You Don’t Know Adam Smith

Currently, I’m reading The Wealth of Nations by Adam Smith on my Kindle and am only 8% of the way through.  Quite frankly, I am shocked to say the least concerning many of his thoughts, ideas and observations about the economy, but also about society and the relation of the economy of goods and services to the rest of society as a whole.  Not only does he advocate the “liberal reward of labor” in order to encourage happiness, health and well being in the society (which he ultimately attributes to economic health and continued growth through more industrious behavior from the workers), but he also advocates radical notions, even in our own “modern” economies that tend towards the “moderation of work” in order to ensure what he hypothesizes is greater wealth production for the society as a whole.  From the scanty piece that I’ve read of him so far, he seems to be advocating a market economy, where people are allowed to exchange goods and services for the actual value that they have (rather than have a central state or monopoly controlling the prices) with the necessary legal structures needed to ensure that companies, businesses and financiers are abiding by these principles that ensures that wealth is being produced for the people living in the society by what he calls “the progressive state.”  He envisions societies run by corporations or where wealth is holed up in small sections of the society as being stagnant or regressive states, where economies don’t flourish, don’t thrive, and where economy and social well being (what seems to be his chief concerns) grind to a halt.  He uses the examples of what are the North American British colonies in the North (he says that slavery is ultimately a more expensive proposition for employers), the Chinese economy/society of 1776 and the then, British East India Company ruled state of Bengal as three examples of what happens to economies when and where the state is progressive (the American colonies), stagnant (China) and corporate owned, run and regressive (East India Company ruled Bengal).

What I think Adam Smith envisioned was that the economy would be run by the rational self-interest of the employers, and so, they would naturally follow along the path of paynig out high wages in proportion to what was earned and allowing workers idle time to rest and not over-exert themselves.  I think that he would call our current governments regressive and our current economies not conducive to real growth, even though businesses are posting higher profits and corporate executive compensation is doing very well.  I think he would compare our current predicament of corporate rule as either being stagnant at the very best, regressive at the very worst, and not conducive to fulfilling what he seems to consider as being the ultimate goal of the economy: to bring about sustainable happiness and well being for the majority of the people living in society.  The rational “individual” that he seems to imagnie does not really seem to exist in the context of the real society.  Otherwise, the business and banker leaders of the world wouldn’t be working to scantily compensate their workers for their own excessive “gain”.  Therefore, I think he would advocate for a return to a more progressive state that ensures and enforces the economic and social rights of the majority working classes such that general happiness and well being is achieved in society, and that the economy is able to naturally grow according to the Invisible Hand of the market forces (which are based upon the needs and desires of the general population and influenced by some of the laws that the society’s state makes).

I think that, based on this reading of Adam Smith, that he would be actually advocating for a more socially and environmentally connected economy where excessive control of wealth and power by a few individuals is not accepted or legitimated by law or by informal social standards.  I think that the conservatives and Libertarians who use Adam Smith are only using a very scanty and poorly interpreted piece of Adam Smith (strictly, his bit on individual self interest and the Invisible Hand) to justify the very patterns of behavior that Smith was writing aganist for not only the economy’s sake, but for the sake of those living in society in general.

If you don’t believe me, than read Adam Smith yourself carefully.  He’s not the easiest writer to read, but you can get his work The Wealth of Nations for between $0-$0.99 as an e-book.  This is before I’ve gotten into his lesser known book, The Theory of Moral Sentiments, which I bet, gets more in depth about his actual philosophies concerning human social behavior and social interactions.  I do not think that he would have advocated or supported the sociopathological behavior of conservatives or Libertarians, and would have, instead, called such philosophies as self-destructive for the individuals who perpetuate those ideas, concepts and behaviors, ie, not products of rationally thinking individuals who are accurately looking at the world around them.

The economy is now in progressive territory after the failed experiment of centralized control that was done in the Communist countries of the 20th century.  The conservatives and Libertarians have it wrong, both philosophically and, more significantly, functionally as well, for their sakes, for others’ sakes and for their sakes through being for others’ sakes as well.

Have at them!

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