SMITH’S FACTS WEREN’T RIGHT AND HIS THEORY WAS WRONG

SMITH’S FACTS WEREN’T RIGHT AND HIS THEORY WAS WRONG

1. SMITH CHEATED ON KEY AND CENTRAL FACTS

Gwydion M. Williams, member of Ernest Bevin Society, a British Trade Unionist group, ADAM SMITH: WEALTH WITHOUT NATIONS, 2000, p. 5.

A detailed analysis of Smith's logic shows that he cheated, not on minor matters but on the key and central arguments. Rather than show reasons why division of labour is best expressed in commercial society, he pretended that division of labour could only happen via a free market. No attempt was made to reconcile this with existing social realities, where Britain's flourishing industry relied on regulated markets and where complex division of labour would be found in areas where market forces had not yet reached. Adam Smith's most famous example, the manufacture of pins, turned out to have ignored the actual social context of pin making. It was in fact one of many industries that had been promoted in England by government initiative. It was moreover exceptional among the industries of the time, with its fragmentation of production into small repetitive tasks.

Gwydion M. Williams, member of Ernest Bevin Society, a British Trade Unionist group, ADAM SMITH: WEALTH WITHOUT NATIONS, 2000, p. 5.

Smith stood for the 'rights of money', as distinct from the rights of producers and workers. But money is no more than a way of thinking about certain sorts of human relationship. And Smith's ideology had time and again been used as a pretext for distorting society in favour of the owners of money and against the interests of everybody else. And yet, as I show in detail later on, his assertion that progress was generated by the 'rights of money' is just an assertion, and rests on no genuine body of evidence.
3. SMITH’S COMMERCIAL SYSTEM DID NOT LEAD TO THE INDUSTRIAL REVOLUTION

Gwydion M. Williams, member of Ernest Bevin Society, a British Trade Unionist group, ADAM SMITH: WEALTH WITHOUT NATIONS, 2000, p. 5.6

After several years spent studying both Adam Smith and the standard histories of industrialisation, my main conclusion is that there is no necessary connection between the Industrial Revolution and the Commercial system idolised by Adam Smith. Original scientific thought, agricultural improvements, technological progress, mass production all of these can occur without the commercial system. Whereas commercial structures with no strong state to support them tend to fail this was the fate of the Hanseatic League. The British Industrial Revolution was a special case, occurring outside of existing social structures, yet also under the protective umbrella of a state that imposed peace and a common legal standard, as well as tariff barriers that featherbedded newly born British industries until they gradually grew to world class status. And it was a state that was all in favour of 'improvement'; and happy to leave the details to enterprising individuals.
4. SMITH TACITLY ACCEPTED THE SLAVE TRADE

Gwydion M. Williams, member of Ernest Bevin Society, a British Trade Unionist group, ADAM SMITH: WEALTH WITHOUT NATIONS, 2000, p. 7.

In the absence of hard evidence, it is a reasonable suspicion that Britain could not have achieved its industrial takeoff just by honest work and ingenuity. It could not have happened without colonies based on conquest and genocide. It would have failed, or been much slower, without the remarkable flow of wealth that came from the modern capitalist slave trade. Smith was remarkably evasive on the subject of slavery. He preferred to look just at the residual serfdom in foreign countries and not at the modern capitalist chattel slavery that was fueling the progress and prosperity he so admired. As an observer of the world around him, he was decidedly 'economical with the truth'.

ADAM SMITH’S NOTIONS OF JUSTICE AREN’T HYPER-INDIVIDUALIST

1. ADAM SMITH, LIKE ROUSSEAU, WAS A COMMUNITY THINKER, NOT AN INDIVIDUALIST

Patricia H. Werhane, Ruffin Professor of Business Ethics in the Darden Graduate School of Business Administration and Adjunct Professor of Philosophy at the University of Virginia, NEW LITERARY HISTORY, 1996, p. 14-15.

Tzvetan Todorov's essay "Living Alone Together" challenges us to rethink the thesis that each of us is a purely autonomous individual, and that individuality, not community, is humankind's highest achievement. Going back to the writings of Jean Jacques Rousseau and Adam Smith, Todorov demonstrates that the roots of what is often called radical individualism do not rest in the Enlightenment, as is sometimes alleged, and in fact that thesis is contradicted by the work of two of its greatest philosophers. As Todorov demonstrates, both Rousseau and Smith argued that human beings are neither merely egoists nor asocial. While defending a form of individualism, both put forth a definition of humankind as constitutively social beings. The importance of Todorov's conclusions cannot be exaggerated in light of an accumulation of secondary literature arguing to the contrary.

Patricia H. Werhane, Ruffin Professor of Business Ethics in the Darden Graduate School of Business Administration and Adjunct Professor of Philosophy at the University of Virginia, NEW LITERARY HISTORY, 1996, p. 19-20.

Nevertheless, the origin of obligation and covenant and thus justice rest in this third law of nature. It would appear, then, that the origin of obligation derives from natural law, not from social convention. Obligation and covenant are not alien to the natural order, they are part of natural law; but they are realized only when there are guarantees of reciprocal respect and trust, guarantees that are possible to be realized only in a commonwealth. The point of this discussion of Hobbes is twofold. First, Hobbes makes an important argument that although the state of nature is a state of chaos, one of its laws is that "men performe their covenants made." So it is part of natural law that one honors promises, contracts, and agreements, even though the mechanism that guarantees that this will occur must be established in a social context. In the state of commonwealth rights claims, in particular liberty, entail "be[ing] contented with so much liberty against other men, as he would allow other men against himselfe." That is, rights claims entail obligations to respect equally rights of others and reciprocally, obligations of others to respect my claims. Thus laws of nature impose restrictions on natural rights so that, in fact, the realization of one's liberty can only take place in this context of obligation. Thus the contention that rights talk has mainly to do with manifesto rights neither derives from the father of the Enlightenment nor, as I have argued elsewhere, does that view make sense for Adam Smith.
3. THE ALLEGED HYPER-INDIVIDUALISM OF SMITH, HOBBES AND LOCKE IS WRONG

Patricia H. Werhane, Ruffin Professor of Business Ethics in the Darden Graduate School of Business Administration and Adjunct Professor of Philosophy at the University of Virginia, NEW LITERARY HISTORY, 1996, p. 15.

Without distracting from this careful, clear, and largely accurate analysis, in what follows I shall expand Todorov's conclusion. I shall argue that even the work of Thomas Hobbes, the accused "father" of asocial theories, has been sometimes exaggerated. This being the case, the alleged radical individualism of contemporary rights theories which trace their origins to Hobbes (as well as to Locke and Smith), is simply wrongheaded.