Misinformed About Adam Smith

Ronnie Cameron writes HERE on “Wealth of Intelligence Can Lead to the Wealth of a Nation”

 “Adam Smith, the creator of political economy wrote the Wealth of Nations. Wealth of Nations was the first written doctrine on how a nation can gain wealth and the practice of free markets. Philosophies like 'Division of Labor' and 'Market Price of Commodities' have shaped economic thought since 1776. His work has driven the world into a successful Industrial Revolution. His theories are very much relevant to this day but we are in an age where more is necessary. In this era of globalization and technology, education and intelligence is what sets people apart in the today's workforce. We live in an age where information is in absolute abundance. Billions of people have access to a world of knowledge at the touch of their hands through smartphones and tablets. But with all of this information and knowledge there is very little understanding.”

Comment

You can follow the link and read Ronnie Cameron’s recommendations, including his observation that “we believe that our government is supposed to solve this problem”.

However, I am disappointed with his solution to the problem, as much as I am disappointed with his portrayal of Adam Smith’s role in the 18^th century.

Adam Smith did not “create” political economy.  He joined a line of authors of various “solutions” to the perceived problems of political economy” as they saw them in the decade, and in some cases, centuries before he began to write his now famous “Wealth Of Nations” published in 1776, but which he commenced in 1760, and which he had been lecturing on since the 1740s. 

“Philosophies like 'Division of Labor' and 'Market Price of Commodities' have shaped economic thought since 1776”, writes Ronnie Cameron, but many authors had written and taught about the ‘division of labour’ before Adam Smith – which predecessors he recognised had “very often taken notice of” the “division of labour” before him in paragraph 2 in Wealth of Nations (WN I.i.2: 14), and others who also had written about the “'Market Price of Commodities” before him.  Even more embarrassing for Ronnie Cameron’s theme, Sir James Steuart published his “Principles of Political Economy” on 1767, nine years before Smith published  Wealth Of Nations” in 1776.

Moreover, to assert that Smith’s Wealth Of Nations drove “the world into a successful Industrial Revolution” is absurd.  Societies do not change or get driven like that from a single book.   Societies are not designed nor premeditated by any author, no matter how brilliant an author’s insight or intentions.  

The world’s societies since our species occupied the seaboard and hinterland of East Africa from two hundred thousand years ago and their descendents there afterwards socially evolved through the Ages of Hunting and Gathering; Shepherding, Farming , and (“at last’) Commerce  did so without any books.  If anything history shows that human attempts to lead societies in any particular direction by “sacred Words of the Invisible Gods” are hopelessly inadequate (and usually ended in tears, certainly in disappointment).

The evolution of the “industrial revolution”, as we call it, was a very slow process practiced by individuals over centuries beyond the lives of those whose endeavours cumulated beyond individual lifetimes, mostly not connected to each other, and certainly not to any book.   China reached the pre-industrial stage but failed to continue even with its impressive knowledge of the anti-chamber of the necessary technology.  The impressive apparatus of the Chinese State suppressed the necessary elements of individual liberty in its cloying superstition and historical authoritarianism.  The industrial revolution was underway before Smith’s Wealth Of Nations and he never mentioned it because he did not notice it.  Nor did precious few others until after its birth pangs were past, and its successor revolutions were rapidly evolving towards and beyond “take off”.

Negative evidence for the above argument is the fate of societies designed by philosophers but without deep foundations in the fundamentals regarded by the “revolutionaries” as necessary for their politics.  I am referring to the supposed “successor societies to “capitalism” in the form set out in such as the  “Communist Manifesto” by Marx and Engels,  or any other of the phoney utopias proposed from time to time (the latest of which are the hopeless suggestions for reforming capitalism or for saving the planet, or for world government and so on).

 Now one thing is absolutely certain, taking the whole of written history into account (and probably certain for much of pre-history too), no government is ever likely to be able solve be able to solve the problems considered to be important enough to need to be solely solved by a government.  The most I would concede is that a government may be part of a solution, but never all of it, because governments are often a major factor causing the problem, not least because of their arrogance about their abilities as seen by wild-eye certainties of their political ideologies.