Progressive Writers Bloc

The Real Adam Smith — Part II

By Bill Becker

Bill Becker

In Part I of this essay, I promised to show that Adam Smith, the author of Wealth of Nations, was not nearly as friendly to the merchants and master-manufacturers of his own day as our modern captains of industry would have us believe. It will follow, again contrary to what they would have us believe, that Smith would be even less approving of their own relentless efforts to impose laissez-faire capitalism on the entire world.

Corporate America would have us believe that if he were with us today, Smith would share its loathing of labor unions as an unnatural, even immoral, interference with the hallowed free market; that he would enthusiastically applaud the subjugation of that impulse which, increasingly rarely, animates workers to believe that they are worth more than their employers pay them; that he would comfort our captains of industry and finance as a loving parent comforts a child unfairly treated by a bully. In fact, Smith was quite sensitive to the needs of labor, and quite aware of its lack of power vis-a-vis those who control capital.

The masters of Smith's day were "always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate," and "sometimes enter into particular combinations to sink the wages of labour even below this rate." There are "no acts of parliament against combining to lower the price of work; but many against [workers] combining to raise it." If the workers, in their desperation, actively resist the sinking of wages, "the interposition of the civil magistrate, ... the superior steadiness of the masters, ... the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing, but the punishment or ruin of the ringleaders."

Would Smith have stood with America's captains of industry in opposition to the National Labor Relations Act of 1935, which protected the rights of workers to form unions, engage in collective bargaining, and to strike? Not likely:

"Servants, labourers, and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged."

Improvement of "the circumstances of the greater part can never be an inconvenience to the whole," says Smith, but it is clearly an inconvenience to "those who live by profit," namely the "merchants and master-manufacturers." Does Smith sympathize with them? On the contrary. Their interest

"is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

If you can say "Enron," go to the head of the class.

For the full text of the essay from which this article and my quotes derive, go to www.williamgbecker.com.

Visit us at ProgressiveWritersBloc.com.