the invisible hand that moves the free market capitalism was limited to not necessarily producing the worst result for society. That's a long way from the definitely producing the best result for society impression most people have these days.
Also one of the preconditions for the success of Smith's market was the preference for employing domestic labor. Now how could have the mercantile class overlooked that one...
And please don't come back and say that true communism hasn't been tried and that it involves no government. According to Marx you have to start with a state and then have a 'dictatorship of the proletariat' And THEN the state will eventually wither away.
States, my good people, do not just wither away.
Actually communism is evil and has been shown repeatedly to not work. State sanctioned capitalism is also evil and would not be allowed to happen in a truly minimalist, libertarian government.
For those that do not understand the definition of libertarianism -- look it up.
Capitalism is evil in itself, as it beckons us all to genuflect before money and material things and put them ahead of everything else. It is going to, and it deserves, to fail. So damn be it, and to hell with the rich white man's affirmative action program of too many hundreds of years.
I have long thought that Adam Smith wouldn't recognize his teachings as interpreted by Milton Friedman or Alan Greenspan any better than Jesus would be able to recognize his teachings as interpreted by Pat Robertson.
I suspect Ralph Nader's capitalism is closer to what Adam Smith envisioned.
Long live Adam Smith. (And God protect us from Smith's followers.)
Adam Smith defended classic British capitalism inextricably linked to British imperialism, thus defending what George III did at his worst to the 13 colonies. For any state, in this case, Great Britain will seek markets where ever it finds them, and if not within that state will seek them in other lands-- think 13 colonies. If these lands provide these markets without a fight and thus placate the empire, the British one in this case, then fine. But if they don't, then force will come in to play, and the military, also British in this case, will take what the state wants at gunpoint, which is where militarism comes in with imperialism to provide markets for states in the capitalist context, and nothing will change that but the end of capitalism. This won't guarantee imperialism ends, but keeping capitalism will guarantee that imperialism continues. Now that's the real dea!
The economy of scarcity, of przing rare goods is also predicated on establishing cost differentials between resource and product including the value of labor.
I believe it was in the 6th century that Lao Tzu wrote the Tao te Ching before he left "civilization" to live with the "barbarians" - or dropped out. In it he notes the relationships of these dynamics.
I would also add that advices from the indigenous peoples include the necessity of our reaffirmation of ancestral wisdom. We are not accustomed to thinking in these terms despite the obvious necessity. Fortunately, we are in a position to draw from the legacies of the various cultures which have come to and contributed to the true legacy of the nation.
Below is a link to translations of the Tao te Ching. The third section addresses the question of peoples and goods:
http://www.yellowbridge.com/onlinelit/daodejing03.html
The Swiss have equality beause they insist that all are treated the same in matters of public interest. One person one vote.
They also have a Bill of Rights that means something.
They also require all to bear arms: the children of those who have a pile of private money as well as the the guy who herds the cows.
I don't think I get the Machiavelli reference (I kinda like him too).
Think of it this way, we will have the not-so-enviable-opportunity, to at last see Nicholo Machiavelli FORENSICALLY proven to be, what we have long suspected, A TWO BIT, HALF-ASSED TWIT.
Smith is taken as the patron saint of the 'free market', which is then freely translated as the patron saint of 'capitalism'.
The mid 18th century nascent market and capitalism, of course, are entirely different animals.
But there is an Adam SMith for all seasons, for all takers. You shop and select. Both the early Classical Economists and the anti-Classical Historical Economists saw Smith as a champion for their cause.
As peacemcd notes, there is a Christian element as well. A scholarly article (can't locate the reference) argues persuasively that SMith's 'invisible hand' is the hand of God at work as the outflowing of his will on earth - as embodied in 'natural law'.
And then there is J Shield Nicholson's 1909 'A project of empire : a critical study of the economics of imperialism, with special reference to the ideas of Adam Smith' - SMith as sophisticated defender of British Imperialism.
We are, it appears, all Smithians now.
The crucial divide is in the rise of the joint stock corporation (as WIlson notes) and its bizarre entrenchment at the heart of the system as an individual at law.
