Tuesday, March 02, 2010

What Adam Smith Actually Said

Gary Clausheide writes in The Energy Bulletin HERE

Yes, It’s yet another example of a ‘plan’ to change the world by design, based on an account of history from earliest times written to derive the author’s assertions about what’s wrong with the world, including the unsurprising assertion/assumption that ‘them’ (the men with the power, however defined) consciously did what they did and the rest of ‘us’, or at least our ancestors, put up with whatever ‘they’ inflicted and inflict upon ‘us’. In short, the history of the human species has been a conspiracy of the few against the many.

But worry not, Gary Clausheide, has investigated the past and derived the ‘solution’ in something he calls ‘community’. Hence, his post:

The Importance of envisioning ‘community” (part 3)

I shall take two examples of his ‘history”, regarding the views of Adam Smith (read his long post at the link for much, much more):

Adam Smith said that the purpose of government was to protect property. Apparently the property of the wealthy is much more important than the homes, farms, and jobs of ordinary people.”

Adam Smith did indeed include in his lectures on jurisprudence, of which we have two sets of students’ notes (published in 1978 by Oxford University Press and later in a cheap edition by Liberty Press in 1982 – see Amazon) a discussion on the origins of civil governments, in which he summarized their role to protect the rich from the poor.

In those first ages of the new means of subsistence as some human groups left the old mode of subsistence, derived from the forest and the open plains (scavenging, hunting and gathering) to new modes, such as shepherding and more recently, farming, Smith identified an inescapable necessity, that of protecting the product of the labours of some people (but not those who persisted in the older ways) from the inevitable depredations of people wandering into the feeding areas of the herds and the planted fields of the farmers.

Those families who laboured to catch, coral, and consume from their herds had to prevent their herds wandering away, or being taken away by other families. The first property was that which belonged to the labourer. When a group of families enacted that idea they asserted the first acts of civil government – to protect those with from those without.

Those families who cleared the land of trees, plants, stones, and debris, to plant seeds, to tend them, and to harvest them, had to prevent animals and humans wandering across their lands and eating or destroying growing plants. In less than a day, either trespass could wipe out months of hard labour, from which those dependent on future food stock could starve.

The parable of Cain and Abel in Genesis is a tale of a clash between a farmer and a shepherd that echoes down the ages.

Group-approved conduct and group disapproved breaches of such agreed conduct also bound the members of a hunter-gatherer group. The new forms of subsistence that appeared along today’s Turkey/Syria boarder area 11,000 years ago, which spread from 8,000 years ago into Europe, gradually formed more complex civil codes and the associated apparatus of civil government.

Those families that had adopted the new subsistence modes became wealthier than those that had stayed as hunter-gatherers and those who occupied the fringes of the new modes as occasional labourers, supplementing their reliance and access to both old and new modes (I take account of Diamond's critique. He missed the point that for those early herders and farmers, living at the end of the Ice-Age. it was adapt to new modes or die).

By wealth, Smith, as always, meant the “annual output of the necessaries, conveniences, and amusements of life”. It had nothing to do with today’s meanings of wealth; in those days of which Smith speaks, wealth was what was created by the labour of those who undertook the work to make the new modes viable.

Gary Clausheide appears not to have understood these points in his assertions. Of course, from these early starts, the spread of the new modes took on different forms and moved away from the original right of labourers to the fruits of their labour to tribal, later national, forms of ‘kingship’, represented by the agrarian societies of Egypt, Babylon, Greece and Rome. But that is another story. And covers the role of civil government to protect the rich from rival rich claimants to another’s property as well as the poorest claimants to the wealth created by others.

A lot of writers in the “collapse” movement disparage trying to plan out a society in advance. Capitalist economists certainly hate the idea of a “planned society”, believing as they do in Adam Smith’s theory that everyone naturally operates in their own self-interest, and that doing so leads inevitably to social harmony – with the help of an invisible hand. It was and is a pretty wild theory, but it has served the merchant class well these past 230 years.”

I do not recognize this as a “theory” enunciated by Adam Smith. It is certainly a theory attributed to Adam Smith by modern economists and Gary Clausheide, of which I comment critically upon regularly on Lost Legacy. Briefly, Smith was not naïve about the “rulers of mankind”. His critical approach to feudal lords (and the allodial lords before them), to princes, sovereigns, and legislators, and, above all, to the “merchants and manufacturers” of his day (of whom he scarcely had a word of praise) is well known by all who have read more than a few tit-bit quotations, torn out of context, from his books, Moral Sentiments (1759) and Wealth of Nations (1776).

Gary Clausheide appears to be among the quotation seekers and not among the readers of the works of Adam Smith (a feature, I am sad to say, that is prevalent among too many modern economists, and not just “capitalist” economists).

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