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Long-dead White Male Still a Problem

Adam Smith is generally acknowledged to be the father of modern Economics. Why is this long-dead white male still a problem?

Quite simply,  it is because of what he said and how he said it more than two centuries ago.  The wealth of a nation is determined by its resources which include physical and intellectual ones. How well these are used depends on  a legal framework conducive to their proper use and protection. Adam Smith, famed Scottish economist and moral philosopher, laid out his vision for a proper political economy about 250 years ago in his famous book “An Inquiry into the Nature and Causes of the Wealth of Nations”

Smith explained how, in a proper environment, people pursuing their own self-interests benefitted themselves and others. He used the concept of an “Invisible Hand” to explain how properly operating markets worked.

Since Smith’s time, knowledge and technology have exploded. So has government! Was the growth in government necessary or opportunistic? A recent observation seems proper:

Government is nothing but “professional advocates” fighting over loot and plunder. Oh, the politicians and the “professional advocates” dress it up to look like history’s famous arc, but in reality it’s just pirates squabbling over the loot 

The Founders of this nation intended government to be a passive referee. Instead, it has joined the game, pursuing its own wealth and power. It is the biggest and most ruthless player in the mix.

Today, formal economics has little to do with Adam Smith and social cooperation. It uses the tools of the physical sciences to “model” human behavior. Some claim this focus arises from “physics envy,” implying that economists need to show they are as talented as their physical science peers. Such tools are impressive. They advance tenure chances although their advancement of behavioral science is dubious.

Smith’s message is still the core of true economics. Some quantitative economists use the term “literary economics” to diminish his contributions. Yet Smith’s impact is permanent, proper and the heart of true economics (and other behavioral sciences).

Public schools avoid Adam Smith despite (because of?) his moral, economic and historical relevance. Instead, government schools teach social science as a history of inflated unfairness and exploitation. All problems, real, imagined or invented, have the same solution—bigger and more powerful government. “Proper” behavior requires more laws, controls and other incentive/coercions. The same goes for “good” outcomes!

Smith’s “invisible hand” is a dangerous construct. The claim that freedom and its virtues are possible and normal in a limited government setting . Men have interests that are advanced through cooperation, not confrontation and coercion. Cooperative undertakings are natural when they are mutually beneficial. The iron fist of government cannot force real cooperation or the prosperity that results.

Unity without the iron fist of government is a normal state of society. “Professional advocates,” parasites if you prefer, denounce Smith. He advances free markets which benefit you but not them.

I surveyed several nearby schools to find out whether Adam Smith’s market orientation was part of the curriculum. None responded in the affirmative. (Most did not know who he was.) My sample size was not large enough to claim statistical significance, although I have little doubt that a proper-sized sample would not alter the conclusion.

Government schools promote dependency. They advocate more government as the solution to real or imagined problems. The Catholic Church does not promote the Islamic religion because they are competitors. Similarly, government schools do not promote free markets, because free markets compete with a government-dominated society.

Those who attended school before the mid-1970s received a more balanced education. Government wasn’t so in control of schools and their curriculum then. Trust and confidence in schoolmates, business associates and neighbors was common.

If government closed for some period, no one worried that the world would end. Some rejoiced!

 

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