Adam Smith, The Wealth of Nations, and the system of natural liberty 25

Adam Smith theorized that cultural morals moved just like free markets.

Today, June 5, 2023, is the 300th birthday of Adam Smith.

He is one of the greatest figures of the Enlightenment. As the founder of free-market capitalism he did more for the prosperity of humankind than anyone else in history.

In 1776 he published his famous book, An Enquiry into the Nature  and Causes of the Wealth of Nations. It taught that when people are free to pursue their own ends (under the rule of law), they and their society will prosper.

His name stands forever for Liberty and Prosperity, the two greatest aids to the pursuit of happiness.

What a year 1776 was for Liberty! Adam Smith’s book taught the benefits of it for the thriving of nations and individuals, and the American Declaration of Independence  established it as the political condition of a new nation coming into being – a nation that was to prove him right. 

Economics professor Mark Skousen writes at the New York Post:

Adam Smith (1723-1790) put together the classical model of economics, consisting of free trade, limited government, the virtue of thrift, balanced budgets and sound money.

Smith called it “the system of natural liberty”.

He made an outlandish prediction in his famous book The Wealth of Nations, declaring in 1776 that his model would result in “universal opulence which extends to the lowest ranks of the people”.

It was a tall order.

Indeed, at that time life was “nasty, brutish and short” for most people, to quote Thomas Hobbes. There was very little progress.

But as the world gradually adopted Adam Smith’s model of free trade, low taxes, deregulation, patent law and sound money (supply-side economics), we witnessed the Industrial Revolution in the West, then in the East, and a 100-fold increase in our standard of living.

Adam Smith’s incredible forecast had come true.

The outcome was a hat trick: maximum liberty, individual improvement and public benefit, all at the same time.

So, how much of the Adam Smith model still exists today?

At the top of the list, free trade and globalization have been a big success. The Soviet central-planning model has been abandoned.

Capitalism delivers the quantity, quality and variety of goods and services that the centrally planned economy never could.

The Economic Freedom Index — based on the Smithian measures of laissez faire, balanced budgets, sound money, free trade and rule of law — shows a marked increase from the mid-1970s to the early 2000s.

However, for most of the new century, the Adam Smith model has come under attack by Keynesians, Marxists and interventionists who want a return to top-down policies of authoritarian government, deficit spending, tax hikes, fair trade and over-regulation, all in the name of fairness, equity and saving the planet.

If Adam Smith were alive today, he’d be appalled by the never-ending federal deficits and out-of-control national debt.

He would not approve the overgrown welfare state and military-industrial complex.

He’d be shocked to see the US tax code at over 7,000 pages, and the federal tax regulations exceeding 75,000 pages.

The bloated bureaucracy would be a reminder of the mercantilist policies of his age.

Perhaps there’s a white knight out there coming to put America back on a sound fiscal and monetary basis, but I fear Humpty Dumpty has fallen and can’t be put together again.

I don’t see America becoming another Venezuela, but neither do I see it as another Singapore.

It’s easy to become pessimistic. But perhaps we can learn something from Smith, the ultimate optimist.

Nearly 250 years ago, he wrote, “The uniform, constant, and uninterrupted effort of every man to better his condition . . . is frequently powerful enough to maintain the natural progress of things toward improvement, in spite both of the extravagance of government, and of the greatest errors of administration.”

This well-known and much quoted passage from The Wealth of Nations is a beautifully phrased  explanation and defense of a free market economy:

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.

Enlightened self-interest, not philanthropy, not altruism, not the impossible agenda of trying to love our neighbors as ourselves, is the key not only to each our own benefit, but inevitably also to the benefit of our society, our nation, and potentially our world.

Provide something – goods or services – that others want and will pay for, and the result is personal and general prosperity.

An “invisible hand” – as Adam Smith wrote –  works the trick.

The day of his birth was a great day for mankind.

We celebrate it.

