Liberals and Adam Smith

David Brin writes CONTRARY BRIN HERE

“Liberals, you must reclaim Adam Smith”

"I've said it before and must (alas) repeat it ad nauseam. Many of our modern struggles -- in the U.S. and across advanced societies -- could be altered if both sides actually (for the first time) read Adam Smith.  The left would learn that he was not the  viciously cruel exploiter of the masses that dopey campus ranters portray him, but rather, the first modern thinker to propose a generally flat and fair (if highly competitive) society, one moderated with many kindnesses that he defended in The Theory of Moral Sentiments. Though yes, he maintained that society could better afford kindness if it maintained a vibrantly creative-competitive marketplace for great new products and services. A forecast of stunning accuracy.

Conservatives would realize that Smith praised competition as the greatest creative force… but that competition's top enemy is not always a government civil servant!  There is another, older enemy of enterprise and freedom, that crushed opportunity and competition in 99% of societies across 6000 years. The principal enemy of freedom and markets denounced by Smith was monopolistic or conspiratorial oligarchy, of exactly the kind that the American Founders rebelled-against.

Here's a summary I found recently:  "Ironically, Smith's epic work The Wealth of Nations, which was first published in 1776, presents a radical condemnation of business monopolies sustained and protected by the state, in service of a lordly owner-caste. Adam Smith's ideal was a market comprised of small buyers and sellers. He showed how the workings of such a market would tend toward a price that provides a fair return to land, labor, and capital, produce a satisfactory outcome for both buyers and sellers, and result in an optimal outcome for society in terms of the allocation of its resources.

"He made clear, however, that this outcome can result only when no buyer or seller is sufficiently large to influence the market price—a point many who invoke his name prefer not to mention. Such a market implicitly assumes a significant degree of equality in the distribution of economic power—another widely neglected point." (excerpted from David C. Korten's book, When Corporations Rule the World.)

It is an argument made forcefully later by Friedrich Hayek, another genius whom the right idolizes in abstract, while betraying almost everything that Hayek stood for, such as maximizing the number of skilled, empowered and knowledgable competitors and thwarting conspiracies among monopolists and oligarchs, whether those were rooted in government bureaucracy or in narrow owner elites.

This was the point of the Progressive Movement 100 years ago, creating anti-trust laws that shattered the then-looming Gilded Age oligarchy and restored competition to American markets.  It had to be done again in the 1930s and 1940s, resulting in the flattest and most vibrantly entrepreneurial society and fastest-rising middle class the world had ever seen (and shocking the hell out of Marxists, who thought their teleological forecasts could never be reformed away.)

That flattish society (I call it "diamond-shaped) was the product of reforms instituted by the "Greatest Generation" that is much admired on the American Right, for overcoming a depression and Hitler and containing communism.  Alas, for their narrative, the Greatest Generation also adored Franklin… Delano… Roosevelt. Their innovations so reduced class disparities and class friction in America that the Boomer generation grew up assuming that such things were behind us forever.

== But human nature had not been abolished.  ==

Alas, "class struggle" is a sure theme of our present times. As Smith would tell you, cheaters always find a way to come back, as the flat social order is once again being crushed by skyrocketing (French Revolution-level) wealth disparities, monopoly and oligarchy.  Raising the question… can Americans do it again?  React not with radicalism or excesses like socialism, but with steel-eyed moderate reforms that restore flat and open competition for another generation? History shows far more instances of the former, than the latter.

"In the real world of unregulated markets, successful players get larger and in many instances use the resulting economic power to drive or buy out weaker players to gain control of ever larger shares of the market. In other instances "competitors" collude through cartels or strategic alliances to increase profits by setting market prices above the level of optimal efficiency. The larger individual and more collusive market players become, the more difficult it is for newcomers and small independent firms to survive, the more monopolistic and less competitive the market becomes, and the more political power the biggest firms wield behind demands for concessions from governments that allow them to externalize ever more of their costs to the community," writes David C. Korten.

Adam Smith again said it best, defying the stereotypes and cliched images of him.

"When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favor of the masters.”

He saw a tacit conspiracy on the part of employers "always and everywhere” to keep wages as low as possible.

Does that sound like the guy who you were taught believed only in dog-eat-dog?  Or that only billionaires are "job-creators"?

No wonder today's "libertarians" -- all-too caught up in the hallucinatory web spun by Rand and Rothbard and by Koch-financed "think tanks" like Heritage and Cato -- never refer anymore to the "First Liberal" and the founder of true libertarianism.  Because Adam Smith would remind them that the real foe of enterprise has -- for 6000 years -- been owner-oligarchy and monopoly.  The very forces that are rigging our elections and subsidizing propaganda that has driven a third of our neighbors crazy, re-igniting the American Civil War.  So crazy, they proclaim that only government bureaucrats can harm capitalism, enterprise or freedom. 

"We like competition and open-flat and fair markets!  They are the wealth generators that then enabled us to take on great projects like education and science and helping the poor. The real destroyers of that healthy version of capitalism were denounced by Adam Smith, and by the American founders -- monopolists and secretive cheaters, and those who would be lord-owners of everything. Getting rich by innovating new goods and services in a truly competitive market? That's great! Grabbing everything through cartels of cheaters? That is what Smith and the Founders denounced. …." [Follow the Link to read the rest.]

Comment

I do not agree with some of David Brin’s angry polemic but I do recognize the verbal antics of which he justly complains.  Much of the politics of current US controversies are shrouded in a foggy mist – I do not comment on the politics of other countries, except as they affect the one I vote in (Scotland). Broadly

I am a moderate libertarian and closer to the real Adam Smith, much as David Brin explains above.  If anything I am classical in my economics and as such I am suspicious of over-powerful governments, Left or Right, and professional politicians schooled in the Westminster Village, and in hock to their party machines.

Read David Brin’s polemic and let me know of your response.