Wednesday, October 3, 2012

Adam Smith: the Retcon?

"The Author of the Wealth of Nations",
by John Kay (1790) [A]
 

According to Econoblog101 (h/t Mike Norman Economics):
"This is a warning for those who have bought the Prometheus edition of the Wealth of Nations by Adam Smith. It is abridged, and it seems to have been edited to the effect that Adam Smith appears as a market liberal".
Apparently, one of the passages excluded was this (underlined and bold, within context, at the end):
"It is in the age of shepherds, in the second period of society, that the inequality of fortune first begins to take place, and introduces among men a degree of authority and subordination, which could not possibly exist before. It thereby introduces some degree of that civil government which is indispensably necessary for its own preservation; and it seems to do this naturally, and even independent of the consideration of that necessity. The consideration of that necessity comes, no doubt, afterwards, to contribute very much to maintain and secure that authority and subordination. The rich, in particular, are necessarily interested to support that order of things, which can alone secure them in the possession of their own advantages. Men of inferior wealth combine to defend those of superior wealth in the possession of their property, in order that men of superior wealth may combine to defend them in the possession of theirs. All the inferior shepherds and herdsmen feel, that the security of their own herds and flocks depends upon the security of those of the great shepherd or herdsman; that the maintenance of their lesser authority depends upon that of his greater authority; and that upon their subordination to him depends his power of keeping their inferiors in subordination to them. They constitute a sort of little nobility, who feel themselves interested to defend the property, and to support the authority, of their own little sovereign, in order that he may be able to defend their property, and to support their authority. Civil government, so far as it is instituted for the security of property, is, in reality, instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all." (The Wealth of Nations, Book V, chapter 1, part 2).

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If you read the whole paragraph, it explains why the rich are conservatives: "The rich, in particular, are necessarily interested to support that order of things, which can alone secure them in the possession of their own advantages".

It also explains why civil government (i.e. the State) exists and its true purpose: "Civil government so far as it is instituted for the security of property, is, in reality, instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all".

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I don't own that edition, didn't intend to buy it, and, after this, would be reluctant to recommend it. The book can be downloaded for free from many sources (for instance, Project Gutenberg), I have plenty time to read and Smith's book is important enough to justify the time invested.

As it turns out, while I don't buy all of Smith's arguments, Wealth of Nations is worth the effort. He had relevant things to say, and, unlike many of his successors, he said them with honesty.

Perhaps this explains Smith's apparent lack of popularity among today's free-marketeers.

Image Credits:
[A] "The Author of the Wealth of Nations", by John Kay (1790). Wikipedia.

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