Posted under Economics, liberty by Jillian Becker on Monday, June 5, 2023

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A Godless constitution 38

Liberty and Tyranny  by  Mark R Levin (Threshold Editions, New York, 2009) is an excellent book; we welcome it; we agree with most of  what Levin has to say.

However, on one point we take issue with him. He writes (pages 33-34):

The question must be asked and answered: Is it possible for the Conservative to be a Secularist?

Of course we firmly answer YES, because that is what we are.

He goes on: 

There are conservatives who self-identify as secularists, whether or not they believe in God or take a religion, and it is not for others to deny them their personal beliefs. However, it must be observed that the Declaration is at opposite with the Secularist. Therefore, the Conservative would be no less challenged than any other to make coherent that which is irreconcilable.

Leaving aside his implication that unless one believes in God one cannot be a true Conservative, let’s examine his conviction that non-belief is ‘irreconcilable’ with approval of the Declaration of  Independence. 

The Declaration refers to God four  times.

1. In the first paragraph it says that ‘the Laws of Nature and of Nature’s God‘ entitle a people to a separate and equal station with another people. It would make no difference to the meaning and import of this part of the Declaration if the four words ‘and of Nature’s God ‘ were omitted. 

2. It asserts that ‘all men are created equal, that they are endowed by  their Creator with certain unalienable rights’ etc.   We agree with the ‘rights’ to live, be free, and pursue happiness. The word ‘rights’, however, muddies the waters somewhat as a right has to be granted in law, and if no earthly law can be said to have endowed mankind with these ‘rights’, then the only source imaginable  to keep the sense of the word is some Transcendent Legislator in the sky. At least the authors kept the list of such God-endowed ‘rights’ wisely short. To make a list of all things that should be allowed to men would be an infinite labour to achieve the impossible. Better to list the things men may not do – and keep it as short as necessity allows. Which is why we prefer to say that everyone should be free to (eg) live and pursue happiness. But to come back to the wording of the Declaration, its meaning would be exactly the same if instead of  ‘are endowed by their Creator with’, the authors had used the single word ‘have’.

3. In the final paragraph, the ‘Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do’ etc.  Here the Transcendent Legislator is also the Transcendent Judge of rectitude, but as it is ‘by Authority of the good People of these Colonies’ that independence is being declared, He is not required to say a word and can let His approval be assumed by the authors. Again, if the phrase about God were omitted, the Declaration, its meaning, import, and power would in no way be altered.

4.  In the last sentence, the authors mutually pledge their lives, their fortunes, and their sacred honor to support the Declaration. That is to say, they each guarantee to defend it whatever it takes. They also put in that they rely firmly ‘on the protection of Divine Providence‘. But they are far too sensible to rely on it exclusively. If that phrase , and the word ‘sacred’, were omitted, their pledge would remain just as valid, and their commitment would be no less strong.

So while it may be the case that a Conservative must agree with the values and purpose of the Declaration, Levin’s case is not proved that you can only agree with the Declaration if you believe in a supernatural master of the universe.  

Levin goes on (page 34) to quote George Washington as saying:

“Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable results … And let us with caution indulge the supposition that morality can be maintained without religion.” [Levin’s ellipsis]

It seems that he interprets the last sentence to imply that Washington did NOT think morality could be maintained without religion. To us it seems clear that Washington DID think it possible to be moral without being religious (as we believe we are). To  Washington this was a concession or ‘indulgence’ that he granted ‘with caution’ because (probably) he didn’t want anyone to think he shared that view. But that doesn’t cancel his acknowledgment of the possibility.  

Finally, Levin should be reminded that the Constitution of the United States does not mention God. Not once. And it is the Constitution that a Conservative must stand by. One definition of an American Conservative could be ‘a strict constitutionalist’.  

Posted under Atheism, Commentary, Conservatism, Reviews, United States by Jillian Becker on Sunday, May 24, 2009

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