Sunday, October 29, 2006

Misuse of Adam Smith's Quotations

Irrelevant quotations from Adam Smith do nothing for his reputation and expose, in my humble view, inadequacies in those who resort to them. Ian Martin provides an example that is both unnecessary for his article: ‘This is not the time to start ripping apart our constitution’ in today’s Sunday Telegraph (London), and is logically true but meaningless:

“Adam Smith wrote of cartels in industry: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public." The same can be said of politicians in search of a consensus.”

Smith wrote about Guilds that operated monopolies in towns in 18th century Britain. They covered all the trades working in a town and excluded any person who had not served an apprenticeship from employment in their trades. Smith’s famous quotation referred to these bodies because they raised prices against consumers and held back wealth creation.

They were not cartels in the modern sense, but it is a common attribution today.

His last sentence begins: ‘The same can be said’, which is true as a statement because anything ‘can be said’. The test is whether what is said is applicable to the case the author draws, namely ‘politicians’. I do not think so. Politicians compete for office, even within the same party; the 18th century guilds did not compete; they were monopolies in their silos.

Does the quotation add anything to Ian Martin’s article? Not at all. It fills space, links a dubious argument (more a rant) and scores a ‘recognition’ point for using Adam Smith’s name.

It should also be noted that the guilds did not seek 'consensus'; they enforced their writs by driving out interlopers who had not served a seven-year apprenticeship in the same town, and using legal means (the magistrates were in one of the guilds) to deprive them of a living.


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