Wednesday, April 06, 2005

Freedom for people in markets

Seth Sandronsky in his review of a new book by Samir Amin, an unrestrained critic of all things American, called “The Liberal Virus: permanent war and the Americanisation of the world”, (Monthly Review Press, 2004), makes the following remark on Adam Smith’s version of ‘liberalism’:

"Once, to be a liberal meant to privilege the market over people. So wrote Adam Smith, the
guru of capitalism, over two centuries ago. For him liberalism was nations and peoples
pursuing their self-interest, or freedom, in the market place. Thus freed, society would

Currently, liberalism describes policies or views that run counter to the market freedom
Smith backed. His vision was the traditional meaning of liberalism. Today it is actually the
conservative, or free-market approach. In George W. Bush’s America such liberalism is a
dangerous sickness…."

Of Samir’s latest critique of American foreign policy or Sandronsky’s vision of George W. Bush’s ‘dangerous sickness’, I shall say nothing. Of Sandronsky’s version of Adam Smith’s legacy I shall comment simply that Smith was never a ‘guru of capitalism’, an economy of which he knew nothing and said nothing.

Markets did not enjoy privileges in Smith’s day; his Wealth of Nations was a critique of the lack of freedom of people in markets under the institutional monopoly privileges awarded to ‘merchants and manufacturers’ by gullible governments and legislators. In no sense did Smith ‘privilege’ markets over people.

In fact, the sentence (and its disconcerting ‘Americanisation’ of nouns into verbs) is meaningless, except at the most trivial level:

if a person wants to sell apples above the competing prices of her neighbouring stall holders it is hardly dictatorial of the other stall holders, i.e., the market, to gain customers from among those who would otherwise be forced to buy their apples from the higher priced seller, or for the majority (all?) of the customers to choose to buy cheaper elsewhere. In both cases, the players in the market – all of them people – exercise their freedom to do so.

To complain that this ‘privileges’ (!) the majority of the people making up the market over the single seller, i.e., one person among the many people, is a strange, even reactionary, conclusion. It leads to the defence of monopoly – that people should be forced artificially to pay the higher prices sought by a high priced suppliers despite the lower prices offered and accepted by the majority of people in the market.

It was not ‘market freedom’ that Smith backed; it was individual freedom for people in markets to do with their revenue what they wished, within the law, and for suppliers to do with their ‘stock’ as they wished without artificial and unnecessary barriers to them exercising their ‘trades’, again within the law. It is the people who are free in markets, not markets that are free or ‘privileged’ over people.

[References: Dissident Voice, 5 April, 2005 in, and "Adam Smith’s Lost Legacy", Palgrave Macmillan, 2005)


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