Man, this makes me crazy...

How many times do you listen to some pundit on the radio or TV talk about the "model" for economic understanding as being Adam Smith and his Wealth of Nations? I don't care if you are talking about conservatives or liberals, all can point to Smith and say "See? It's right here!" when in reality, I am more and more convinced that not a single one of them have ever read the work.

On the anniversary of the first publication of the work, I listened to a very vocal conservative host on the radio and heard him discuss how Smith was the fundamental basis for all conservative economic planning, and how he penned the first work defining "capitalism". Both are patently FALSE statements.

This morning I read a column from a liberal journalist in Philly about how Smith was 90% in agreement with Marx in matters concerning "labor theory of value", and that "right-wingers" who tout Smith as a herald of conservative economics are ignorant and wrong. Also patently FALSE...

Just so there is no claim of bias or that I am failing in my objectivity, I found the single best online edition of the work HERE... so if you doubt what I am about to say, follow the link.

Like many authoritative works of the 18th Century, Wealth of Nations is not a huge volume of writing. It is correctly labelled Smith's magnum opus, but it isn't quite the same as having to read the entire scope of, say, Shakespeare to find you understand his position on any specific topic. The work is only 40 pages online, and it is not a tough read by any stretch of the imagination.

Smith uses these few pages to explain and justify his observations and opinion of the history of wealth accumulation, on both macro and micro scales. He defines the terms he uses, and shows examples of each, to further his opinions on how individuals and nations develop and grow wealth, which he measures in numerous forms.

What Smith does NOT do is use terms like "economics" or "capitalism", because neither had been invented yet. He did NOT consider himself a "conservative", but instead seems to have seen himself as a progressive, or liberal (in the classic sense of the word), and felt that there was, indeed, a place in wealth accumulation on a national scale for such ideas as "fairness", "charity", and a deep and abiding appreciation for a progressive tax system (ideally based on a "housing tax").

Smith mirrors modern conservative opinion in that he bases his conclusions on the demands of the individual, and not on society as a whole (which, I feel, is the single biggest difference between Smiths labor theory of value and that of Marx), and goes on to make the case that when the individual gains, society gains (something Marx denies from the start... his position is that the individual gains only when society as a whole benefits... which is preposterous in its entirety).

Smith does not deny the "interconnection" between all members of a society that Marx bases his position on... in fact, it is a huge factor in the equations laid out by Smith. In Chapter 2 of Book I, Smith give an example of this interconnectivity between members of society when he says:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely. " (I.2.2)

I feel the difference lies in what motivates the interdependence... and that motivation is SELF INTEREST. If the beggar can't depend on the charity of others all the time, then how can the State provide that "charity" at the expense of productive citizens all the time? Proof of the inherent fallacy in Marx's tripe, I guess.

I am just as frustrated, though, by those that insist Smith was a rugged proponent of the modern "libertarian" view of limited government and minimalist tax rates. He goes on at some length to defend the "progressive" tax, stating clearly that it was the moral obligation of the "rich" to provide extra for the poor. My example is here:

"The necessaries of life occasion the great expence 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 expence 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 any thing very unreasonable. It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion. " (V.2.71)

Does that sound like something Ron Reagan would advocate? Is that a fundamental plank of the conservative movement in America? If not, then would the pundits and radio hosts of the Conservative Right PLEASE stop claiming Smith as that "corner-stone" economic truth.