Adam Smith's recipe for a Socialist welfare state.

[Joe Chi Minh]

(snip) "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 BELEIVED 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. (I would add:... "The economic barbarism wrought in Smith's name is good for the economy in the way that cannibalism is nutritious". <.. an analogy borrowed from an American known as the Freeway Blogger>)

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.”

WHY HAVE WE NOT BEEN TOLD THAT ADAM SMITH WAS A NEW LABOURITE/ONE NATION TORY, BUT INSTEAD, PEDDLED THESE GROTESQUE LUDICROUS INVERSIONS OF THE TRUTH CONCERNING SMITH'S MORAL AND ECONOMIC PHILOSOPHY?

All Smith was advocating was recourse to the elementary common sense of the age-old Christian axiom, that grace builds upon nature (don't throw the baby out with the bath water), in the teeth of the political "correctness" of his day; that while businessmen should not be trusted anywhere near government - indeed further than you could throw them - their peculiar skills should be harnessed for the common good. Since we are not pure spirits, but are attached to bodies, which, of course, need nourishment and other forms of material sustenance.

PS: The full text of the article by Rick Wilson, from which these quotes are taken are to be found at this link:

http://www.commondreams.org/archive/2007/09/23/4046/

The capitals are mine.

[annabanana]

1. Oh, I will SO kick this!

The twisting, abridging and misuse of his name to excuse the WORST corporate behavior really should just stop.

[safeinOhio]

2. Social Darwinist to boot.

[Joe Chi Minh]

3. Thank you, Anna. I've changed "misconception" to the more accurate,

"inversion of the truth".

Incidentally, it seems that, wittingly or not, the Scandinavians have been admirers of the REAL Adam Smith, and have paid him the highest possible tribute by their adherence to his general economic credo. I say "general", as they may have found it impossible to keep business people completely outside the wheels of government.

[Kurovski]

4. K&R. (nt)

[truedelphi]

5. Great Post KCabotDMII. And it might shock people to realize

That at one time our country tried to prevent monoploies, as the country's leaders realized that when one company controls all of a turf, there is not much chance for innovation.

The anti-trust laws used to mean something.

And maybe you could explain this to me -- whatever happened to tariffs?

[Joe Chi Minh]

12. I'm not sure of the context of the "tariffs" you have in mind, truedelphi, except the

larger one - which makes me suspect that your question is rhetorical anyway.

I take it's import to be exceedingly negative, such as the removal of all constraints on imports, outsourcing abroad, etc. - the despicable removal or liberalisation of a host of measures originally intended to protect the country and its people, from predators, domestic and foreign - in favour of viciously injurious and desperately unpatriotic notions of profitable trade, and of employment regulations, etc.

I should also have capitalised, “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.” Particularly, the last phrase. I always try and work in a reference to "Adam Smith's vile masters of mankind". Admittedly, a contractiion of the phrase, but the import is clearly the same. Vile actions are habitually done but vile people.

What really excites me is finding that, thanks to that article by Rick Wilson in Common Dreams, progressives now possess the best possible cudgel with which to belabour the far right black and blue; to humiliate them, to mock them, to taunt them to EXPOSE them for the double-dyed liars, fools and knaves they invariably are ("By their fruit, you shall know them"): THEIR OWN MOST HOLY MANTRA used like a stake through the heart of a vampire.

It's all there in black and white. Incontrovertible. Businessmen are the most venomous poison to government. Obama's contemptuous disowning of lobbyists and his undertaking to banish them is very Adam Smith, isn't it? I think John Kerry was very Adam Smith in that regard, too, with his proposed New Deal.

In days of old, while mindful of the benefits provided by the trading of his merchants, a king would no more dream of allowing them to dictate national policy to him and his courtiers than fly to the moon! What was that Lincoln said? "...that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people, shall not perish from the earth."

Just the same, Smith is saying, if a greenhorn family who had recently moved to the wilds of Alaska wanted to get rid of their team of huskies, because they weren't house-trained, an Alaskan wilderness veteran would tell them not to look for figs to grow on thorns, but to use the dogs for what they're trained for and good at: pulling sleds. Interestingly, the Alpha male in the pack will dominate the human musher if he allows him to, and then, if he's in the middle of nowhere in a snow-storm, he'll have an Alaskan version of Iraq, Afghanistan, subprime-loan meltdown, Katrina and all the rest.

Anyway, I hope lefties and progressives everywhere rub their noses in Adam Smith until they wish they'd never heard of him. Adam Smith Institute, a think-tank? They sure got that right. Trouble is, it just seems English isn't their first language and they completely misunderstood what he was so clearly saying to the rest of us!

[truedelphi]

14. My question about tariffs was not rhetorical in the slightest

I remember studying about tariffs in school in the sixties.

