Was Adam Smith a socialist?

B,

Thanks for your comment. It is indeed refreshing to see someone saying that they 'didn't know that', unlike some contributors who seem to know everything.

In a like vein, I can't speak about Hayek - the fact that he was Lady Thatcher's 'hero' was enough to put me off - I anticipated a strong rise in my blood pressure, which I could well do without, if I started to read 'The Road to Serfdom.'

Having said which, 'serfdom' never arrived following the post-war agreement of full employment and the welfare state, which lasted until 1979.

Some more words from Mr Smith .... "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." He was a believer in 'the liberal reward of labour.'

Best wishes,

PB

I'd take issue with your last statement and say:

Under Labour's watch, the 3R's are so badly taught that kids need to be kept in school until the are 18 or even older.

Fair enough Peter, I didn't know that.

I dunno about Smith and socialism, but I think it's interesting to take the philosophers the modern right claims to be inspired by, and to test its political practices against those philosophers' ethical thinking. When the practices come up short, it often exposes an indifference to other people being cloaked by fake ideals. I find Hayek, for example, far more aware of how societies and culture work, and what needs to be done to make them safe, than his supposed acolytes.

If Smith were a socialist how could his image have ever ended up on the twenty pound note under New Labour, one of the most rabidly anti-socialist and neo-liberal governments in living memory? I mean even Gordon Brown admires Adam Smith and nobody could possibly mistake our current Prime Minister for a socialist! - often I have trouble imagining him as being human at all! I rest my case.

"However, he did appear to accept a rationale that government could and should execute certain functions (what we nowadays call 'infrastructure') 'for the public good.' He also accepted the need for everyone to be in receipt of a basic level of education."

As a minarchist, I totally concur with Adam Smith. The problem with your take on Smith as a socialist is that socialists feel that "infrastructure" comprises most of life, whereas minarchists believe that infrastructure is only those things that cannot effectively be provided by the market, because of the level of economic externalities involved: roads, defence, justice, waste collection ... that's about it. And a basic level of education is the 3R's, not mandatory schooling till you're 18.

Can I just add that under Labour's watch, the 3R's are so badly taught that there's no point in keeping kids in school till they're 18?

Anthony,

Thanks for the response.

Regarding your comment, 'it just doesn't feel like he is theirs to own', may I add : "We have no acts of parliament against combining to lower the price of work ; but many against combining to raise it."

And : "We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen .... 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."

I wonder what goes on 'behind closed doors' in the CBI .... ?

Let me know when you read these quotations (and the ones in my article), in bold letters, on the website of The Adam Smith Society .... I'll send £50 to your favourite charity.

Hugh, I'll come back to you tomorrow, if I may.

May I say, in the meantime, that I at no time introduced the equation Conservative = evil into my article? Indeed, 'one-nation conservatives' such as Harold Macmillan and 'Rab' Butler were anything but 'evil'; they were good-hearted politicians who understood the need for two of the factors of production (labour and capital, the third being land) to get along with accommodation and agreement.

Hi Peter,

I agree with your last comment entirely.

There is a spontaneity to Smith's philosophy and it is grounded very much in free association. On occasion the left drift to more statist and technocratic solutions. The social nature of liberty and the morality underpinning that- as described by Smith- is something that provides food for the liberal left. The neo-liberal right has seized this philosopher but when I have read him it just doesn't feel like he is theirs to own.

Yes of course re Disraeli but, as you will surely agree, he was a (brilliant) pragmatist who responded to Gladstone and keeping an eye on the need for the Tories to have working class support. So his principles were mutable, but in the case of the Second Reform Act it could be argued that in practice his policy was leftist.

Anyway, no of course I'm not saying the 19th century Tories were socialist. I was saying that Gladstone and his party had some beliefs which coincided with later left wing working class politics which could be described as socialist. And thus the Liberal Party of the late 19th century could be described as slightly socialist. I take your point re Keir Hardie, but Gladstone had a lot of support among late 19th trade unionists.


Ultimately this sort of debate founders on the definition of socialism of course. I guess you'll see it as being defined by excessive state power and lack of respect for the individual? Whereas I see that it sometimes leads to that, but think it's more about equality of opportunity, fair distribution of political power, helping the disadvantaged defend themselves.


And no, before you ask, I don't think the current government embodies those principles.

Sorry but suggesting Adam Smith was a socialist goes a bit beyond "flawed"

Nicolas,

A staggering contribution!

As I say in another response, there's a lot more (to Adam Smith) than the right would lead us to believe ('self interest' da da da).

I believe that in Adam Smith's time, land was the main source of great wealth (the industrial revolution was in its infancy).... and, what was the party of land ownership then? The Tory party.

Guy M, No. You withdraw 'logic light' and 'stupid' : may I suggest 'flawed' - you only need to use it once. We can then resume debate as it should be conducted.

