The Real Adam Smith

[Kidlicious]

Did anyone watch BookTV last night? They did The Wealth of Nations. It was very interesting. I didn't think I would learn anything new, but I was wrong. For the discussion they had a expert of moral philosophy, Samuel Fleischacker, and an economist, Russel Roberts, on.

On most things they agreed. They only thing they disagreed on was whether Smith would support universal healthcare or not. Fleischacker said he would and Roberts said he wouldn't.

The most interesting thing to me is how much of an egalitarian Smith was. He was an anti-materialist. That's amazing to me. He said that happiness doesn't come from aquiring materials, but from relationships with others. Also, he was very much opposed to rich businessmen and large businesses. He called for the East India Trading company to have it's charter revoked. If he were alive today he would be outraged by the way corporations claim to be for the public good, and would be opposed to allowing them to promote themselves and their ideas the way we do. Furthermore, he was against conspicuous consumption long before Veblen ever came along.

He was also anti-war, and would have been outraged at the way the US borrows money to pay for it's military and fight wars all over the world. He said wars should be paid for in the year they are fought.

[Imran Siddiqui]

Well, it is evident that large corporations do tend to make the market less "free" in the terms of unbridled competition. But Smith was writing about a somewhat utopian ideal of small business perfect competition. I don't think he realized (or wasn't interested) the incredibly productivity gains that come from economies of scale - imagine building computers if there were no big corporations.

[Kidlicious]

Well, it is evident that large corporations do tend to make the market less "free" in the terms of unbridled competition.

True. Why would a corporation care about their image in the kind of environment that Smith proposed?

But Smith was writing about a somewhat utopian ideal of small business perfect competition.

So you don't think he was talking about real world solutions to real problems?

I don't think he realized (or wasn't interested) the incredibly productivity gains that come from economies of scale - imagine building computers if there were no big corporations.

That's true but look at the problems that come with the information age. Particularly that the common person is at a disadvantage to those who have access to more information.

[Kidlicious]

Here's a review of Fleischacker's book on Smith.

On Adam Smith's Wealth of Nations: A Philosophical Companion

Adam Smith was a philosopher before he ever wrote about economics, yet until now there has never been a philosophical commentary on the Wealth of Nations . Samuel Fleischacker suggests that Smith's vastly influential treatise on economics can be better understood if placed in the light of his epistemology, philosophy of science, and moral theory. He lays out the relevance of these aspects of Smith's thought to specific themes in the Wealth of Nations , arguing, among other things, that Smith regards social science as an extension of common sense rather than as a discipline to be approached mathematically, that he has moral as well as pragmatic reasons for approving of capitalism, and that he has an unusually strong belief in human equality that leads him to anticipate, if not quite endorse, the modern doctrine of distributive justice. Fleischacker also places Smith's views in relation to the work of his contemporaries, especially his teacher Francis Hutcheson and friend David Hume, and draws out consequences of Smith's thought for present-day political and philosophical debates. The Companion is divided into five general sections, which can be read independently of one another. It contains an index that points to commentary on specific passages in Wealth of Nations . Written in an approachable style befitting Smith's own clear yet finely honed rhetoric, it is intended for professional philosophers and political economists as well as those coming to Smith for the first time.

[Patroklos]

I would imagine that the real stickler for Smith concering the East India Trading company was that it had a charter, or in other words a form of state sanctioned monopoly. If it were simple trading in an open market that would be a different thing.

[Kidlicious]

I would imagine that the real stickler for Smith concering the East India Trading company was that it had a charter, or in other words a form of state sanctioned monopoly. If it were simple trading in an open market that would be a different thing.

That's true, but generally speaking, he saw it as evil because it was a big greedy company.

[Kidlicious]

Here's the economists blog http://cafehayek.com/

[dannubis]

State sanctioned greedy company.

[Kidlicious]

State sanctioned greedy company.

I think what's important is the results of the company whether it was state sanctioned or not.

[Ben Kenobi]

You need to read Wealth of Nations, not watch a TV show, Kid.

[Kidlicious]

Another point is that he made a point to say that producers should only exist to benefit consumers. Any benefit that producers get, they should only get so that they can benefit consumers. Produders should never get a benefit that costs consumers.

So called "free" speech for corporations costs money.

[Kidlicious]

I would imagine that the real stickler for Smith concering the East India Trading company was that it had a charter, or in other words a form of state sanctioned monopoly. If it were simple trading in an open market that would be a different thing.

Well that ignores the fact that he was an egalitarian. As an egalitarian he was against big business as well as big government.

[Patroklos]

That makes no sense. In light of his theories he should have no problem with big buisness as long as it is conforming to free market forces. He may not have liked or trusted big buisness, which makes sense given that big buisness in his day refered almost exclusively to state sanctioned monopolies like the East India Trading Company, but they are not at all at odds with his theories.

[DaShi]

Is this one of those "the Constitution guarantees religion be taught in schools" things, but with Adam Smith?

[Main_Brain]

Also, he was very much opposed to rich businessmen and large businesses.

I dont follow that interpretation? Quite a while ago i wanted to quote Mr. Smith regarding companies, unfortunatly i had forgotten that Adam Smith doesn't mention private corporations at all. True he argues companies (Like East India and Hudson) subsidized by monopolies ( spoiler: He was against them ) Yet large businesses? Which Book are they discussed in?

He elaborates on Manufacturies (sp?) and international Trade, but Big Business? I dont think so. The Reason is quite simple, in 1776 when his original Book was written, the incorporation of companies was still a political act which required royal/ parlament admission in Great Britain.

Limited liability FTW