Responding to the recent full-throated baying of conservative “economic watchdogs,” I slogged into the swamp of their icon Adam Smith’s murky tome, “The Wealth of Nations,” to see if they had finally treed anything of value.
In the late 18th century, Newtonian physical science invented oversimplified models and considered only measurable items, but produced spectacularly successful results. Adam Smith apparently tried this same technique on human behavior.
For example, he defined “wealth” as the monetary value of annually produced useful goods (and some services). To me, wealth also involves good friends, family, good health, a liberal society, music and occasional contact with unsullied nature, none of which was considered by Smith.
Even accepting his limiting simplifications, however, his results fall far short of Newton’s, and some of Smith’s predictions were totally wrong. For example, Smith claimed that British rule in America was advantageous to the colony, not England, and predicted (p.627) that the American “disturbances” would quickly die away (ironically, his work was published in 1776).
Nevertheless, there are many seldom-mentioned nuggets buried in Adam Smith’s pioneering work. For example, he considered baubles like jewels, mansions, antiques and flashy carriages to be harmful economic wastes (p.444). He had great faith in workers (p.175), and stated that corporations corrupt labor. He considered country ploughmen superior to sophisticated town dwellers.
He promoted a progressive tax on the wealthy (particularly on luxury goods) but no tax on food or necessities for the poor (p. 1126). Throughout his work, Smith opposed very large corporations. He repeatedly bemoaned the influence of merchants on government (corporate lobbyists in Nashville would be high on his hit list). He considered excess profits very damaging, economically, and he stated that “(wealthy entrepreneurs) complain about the extravagant gain of other people; but say nothing of their own.”
He groused that companies “frequently complain of the high wages of British labor…but they are silent about the high profits of stock” and he felt traders (including bankers and stockbrokers) were the least valuable members of economic society (p.847).
Smith defined “capital” as something that increased productive capacity. For example, better plows or increased soil fertility would build a farmer’s capital, as would improving his education or investing in productivity-enhancing infrastructure. Building LaGuardia airport, the Lincoln Tunnel, the Triborough Bridge, the West Side Highway, the TVA dam system, rural electrification, the Mathematical Tables Project and even Cumberland Mountain State Park were all capital increases.
Unfortunately, Roosevelt didn’t invest in building education or health care capital to an equal degree, or we might have seen even greater dividends. Nevertheless, he and Eisenhower (Interstate Highway System) indisputably presided over the greatest increase of national capital since early in our history.
All of it was criticized as “pork” by wealthy plutocrats at the time, but as classical economics predicted, an unprecedented period of American productivity followed.
We are presented with a similar opportunity today. If we focus on increasing our common national capital and resist the selfish, bauble-accumulating economic royalists, Adam Smith would predict another economic surge for our children.
Why, then, do we find his stingy, misguided, obstructionist hounds once again barking up the wrong tree? Bad Dogs! Go Home!
Columns
March 10, 2009
WE THE PEOPLE: Thoughts on bringing a recession to heel
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GARY'S WORLD: Thank our veterans this weekend
A tremendous opportunity presents itself in our community this weekend — an opportunity to honor those who served in the Vietnam War. Personally, after attending last year's first Welcome Home celebration, I wouldn't want to miss this. It was an emotional event for both Vietnam veterans and ordinary citizens. It was a great way to commemorate Vietnam Veterans Day in Tennessee, March 29.
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RANDOM THOUGHTS: "Antiques Roadshow" comes to Tennessee
If you are one of the 10 million who watch each episode of the “Antiques Roadshow” mark your calendar. The three upcoming Mondays, March 30, April 6 and April 13, were all taped in Chattanooga last July.
- LION AND THE LAMB: An open letter to Sharon Baier I was happy to read your well-written article, printed in last week's Chronicle. It makes a strong case, in the story of Al and Jennifer, that "To make money, you have to spend money." That misguided couple thought that they ought to cut down on their purchase of supplies, to save money. They did so, week after week, until they lost their business.
- WE THE PEOPLE: Veterans storm the Hill When young men and women risk their lives and sacrifice both physical and mental health for their country, a grateful country should at least provide them with shelter, food, and health care. But there is a lot of hypocrisy between what some windbag says on Veterans Day and what the country actually does for veterans.
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THEREFORE I AM: Kids stress out parents? Well, duh!
This just in: According to an expert, children can add stress and strain to a marriage. In other news, further expert studies have indicated that the sky is in fact blue, Paris Hilton is a tad spoiled, peanut butter and chocolate taste great together, and the Middle East has issues. Thank goodness we have experts to tell us these things.
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INSIDE THE FIRST AMENDMENT: With shekels come shackles
When President Obama launched his faith-based initiative at the National Prayer Breakfast on Feb. 5, he promised not only to sustain the Bush administration’s signature domestic program — but to expand it.
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THEREFORE I AM: Jim Croce and I will keep you safe and sound
My philosophy of life is simple: When in doubt, follow the advice of a dead folk-rock star. I always found Jim Croce to be particularly handy in this capacity. Don’t tug on Superman’s cape. Don’t spit into the wind. Don’t pull the mask off that old Lone Ranger, and regardless of how badly you may want to, do not, under any circumstances, mess around with Jim.
- STUMPTALK: Stimulating a war on prosperity and freedom Near Bush’s sunset, Treasury Secretary Paulson and Fed chairman Bernanke terrified the nation with “the sky’s falling and America is doomed” unless the government steps in with new regulations, institutional takeovers and massive lending.
- WE THE PEOPLE: Thoughts on bringing a recession to heel Responding to the recent full-throated baying of conservative “economic watchdogs,” I slogged into the swamp of their icon Adam Smith’s murky tome, “The Wealth of Nations,” to see if they had finally treed anything of value.
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LION AND THE LAMB: Reality
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