Wednesday, August 18, 2010

The Phoney Adam Smith Quotation Nailed

The question of who invented this alleged quotation and attributed it to Adam Smith first came to the notice of Lost Legacy from something posted by ANDREW C. REVKIN posts in Dot Earth (HERE):

‘The Endless Pursuit of Unnecessary Things’

“Adam Smith, the father of economics, 250 years ago, said: “An investment is by all right-minded people to be commended, because it brings comforts and necessities to the citizenry. But, if continued indefinitely, it will lead to the endless pursuit of unnecessary things.


Reading the sources given by Andrew Rivkin, it appears that the so-called quotation was alleged by Charles Handy (HERE):

CHARLES HANDY: Now that I am sitting where the great Peter Drucker walked and talked, I wonder how he would have reacted to some of the things that bother me. For instance, how would he respond to what I call "Adam Smith's Great Conundrum?"

Adam Smith, the father of economics, 250 years ago, said: "An investment is by all right-minded people to be commended, because it brings comforts and necessities to the citizenry. But, if continued indefinitely, it will lead to the endless pursuit of unnecessary things."

Now that I am living for a while in California, I am staggered by the amount of "unnecessary things" that I see in the malls that dot the suburbs. America is no different from anywhere else, of course -- just more so.
The conundrum is this: All that stuff creates jobs -- making it, promoting it, selling it. It's literally the stuff of growth. What I'd love to ask Peter Drucker is: How do you grow an economy without the jobs and taxes that these unnecessary things produce?


A regular Lost Legacy commentator, ‘David’ offers this comment, which parses the language of the quotation:

'An investment is by all right-minded people to be commended, because it brings comforts and necessities to the citizenry. But, if continued indefinitely, it will lead to the endless pursuit of unnecessary things.” The entire phrase does not seem authentic: “Investment” does not appear in WON. Investigate and Investiture are the only are the only references to Invest. “All right minded people” comes very close to question begging. “Comforts” is never used in this sense. The usual phrase is “necessaries and conveniences”. “Citizenry” is never used. Presuming this is meant to be investment for manufacture and that the Industrial Revolution had not really begun. The capacity for the production of necessary things was barely sufficient. This appears to be a modern idea looking for historical justification, without a convenient “invisible hand” to support it one had (perhaps) to be created. David


My original comment was:

Smith described wealth as the annual output of the 'necessaries, conveniences, and amusements of life'(Wealth Of Nations). Basic hunter gathers were limited to 'necessities' by the limits of what an individual could make of the bounties of nature and the fruits of his/her labour. The conveniences came later (shepherding and farming) and mostly enjoyed by the elites.

In the transformation to commerce, consumption gradually rose (population increased, but per capita incomes of the majority remained basic - the elites syphoned off luxuries and stone 'civilisation'.



Smith said the driving force for these changes was the urge to self-betterment, epitomised by his fable of the ambitions of the 'poor man's' son (Book IV, WN), who strived and suffered for wealth, represented by 'trivia', but this cleared the land and created the technologies that 'crossed oceans', etc.

Now this is close to the 'unnecessary things' themes, but misses the point. Life on 'necessaries' is mean, low population (10 million not 6 billion), and short, in the midst of ignorance (murderous superstition). 

The 'unnecessary things' theme is an unwarranted perversion of Smith's meaning
.’

Looking closer at Charles Handy’s statement. Note the date it was made: 4 February 2008. Long enough to develop a following, but not enough to make it true. But it unravels on examination, as shown by ‘David’ above.

Charles Handy, an economist of some note,also exposes its basic weakness:

‘Now that I am living for a while in California, I am staggered by the amount of "unnecessary things" that I see in the malls that dot the suburbs. America is no different from anywhere else, of course -- just more so.’

He visits malls and spots many thing he has no demand for at all, and, concludes that these are ‘unnecessary things’ because he does not think them ‘necessary’ for him. Staggering arrogance in my view.

Before travelling to France some weeks ago, I visited a bookshop in and Edinburgh mall (my doctor advised walking as part of my recovery programme, hence, I pushed a shopping trolley round the supermarket with my wife and called at the bookshop on my way back to the car). I passed many food cabinets without stopping – technically their contents were ‘unnecessary’ for me, but not for those many other customers who would select from them.

Low and behold in the large bookshop, I passed by most shelves without a glance at the titles. I made my selections from only three displays out of the scores available and chose 14 books out of the many thousands in the shop. Did that make these thousands of other books ‘unnecessary’? Individually, for me, perhaps ‘yes’, but socially, for the entire book-buying population of Edinburgh, almost certainly ‘no’.

And a moment’s reflection would show that the author of the so-called ‘Adam Smith’ quotation (definitely not Adam Smith) was totally misguided and in effect, totally authoritarian. What he or she regards as ‘necessary’ is a ‘necessity’, and should be produced, but all else in her/his view ‘unnecessary’ and should not be produced. Absolute codswallop.

The so-called 'Adam Smith's Conundrum' is not a conundrum at all. It is rubbish, as far a Adam Smith's involvement is concerned because Adam Smith said no such thing.

If Charles Handy did not invent his silly quotation, he should tell from whom did he first hear or read it. That the story appeared in the New York Times (a paper noted for its careful editing) itself gives the attribution an undeserved credibility.

UPDATE:
This just in:

'I tend to agree with you David. There are elements of Smith but also of Keynes, mixed with a bit of 'Hollywood' buddhism. And other stuff besides. It's increasingly sounding to me like something from a 'League of Gentlemen' stocktake in the Local Shop. I have a suggested script, if you're interested...;-)' Ruari.

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