The Wealth of Nations is not the Bible but a mid-18th Century bon bon.
What we had was the best, to wit; collective rules, laws, regulations we HAD in place to counter capitalism's most fatal flaw....GREED. The socialist or 'communal' or perhaps even....yes compassionate side of Mr. Smiths treatise can be interpreted as just that....countering the fatal flaw of unbridled greed. The question burning most of us these days is in wondering just what "armageddonish trigger" has caused such a mad dash for unbridled greed. Conceptual analysis of all possible answers eliminates all but one. Our government has reached critical mass in every sense, and is in the process of effecting it's own self destruction
It is my understanding that a "communist society" has never existed. The exception may have been early mankind. In primitive communal societies, all able bodied persons worked for the good of the tribe. Every one would share in the hunt or what was produced communally. All instruments needed to hunt or gather food where held communally. They had no state (government). This was a classless society.
Theoretically it seems, one major component of a communal or "communist society" would be one without a government.
Maybe this would make sense to more people if they wanted a society without government.
PJD, 95% of what world? Not this world, surely?
How many times does communism have to be shown not to work, to convince you people that it doesn't?
Take China, for instance, which was sort of Communist China, up until recently when it became Capitalist / Communist China. The Union of Soviet Socialist Republics. Now capitalist Russia.
Since when is a minimalist government not a truly democratic government? And you said "in the absence of government, the wealthy powerful will simply hire the necessary private armed forces to keep the rabble in line."
The rabble, which is us, can fight our own battles. We're just as capable of forming armies as any rich corporation is of hiring them. Especially taking into account that when there is no government, the money that these hgue corporations rely..doesn't exist. Not if we don't want it to.
oldcommie said:
"I heartily agree with ezeflyer's statement:
A corporation where We the People own equal shares of non-transferable stock in our public treasure, receive equal dividends from its leasing and have equal voting rights in is a direct democracy. It's also one of the best definitions of socialism I've seen in a while. Right on!"
Funny thing. I ran the idea past a Republican friend and he said that I was a Republican. This could make it a universally acceptable solution and a win-win situation!
The Declaration of Independence was the first document to make the needs of the people the purpose of government.
This being true. It seems to me the question is basically this: are there collective needs and are there universal values? We should debate this out, then guarantee whatever the Public wants.
Private corporations can never address these precisely because they put private interests above public ones. Why should the things we use together and in common be considered private property? Wealth means collective -- the forests and the waters, our health, the media, the technology that builds the world. Riches, on the other hand, refer to private riches.
Another way to look at this is to define what it is to be human and to demand that collective society guarantee these things as rights. Clearly humans need the essentials of food, shelter, clothing, education, health care and culture. Only true public power in the broadest sense, enshrined in law and guaranteed locally, can possibly guarantee that everyone has equal access to their human potential.
Finally, what can it hurt for anyone to read some of the great political, and economic classics. I am sure we can all make up our own minds on the question, "makes sense to whom?"
Hey, would someone tell that maniac Jim Cramer about Smith?
thanx
"militantliberal, [the communiast manefesto] makes sense to whom?"
It make sense to the 95% of humanity, who must sell their labor, competing against other humans for a wage that will buy them another day of life.
"A minimalist government or no government at all..."
OK, so, in the absence of government, the wealthy powerful will simply hire the necessary private armed forces to keep the rabble in line. How, for crying out loud, is this an improvement over a truly democratic government??
Please. Put down your Ayn Rand novels, look at the real world, and think, please, just think!
Capitalism is fine as long as it is regulated to the extent that it cause no harm to people, country or planet.
It has been said on these boards before, "Unregulated capitalism always leads to fascism".
Thanks Rick Wilson for an excellent article.
Reclamation/reformation of capitalism seems an obvious goal, but how does one get there from here.
It seems the hint as to what has gone wrong lies in the statement, "Smith died in 1790, before the industrial revolution, mechanization, and the rise of large-scale businesses, let alone the government-sanctioned corporations, trusts, and giant global industrial or financial organizations..." Immortal and soulless organisations of immense power and wealth, in other words. One of Smith's basic premises was the no buyer or seller should be so powerful as to affect the price unduly.
