Philosophy discussion

It's an interesting subject, but I never finished the book; I don't have any burning insights to share.

Actually, yes, only I haven't read it yet. I was just poking my head in around here to see if anyone had strong feelings about editions.

I'm trying to give myself a bit of a crash course in economics, and I've read bits and pieces of this but not the whole thing.

Is it worth reading an unedited, unabridged edition? Are the pre-digested ones good enough, or do they leave out crucial features of Smith's ideas?

What is Adam Smith's relevance to modern economics? I always hear him held up as an example by advocates of the modern free-trade system. I've never known Smith's theories on economics well enough say how accurate this is, but I sometimes wonder if a sort of argument from authority motivates many of these commentators. How valid is it to apply 18th century theories to a 21st century economy?

Smith also wrote extensively on ethics and was a formidable moral theorist. (IIRC, that was how he saw himself, primarily.) In any case, it's only because of Smith that we discuss trade in terms of its limitations, which by itself makes him pretty important, to my mind. Marx, Keynes, Ricardo and every other economist, as well as most political theorists, all assume familiarity with his work.

One thing I've heard objected to about Smith's presentation is that it applies only locally. He could not have anticipated the transnational power of modern global capitalism, and his writings cannot be taken to endorse it. Wasn't he the one who also talks about the "thumb" that business owners have on the economic scales?

Smith isn't ideological because Enlightenment writers precede the ideologues who came later. This is also why I like Hume better than Kant. It seems the Enlightenment led both to system-builders and free-thinkers, but the writers of the 18th century give readers a feel for the kernel of truth we're looking for, using non-technical language accessible to all.

I agree that a country's interests aren't represented by stockholders. But that raises an interesting question: For whom does a nation-state come into being in the first place? That is, for whom does it act? Thinking about it this way, it's hard to equate the interests of landlords with those of workers because land ownership conveys political power in a way that labor does not. I don't know how closely Smith looked at the phenomenon of land ownership.


In any case, it's only because of Smith that we discuss trade in terms of its limitations ...

Conrad, I take it you mean the overall concept of looking at economics as the distribution of scarce resources?

Patrice, I fear that Smith was right about his suspicions about stockholders. It appears they let their execuitives get away with anything that enriches the bottom line.What does Smith say about greed when it is the prime motivator of markets?

An update -- I just ran across a discussion of Adam Smith in the book Understanding Power. Chomsky makes a couple of points.

Generally, he says no two points of view are more antithetical than classical liberalism and capitalism. Chomsky points out that Smith was famous for his discussion of the division of labor, a setup he opposed because it robbed people of freedom, which is the basic idea driving Wealth of Nations. Free markets as Smith understood them would help guarantee personal freedom.

So opposed is modern capitalism to the principles Smith espoused that in its bicentennial edition, the University of Chicago left "division of labor" out of the index and distorted the text itself (so Chomsky claims). George Stigler's introduction to that same edition is in fact, as Chomsky puts it, diametrically opposed to Smith's text on point after point.

Chomsky is saying the book's neoliberal interpretation is the opposite of what Smith actually says, and assumes nobody actually reads Wealth of Nations. If we really applied Smith's principles to a modern society, what we would get, he says, is a system close to anarcho-syndicalism such as that which prevailed in Spain briefly in the 1930's.

Some other remarks he made left me with the belief that the book must be read without abridgement because the full context says something quite different from what the ideology of modern schools and scholars is claiming.

Wow -- that's a pretty stong attack by Chomsky.

Then nothing Chomsky is claiming here is true?

Chomsky is saying that Smith acknowledges that from a business standpoint, this is the best way to make pins. But he asserts that Smith is coming at this from the standpoint of the Enlightenment concern for human freedom, and that he opposes division of labor from that point of view. Since you're the one reading the book, you'll have to be the judge of Smith's attitude about division of labor.


I find Chomsky very difficult to understand. I think he's an ideologue and there is a lack of honesty in his understanding.

This is the first time I've read anything by Chomsky, and I'm not finished yet. Here he's non-technical, so he's much easier to understand than straight philosophy. What he says in this book fits no ideology so far as I can tell.

His underlying message in the book is skepticism, especially in relation to the worldview of those who have political power. His status as an outsider, or non-mainstream, certainly does arouse suspicion of what he says. I don't know about his other books, but this one seems well footnoted and pretty much on the up-and-up. I'll have to do a review on it when I'm done.

I'm just about done with the book, and Adam Smith gets a couple of other mentions in it. I think what Chomsky is saying, in the example of the division of labor in pin manufature, is that Smith's emphasis interest lay more in the kind of worker this will lead to as much as an interest in mass production. He's looking at the book as another Enlightenment document rather than a specific economic treatise. Whether it's really valid to construe Wealth of Nations this way is something I don't know.



Chomsky is a socialist/communist, right?

Chomsky hates both communism and establishment liberalism. He defines himself as a libertarian socialist, similar to an anarcho-syndicalist. Because there are some many varieties of libertarians and anarchists, I'm not sure what all that entails; he doesn't talk about it much in this book and doesn't directly advocate it. I do like that he encourages skepticism about anything any public figure says, and he includes himself in this point.

Of course, the Enlightenment writers were all fascinated by the certainty by which Newton's physics worked. It was absolute knowledge, and they wanted to see if absolute principles could be worked out for aspects of human experience. Kant sought to replicate Newton in philosophy, and Smith did too in what's now known as economics.

Social conditions change, and absolute certainty proves elusive. Smith advocated the free flow of both capital and labor. At the time, Smith was assuming was that capital was immobile and labor mobile. Capital, for example, was tied down in land and by old technology, while labor in England was mobile, especially after the enclosure of the commons.

Today the opposite is the case. Capital goes anywhere, and labor largely stays in place. Later economic thinkers may have models that account for subsequent changes toward the modern system.