Saturday, March 22, 2008

Adam Smith on Markets and 'Rules'


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Rik at Liberal Media Elite (‘foul mouthed commentary from America’s heartland’) writes (22 March):

Same Shit, Different Day' here:

Capitalism, with too much freedom, will drive itself off a cliff. Does it every time. The great capitalist voice, Adam Smith (hell of a guy, hell of a philosophy, hellaciously misunderstood by his proponents today), knew that markets have to have rules. Rules are also known by a less popular name…regulations.’

Comments
Adam Smith was not ‘great capitalist voice’ because he never knew the word nor the phenomenon, though he may have been some sort of a ‘hell of a guy, hell of a philosophy, hellaciously* misunderstood by his proponents today’.

Hellacious = ‘distasteful and repellant’; or (slang): ‘extraordinary or remarkable’, so take your pick.

Adam Smith favoured social arrangements in a regime of justice (otherwise ‘society would crumble into atoms’ (TMS II.ii.3.4: p 86) which is not the same thing as markets being governed by ‘rules’ or ‘regulations’, so much as their being subjected to competition.

He didn’t think that rules and regulations – the law even – should be used to support monopolies, coercion by ordinances, city councils and states at their borders to use tariffs and ‘rules’ to protect domestic merchants and manufacturers from imports and prohibitions’, nor applied in a modern context for businesses and state organizations to be allowed freedom to pollute the environment, to dump toxic waste to poison people, or to employ labour in dangerous processes.

The issue is about which set of ‘rules’ should apply, which is a moral and therefore a political question. It is not a case of a society without rules versus a society governed entirely by rules; it is which sets of 'rules' are supportive of the spread of opulence to the labouring majority and their families.

I do not think Adam Smith regarded mandatory 'foul mouthed' commentary in place of educated discourse was a contribution to civilised learning.

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