How can one put the genie (or in this case the corporation) back in the bottle? Is there an answer to that?
El Cabrero, If we didn't have the government coddling the corporations, the unions, citizens, and organizations would have a chance.
BIG GOVERNMENT sucks. It doesn't matter if it's Left dominated or Right dominated BIG GOVERNMENT. It should be neither but possibly a little bit of both.
All we need to do is to aim again for the freedom we (the anti-federalists) once called for but never completely got.
We will never get it on the BIG GOVERNMENT track we're on now.
A minimalist government or no government at all.
Robert Settgast, yeah, there's a lot of that going on..misinterpretations.
It kind of reminds me of the way the neo-cons and neo-fascists, and following this, the liberals, misinterpret the word 'libertarianism'.
I heartily agree with ezeflyer's statement:
A corporation where We the People own equal shares of non-transferable stock in our public treasure, receive equal dividends from its leasing and have equal voting rights in is a direct democracy. It's also one of the best definitions of socialism I've seen in a while. Right on!
Mr Wilson;
Your clarification of Adam Smiths writings well stated & informative. However, the mis-interpretations of his Classical Economics Theory (an indirect advocacy of Laissez Faire policies) to justify wealth concentrations, is absent.
It is reminiscent of the mis-use of Darwin's theories of evolution (Survival for the Fittest). This biological theory was mis-applied as "Social Darwinism" to justify disproportionate distributions of wealth.
militantliberal, makes sense to whom?
You know, I wouldn't count Karl Marx out yet, either. I just re-read Communist Manifesto and much of the first section still makes sense.
Thanks for your comments on my op-ed! Frankly, I was surprised (and pleased) it got accepted.
I agree with the idea of reclamation!
Re: capitalism today. I think what we need is a system of countervailing power. Business has a role, but so do unions, governments, citizens, and organizations.
"There are a lot of writers, philosophies, and symbols that bear reclaiming in these days…"
There are. Especially Thomas Jefferson.
It should be remembered that Smith wrote at a time when the old feudal societal structures were dissolving under a wave of trade. Compared with the feudal structures, or the mercantalism that made apology for a very few wealthy folk having all the power, Smith was a raving liberal.
This, it should be said, was a by-product of his Christian faith, which is unmentioned in this article to avoid distraction from the main point. But reading Smith's canon, it is obvious that his goal was the common good of all, and his system was, in comparison with the other options, truly compassionate toward the poor.
There are a lot of writers, philosophies, and symbols that bear reclaiming in these days....
Thank you, frank1here and ezeflyer for those all-around awesome comments. Also, thanks to Rick Wilson and especially Adam Smith.
Those were the days! When this country was first forming and there so much hope. A wonderful seed of freedom that resonated around the world.
And now what do we have, fellow Americans? A bizarre and oppressive combination of (the worst) of neo-fascism and screwball socialism.
I think Capitalism is not the problem any more than Communism is. It is concentrated wealth on the one hand and concentrated power on the other; two sides of the same authoritarian coin.
The problem of extreme wealth/power concentration has been shown by the Swiss to be amenable to direct democracy. A corporation where We the People own equal shares of non-transferable stock in our public treasure, receive equal dividends from its leasing and have equal voting rights in is a direct democracy.
frank1here, can global neoliberal capitalism be reformed? Isn't the Iraq War a manifestation of capitalism in crisis? Isn't global warming a result of mass consumerism and greedy bastards roaming the earth looking for cheap labor and cheap natural resources without environmental protections? Can we call ourselves "progressive" while hoping for a kinder, gentler capitalism? I'm skeptical.
In the same way, those who feel they must adhere to Christianity should have the Sermon on the Mount thrust frequently before their eyes. Its not supposed to be about "I'm the one who is in charge and right all of the time."
Three cheers for Rick Wilson! I've been reading Common Dreams for years, and this is one of the best articles I've seen. Thank you for providing a more holistic portrait of Adam Smith and for countering right-wing ideologues who continue to distort his legacy. Hopefully progressives can learn from Smith's teachings and use them to their advantage instead of instinctively dismissing anything that smacks of capitalism and profits.