Guest Editorial: What did Adam Smith really say?

As the campaign season begins to hit high tide, one of the more common motifs from conservatives is the lament that government inhibits growth and prosperity and that a truly “free market” would unleash the powers of the marketplace — the result being a society bathed in opulence.
Those believers are smart enough to ride on the backs of others. It gives the principle more heft when it is attributed to historical figures with reputations beyond repute. If they could find a biblical passage that fit the message, they would add Jesus Christ to the list of their supporters.
For today’s political purposes, the free market apostle is Adam Smith. Capitalists laud his “invisible hand” as the force that should determine the marketplace results and private property as the unequal force that still accrues to the benefit of the wealthy, but provides opportunity to the poor as well. They quote Mr. Smith’s “Wealth of Nations” as a defense for growth regardless of outcome.
Repeat something often enough and it becomes what people believe. In this case, Mr. Smith is being misinterpreted beyond the point of recognition.
What would he think of our “shop till you drop” way of growth?
He argued precisely the opposite. He thought it venal to have demand built upon “mean rapacity.” He despised hyper-consumption.
And would he shrug his shoulders if he saw the disparity between the super-rich and the rest of society? Would he say that’s the work of the market, let it be?
He made it abundantly clear that the rich should pay more than their share of the taxes necessary to sustain a prosperous economy. He also made it clear as to the importance of high wages, understanding that a society’s “wealth” is best determined by how many people are doing well, not how few: “The high price of labor is the essence of public opulence.”
And, as “invisible” as some would like to make the 18th century economist’s thoughts about government regulation, he understood perfectly that, left to their own devices, the few would quickly control the market, set their own prices and their own costs. In a true laissez-faire economy the consumer would always be at the mercy of the producer, something he opposed.
Mr. Smith knew this and wrote about it exhaustively: “The interest of the dealers in any particular branch of trade or manufacture, is always in some respects different from, and even opposite to, that of the public.”
It’s just that our market libertarians forget this, unwittingly or not.
This “oversight” is something practiced on both sides of the argument. Karl Marx’s words can be parsed to say what the far left would have them say, Adam Smith’s words can [and are] parsed to say what the far right would have them say. For the sake of this argument, Mr. Smith’s words are being bent beyond recognition because what he said and what he meant make for a difficult conversation in a political world that depends on things being black or white.
How does an ardent defender of capitalism and “free markets” defend their apostle’s belief that the rich should pay a greater share of their income to support society’s collective needs, or that the government should be a consistent part of the regulatory process to prevent abuse of the have-nots by the haves?
They don’t. So, they pretend he didn’t….

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