And then suddenly I'm grown up and living in the eighties and a guy named Michael Moore makes me aware of the fact that the Auto Industry in America (as we knew it) is collapsing. The GM motor company is putting its factories in Mexico and the Flint MI workers are suffering as a result.
Moore even prefaces a later book of his with contrasting photos of the rubble of a headquarters building circa late 1980's Flint MI with the rubble of the Oklahoma government building blown to pieces (Allegedly by Tim McVeigh) The structures in the two photos - one ruined by globalisation and one ruined by terrorism, appear almost identical!

I never heard the word "tariffs" in the nineteen eighties. Instead there was a new lexicon of "Free trade," "Free markets" then a new term, "globalization," being a term that followed soon after. So I guess that the tariffs disappeared. I guess. What I don't have to guess about is the disappearance of our jobs - those definitely disappeared. The textile industry at first moved from more northern to southern states, and then went elsewhere, the Honduras, Central America, China. Our steel mills are gone and so are the auto companies.

Those good paying jobs are replaced with being a greeter at Wal Marts. So the jobs that paid $ 27 an hour, with union benefits and health and safety oversight were replaced by jobs that pay maybe $ 9.

Anyway I googled "Tariffs" + "Adam Smith" + monetary policy and came up with this tidbit posted over on Amazon reviews:
"The author (writing abt Adam Smith) does an excellent job in showing that, historically, the role of government spending(on infrastructure,public goods,public works,education and public health),import restrictions,tariffs,quotas,etc., has played a major role in the economic development of every single first world country over the last two hundred years.This fact directly refutes the claims of many,if not all,economists,especially those making policy decisions at the World Bank,International Monetary Fund,and World Trade Organization, who claim that free trade is the way a country reaches prosperity. Free Trade is interpreted in a neoliberal(libertarian anarchist) manner to mean that there is minimal government spending and no tariffs whatsoever.The author demonstrates that the historical record provides zero support for this approach.The author is certainly correct.

"My major criticism of the book is the author's apparent belief that Adam Smith supported the ideas of Laissez faire and free markets.This is simply incorrect.Adam Smith was a major SUPPORTER of both revenue tariffs and retaliatory tariffs if there was any chance greater than 0 that the retaliatory tariff would lead to the repeal of the original protective tariff that had been instituted by the offending country.This is all covered on pp.434-439 of the Modern Library(Cannan)edition of Smith's Wealth of Nations (1776)."

[Joe Chi Minh]

17. What a terrific find, truedelphi! I'm a gonna look it up myself. How

they have got away with it for so long, well...! It's got to stop. As soon as one of us, the US or UK gets back a New Deal, One-Nation government, they need to co-opt Adam Smith to where he belongs on the left, with clear blue water betwixt themselves and the corporatist recidivists.

It just goes to show that most scholars just want to keep their heads down and build their careers (understandable enough, even responsible, I suppose, family-wise), and those who see that the Emperor is stark naked, are not sufficiently enraged or bloody-minded to go after them with a metaphorical meat-axe. That's what I want to do. And I hope everyone else does. Right now, I'm a going to change my signature line to: "The Adam Smith Institute and Corporatist government - Adam Smith's worst nightmare."

As regards the quotas, etc, that was what I thought thought you meant, tariffs on imports, etc. But as for your technical answer regarding the historical time-scale of the recidivism, I wouldn't have a clue either. But the only thing that matters is that we know they're a gawn! And it ain't gonna stay that way!

[truedelphi]

19. Well thank you sir. But I wouldn't have been compelled to google this stuff

IF it were not for the fine kick in the pants that your topic brought about. It made me consider
the notions of "free trade."

As far as your sig line "The Adam Smith Institute and Corporatist government - Adam Smith's worst nightmare," I like it - I really do.

[Joe Chi Minh]

21. Great! Thanks. It's funny how it suddenly hit me so forcibly the other day, when

re-reading the article. Old Labour to his finger-tips!

Being a politician, Dennis Kucinich may seem a shade too pragmatic on occasions on tangential issues, but he and Adam Smith are so close in their thinking on the big issues, aren't they? Maybe he could set up a Dennis Kucinich - Adam Smith Institute?

[truedelphi]

27. How will we ever get an entire generation of economists

To understand how misled on the basics the current thinking has led them?

My son has a bachelors in economics from Northwestern. married to a banking executive. neither one of htme has any notion of the Federal Reserve's questionable existence. they both will tell you the F.R. has prevented bank panics. (Which is true -e xcept for those that it helped create - like the Great Depression.)
<sigh>

It would be very good if Kucinich can not only get Bush/Cheney in front of the Hague, but re-educate the American public as well, regarding all things economic.

