Tuesday, January 27, 2009

A Distorted Version of History

John Kozy writes on Global Research.ca, Blog, 26 January (HERE):

‘Capitalism Snuffs out the Age of Enlightenment's Candle’

“Mercantilism initially became the dominant economic theory and its implementation was carried out by imperial conquest and exploitation, and Adam Smith's classical economics was introduced merely as a more efficient way of expanding national wealth. The successful adoption of classical economists can be attributed to him and John Locke and those self-seeking aristocrats who recognized the license to steal that it provided.

Both Locke and Smith lived in a class-structured monarchial England. Although they themselves were not aristocrats, they certainly were not commoners. Both had aristocratic benefactors. The first Earl of Shaftsbury, who became Lord Chancellor, became Locke's benefactor, and Locke became the secretary of a very powerful board. Adam Smith's patron was Lord Kames. Smith obtained a lucrative post as tutor to the young duke of Buccleuch. So although neither Locke nor Smith was an aristocrat, their close associates were and both benefited from and shared in the privileges of the aristocracy. Sociologists claim that people who have a similar location within a system of property relations develop other important similarities of thought, values, style, behavior, and politics. Since both Locke's and Smith's principal associations were with members of the aristocracy, they both acquired and attempted to preserve and perhaps further establishment values.

Although Locke has gained some standing as a philosopher while Smith has not (even though he was a professor of moral philosophy), Locke made a fundamental categorical mistake in his Second Treatise on Government which Thomas Jefferson was quick to notice. Locke named life, liberty, and property as natural rights. Even in Locke's England, society could at least try to protect the lives and liberty of even common people, but it could not attempt to protect their property since they had none. So Jefferson altered this list of natural rights to life, liberty, and the pursuit of happiness. Since, in most respects, only the English aristocracy held property, its protection became a protection of the status quo. And protection of establishment property even today is the fundamental reason for the distinction between those economic activities that are legitimate and those that aren't. That alone accounts for the difference between selling a consumer a product that is a dud, and a consumer's buying a product with a check that is a dud. The haves get to keep what they have while the have-nots get fleeced.

Smith, too, is an establishment philosopher. As Richard Reeb has pointed out in "An Historian on British History" (http://adamsmithslostlegacy.com/2008/12/historian-on-british-history.html)

"There were essentially two approaches that kings of the early modern nation states took toward the generation of national wealth. One supported acquisition of precious metals and hoarding them for national purposes ... Another view, favored in Britain, was that it was better to encourage merchants to build their fortunes with limited regulation, as a growing commerce funded government with minimal taxation. Adam Smith’s Wealth of Nations provided the most powerful argument for the second view of national wealth. The British government was no less tempted to commandeer the resources of the country than the Spanish, but Smith made a compelling case for laissez-faire (let them do as they please) as far more productive than national missions to exploit natural resources the world over to enrich the government’s coffers. Smith’s famous "invisible hand" was not blind to the avarice of businessmen (quite the contrary) but rather saw them as more efficient producers than any government could ever be." Smith's goal was not only to preserve the establishment but to make its economic avarice and exploitation more efficient. In effect, the adoption of classical/neo-classical economics not only succeeded, it extinguished the goals of the Age of Enlightenment and put an end to humanity's progress toward liberté, égalité, fraternité and what Lincoln so aptly expressed when he spoke of "a new birth of freedom" and a "government of the people, by the people, for the people." Not a single such government exists today, and our nation states, although slightly altered in form, mimic the monarchial states of seventeenth century Europe in which common people not only exist for the sake of the state and its institutions but are thought of as expendable.

