Thursday, June 29, 2017


Mark Skousen’s book is offered on Google Alerts: “The Big Three in Economics: Adam Smith, Karl Marx and John Maynard Keynes” HERE
The Blurb tells us that:
History comes alive in this fascinating story of opposing views that continue to play a fundamental role in today's politics and economics. "The Big Three in Economics" traces the turbulent lives and battle of ideas of the three most influential economists in world history: Adam Smith, representing laissez faire; Karl Marx, reflecting the radical socialist model; and John Maynard Keynes, symbolizing big government and the welfare state. Each view has had a significant influence on shaping the modern world, and the book traces the development of each philosophy through the eyes of its creator. In the twenty-first century, Adam Smith's "invisible hand" model has gained the upper hand, and capitalism appears to have won the battle of ideas over socialism and interventionism. But author Mark Skousen shows that, even in the era of globalization and privatization, Keynesian and Marxian ideas continue to play a significant role in economic policy.
How serious this book is I am not sure.
Adam Smith never advocated nor discussed ‘laissez-faire’. If anything he was supicious of one-sided declamations that are inherent in the French merchant’s plea for laissez-faire (‘Leave us alone’) from French ministerial state officials managing the behaviour of said merchants at recognised official market places across 18th century France. Incidentally  such town and village market places still abound across France and are still tightly regulated in my experience.
Adam Smith has been attributed with ‘laissez-faire’ by lazy (pun) academcs who ascribe to laissez-faire meanings it does not have.
Laissez-faire is not about equal liberty for employees to decide/influence their wage-levels. The only choice an employee had in Smith’s time to improve their wages was to accept the ‘going rate’ or leave without a job. There was no question of collective bargaining or of collectively refusing to supply their labour at the unilaterally employer-determined ‘going rate’, including lowering existing wage rates. The law was on the side of employers in these disputes, including conviction to be followed by transportation to Australia and such like. Hence, employers and their spokespeople, including to their shame, bought and paid for academics.
In a case regarding employer resistace to reducing the hours of work per day by two hours, the academic tried to make his paid for ‘expert’ advice show that the entire profits of the firm were made in those last two hours! Laissez-faire indeed!
Adam Smith advocated ‘natural liberty’ for all, not laissez-faire only for the rich and powerful.
As for the sentence: “Adam Smith's "invisible hand" model has gained the upper hand.”  This is a total misreading of Adam Smith’s use of the metaphor of “an invisible hand”, of which I regularly cover on Lost Legacy. It was never a “model” for Adam Smith. It was a metaphoric expression. How metaphors work is covered in Adam Smith’s “Lectures on Rhetoric and Belles Lettres”, one of Smith’s less read, even “unread” books. Mark Skousen should read it soon if not now. 


Post a Comment

<< Home