Tuesday, December 09, 2008

Adam Smith is Innocent

David Glenn Cox posts in OpEdNews.com (HERE) and writes ‘In the Shadow of an Apocalypse’:

In their zealotry to make America over in the vision of Adam Smith they have overdone it and killed the goose that laid the golden eggs in the process. The combination of outsourcing and the throttling of wages have created a critical mass in our economy and the creators of the term "Great recession" need to start again. How about the nuclear depression, or the depression to end all depressions, or even the victory over the American worker depression?”

The above is from trenchant attack on all things Republican in America, of which I have not comment because, a) I do not comment on the politics of other countries; confining my efforts to the country in which I vote (Scotland); and b) I am less depressed about such matters in the knowledge that the US Constitution limits to two terms in which any individual President can hold that office and the current incumbent is about to be replaced by the one elected in November, only a few weeks away.

I am disappointed that David Glen Cox misreads (or, more likely, misheard) the opinions and observations of Adam Smith on the workings of commercial markets economy in general and his views on the prospects for the new republic of the United States.

How David Glen Cox sees “in the vision of Adam Smith” anything evil, morally reprehensible, or likely to kill ‘the goose that laid the golden eggs’, is so far beyond my comprehension as to be unbelievable, and saddening. My flabber is well and truly gasted.

Adam Smith was an enlightened 18th-century moral philosopher whose study of previous societies since the human species began to move out of the forests to become, first, scavenger-gathers, later hunter-gatherers, and then in some small pockets of the globe, following the last great ice-age about 8,000-11,000 years ago, discovered shepherding and, eventually farming, which led him to see the bold possibilities, despite the ‘vile rulers of mankind’, arising from the invention of property through (‘at last!’) to commercial society.

Smith had no doubts that from commercial societies, there had been a spread of what in his time was considered to be opulence, reaching right down to the poor labouring folk and their families, who made up the bulk of the population.

He didn’t consider – certainly did not agitate or demand – that the spread of opulence showed be forced by government (he displayed contempt for the slavish willingness of legislators and those who influenced them to promote policies than benefited those who monopolized, protected, and enhanced their private interests), nor did he expect the necessary changes to come about other than ‘slowly and gradually’.

But he did expect with confidence that the spread of opulence would occur from continual economic growth, the defence of societies from invasion, the institutions of justice, and the appropriate investment by undertakers (entrepreneurs), and failing these improvers, and because of the capital involved, by enlightened governments, which would also invest in the institutions of education for all children, irrespective of income.

In so far as, ‘America’ is concerned, he made the rare prediction in Wealth Of Nations (p 624; Canaan ed., p 590), while discussing ‘Of the Advantages which Europe has derived from the Discovery of America and from that of a Passage to the East Indies by the Cape of Good Hope’ (WN IV.vii.c) he also wrote:

Such has hitherto been the rapid progress of that country in wealth, population and improvement, that in the course of little more than a century, perhaps, the produce of America might exceed that of british taxation.’

Well, it certainly achieved that and much more, and today the USA stands as the world’s largest economy, notwithstanding the withering criticism, plus not a little of the bile of David Glen Cox against Adam Smith, in these matters a wholly innocent philosopher.

And this directs me to my final point; to what extent has David Glen Cox contributed to the present state of the USA, as he sees it? What has he done to use the opportunities of any commercial society, and one with a constitution such as that operating in the United States, the separation of powers, and representative democracy, in which, unlike Adam Smith, who never had a vote under the British 18th century franchise, David Glen Cox has been free to vote, to run for office, or set up a co-operative or a business, to pursue for profit and not-for-profit an employment creating entity, and to run it on honest, reputable lines which correspond to his moral outlook?

Adam Smith’s ‘vision’ was precisely captured in the answer to that question. He was no friend of monopolists, protectionists (there are strong hints in David Glen Cox’s piece of protectionism and not a little angst about poorer countries developing themselves out of poverty – what David Hume called ‘jealousy of trade’, and the cause of too many wars for disreputable ends).

I ask these questions, because if someone regards his country as so awful as David Glen Cox apparently does, I suggest he take an early long, good look at himself in a mirror, and ask what he did to make something better happen, before he vilifies Adam Smith so strongly and unfairly.

Smith is dead; David Glen Cox evidently is very much alive and has lived through much of the last several decades.


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