- Capitalism and Alternatives -

A reflection upon Adam Smith

Posted by: Samuel Day Fassbinder ( Citizens for Mustard Greens, USA ) on October 31, 1999 at 18:28:40:

In Reply to: tip of iceberg posted by Gee on October 29, 1999 at 13:26:18:

: : Out of all the systems of government and economics discussed in this form, which one would be best at bringing about the following:

: In all seriousness I think it would have to be a dictatorship of sorts - because in each case there are no doubt counter-interests and counter views to the 11 goals you have stated.

SDF: At any rate, Adam Smith was not confused about the REAL dictatorship that is the result of the class struggle under capitalism:

What are the common wages of labour, depends every where 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 parites 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... In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long-run the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate.

We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of. Masters too sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour. Their usual pretenses are, sometiems the high price of provisions; sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their master into an immediate compliance with their demands. The masters upon these occasions are just as clamourous upon the other sicde, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen...
-Adam Smith, from The Wealth of Nations (Chicago: University of Chicago Press, 1976), pp. 74-76.

So, unlike the current crop of apologists for capitalism, Smith:

  • did not fantasize about the irrelevance of social classes
  • knew what the real names of these social classes were
  • did not fantasize that capitalism was solely about individuals acting alone, but admitted that their political "combination" was a normal fact of life
  • understood what the results of political combination would be under the current system
  • recognized the dependence of the owning classes upon the government that apologizes for their rule (i.e. the real dictatorship)
  • did not "divide up" the public according to arbitrary measurements of income level (as Paul Samuelson does in his classic textbook Economics), or according to some arbitrary allegiance to his own personal philosophy as falsely attributed to social groups, such as the example below:

    : A: Poeple, organisations & politicians who want to do away with limitations of the power of state.
    : F: Poeple, organisations & politicians(rare!) who want to do away with the imposition of limitations of the autonomy of the person.

  • knows the REAL limitations upon the "autonomy of the person" as they are imposed upon those who have to sell their labor in order to survive
  • and finally, Smith knew which side had the money and the power in his society, unlike the current crop of apologists, who have to ignore and/or forget realities of money and power in order to apologize for those who already have these things.

So what made Adam Smith different from the apologists of today? I think it was that Adam Smith was attacking an aristocracy, which were the feudal powers of his time, whereas the apologists of today are defending one. The reader, of course, has the right to his or her own opinion.

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