Forum Post: Adam Smith
Posted 12 years ago on Nov. 3, 2011, 5:49 p.m. EST by youngandoutraged
(123)
from Iowa City, IA
This content is user submitted and not an official statement
Wikipeadia informed me that Smith considered his book “The Theory of Moral Sentiments” to be more important than his work on economics. Thus I came to realize the gaping flaws in our own interpretation of the free market and what it can and cannot do for us. Let’s get this straight; the free markets do well in some things, like setting the price of a non-food good or selecting the best product of many. However, when free market principles are incorporated into things like politics or education, the negative externalities accumulate on those receiving that education or public service. Every single human achievement comes through some combination of labor, capital, and externalization. E.g. the cost of building the pyramids was almost entirely externalized to enslaved populations, and part of the true cost of fossil fuel use is atmospheric degradation. Things have changed a fair bit since our dear Adam Smiths’ time. We have experienced rapid onset globalization, as well as a decline in morals due to waning church influence and the profit motive that defines our business generation. In Smith’s time, a negative externality may have been as extreme as slavery, but the beauty of externalizing costs was that no one could see the true price of cotton, because slavery was accepted. Flash forward a generation. Now the children of those first slaves are also slaves, the true cost of that labor that cheap is dolled out in beatings and rapes. The slave trade and its legacy represent the greatest negative externalization ever committed, yet to an 18th C economist, the benefits would seem to FAR outweigh whatever negative consequences might arise. We in the 21 century are absolutely buried by the accumulations of several hundred years of business’ and society’s negative externalities.
I agree with some laws such as those preventing slavery and child labor. But I don't see the sense in this all-or-nothing logic. Isn't competition in farming good for us all, so that food prices aren't through the roof?
Isn't competition in healthcare good so that healthcare costs aren't through the roof? (this is what's wrong with US healthcare: no competition)
Don't you like paying less for computers and hard drives because the manufacturers are always competing?
If there was anywhere in America that we could drill for oil, we wouldn't be dependent on the middle east. Wouldn't that be a good thing for gas prices to go down due to competition?
At my university I pretend to learn while my teachers pretend to teach. If there was more free-market in education, tuition would go down and I would be learning rather than playing charades.
Free market principles can work just fine, but it's important to remember some of the characteristics of an efficient market: perfect knowledge thoroughly distributed to all market participants and zero barriers to entry such that monopoly becomes impossible. Transparency laws help with the first characteristic, but they are sorely lacking (audit the Fed!), and there are a number of regulations that actually create barriers to entry for no purpose beyond the lobbying of private individuals. The health insurance industry seems downright fraudulent in terms of the lack of consumer knowledge and artificial barriers to entry that it enjoys..
From my perspective, we in the 21st century are buried by our own frivolous desires, and church and religion do nothing to fix this. Some of the most religious people I know (including my parents) fully support neoconservative imperialism and the current economic system. Free market principles in education or politics are the least of our worries, as we as a people are largely ignorant of the underlying principles that govern the economic system for which we labor.
Religion is the enemy of critical thinking.
Do you want to know why your parents feel the way they do? Because heretofore they existed as in a "state of nature," just as our colonials. Their very survival was rather precarious indeed and it was only when placed upon certain paths, in light of circumstance, that survival was possible. The labor of past generations has served to insulate us well from all that threatens; you sit upon the very same fence but are unable to see the fire, or even feel of the heat, through the smoke.
We don't labor for an economic system; we labor for ourselves, and in acquiescing to our own desire, we seek the niche, as valued of society. Today's niche exists because we had met our basic needs in abundance; there was both time for creativity and excess energy for labor. And frivolous desires created works of art that are valued.
True, perhaps corporations have grown too large as denuded of all morality. Or perhaps they were never possessed of morality. But the evolutionary force that led to this creation is unstoppable.
And I really do love my Ipod; such a shame it was not made in America because we ourselves should be possessed of such creativity. And that is the very reason that, historically, the traveler traveled in search of another's knowledge. We need to travel more...
What government of any form represents is the polity as those that have risen to power through strength of influence. And much like the bee colony, we are a communal species.
Caring for ourselves requires a tremendous amount of labor, best performed in communion. And no society has ever existed anywhere without its proletariat. Even amongst the tribal society there are examples: the Native American utilized the women and children; in Africa, it was the slave.
But slavery is not without its expense; it's not free labor - there is an initial investment and there is maintenance. For this very reason, African slavery was not generally viewed as economically feasible in the North with it's much shorter growing seasons. So it existed on smaller scale and fell to disfavor much earlier in our history.
True, America was comprised of rather distinct classes but only amongst those that were free; our slavery was never color blind and the one truly defining difference in colonial America was this - either one was free or one was un-free. (And a very significant proportion of society was unfree.)
And I was following you in earnest until all decayed in mindless rant. Yes, the proletariat still exists because we are still a hierarchical and communal species; and slavery, we find, arrives by matter of degree.
In the North, which was possessed of an entirely different economic logic, the wage slave gradually supplanted the predominantly African slave population of the South. We are them.
But we're not buried in externalities - quite the opposite - we are internally and biologically infused with desire, as needs, that require the communal effort of our labor.
"Every single human achievement comes through some combination of labor, capital, and externalization."
yup,. and the freemarketers spouting their nonsense,. just do not understand that the externalities are not accounted for by any formulation of their fabled "free-market". With out accountability beyond just cash and profits,. the free-market is a blight on the planet.
I think it can be fixed though. We just have to acknowledge the externalization and find a way to encourage the minimallization of externalization
we need to end the culture of domination that rules the world currently,. .