Some economists may claim that this is mere happenstance, not a necessary result of the economic system, but that claim is vacuous. Under classical economics, individuals supposedly act in their own self-interest as economic agents who dedicate themselves to those economic activities that bring the greatest income. But if this were so, society would be impossible. No one would be willing to do the low-paying jobs that the existence of society requires. Who would be a minimum-wage sewer worker? Who would be a public school teacher? Who would be a nurse? Who would be an artist, a serious (as opposed to a popular) composer, a social worker, an ambulance driver, a fireman, a policeman, a janitor, a door man, a porter, an factory worker, an oil rig worker, a lumberjack, a garbage collector, a checkout clerk at a grocery store, a college professor in a public institution, or even a cleric? People would do most of these jobs only out of necessity, which means that the system impales its adherents on the horns of a dilemma. Either Classical economics is founded on the completely false postulate of economic self-interest or it must be designed so that the largest numbers of people in a society are never allowed to pursue their own self-interests as economic agents. (Anyone who believes that adopting a theory that impales its adherents on the horns of a dilemma is rational is delusional.) One economic aspect of this design is Smith's subsistence theory of wages. (Only a person with a low opinion of common humanity could even have proposed such a thing.)

John Locke, Adam Smith, and Classical economists snuffed out the Age of Enlightenment's candle! They brought human progress to a dead stop.



“Mercantilism initially became the dominant economic theory and its implementation was carried out by imperial conquest and exploitation, and Adam Smith's classical economics was introduced merely as a more efficient way of expanding national wealth.”

Comment
John Kozy sees the world through cracked glasses if he can write and believe that “Adam Smith's classical economics was introduced merely as a more efficient way of expanding national wealth”. By what social mechanism are such convenient arrangements between a system of government and an individual moral philosopher is ‘fixed’ politically?

Adam Smith independently observed, including reading widely and visiting people from all ranks of British 18th-century society, and wrote about what he observed without fear or favour to anyone. He was not a salaried hack, as implied by John Kozy.

“Both Locke and Smith lived in a class-structured monarchial England.”

Comments
From Canada it may look like that – at least for those lazy enough not to check their sources – but Smith lived all his life in monarchical Britain, and arguably, so did Locke since the crowns of England and Scotland were unified in 1604 and for just over 100 years there was a union of crowns consisting of Scotland and England. Since 1707 there was a union of parliaments creating both a united kingdom and a united parliamentary government within a constitutional monarchy.

It is a fair bet that John Kozy’s ancestors in the 18th century also lived in a ‘class-structured monarchical’ country (and he still does living in Canada), which does not in any way compromise his intellectual independence, any more than it compromised Locke’s (who suffered exile 1682-1688).

Smith’s intellectual independence is a fact too. His closest associates (example, Dugald Stewart) were investigated in 1793 by the legal authorities who were suspicious of Smith’s alleged sympathies with political dissenters against the government – the French Terror caused widespread fear and loathing of anything likely to promote unrest among the British labouring classes – the Wealth Of Nations was a likely prime exhibit for a proposed prosecution of his followers.

It’s interesting what a bit of context does for an empty narrative.

Adam Smith's patron was Lord Kames. Smith obtained a lucrative post as tutor to the young duke of Buccleuch. So although neither Locke nor Smith was an aristocrat, their close associates were and both benefited from and shared in the privileges of the aristocracy.”

Comment
‘Lord’ Kames was not an aristocrat. He was Henry Home, a jurist, who on his appointment to the bench took the honorary title of ‘Lord’, as is still the custom. He was also an accomplished man of letters (Historical Law Tracts, 1758; Essays on Morality and Natural religion, 1751; Sketches of the History of Man, 1774), which apparently counts for nothing with John Kozy. Benjamin Franklin also met Lord Kames – perhaps he was ‘guilty’ of whatever too?

Smith’s appointment as a tutor to ‘the young duke of Buccleuch’ was arranged by the duke’s stepfather, Charles Townshend, the then Chancellor of the Exchequer (of the Boston ‘tea tax’ fame) who had read Smith’s Moral Sentiments and was impressed.

But in what manner Smith ‘benefited from and shared in the privileges of the aristocracy’ is not said. Smith never had a vote under the then franchise; he lived frugally (no carriage-and-four for him), and he was scornful of ‘trinkets, baubles, and contrivances’. His only ‘treasure’ was his library.

