Beware What You Wish For

Brandon Dupont posts in Economic Incubator (worth bookmarking) HERE

“Was Smith an Advocate of Consumerism?”

Angus Sibley, writing the Distributist Review, falsely attributes to Adam Smith a desire for “unrestrained competition”: “We cannot all persist in producing and consuming more and more. It should therefore be obvious that redistribution, combined with reduction in wasteful consumption, is the only possible route to a just overall distribution of the planet’s finite resources.

 But libertarians are blind to this fact. They stick to their view that the only way to eliminate penury is to press ahead with economic growth, to provide ever more goods for the infallible free market to distribute. We have seen how Smith’s classical economics called for unrestrained competition to encourage more and cheaper production. But that strategy has run into the buffers of global sustainability. It has ceased to be relevant, yet still it dominates our thinking and practice.”

Sibley also apparently believes Smith was an 18th-century advocate of modern-style consumerism:

“This attitude [an obsession with competition] can be traced back to Adam Smith, who lambasted the anticompetitive craftsmen’s guilds of his day. Without them, he argued, “the wages of the workmen would be much lower…the trades, the crafts, the mysteries, would all be losers. But the public would be a gainer, the work of all artificers coming in this way much cheaper to market.

 His dream was to make everything cheaper, so that we could all (apart from the impoverished workmen) buy and consume more.”

In reality, Smith rightly condemned collusion between business and government that would generate monopoly profits and lower wages.  Smith was not obsessed with competition but he did prefer it to the anticompetitive trade barriers businessmen sought (and often obtained) from the British government.  That, in fact, is what Book One, Chapter 10 of the Wealth of Nations (from which Sibley has taken this quote) is all about.  To argue that Smith’s “dream” was to make everything cheaper so that everyone except the poor workmen could buy more is a mischaracterization.  In fact, Smith railed against rent-seeking merchants who would suppress wages and artificially raise their prices.

And far from advocating low wages, Smith thought that asymmetries in the wage bargain between workers and employers could artificially suppress wages and distort justice:

“Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate.”

Nor was Smith a hedonistic advocate of consumerism as Sibley implies. One only has to look to his Theory of Moral Sentiments for evidence of that:

“How many people ruin themselves by laying out money on trinkets of frivolous utility? What pleases these lovers of toys is not so much the utility, as the aptness of the machines which are fitted to promote it. All their pockets are stuffed with little conveniencies. They contrive new pockets, unknown in the clothes of other people, in order to carry a greater number. They walk about loaded with a multitude of baubles, in weight and sometimes in value not inferior to an ordinary Jew’s-box, some of which may sometimes be of some little use, but all of which might at all times be very well spared, and of which the whole utility is certainly not worth the fatigue of bearing the burden.”

Comment

Brandon does a good job in refuting Angus Sibley’s assertions. I would only add remarks on an aspect of Sibley’s misunderstanding that is also fundamental to Adam Smith’s legacy, specifically his distinction between the contribution to the measure of the annual revenue of a society regarded as the annual output the “necessities, conveniences and amusements of life”.

These distinctions play an important role in the living standards of the various “ranks” of people, however divided in different cultures, on the speculative information available in the Eighteenth Century, to reflecting the known divisions formed by the different “Ages of Man” that ran through the First Age (hunter-gathering), the Second Age (shepherding), the Third Age (farming), and the Fourth Age (commerce).  These distinctive ages were also noted by Smith’s contemporaries (e.g. Montesquieu, Turgot, etc.,) and which he taught at Glasgow 1751-63 (Lectures On Jurisprudence).

We know now that In the first age, humans lived on what they could find in their immediate neighbourhoods.   Over time, they developed extensive (and intensive) knowledge of their locality and moved on elsewhere.  With shepherding, probably discovered ‘accidentally’, they moved wherever the prime herds moved.  Likewise with farming, apparently discovered about 11,000 years ago in the near eastern landmass, from which it spread out, and was developing in the Americas by the time the Europeans invaded.    Again and again, increasing sophistication of knowledge led towards commercial societies, from primitive exchange in cultural forms of various instruments of (male) tyranny, towards monetised exchanges.

Throughout these evolving changes, annual outputs moved from ‘necessities’ towards ‘conveniences’, and short spurts to ‘amusements’ (including jewellery) consumed by the upper reaches of their societies.  Stone tools – themselves representing million-year episodes – produced necessities; mineral and vegetable extracts produced bodily decorations, adding complexity to language, beliefs and rituals, and to a stage beyond necessities towards “conveniences”.

Brandon cites Moral Sentiments to the pages on “the poor man’s son” parable, in which Smith both mocks and moralises about the obsession of some with ever more elaborate conveniences and amusements, such as ever more accurate watches beyond their functional purpose.

Angus Sibley seems to be agitated about quantitative consumerism.  I wonder just how much he is himself frugal in his own consumerism – just how many books does he own or has he owned, for example?

Smith favoured high, lower cost output so that real wages would rise and those whose labor created this output would share in what they produced.

Mr Sibley can experience the lower consumerism, to which he asserts his preference, by leaving North America and travelling to South America or sub-Saharan Africa with a view to settling in any of the villages there and enjoying what he espouses to wish for – basic subsistence on necessities without the contamination of conveniences or that of amusements.  If language is a barrier to such a drastic test of his convictions, he can always walk to the nearest ghetto and take up permanent residence there without his conveniences and amusements.