[Joe Chi Minh]

31. Absolutely. After all, Adam Smith was obviously the patriarch and definitive prophet

of Socialism. It's not a matter of conjecture or open to dispute. His words are there all for all there to see, as plain as a pikestaff.

They will get away with the bare-faced Big Lie just as long as we allow them to. They own the MSM, but as we own the truth with regard to economic sanity, economic justice and economic patriotism, we own the blogosphere in all matters economic affecting our respective countries. They are rogues and vagabonds of the very same ilk as the robber barons.

[anitar1]

6. K & R n/t

[LeftishBrit]

7. Most interesting - thanks for posting!

[eridani]

8. Noam Chomsky quotes Smith a lot.

He loves to point out the interesting Smith tidbits that conservative economists conveniently "forget" to include in their indexes.

[bean fidhleir]

10. I've been telling people for years that the rightwingers have obviously never read Smith

by they (the people I'm saying this to) just ignore me. The noise machine has been so successful that these people, liberals, "know" that I'm wrong about Smith and sneer at me for being duped. It would be funny if it weren't so sickening.

[truedelphi]

15. What you are saying is why there are few neocons and few "liberals"

that I trust.

The only label I subscribe to myself and to most people that I respect is that of being an independent thinker.

I find people who are "liberals" to be very inconsistent. Talk to them and you find them saying things like housing density bad, over immigration good. I had one environmentalist assosicate who didn't like leaving out anyone who wanted to come to this country out in the cold, but she also was vehemently opposed to any new homes being built anywhere between San Francisco and the Oregon border. So these new people are going to live where?

[eridani]

30. Agreed. Chomksy correctly identifies Smith as a pre-capitalist philosopher IMO. n/t

[Vidar]

9. I appreciate the history lesson. Highly recommended.

[Karenina]

11. . .

[Joe Chi Minh]

13. It is important to see the point Smith was really making: that grace builds

upon nature. Not that economic libertarianism and the profiteering spawned by the unregulated, open-ended greed of corporatism and its humanoid engines are desirable AT. ALL!!!

It is no coincidence that what is grotesquely enacted as political correctness, but which is a travesty of any kind of correctness, is a pandemic contemporaneous with the spread of militant atheism. It's why Socialism has been such a bitter, bitter disapointment to me. They are doctrinaire, without having the remotest glimmer of common sense or common feeling. That, and the fact that our New Labour Party, created by Blair and elements of our security service, have proved to be cynical chancers, with no more genuine concern for the mass of the people of the country than my aunt Fanny.

Today, we read in our papers, here in the UK, that a woman gave her kidney for her mother, but was told it had gone to someone else in more urgent need. I mean I can't unequivocally identify why the apparently perfect logic of that is hideously flawed,
but I don't have any doubt at all that it is. And it cries to heaven for vengeance.

Well, the truth is that it was a violent offence against the most elementary moral beauty, a good example of an outright repudiation of grace building upon nature. Such a gift was made in a certain spirit of sacrificial love, which should never have been thwarted and redirected by a weasely functionary who respected statistics more highly. I know someone else who offered a kidney before it was acceptable, and who specifically stated to his doctor that he wouldn't want a say in who received it, though he'd personally prefer it went to a poorer person. But that's another matter all together from a gift specifically given by one family member for another.

Incidentally, Hugo Chavez is clearly a dyed-in-the-wool acolyte of Adam Smith! Viva Ugo!

[rockymountaindem]

16. Smith is so misinterpreted by the RW it makes them look pathetic

Of course, since they exist mostly in their own echo-chamber, the truth often matters little.

[Joe Chi Minh]

18. I think the word you are looking for is, "never", Rocky...

[SoCalDem]

20. A tax expert on C-Span last week said that when he started, the top bracket was 90%

when was that?

It was during the most prosperous time in our history..our Golden HeyDay..the 60's... when everyone wanted to BE us or at least be LIKE us..

Were the super rich wandering the streets, dressed in rags, as they begged for scraps of food & spare change? Nope.. they lived well.... like they do now..

The only difference was that they paid their "fair share"..and took some of the "heat' off the rest of us..

That was a time when even poor folks could buy a home they could afford, they could afford to send their kids to school, roads & bridges were being BUILT.....Many more jobs were UNION, people had pensions, and could actually afford to take their kids to a dentist or doctor (and most people didn't even HAVE medical insurance back then..

[Joe Chi Minh]

22. In the UK, the top tax band was 95%: 19 shillings and sixpence in the pound. They

still had their ocean-going yachts, but still whinged and whined as they do to this day, of course - unabated!

[juno jones]

23. May I recommend

(if you haven't already read it) 'Poverty and the Industrial Revolution' by Brian Inglis (pretty sure that's the name).

