Sunday, October 19, 2008

Adam Smith, Socialist?

Jonathan Cohn nails the point at TNR.


Anonymous Anonymous said...


It always amazes me the extent to which corporate libertarians, those most prone to citing him, have apparently never even read, or at least didn't understand, Smith.

Try to reconcile the following, for example, with the modern-day right's positions re: capital vs. labor or management vs. unions:

"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. 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 everywhere 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 everywhere 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 tile price of their labour. Their usual pretences are, sometimes 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 masters into an immediate compliance with their
demands. The masters, upon these occasions, are just as clamorous upon the
other side, 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 combination of servants, labourers, and
journeymen. The workmen, accordingly, very seldom derive any advantage from
the violence of those tumultuous combinations, which, partly from the
interposition of the civil magistrate, partly from the superior steadiness
of the masters, partly from 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."

-- The Wealth of Nations, Book 1, Chapter 8: "Of the Wages of Labour"

1:21 PM  

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