22 June 2006

Adam Smith

The picture here is the resting place of Adam Smith.

The people who worship what they think is the doctrine of Adam Smith and the "invisible hand" have probably never read his works. This god of Capitalism believed that it could not survive without a code of ethics that was fair to the employee simply because all wealth derived from labor. Whether it was your own or your employeess, that labor was to be rewarded in proportion to the wealth produced. Thus slavery was not an economical structure because the cost was greater than the benefit.

All people operate from a position of self interest. Even the good deeds we do are because we are rewarded by our self image of ourselves as decent people.By racing to the lowest common denominator towards slave labor, modern corporations see short term gains in profits but have higher costs in social services or in the worst cases higher disease and mortality as populations increase and labor becomes cheaper and cheaper. While higher salaries as a reward for education and accomplishment produce lower birthrates and greater long term profits.

This isn't Communism or Socialism that reward everyone no matter what they produce. So when Conservatives accuse Liberals of Socialism they are totally out of line with the Capitalism they profess to support. Then there is that whole biblical injunction (for those who lean in that direction) thing about the Laborer being worthy of his hire. This wisdom has been out there for centuries.

No one does something for nothing. There is no free lunch. The greatest achievements come from everyone being satisfied with their production to reward ratio. That's why Jefferson put the whole "pursuit of happiness" bit in the Constitution. You don't get rewarded for sitting on your rear, but if a society creates a climate of reward for effort, you have success for everyone.

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