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dreamdancer

Adam Smith distrusted and denounced the capitalist class

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it seems mr smith had a much purer vision of the freemarket than the corporate abomination currently presented as the only possible alternative...

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Adam Smith describes the relations of the three fundamental groups in the economy, the proprietors of land, those whose wages support them, and third, the owners of stock, who employ the workers and thus control the economy due to their ownership. Smith observes that the interests of the owners does not always match the interests of workers or even society at large. The reason is:

“the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin. The interest of this third order, therefore . . . is always in some respects different from, and even opposite to, that of the public . . . to narrow the competition, is always the interest of the dealers . . . but to narrow the competition . . . can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

Smith also describes a major impediment to the genuine free trade that he advocates: the lobbyist. Public opinion is against the establishment of complete free trade, but “What is much more unconquerable” is the “private interest of many individuals.” The monopoly of manufactures was “like an overgrown standing army” which have “become formidable to the government, and upon many occasions intimidate the legislature.”



http://www.onlinejournal.com/artman/publish/article_499.shtml
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My past readings of Smith's works don't indicate to me that he was in favor of taxing the rich, etc.



then you need to read again...

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Adam Smith looked to government-supported education to mitigate the effects of the division of labor

While Adam Smith expounded upon the virtues of the division of labor early in the book, he simultaneously abhorred the effects of the division of labor, upon which capitalism is founded, and recommended government sponsored education to compensate for its deleterious effects. Smith eloquently describes the effects of the division of labor upon the largest portion of society, the labourers, whose work becomes “confined to a few very simple operations, frequently to one or two.” Unfortunately, people derive their understanding of the world from their everyday experience, which is largely their daily work. This means that:

“The man whose whole life is spent in performing a few simple operations . . . generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life . . . renders him incapable of exerting his strength with vigour and perseverance, in any other employment than that to which he has been bred. . . . in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.”



http://www.onlinejournal.com/artman/publish/article_499.shtml
stay away from moving propellers - they bite
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I see what you are trying to get at. What I think is being omitted is the view as a whole.

The big idea? What good is it if there is no market for your goods because all wealth is concentrated in a few people or entities? It is in a firm's best interest to have a prosperous and large base of consumers.

Tax the rich? Yes - but that's not the whole story. Tax production? Yes. Consumption? Yes. At a rate that will dissuade consumption or production? No.

Special interests? Yes, these are more easily controlled in a democratic society. Hence, when the wealthy are outnumbered 99/1 then there will be some issues that are faced will undue burdens placed upon them. Laws that would benefit or burden them should be met with great scrutiny.

Where I believe the right - amd particularly the left - fail is in equating "self-interest" with "selfishness.". The two are distinct. In my firm, we outpaid other firms and got the local law school valedictorian as our clerk. We also got the best paralegal in town.

It cost a pretty penny but in our self interest it pays off. Had we been selfish we would have gotten less skill for less money and increasing our profits - temporarily. But we believe it is in our best interest to pay more to get more.

This is something the left doesn't understand. Mine is "skilled labor." Our staff are skilled. The more skilled, the more they are worth.

Unskilled labor is a different dynamic. Treating unskilled labor as if it was skilled is inefficient because it assigns more value than it is worth. Wealth wan be build by building a greater number of skilled laborers. It is not the long-term self interest to keep a nation unskilled. Slaves lack purchasing power. No market exists.

Unskilled labor is worth something. Just not much. Smith viewed the micro and the macro aspects. Unskilled labor is different from skilled.

It may take some digging to find any recent examples of the long-term negative consequences of assigning something a value greater than its true worth. Not just services but goods and even property.

If I could only think of an example of a bubble bursting...


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It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”



reminds me - isn't Madoff due in court today?

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Unskilled labor is a different dynamic. Treating unskilled labor as if it was skilled is inefficient because it assigns more value than it is worth. Wealth wan be build by building a greater number of skilled laborers. It is not the long-term self interest to keep a nation unskilled. Slaves lack purchasing power. No market exists.

Unskilled labor is worth something. Just not much. Smith viewed the micro and the macro aspects. Unskilled labor is different from skilled.

It may take some digging to find any recent examples of the long-term negative consequences of assigning something a value greater than its true worth. Not just services but goods and even property.

If I could only think of an example of a bubble bursting...



you sound as if you know what you're talking about :)
what has been happening is capital has been overvalued and labour has been undervalued - the result a massive disfunction in the economy as a whole.

i'm not saying unskilled/minimum wage labour should be overvalued just valued 'fairly'.
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blue skies from thai sky adventures
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It may take some digging to find any recent examples of the long-term negative consequences of assigning something a value greater than its true worth. Not just services but goods and even property.



What is the real value of gold? You can't eat it, make cars with it, make guns with it, make houses with it. Its uses in electronics hardly justify its cost.

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what has been happening is capital has been overvalued



Certains type have.

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labour has been undervalued



Then why is unemployment rising? Typically one would invest more in the undervalued factor.

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i'm not saying unskilled/minimum wage labour should be overvalued just valued 'fairly'.



There is a highly subjective word - "fairly." What is "fair" and what is not? From this you may find extremes which both depend on the side you are on.

What is the fair result when choosing between the sheep and the wolf? Shall we protect the sheep and let the wolf die? Or shall we let the wolf live at the expense of the sheep?

There is no right or wrong answer. If I am a sheep, nothing but allowing me to live would be fair. If I am the wolf, nothing but allowing me to kill the sheep would be fair.

Often - this is the black and white that is faced. There is simply no way to split it.

So what is a "fair" wage? It depends on whom you ask.


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So what is a "fair" wage?



it is what the minimum wage should be. there is already a national structure to work it out and implement it (the same as there is to set interest rates, another key economic variable). the economic figures say that it should be put back to the relative value it had in 1968.
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