Tuesday, December 30, 2008

Osmosis From Fact to Fiction

An Editorial in Dallasnews.com (Dallas Morning News) HERE:

Editorial: Capitalism without morality is piracy

“Adam Smith, whose 1776 work, The Wealth of Nations, is a foundational document of modern capitalism, taught that an "invisible hand" of self-interest guided the free market toward greater prosperity for all. In that famous volume, Smith wrote, "It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest."
But self-interest, in Smith's view, is not the same as selfishness. Capitalism's prophet believed it's in everyone's economic self-interest to behave morally – which entails being trustworthy. As he and other enlightened defenders of the market argue, capitalism works only within a strong moral framework that creates social trust. Absent a common moral sense restraining our worst impulses, capitalism becomes a kind of piracy
”.

To which Ken Mathias, a reader, includes in his comments HERE:

This editorial quotes Adam Smith's The Wealth of Nations: "Absent a common moral sense restraining our worst impulses, capitalism becomes a kind of piracy."

Comment
I would appreciate a source for the alleged quotation from Adam Smith’s Wealth Of Nations.

Smith never used the word, ‘capitalism’, in anything he wrote. The word was not used in English until 1854 (by Thackeray in his novel, The Newcomes) and Smith died in 1790.

It is an example of metamorphosis by Chinese Whispers (message: ‘send reinforcement we are going to advance’ became, eventually, ‘send three-and fourpence we’re going to a dance’).

Of course, Smith did not teach ‘that an "invisible hand" of self-interest guided the free market toward greater prosperity for all’.

He certainly said that if the political economy of mercantile commerce, the state-run system of the 18th century in Britain, was replaced by repeal of the many laws of the then current prevailing orthodoxy, such as monopolies, protectionist tariffs, restrictive labour, settlement and apprenticeship laws, and laws of entail and primogeniture, colonial monopolies, wars to defend them from rival neighbours, and wars for trivial ends (the egoism of Princes and governments) and thyeir jealousies of trade, then there would be slow and gradual progress towards opulence across the whole population.

These had nothing to do with magical disembodied body parts or invisible hands. The process of the spread of opulence was known and knowable. His single use of the metaphor was about something else (risk avoidance) (see my paper: Adam Smith and the Invisible hand: from metaphor to myth', downloadable from the link (in red ink) on the Lost Legacy Home page).

Labels:

0 Comments:

Post a comment

<< Home