Adam Smith Was a Socialist

I hate politics. I cannot stand the maneuvering to avoid discussing issues, and instead focus on name calling. The latest idiocy is the entire Socialist meme, which, having seen the banking industry nationalized, is a bizarre charge to make these days.

It is especially odd, given the nature of wealth distribution in a capitalist system that has any form of taxation. Most economists would regard it as unexceptionable.

It can be traced to Adam Smith’s “Wealth of Nations” (1776), his seminal treatise on capitalism. As Steve Coll pointed out in a The New Yorker column:

“The necessaries of life occasion the great expense of the poor. . . . The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. . . . It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”

-Adam Smith, quoted in the New Yorker, October 27 2008

Smith’s notion of reasonableness did not anticipate the Fox News Channel, however. Last Tuesday, [Joe the Plumber] appeared on that network, where he denounced Obama’s comments as “socialist.” He said that Obama “scared me,” because he “wants to distribute wealth.” Wurzelbacher also granted an interview to the advocacy group Family Security Matters, whose advisory board includes the conservative talk-radio hosts Laura Ingraham and Monica Crowley. By means unknown, Joe’s story of ambition and resentment reached the campaign of Senator John McCain.”

I wish people would focus on the more mundane things, like How are we to regulate Wall Street, what should our economic and tax policy be, what should we do about energy, the war, etc.

Or, we could simply name call.


Steve Coll
The New Yorker, October 27, 2008

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