Freethought & Rationalism Archive

LymanLover · 05-09-2003, 05:56 AM

I once heard a quote from Adam Smith (paraphrase):

"Whenever you see two business men talking, they are in a conspiracy against the public."

Confirm or deny?

I have also heard that the "invisible hand" market conservatives sometimes refer to is only mentioned once in _The Wealth of Nations_, a massive tome that I admit to not having read (yet).

Thoughts?

Kinross · 05-09-2003, 08:41 AM

Yes he said it but those who quote it only quote the part they want when they propose governmet regulation. The full quote is:

Quote:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible, indeed, to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.

He is stating that yet yes this occurs, but we can't and shouldn't do anything about it.

And yes the "invisible hand" is only mentioned once, at the very beginning.

Quote:

By preferring the support of domestic to that of foreign industry, he intends only his own security ; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

It is a means of setting up the premise of the entire book.

MortalWombat · 05-09-2003, 08:53 AM

He seems to be in favor of progressive taxation.

From The Wealth of Nations

Quote:

"The subjects of every state ought to contribute toward the support of the government in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the state."

Dr. Retard · 05-09-2003, 09:00 AM

The "invisible hand" also shows up in Smith's Theory of Moral Sentiments:

Quote:

The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.

Here Smith is talking about our natural impulses towards the admiration of frivolous gadgets and luxury. We like things that display order and arrangement, that are 'cool'. He says it's a good thing we have these natural impulses, because they motivate us to industry. And even though rich people are self-centered, their frivolous tastes provide work for others, and produce real social benefit for everyone else.

Smith also used the phrase in some essay on astronomy.

Kinross · 05-09-2003, 10:49 AM

Quote:

Originally posted by MortalWombat
He seems to be in favor of progressive taxation.

Not at all. You are trying to take sound bytes and Adam Smith's writing style does not lend well to that. You need to read the entire passage. He is very long winded and can take 100 pages to get to point of the matter.

If you read the entire passage you would see that what he was proposed was something very similar to a flat consumption based tax.

MortalWombat · 05-09-2003, 11:27 AM

Quote:

Originally posted by AdamSmith
Not at all. You are trying to take sound bytes and Adam Smith's writing style does not lend well to that. You need to read the entire passage. He is very long winded and can take 100 pages to get to point of the matter.

If you read the entire passage you would see that what he was proposed was something very similar to a flat consumption based tax.

According to Sam Fleischacker, Associate Professor of Philosophy at the University of Illinois in Chicago and author of "A Third Concept of Liberty: Judgment and Freedom in Kant and Adam Smith" (Princeton University Press, 1999):

Quote:

Finally, one part of protecting liberty involves making sure that there is as little poverty as possible. Great poverty breeds crime, which interferes with everyone's liberty and of course prevents the poor themselves from having the mental or material resources to act with full freedom. Protecting freedom directly requires an investment at least in public education and public health, especially for pregnant mothers and young children. Smith supported using tax money for these kinds of measures. Indeed, he gives express approval to progressive taxation, recommending a higher road toll for luxury carriages than for freight vehicles so that "the indolence and vanity of the rich" can be made to contribute to "the relief of the poor."

Is he trying to take sound bytes too?

As an aside, Smith's "Wealth of Nations" can be found online in its entirety here if anyone is interested.

Kinross · 05-09-2003, 12:33 PM

Quote:

Originally posted by MortalWombat
Is he trying to take sound bytes too?

Unfotunatly yes. A progressive tax is a tax on income, Smith was talking about a tax on luxury items.

If you bother to read the entire section on taxation you would see that Smith proposed two ways to collect taxes.

1.) A consumption tax on luxury items. He was very clear on luxury and non-luxury items. Basicly food, clothing, and shelter are tax free. Everything else is a luxury and taxable.

2.) "Ground-rents"

He was very much opposed to excise taxes, customs, and taxes on profits. And most of all his harshest criticisms was a tax on labor, the area where progressive taxation occurs.

MortalWombat · 05-09-2003, 01:26 PM

Semantics aside, the point that I am trying to make is that Smith's phrase "The subjects of every state ought to contribute toward the support of the government in proportion to their respective abilities" lies at the very heart of the incentive for, and implementation of, progressive taxation.

And apparently, I'm not alone in this belief, as judged by Professor Fleischacker's article. Conservatives and libertarians don't have a monopoly on interpreting the Gospel according to Smith.

Kinross · 05-09-2003, 03:11 PM

No, you are trying to take one sentence from a 1000+ page book to propose that the author supports an idea that didn't even exist during his time.

I beg of you, go read the entire work and then come back an tell me if Adam Smith thought a complex progressive tax system was a good idea. Not quote some sound byte from a socialist philosopher who can only get published in a two bit rag.

05-09-2003, 05:56 AM	#1
LymanLover Veteran Member Join Date: Feb 2003 Location: Arkansas Posts: 1,982	Adam Smith I once heard a quote from Adam Smith (paraphrase): "Whenever you see two business men talking, they are in a conspiracy against the public." Confirm or deny? I have also heard that the "invisible hand" market conservatives sometimes refer to is only mentioned once in _The Wealth of Nations_, a massive tome that I admit to not having read (yet). Thoughts?

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05-09-2003, 01:26 PM	#8
MortalWombat Veteran Member Join Date: Apr 2001 Location: St Louis area Posts: 3,458	Semantics aside, the point that I am trying to make is that Smith's phrase "The subjects of every state ought to contribute toward the support of the government in proportion to their respective abilities" lies at the very heart of the incentive for, and implementation of, progressive taxation. And apparently, I'm not alone in this belief, as judged by Professor Fleischacker's article. Conservatives and libertarians don't have a monopoly on interpreting the Gospel according to Smith.

05-09-2003, 03:11 PM	#9
Kinross Veteran Member Join Date: Sep 2001 Location: . Posts: 1,281	No, you are trying to take one sentence from a 1000+ page book to propose that the author supports an idea that didn't even exist during his time. I beg of you, go read the entire work and then come back an tell me if Adam Smith thought a complex progressive tax system was a good idea. Not quote some sound byte from a socialist philosopher who can only get published in a two bit rag.

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