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Argument The First: "The Market Should Have No Government Constraints"
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- Argument The Second: "Markets Produce Equality"
- Argument The Third: "The Invisible Hand"
Argument The First: "The Market Should Have No Government Constraints"About the only true thing that those people arguing Smith as the defender of capitalism will say is that Smith argued in favor the market economy. That's true. he did. Sort of. More, he argued AGAINST the kind of economy that would distort the market away from the "natural price" of an item. That kind of economy - a mercantilist one - mostly existed because of monopolies. Due to the serious resource intensiveness of searching for many expensive goods and the costs of shipping those goods (by long end costly boat trips, usually), only the super-rich of those sponsored by kings and queens could afford to do it. Thus, they were the only game in town. And as Bill Gates could tell you, when you're the only game in town, you can charge whatever price you want. You can also use all the stroke that your money and privileged position in society gets you to squash your competition. We call this "monopolistic behavior." Its not really so different today as it was in years past. Smith saw a solution to this problem: locally-organized, lively markets of small producers and consumers. With a lot of people able to produce goods and services, you would have people continually trying to offer those goods and services for less than their neighbor. This takes the big producer out of things, and allows communities to grow by producing essential goods. David Korten, the bestselling author of When Corporations Rule The World and The Post-Corporate World, has painstakingly researched Smith and come up with a list of provisos which he believes Smith would endorse that markets should live up to. Smith had a lot of conditions that markets needed to meet before they could be effective. Another of those conditions was that the markets had to be LOCAL. None of this transnational stuff, which is one of the things he hated so much about mercantilism. Rich men that ran the Hudson's Bay Company could obey "the vile maxim" and create monopolistic price regimes which hurt the poor and working people. To truly achieve optimal market function, you would have to have many people capable of producing goods and services in a locality, thereby maximizing competition. A big part of this is encouraging locally-owned small enterprise. As Smith writes, "A gardener who cultivates his own garden with his own hands, united in his own person the three different characters, of landlord, farmer, and labourer. His produce, therefore, should pay him the rent of the first, the profit of the second, and the wages of the third." In his ideal market, people take on multiple roles - owning land, tending it, and preparing the goods for market. What shouldn't be allowed to happen? Big corporations consolidating power. Though what we know of as corporations didn't exist in Smith's day, there were big businesses which, though different in form, served the same social role. Significantly, Smith railed against the "Joint Stock Companies" and their effects on society. For one thing, the rigidly stratified companies took workers away from the position of influence, undermining the direct participation necessary from the classical liberal perspective. For another, he worried that these companies might be turned by legal decree into "immortal persons" - a warning that has been borne out by history. So as we can see, the notion of Smith as an unrestrained free-marketeer is far from true. This continues as we examine one of the next arguments you'll hear on Smith. Argument The Second: "Markets Produce Equality"This is another argument that is made which is literally true - Smith did say something that included the words "liberty" and "equality" relating to markets - but is not entirely correct. What Smith said was the under PERFECT liberty, a free market situation would produce a tendency toward equality. What this reveals isn't so much Smith's thoughts on markets as his thoughts on people. If people were able to achieve total freedom, and everyone was just as free as everyone else, then by golly, EVERYONE would get just as wealthy as everyone else. What does this idea sound like to you? It sounds like Smith believed that everyone - even the poor - had an equal shot at success if there was a level playing field. This tells us two things: first, that his big problem with mercantilism was that it failed to create a level playing field; and second, that we (government?) should take steps to ensure that such a playing field could be created. Another manifestation of this idea? “The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.” That is, you give everyone a chance, everyone can succeed. Say what you will about this idea, it certainly isn't a capitalist one. Well known is Smith's idea that the market brings with it the "division of labor" - whereby certain workers are shunted in laboring jobs, while others go on to different employment. Most people only know of the praiseworthy effects Smith ascribed to this phenomenon - efficiency of the economy, driving prices down, and so forth. But Smith the moral thinker condemned the human effects of this trend, saying it created humans who were "as stupid and ignorant as it is possible for a human creature to be," and would create a permanent underclass unless government - yes, government - "take(s) pains to prevent" this fate for the "labouring poor." Argument The Third: "The Invisible Hand"Okay, so this isn't really an ARGUMENT, per se. It's rather a catchphrase, a buzzword, an ear-tingling code that has found its way into the discussion of Smith. It's probably the only part of The Wealth Of Nations that your high school economics teacher knows. And THAT I'm serious about. I list it anyway because it is what people throw off at you in an attempt to "prove" that Smith was into all of this free-market jive. "Didn't Smith say that under market conditions, an 'invisible hand' would drive prices to their ideal level?" Well, sort of, but not really. Quick quiz: how many times does Adam Smith use the term "invisible hand" in the 900+ page Wealth Of Nations? I'll give you a hint: you can count to that number on the finger you use most while driving. That's right: the 'invisible hand,' which is presented by scholars as one of the core elements of Smith's philosophy, is used a whopping ONCE in the weighty tome that is The Wealth Of Nations. Try this quiz on your teachers. They'll appreciate it. Really. The quotation in question: "Every individual...generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." What this shows - rather than just giving you a snappy comeback to the inevitable use of the term by the Smith touts - is that rather than being an integral part of his philosophy, this notion of "the power of the market" was just an illustration, a one-time thing that seems almost thrown off half handedly. It also shows you that, in the back of Smith's mind, there is an overarching principle of the public interest which seems to be his ultimate goal - indeed, the goal of all classical liberals. In Conclusion I hope you’ll see from this not only how to answer Adam Smith in debates, but a truism about life. DON’T TAKE WHAT PEOPLE TELL YOU AT FACE VALUE. I’ve been told since I was 14 years old that Adam Smith was the father of capitalism, I read the original works at 22, and whaddaya know? It isn’t true. Makes you wonder what else about history and philosophy people have gotten wrong. I also hope it inspires you to go out and read Korten and Chomsky. Obviously, if you want to read Smith, the original is always the best - but Korten especially gives a great summary of Smith’s nuanced, interesting - and challenging- ideas about ethics and the market. Directory: uploads uploads -> 587 Return function, r i(X) r i(0) r i(1) r i(2) r i(3) 1 0 2 4 6 Thermal Station, I 2 0 1 5 6 3 0 3 5 6 10 uploads -> Department of science and humanities department of mathematics part-a questions and answers uploads -> The Case Against the nypd’s Quota-Driven ‘Broken Windows’ Policing What Is It? uploads -> For want of a nail uploads -> Ownership Models There are two different types of ownership models uploads -> Police Militarization uploads -> City of rising star regular meting thursday, july 14, 2016 uploads -> Township of winfield uploads -> Stop Militarizing Law Enforcement Act of 2014 uploads -> The Black Panther Party’s Ten-Point Program What We Want Now! Download 5.81 Mb. Share with your friends:
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