I read it back in the Reagan/Bush years and it was interesting to see how the actual comments of Adam Smith and Malthus were twisted even in their lifetimes by, shall we say 'elites' to justify their mistreatment of poor workers. What was even scarier is that these false arguements have become such a part of our political and economic structure that any number of the quotes in the book could have easily been uttered by Reagan and his neo-con ilk. The similarities were striking, and it was scary and enlightening to see how far back the roots go.

Sorry I have no spicy quotes or passages, I recently got down to 'desert island' books during my last moves. I don't think the book is too hard to find (although, I think in one American release the title was changed to The Philanthropists...I guess that sounded less dry....) It sounds lugubrious, but it is actually pretty swift reading.

Thank you for a great post! :)

edit for sp.

[Joe Chi Minh]

24. Thank you, junofeb.

"....shall we say 'elites'"? you ask. I prefer, "the vile masters of mankind of his day", Juno. Certain phrases like that resonate with me like magic, when I think of how the liars have got away with such an almighty scam, scot free! And for so long, it seems...

Once I realised Old Labour ticked all the right boxes, it was like scales falling from my eyes. I'm still bemused at the enormity of it, though I shouldn't, where essential narcissistic psychopaths are concerned. To them, lying is as normal as breathing.

Incidentally, Adam Smith was a moral philosopher. Little wonder his words are so antipathetic to the kinds of society that lionised such companies as Enron and WorldCom, and produced this current economic mayhem. On the other hand, Ken Lay did say something about the Almighty having a different plan for him, etc..... Pious and devout to the last.

[juno jones]

25. I stand corrected

:D

I guess I was trying to gild the 'vile masters' bit, but you are right, the truth should stand unvarnished on it's own.

[Joe Chi Minh]

26. No. It's my fault. Sorry! I just have to get "tvmom" in as often as I can.

It's becoming a mania! But I like your wry humour.

[juno jones]

33. Ahh, thanks!

:P

I enjoy your posts. Heck, I learned a few things from this one; this kind of information exchange is one of the reasons I came to DU in the first place (getting hooked in the process, I might add).

Keep it up!

[enlightenment]

28. Thank you. I've been teaching the full story to my

student's for years - it's always a pleasure to see their faces as they realise that they've only been getting part of Smith's philosophy. It is so important to remind people that Smith was a Moral Philosopher - the study of economics was in it's infancy (foetal, even).

[ConsAreLiars]

29. Both Smith and Marx understood that Capitalism had an inherent impetus toward totalitarianism,

such as we see now in today's reality, but they differed in whether it could be regulated (Smith) or whether the inexorable process of the accumulation of capital (theft of the product of the labor of the workers) made this result inevitable (Marx). See this for how Marx viewed Adam Smith's utopian optimism: http://www.marxists.org/archive/marx/works/1885-c2/ch19.htm . If it seems a bit abstruse, and one is still willing to do a bit of work, check out http://en.wikipedia.org/wiki/Labor_theory_of_value and take note of the fact that Marx cites Ben Franklin as one of the sources for this way of looking at economic systems.

[Joe Chi Minh]

32. It's only the distribution of the country's wealth in terms of the respective incomes of the

workforce at every level, and the enormously negative effects of its abuse, that interest me.

The impression I have is that, in post WWII Japan, the low ratio of the income of their CEO's to that of the company's lowest-paid worker, instituted by none other than McArthur (presumably, in view of McArthur's role in the traitorous fascist conspiracy against Roosevelt to punish their militarist leaders) contributed significantly to the country's burgeoning prosperity. Only undermined more recently by US interference, turning the clock back to Japan's more feudal/fascist past, i.e. US/UK-style capitalism.

Another major factor seems to have been the self-belief (they had thought they were only capable of copying), and the spirit of co-operation, rather than competition, among the workers within companies, introduced by the seminally insightful US business consultant, J Edwards Demming. He said it couldn't work in the US, because an ethos of co-operation would not be politically acceptable!

Which is not to say that I didn't appreciate your information on the respective views concerning regulation of Marx and Smith, and your raising of the question of the inevitable rise of totalitarianism. It seems that both lead down that totalitarian path, but only because of man's fallen, corrupt nature. Smith's, imo, far less unrealistically Utopian vision seems to have survived and fared rather better in Scandinavia than Communism. Though it is has always been difficult for the more enlightened and decent countries to persevere on their sound foundations, in the teeth of the psychopathic onslaught of the far right, most notaby, of course, as typified by the US and UK.

However, it looks as if Providence is ordaining that the beast should be slain, and this incipient depression and any attendant wars could precipitate its final demise, and the triumph of the body of mankind.