Peter,

I have just read your contribution on 'Private schools and pursuit of privilege'.

I wish my post had elicited a response from you of equal quality. Having said that, there are still a few of us around who have not been brainwashed by 'New Labour.'

Boy! Does that comment add 'real value!'

You forgot to mention that both (AS and GB) were Scots.

Peter, May I suggest that you email David Cameron, quick pronto, your sure-fire vote-winning slogan for the Conservatives : "We believe in greed."

Not much of a discussion, I admit .... but I always find it somewhat incongruous that the 'Conservative Party at prayer' (an old definition of the Church of England) seems to forget that greed is one of the 'seven deadly sins' and that 'it is easier for a camel to go through the eye of a needle than it is for a rich man to enter the Kingdom of Heaven.'

B Bendle, Thank you for your response. 'Historical context' is, I think, a key phrase. In 1776, relief extended to the provision of goods (not many services!) to maintain the 'deserving poor' at a subsistence level of life.

However, Mr Smith acknowledges in 'The Wealth of Nations' that he understands necessaries ('subsistence') .... "not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without."

He goes on to say .... "in the present times, a creditable day labourer would be ashamed to appear in public without a linen shirt...."

Fast forward to AD 2009 - what are the equivalents of 'a linen shirt' for 'creditable day labourers' and is the present-day distribution of income sufficient to satisfy these fundamentals of 'respect?'

There's a lot more to Adam Smith than we have been led to believe.....

How about we go one step further back and start with posts that aren't "logic light" and "stupid" in the first place, then we might be getting somewhere?

How do any of these statements equate to socialism? Under these tests the US Republican party would seem to qualify.

You do realise that conservatives do generally believe in a proportional tax system (like 20% of what you earn, for instance); that they do support the role of the state in relieving poverty (and Smith, of course, would have been considering absolute poverty); and that by and large they don't actually oppose tax-payer funded education (only how it's often implemented in practice), don't you?

Could it just be that he was a conservative and yet not evil? Are we able to countenance such a thing?

Guy M,

When you discipline yourself to respond to posts without using words like 'logic light' and 'stupid', then I'll respond.

Until then....no way, Hose

Anthony,

Thank you for your response. I am grateful for you to pointing me towards 'A Theory of Moral Sentiments', which I was aware of, but I'm not so sure that me reading it will actually occur.

I'm a bit puzzled by the ambiguity in your last sentence : 'That doesn't mean that there isn't much in Smith for the left.....there is.' Does that mean, to the left, "Get real! This is how it is" or does it mean, to the left, "Well, actually, Adam Smith said much in sympathy with your ideals?"

My post was an attempt to paint a more nuanced picture of Adam Smith to the one that we have now heard from the right for the last thirty years, as I mention in my response to Dan McCurry.

Dan,

Thank you for your response.

I agree that Adam Smith believed that government should be kept out of, as much as possible, day-to-day life as it then was. However, he did appear to accept a rationale that government could and should execute certain functions (what we nowadays call 'infrastructure') 'for the public good.' He also accepted the need for everyone to be in receipt of a basic level of education.

Adam Smith, for the right, is generally remembered and quoted (ad nauseaum since 1979) : "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their own regard to their own interest."

As more than one contributor has remarked, 'own interest' (Mr Smith did not say 'self interest') is not the same as selfishness or greed : it could well be interpreted as having the need for the wherewithal to feed one's family, put a roof over the head of the same family, and generally be able to pay one's way in life.

Regarding the 'credit crunch', Mr Smith said this about bankers and joint stock companies :

(i) ‘The trade of a joint stock company is always managed by a court of directors…..The directors of such companies, however, being the managers of other people’s money than of their own, it cannot be well expected that they should watch over it with the same anxious diligence with which the partners in a private copartnery frequently watch over their own.’

(ii) ‘Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart on any occasion from those rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal, to the banking company which attempts it.’

(iii) ‘The late multiplication of banking companies in both parts of the united kingdom, an event by which many people have been much alarmed, instead of diminishing, increases the security of the public……By dividing the whole circulation into a greater number of parts, the failure of any one company, an accident which, in the course of things, must sometimes happen, becomes of less consequence to the public.’

If banks, regulators and governments had heeded these words a good time ago, many of our present problems would, quite simply, not be now manifest. And, indeed, Mr Smith's fellow Scot Alistair Darling chose to ignore these words in the White Paper on financial services, presented last week. But then, having Paul Myners as a key player in his team, what could we expect....?

Finally, Adam Smith may not have been a 'socialist' (I believe the term first appeared following Robert Owen's 'New Model factories' some fifty or so years later). However, from what I have read in 'The Wealth of Nations', he wasn't a 'red in tooth and claw capitalist' either....

I'd argue the difference between self-interest and greed can be very small. Greed is simply excessive self-interest.

From the Wealth Of Nations:
"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

Modern progressive taxation can largely be traced back to Adam Smith.

