Retrospective Politics About Adam Smith Are Often Hyperbole
Grace
Hollis, Associate Editor, reports (18 April) a speech, by Don Watkins, a fellow
of the Ayn and Institute, to students, in Cavalier Daily Here
“Ayn Rand Institute
fellow Don Watkins spoke to the University community yesterday evening about
his qualms with the nation’s entitlement programs, which include Social
Security and Medicare.
Watkins sought to answer
the question, “What’s really wrong with entitlements?” and first explained how
he believed the nation progressed from “limited government” to an “entitlement
nation.”
“It turns out Americans
didn’t starve in the streets [before entitlement programs,]” Watkins said.
“Even I was surprised by how much people thrived in the world without
entitlements … It’s not an accident Adam Smith published ‘Wealth of Nations’ in
1776 and that it was that unleashing of free human minds in markets that led to
an explosion of innovation and creativity.”
Comment
Follow the link for the
rest of the speech. My interest
was drawn to the above extract.
Entitlements, paid for by
taxation and borrowing, have a tendency to grow, once embarked upon, as do
regulations, tax laws, laws themselves, constitutions, and amendments thereto.
Contrary to Don Watkins’
assertion, it was not an accident that “Adam Smith published ‘Wealth of
Nations’ in 1776”. It was just a
coincidence, in my view. It is
even less likely that his book unleashed “free human minds in markets that led
to an explosion of innovation and creativity.” Such assertions are retrospective judgements, and hyperbole.
First, the ‘facts’: Smith
completed his manuscript in 1773 and he left his mother’s house in Kirkcaldy with
his hand-written pages for London to see his book through the press. In those
days it could take 3 weeks to travel by coach on what passed for roads from
Kirkcaldy to London. By taking the
trouble of travelling to London and living close to his publisher, Smith saved
what would have been many months spent receiving and sending back corrected
proofs of the manuscript’s typeset pages, with many pages going back and forth by
coach in multiple exchanges between his publisher and himself. Normally, this would take a year or
more to have it ready for publication. In the case of Wealth Of Nations it took over three years.
We know this because in
later editions of his two books, Moral Sentiments (1759) and Wealth Of Nations
(1776) his surviving correspondence includes many letters regarding his proofs,
some taking months to be sent and returned throughout the five editions of each
work he prepared up to just before he died in 1790. His correspondence in 1773 with his close friend, David
Hume, reveals his anxieties about losing his manuscript on the journey, or
worse: “should I die very suddenly I shall take care that the Papers I carry
shall be carefully sent to you.” (Letter to David Hume, 16 April 1773). It was common practice for travellers from Scotland to London to write their wills
before setting out.
What else did he do to
prolong his expected shorter stay in London? According to David Hume, Smith became “very zealous in America
affairs” (Letter from David Hume to Adam Smith, 8 February 1776). Smith was consulted by Government
Ministers and MPs about taxation policy and what should be done to avert the
slide into violent confrontation with the Colonists. The net affect was that Wealth Of Nations was held back from
publication, though it was completed and ready to be printed. Therefore, it was an accident that
Smith’s most famous book was delayed from sometime in 1774 until March 1776, three
months before the Colonists’ Declaration of Independence on 4 July 1776.
It was not the American
Declaration of Independence and the final triumph of the Colonists over the
British, let alone the coincidental publication that year of Wealth Of Nations
that unleashed “free human minds in markets” that “led to an explosion of
innovation and creativity”. The
long process to freeing “human minds in markets” and the “explosion of
innovation and creativity” necessarily associated with free markets had begun
centuries earlier in Northern Italy, what is now the Netherlands, and England
(and later in Scotland too).
Claiming this for the USA and a single, if remarkable book, selling a
few thousand copies across three editions, is retrospective hyperbole. Deep, lasting, changes to
socio-economic systems do not spring from a single event, nor a single book.
Don Watkins’ “qualms with
the nation’s entitlement programs, which include Social Security and Medicare”
are 21st-century, politically-motivated “qualms” that have nothing
to do with Smith’s undoubted contributions to political economy. “Entitlements” had nothing, in modern
jargon, to do with anybody’s political agenda in the 18th century. For Smith, his agenda for pragmatic
reform focussed, almost to the exclusion of all else, on the removal of the “mercantile
political economy” of his day, which political economy continued “jealousy of
trade”, “tariffs and prohibitions”, long and expensive wars against potential
trading partners, choking monopolies that “narrowed competition” and raised
prices to consumers, and of course, the pursuit of Empire. These were the unstated targets of Smith’s
ire, it not being safe to openly criticize the Monarch directly.
Wealth Of Nations, said
Smith, contained a “very violent attack” on the entire “commercial system of
Great Britain”. How much changed
over the following 240 years? In these respects, I suggest, not very much.
Meanwhile, the necessary
and truly revolutionary “explosion of innovation and creativity” conducted by
mainly anonymous individuals over several centuries, and more recently, at an
astonishing rate that is dispersed across the globe, continues relentlessly in
dispersed markets, not by design and not by top-down command, and continues to
liberate billions from dire poverty, shortened lives, disease and ignorance at
an unprecedented rate.
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