“Since both Locke's and Smith's principal associations were with members of the aristocracy, they both acquired and attempted to preserve and perhaps further establishment values.’

Comment
Guilt by association is unbecoming of discourse, more suited to tabloids and cynics (and well practised by totalitarian states). If John Kozy has read Smith’s Moral Sentiments (1759) he would know that Smith found ‘establishment values’ somewhat lacking when set against the standards set by moral philosophy. He was also deeply sceptical of the manner in which sovereigns, legislators and those who influenced them behaved.

There are enough quotations available in his books for ‘witch-hunter’ inquisitors to make a case that Smith, for the paranoid, was a dangerous radical. I suggest the John takes a look. True, Smith observed that the ‘distinction of ranks’ was important for social stability, as was justice and the rule of law. He had enough knowledge of what happened in history, recent and ancient, when instability reigned, the lower ranks came off worse, and the upper ranks were replaced by people who behaved the same, and often worse.

In effect, the adoption of classical/neo-classical economics not only succeeded, it extinguished the goals of the Age of Enlightenment…”

Comment
Neo-classical economics is modern and is not related to Adam Smith or anybody writing within 70 years of his death in 1790. By then the Age of Enlightenment had passed with the deaths of those who made it possible (despite, of course, their insidious associations within British society, a paradox left unexplained amidst John Kozy’s bile).

Even Adam Smith’s Wealth Of Nations was cast aside, except for occasional genuflection in vague remembrance, though hardly ever read, as the British and North American economies carried on versions of mercantile political economy, colonialism, protectionism, jealousies of trade, wars for trivial ends, monopolies, and such like.

In its place, a spurious ‘laissez-faire’, falsely attributed to Adam Smith, was practised, allegedly, and a false ‘small government’, also attributed to Adam Smith, became the watchword on the 19th century, as military expenditures continued to climb and ‘non-intervention’ was practised brutally for those merciless in face of pestilence, famine, the factory system, and ignorance.

One economic aspect of this design is Smith's subsistence theory of wages. (Only a person with a low opinion of common humanity could even have proposed such a thing.)”

This is so absurd as to be risible. Adam Smith did not propose any such thing. He observed what was going on; he did not propose such a policy (except if wages were below subsistence). The subsistence wage was the fact of the time, imposed by those employers who saw low wages as a means of disciplining labourers to work long hours to make ends meet. Smith identifies the proponents of such ideas and argues against them.

He railed against the combinations of the masters, ‘conducted with the utmost silence and secrecy’, and described the combination of workmen as ‘defensive’. (Wealth Of Nations, I.viii.13: p 84)

He also added:

Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged” (WN I.viii.36: p 96)

May I respectfully suggest that John Kozy read Chapter 8, Book I of Wealth Of Nations before he asserts notions that tend to undermine this reader’s faith that he knows of what he talks about.

He refers above to a post in Lost Legacy (from which I am grateful). I suggest he reads more of our posts, and at least get his account of Adam Smith and his role as a man of letters straight.

"John Locke, Adam Smith, and Classical economists snuffed out the Age of Enlightenment's candle! They brought human progress to a dead stop."

Comment
Excuse my astonishment at this absurd sentence.

Who were the leading lights in the Enlightenment in Britain?

Why, the very same Adam Smith, Lord Kames, Joseph Black, James Hutton, John Simmons, Dr Reid, William Robertson, Adam Ferguson, Colin Maclaurin, James Millar, and such like, and all of them known to, or who mixed with, Adam Smith in the Royal Society of Edinburgh and the Royal Society of London - Smith was a fellow of both - and many of them attended his famous Sunday dinners at Panmure House, Edinburgh for intellectual conversations.

If John Kozy really believed that Adam Smith (and John Locke, though wrong period) "snuffed out the Age of Enlightenment's candle" he is either on the brink of a sensational career of Nobel-Prize potential ahead of him if he can prove it, or he is worthy only of sad commiseration.

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