I think you'll find Disraeli's government's in the period 1868 to 1885 (he died 1881) were as productive in terms of relief for the poor and working classes as were Gladstone's of the same period (his first 2 premierships).

Did that make the Tory party of the late 19th centruy "socialist"? I think not and I think Kier Hardie would not see the similarities either.

The liberals were certainly "leftist" but by no means socialist as shown by their demise after WW1

Neither the Tory or Liberal Party of those times where "socialist" in the slightest.

One could argue that the pre-1880 Liberal Party were SLIGHTLY leftish: support for increasing parliamentary power at the expense of the monarchy, support for increasing suffrage and social reform, a lot of nonconformists in the ranks. And post-1880 they began talking about increasing the role of the state in welfare, which is why they (rather than Labour, contrary to myth) initiated the welfare state int he early 20th century.

Yes, but wouldn't the tax mentioned in point 2 have been (technically) regressive? Which, as Guy says, rather argues against him as a redistribution advocate. Peter seemed to be stretching a point in the extreme in his interpretation here; at the very least he is skewing the meaning of the word "relief", particularly as it would have been understood in this historical context.

Yes, but Smith was from Kirkcaldy, and although some socialists sometimes like to think he was left-wing, he was in practice very much of the right. So er... nothing like... oh hang on...

I'm not going to work to pay for the NHs, the local schools or the social security benefits of the elss well off. I'm happy that an amount gets deducted to pay for those (we can disagree voer what the "amount" should be).

I'm going to work to the bills that keep my family and I in our home, fed, warm and with a resonable quality of life and standard of living.

The problem with socialism is that it never gets that basic trait of human nature i.e. self improvement and self benefit

I don't think greed is what makes the world go round. Self-interest maybe, but not greed. There'e a big difference.

Greed IS what makes the world go round! That's the main point that Smith attempts to put across. However he certainly didn't approve of greed, all he's saying is that its self interest which gets you a wage, puts food on your table, makes your clothes etc.

He was a very strong advocate of progressive taxation, not flat taxes.

Smith believed in a small state which would place him in the tory camp. His most famous quote "Greed tempered by competition is the best form of regulation" took on some significance during the credit crunch. He also said, "There's a great deal of ruin in a nation". So he does appear to be instinctively small-state.

You could equally ask: is Nu Labour really a socialist party? and be left with the same confusion and hyperbole.

He's not a socialist. Having said that, self-interest does not mean 'selfishness.' I'd strongly recommend reading A Theory of Moral Sentiments which is a crucial companion work to The Wealth of Nations. Smith's world view was of free individuals, seeking to pursue their interest through social exchange (and that entails sympathy as much as profit.) He was strongly against concentrations of power (in business and politics and especially when the two intersect!) I see his thinking as very much in the 18th century liberal and Tory tradition. That doesn't mean that there isn't much in Smith for the left.....there is.

On point one, he might as equally be supporting a flat tax rate of say 20%. The higher earners pay more, in other words "in proportion to an individual’s revenue", but not the higher % rates that Labour supports.

On point two, he might as equally be arguing for a safety net to protect the lower classes in society. Please show me where though he argues for a policy of significant redistribution of wealth? Smith was always very much in favour of stimulus to economic activity and I think you will be hard pressed to find him supporting high rates of taxation and redistribution. Do try though.

Om point three he argues for an education system that includes all. Both Disraeli's and Gladstones administrations moved towards compulsory education between 1870 and 1881 that led to the Education Act of 1881 that made schooling compulsory for children aged 5 to 10. Neither the Tory or Liberal Party of those times where "socialist" in the slightest.

All in all another logic light and stupid attempt to place "socialism" as the be all and end all of "fair" society.

Adan Smith is no more a socialist than the Levellers, Diggers, and Lollards.

A belief in fairness and equality isn't and never was the exclusive preserve of one particular faction.

Is it any wonder the party has lost touch with the public, when it seems some within it think propagating a belief that it has an almost religious exclusiveness to these qualities despite the evidence of the electorates own eyes.

Dodgy expenses, illegal wars, ID cards, the PM repeatedly calling black 'white' with respect to public expenditure, when people are seeing and experiencing cuts in their communities now.

Ooops I forgot mentioning abolishing the 10% tax rate for low earners. If Adan Smith was a socialist what does that make the government? Tories?

On point one, Smith continues with 'a goal of taxation should be to remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.' Sounds like a socialist to me.

Adam Smith also points out that success of any process, business or action is dependent on the self interest of individuals concerned.

Very 'Tory' that.... greed is what makes the world go round.

Discuss!

From Wikipedia: "Smith is reported to have been an odd-looking fellow. One author stated that Smith "had a large nose, bulging eyes, a protruding lower lip, a nervous twitch, and a speech impediment"

Sounds like Brown to me...