August 10, 2008

Reflections on Adam Smith

Today right-wing conservatives like to think that they have the answer to how to make the world better, and they base their answer in the magic of the market to make decisions on how best to allocate resources. And like Grover Norquist, they are absolutely convinced that the government and society cannot and should not interfere with the outcomes.

Was this absolute reliance on the marketplace to run society really what Adam Smith believed? Mark Thoma has a very interesting post that strongly asserts what the conservatives say about Adam Smith's beliefs are wrong, and he certainly would never have subscribed to the "greed is good" philosophy. He starts the piece with a quote from Clive Crooks:

I agree that Smith is badly served by many of his supposed followers. The idea that "greed is good", which one often sees attributed to him, is a travesty. He was no libertarian either. His idea of "natural liberty" was almost the opposite of what it is usually taken to mean (namely, "do as you wish"). He was at pains in both books to emphasize the importance of self-control, of regard for the opinions of others, and of an expansive role of government in providing security, rule of law, and economic infrastructure. Way ahead of his time, he was even in favor of compulsory schooling.

Thoma then goes on to describe how Smith came about writing his two famous books, Moral Sentiments and Wealth of Nations.

First, Moral Sentiments was not a manifesto of Smith’s ideas. Its contents came from the ethics course he gave at Glasgow University between 1752 and 1764 to young students preparing themselves for the ‘AM’ degree. Hence, before jumping to conclusions about its author’s views on morality, we ought to recognise that preparing a basic course in moral philosophy for 14 to 17-year olds requires that the lecturer cover the whole subject and not just his own views. I have been reminding those who read into Moral Sentiments a strong strain of Christianity/Deism in Smith’s thinking, they may be fooling themselves by attributing to Smith their selective interpretations of the views he identifies belonging to the authors he cites, and not necessarily his own.

...However, he also taught Jurisprudence to the same class, a subject that contained a fair amount in it that re-appeared verbatim in Wealth Of Nations, including noticeably the sections that covered the ‘Butcher, Brewer, and Baker’ passage which are so popular with those who see mistakenly that it extols the virtues of self-interest. It doesn’t actually do that, because read carefully in its context (a rare occurrence), the entire chapter is about addressing the other party’s interests and not your own.

Quick quote grabbers (most do not read the book at all) jump to the ‘its-all-about selfish self interest’, which elides into selfishness and then to ‘greed’, when it is about neither. Smith was saying, ‘stop thinking about your own needs; think about the other persons’ and persuade them that the exchange of what you have for what you want from them, so they get what they want from you what they give to you, makes you both better off.

Too bad The Wrecking Crew philosophy of governance is figuring out how they can grab all the cookies, leaving the crumbs for the rest of us.

Posted by Mary at August 10, 2008 08:43 PM | Economy | Technorati links |

It's rare any one person is totally right or wrong about Economics. Adam Smith had some wonderful ideas. I think the problem comes when some, not all conservative folks don't know the difference between:

1. Profit versus Profiteering
2. supply and demand versus what the market will bear
3. Capitalism and Captivism
4. Common Good and Common Stock
5. Business Ethics and Monopolistic Manipulation

There is no longer any allegiance to one's own country in fact many "US" corporations have no national (Not Nationalistic) allegiance.

One day they will realize that neglect and disregard for their employees has shrunk their customer base and we will all fall down together.

Perhaps they will learn to read and "Understand" what they are sowing before they have nothing to reap but a whirlwind.

The world starts with people and commerce is their servant and facilitator. When business forgets this lesson they will eventually suffer or fail.

Posted by: Paul at August 10, 2008 10:56 PM

We live in a country filled with people who call themselves Christians, and yet don't know that Genesis is the first book of the Bible. Why would I expect any more of us than that most of the folks who extol "free market" ideology have no idea where it came from.

Posted by: Cujo359 at August 12, 2008 11:43 AM