Thursday, October 27, 2005

Smith and the Founding Fathers

In two short paragraphs, Erick Galindo, writing in (Cerritos college news on the web, Norwalk, California), manages to misrepresent Adam Smith’s legacy twice:

“Governor Arnold's indecent proposal”

‘Adam Smith may sound like an average name, but the man was less than average. His "Wealth of Nations" created the basic laissez-faire philosophy of free enterprise.

Smith had "an invisible hand" in shaping the United States' capitalistic policy.’

This is common fare on some campuses, where tutors have learned the errors from their tutors (and so on, close to ad infinitum).

For the record: Adam Smith did not create ‘basic laissez faire philosophy’. Laissez faire was first advocated by some French economists before Adam Smith; he met with them, listened to their views on laissez faire, and disagreed that it was safe to let ‘merchants and manufacturers’ completely free because of their unwelcome tendency to form monopolies, restrict the market and exploit consumers. Smith believed that competition is the best discipline to prevent such laissez faire outcomes.

Such misled authors as Erick Galindo can hardly mention Smith (the rest of whose article on its subject meets standards of accuracy) without the obligatory linking of Shakespeare’s metaphor of the invisible hand to Adam Smith (as if their readers would not know whose name they were invoking). Smith’s influence (not completely certain, though evidence is present that he was read by some of the Founders), on the United States in its early days had little to do with the use to which his name was put in the mid-19th to 20th centuries.

What the invisible hand (as used once by Smith in “Wealth of Nations”) had to do the “United States' capitalistic policy” is anybody’s guess because nothing Smith wrote about in the mid-18th century had anything to do with ‘capitalism’, as it developed in the mid-19th century.


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