Friday, April 28, 2006

Three Articles Referencing Adam Smith

I extract from three fairly typical pieces that make their points from different perspectives, two from the ‘conservative’ and one from the ‘progressive’ wings of US electoral politics out of a profusion of such on-line magazines circulating daily in the USA, with many others originating across the world.

Tomorrow a selection could be entirely different, with a different mix to cover ‘anarcho-communists’ from Canada through to ‘liberal’ in the UK and to ‘socio-marxists from Africa or India (see our Lost Legacies’ Archives collection in the right-hand column for such pieces selected since March 2005).

All are treated the same here – no matter what their professed political ideologies or affiliations; my interest is in assessing how they use Adam Smith’s name and alleged ideas in support of their pronouncements about the world, or as illustrations of the right/wrong ideas they claim to support.

Lost Legacy’s stance is to explain, elucidate and to educate readers from the standpoint of knowing what Adam Smith actually wrote, not what is claimed he said and believed, and, in doing so, to make a small contribution to encouraging those readers, who recognise that his legacy has been purloined for ends he did not consider or were not relevant in the 18th century, to read his books and papers, all of which are available in inexpensive editions (browse and order online from Amazon or direct from Liberty Fund, Indianapolis, Indiana, USA:

1 From The Post Chronicle: ‘Socialism Corrupts Human Nature’by Thomas E. Brewton, 27 April.

In the Western world, two views of human nature are dominant:
One is the classical economic understanding described by Adam Smith in his 1776 "Wealth of Nations," in which people as a whole -- at least those with any common sense -- look for ways to improve their own and their families' economic well-being. Smith's keen observations of economic activity in his time, and historically, led him to the view that such activity is spontaneous and part of the natural order, to the extent not impeded by government intervention.

From this understanding comes the idea of the law of supply and demand: when goods desired by people are in short supply, prices rise, and producers are led to increase production of the desired articles, thereby pushing market prices down toward their former level. This insight led him to his celebrated "invisible hand" idea that, while each individual is motivated by his personal interests, those motivations lead people to become more productive and thrifty, thereby increasing the aggregate well-being of society. While at any given time some people are suffering hardship from economic conditions, a free market offers most of them the opportunity to improve their status in the future by dint of hard work and frugality. And human nature leads most of them to take advantage of that opportunity.

None of this is to say that individuals and religious groups ought not aid the poor, elderly, and disabled. Smith was first and foremost a moral philosopher who elevated individuals' sympathy and empathy for their fellows to the pinnacle of morality.

This conception of human nature made England, then the United States, the greatest economic powers in world history while producing unprecedented improvements in standards of living for people at all income levels.

The second conception of human nature, in contrast to Adam Smith's pragmatic analysis of actually observed conditions, is the abstract, theoretical, French, socialistic conception espoused by American liberals (our sect of the socialist religion).”

I criticized Thomas Brewton in April 2005 for asserting that commercial society was more successful where the Judea-Christian religion took root. In the above piece he is more accurate in his portrayal of Adam Smith, except, of course, where he returns to the following:

This insight led him to his celebrated "invisible hand" idea that, while each individual is motivated by his personal interests, those motivations lead people to become more productive and thrifty, thereby increasing the aggregate well-being of society.”

I have criticised this false notion of what Smith meant by the invisible hand metaphor many times over this past year. Obviously Thomas Brewton is not a regular reader yet! However, to be positive he brings Smith’s ‘Moral Sentiments’ neatly into his case.

[Read his article in full at:]

2 Human Events online, ‘Oily Politicians: Part II’ by
Thomas Sowell (a senior fellow at the Hoover Institution ) 28 April.

Politicians have long been known for seizing upon immediate symptoms and ignoring underlying causes and consequences. Back in the 18th century Adam Smith wrote of "that crafty animal" the politician, who is preoccupied with "the momentary fluctuation of affairs."

Yes, Smith was not too fond of ‘politics’ as practiced in the 18th century and of the politicians who ruled the country. He distinguished, however, between politicians – men of ‘faction’ and ‘system’ – and ‘legislators’, a kind of mythical or ideal man of government who legislated wisely in the interests of minimal interference and good, selfless civic government, justice and security.

Smith certainly met and knew many leading figures in government and was consulted by them on occasion on various matters of policy, notably the war in the American colonies and matters of trade. They listened with respect but did not take too much notice, or couldn’t do much in the circumstances to implement what he suggested, for ‘short-term’ reasons of not having the votes in parliament to carry the day.

Thomas Sowell’s article at:]

3 Working for Change, ‘Enlightened self-interest: supporting the estate tax isn’t about class envy’ by Sean Gonsalves, Cape Cod Times, 28 April

The idea that the estate tax is a needed check against concentrated wealth and centralized power, which the intellectual father of free markets, Adam Smith, argued would undermine capitalism itself, apparently causes some kind of allergic reaction among those afflicted with class envy.”

The US ‘Estate Tax’ is the ‘Inheritance tax’ (‘death duties’) in the UK and Sean Gonsalves asserts Smith opposed it because it ‘would undermine capitalism’. That can’t be true because Smith did not write about capitalism, a phenomenon unknown until the 19th century – the word capitalism was not invented until 1854 in the UK, the words ‘capital’ was in English usage from the 17th century and ‘capitalistes’ were used in French from the 1760s.

Smith preferred taxation to fall on usage of public infra-structure, to help to pay for improving public projects, and on revenue (spending) and not to fall on savings because he did not trust governments to spend wisely. He considered politicians of the baser kind to be prodigals and not toe exhibit the growth inducing frugality he considered necessary to encourage the growth of opulence.

[Read Sean Gonsalve’s article at:]


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