Quote Of The Day #46

“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”

From a quote from the leader of the world’s first Communist state to one by the father of modern capitalist economics. You can’t say you don’t get an eclectic mix on this blog!

 

Adam Smith was a Scottish philosopher who is best known for his work The Wealth of Nations that was first published in the same year as the US Declaration of Independence (1776). In this work, Smith sets out the case for a capitalist economy based on supply and demand that suits the ‘enlightened self-interest’ of both businesspeople and consumers. He argues that a market economy is best at allocating resources; according to Smith, the ‘invisible hand’ will ensure that most consumers will get what they want and efficient businesses will make a profit.

 

Another of Smith’s famous sayings is that “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.” Cynical? Perhaps but certainly more in line with human nature than when Jesus Christ demands we “love [our] neighbour as [our]selves” (Mark 12:31) or Karl Marx looks forward to a society organised around the principle of “from each according to his ability, to each according to his needs.”

 

However, as the quote I have shared demonstrates, Adam Smith was not the apostle of an economy organised on a crude Darwinism of all against all. There is much more to a society than its economy. The West has been in thrall to a neoliberal concept of economic policy for at least forty years. Everything has been subjected to the so-called ‘discipline’ of market forces – even areas where the market arguably has little role, in health and education for example. The concept of ‘public goods’ – investments like roads and street lights that are necessary to any society but extremely unlikely to make a profit – has declined to such a point that some areas of the National Health Service appear to employ more accountants than medical staff. I believe society is more than its economy and I think Adam Smith would agree.

 

One does not have to be a 1970s retro-socialist like Jeremy Corbyn or an overgrown sixth former like Owen Jones to be concerned by some aspects of the unfettered hyper-capitalism that dominates public discourse in Europe and North America. According to Oxfam, in 2017 eight billionaires owned as much wealth as the poorer half of humanity. By 2030, the richest 1% are on course to have cornered two-thirds of the world’s wealth. We are heading back to the hideous inequality of the ancient world where the entire surplus of an agrarian society was used to build monuments to dead kings (as in ancient Egypt) or mega-wealthy individuals like Marcus Licinius Crassus could afford to personally finance an army of seven legions (about 35,000 men) to invade Rome’s archenemy, Parthia.

 

Is this the sort of society we want to live in? Are there no considerations other than economic policy that should exercise world leaders? Are increases in GDP the only way to measure success? Many of the most fanatical Remainers in the UK concentrate almost entirely on the supposed financial and economic costs of leaving the EU and ignore questions of sovereignty, culture and uncertainty that were arguably far more important in persuading many people to vote Leave in June 2016. (This is in no way an endorsement of the deeply-flawed Leave campaign or the mendacious politicians who spearhead that campaign. It is merely an observation).

 

I’d like to end with another observation. France in the late 1780s was a deeply unequal society where the royal family and a tiny number of aristocrats lived in obscene luxury whilst up to ten percent of the population were beggars. Taxes were extraordinarily regressive and the church and nobility had exempted themselves from just about all direct taxes. And we all know what happened to that society!