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Monday, July 29, 2013

Book Three: Who Wrote This?

Posted by on Mon, Jul 29, 2013 at 10:14 AM

Not Marx...

Wherever there is a great property, there is great inequality. For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy to invade his possessions. It is only under the shelter of the civil magistrate, that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate, continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government
Yes, it is the man who for many (particularly in Reagan's moment) is to the invisible hand of the market what Jesus is to the invisible God up above. Yes, Adam Smith. Yes, he did believe that a free market was better for all. But, no, he was not naive about the dangers of a society that easily permits its policies to be directed by the interests of merchants. From deep in the third section of An Inquiry into the Nature and Causes of the Wealth of Nations:
Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods, both at home and abroad. They say nothing concerning the bad effects of high profits; they are silent with regard to the pernicious effects of their own gains; they complain only of those of other people

And he was very sober about the unionization of labor...

What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little, as possible. The former are disposed to combine in order to raise, the latter in order to lower, the wages of labour. It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it. In all such disputes, the masters can hold out much longer

I do highly recommend reading Wealth of Nations; but I must also warn you that the final section on taxes kills any kind of attention you exert on it. For sure, there are some nuggets here and there (such as Adam Smith's list of the necessaries of life—it includes not only material needs but also cultural ones), but most of it just goes on and on about this or that type of tax, this or that way it is collected, this or that way it is used, and so on. The main part of the book (some 1000 pages) took me two weeks to read, the short tax section took me a month to complete.

 

Comments (5) RSS

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lark 1
Charles,
Good on you for reading Smith. I have read Marx but alas, (blush) have yet to read the Wealth of Nations. Definitely, on my reading list. These excerpts and your comments are profound. Thanks.
Posted by lark on July 29, 2013 at 10:31 AM · Report this
Goldy 2
The secret to reading Wealth of Nations is to pick it up and read it in small pieces at random. I keep a copy in the door pocket of my car, ready to read when needed.
Posted by Goldy on July 29, 2013 at 10:38 AM · Report this
3

Fairly constituted Property Taxes would solve all this.

Washington does not have fair property taxes.

Repeal 84.55 Now!

Chapter 84.55 RCW
LIMITATIONS UPON REGULAR PROPERTY TAXES
http://apps.leg.wa.gov/rcw/default.aspx?…
Posted by Supreme Ruler Of The Universe http://_ on July 29, 2013 at 10:47 AM · Report this
Will in Seattle 4
Have to agree that reading all seven of Adam Smith's books is highly recommended
Posted by Will in Seattle http://www.facebook.com/WillSeattle on July 29, 2013 at 12:00 PM · Report this
5
I've read Adam Smith, so I'm not overly impressed by him, only all those stooges (like Mitt Romney) who have never read him and most egregiously misquote him!

Far more important, IMHO, would be to read Ferdinand Lundberg's The Rich and the Super-Rich, as well as Forrest McDonald's biography on Alexander Hamilton, and Donald Gibson's Wealth, Power and the Crisis of Lassez Faire Capitalism, and everything the greatest economist in America, Thorstein Veblen, ever wrote.

Adam Smith is overrated, although I agree with his opinions on speculators and certain other progressive insights.

But free markets will never exist......
Posted by sgt_doom on July 29, 2013 at 5:03 PM · Report this

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