Labor Day: Adam Smith, Notorious "Socialist"

 

I posted this on Facebook last year, and thought I would make it a blog post this year. I have included stuff from some of the comments, and expanded it a little.  

 

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Thoughts for Labor Day: 

 

I was in my 20s when I first read Adam Smith's The Wealth of Nations cover to cover. I was struck by the fact that Smith in many ways sounded closer to Marx than to Ayn Rand (and modern right-wing economists.) He was anti-corporate, anti-investment banking, considered high profits to be the sign of a sick society, said that the greatness of a nation could be seen in the rising living standards of its working poor, and warned that employers would organize to artificially lower wages while raising profits. Here are a couple of quotes that are on point:

 

"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."

 

I have been branded a "socialist" for suggesting that in the 21st century, wages should be high enough for food, clothing, lodging, and health care…

 

"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, authorizes, 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, a 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."

 

Then, as now, there is hostility toward unions, and laws enacted to make it difficult to organize. Meanwhile, employers naturally conspire to keep wages low.

 

Make no mistake: Adam Smith did not support the kleptocapitalist nonsense we have today - he warned against much of it, despite living 200+ years ago.

 

I have found that most right wingers who love to name-check Adam Smith have never actually read him. If they did, they would be much more cautious about enlisting his aid in promoting unregulated corporate capitalism that grinds the faces of the poor. (And pretty much anyone not filthy rich.)

 

Much of what we take for granted these days: a five day work week (rather than seven), 40 hour weeks or you (most of you anyway) get overtime pay, no child labor, regulation of working conditions so employers can’t simply assume a percentage of their workforce will die on the job - or get maimed and not be able to work, minimum wage, and so on, came because of unions and protests - one might even say riots. Smith understood that labor will always have structural disadvantages, exacerbated by poverty. Thus, labor needs to inflict genuine pain on those in power to succeed in creating a more just distribution of resources in our society. 

 

For Labor Day this, and every, year. Let us raise a glass to Adam Smith, and with him insist that the greatness of a nation is not measured by the wealth of its filthy-rich oligarchs, but by the living conditions of the poorest members of our society. And purpose to raise those conditions through our votes. 

 

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A few more:

 

Smith also warned that inequality had horrible social effects, because the rich will spend their money on self-aggrandizement, rather than benefit the rest of society. Hmm…

 

He also had great hostility toward "rent seeking," which has pretty much become corporate policy these days.

 

A lesson for Il Toupee: tariffs don't fix trade deficits, they just raise prices and increase smuggling.

 

Smith said that taxes should never fall primarily on the poor, but should be directed at reducing the profits from "rents," that is, income from existing wealth that is not put back into the business. Hey, that sounds pretty "socialist" by today's standards too! That’s the sort of progressive income and wealth tax that people like Bernie Sanders and Elizabeth Warren call for. (Which is further proof, by the way, that what is considered “far left” in the US is actually center to center-right elsewhere in the world - and even 200 years ago.)