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Thread: Did Adam Smith really accomplish anything of substance?

  1. #28
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    Quote Originally Posted by Big View Post
    You see, a few times in this book the author states that often those that Smith had criticized the most, the capitalists that took portions of Smith?s statements and engineered them for their own agendas, were the people that claimed Smith was the saint. So, the West might have taken Smith?s statement that wages will take care of themselves, BUT they largely ignored his reasoning which could apply to 18th Century but not to 21st Century.
    Well that's just what I've been suggesting all along. But you said it better.

  2. #29
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    Sure but what Smith was saying is if wages are good then the population will increase since people tend to have larger families when life is good. Larger families will produce more workers which will eventually depress wages and will cause in 18th Century time more children to die (since Smith believed people would have equal amount of children no matter how poor, another miscalculation) and as a result wages will have to be brought up as fewer workers emerge.

    This is what Smith believed as described in a book. This is completely different from Milton Freedman’s point of view.

    Now, Milton Freedman’s point of view doesn’t work for 2 main reasons. First is the fact that many low wage jobs can simply be shipped overseas instead of raising them. Second reason is the fact that low wage jobs can simply be filled with foreign workers/immigrants that are hungry for work and value American opportunities more than Americans. These two fractors can effectively keep wages low while appropriate unemployment laws can force people to get whatever jobs they can.

  3. #30
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    Now, Milton Freedman’s point of view doesn’t work for 2 main reasons. First is the fact that many low wage jobs can simply be shipped overseas instead of raising them. Second reason is the fact that low wage jobs can simply be filled with foreign workers/immigrants that are hungry for work and value American opportunities more than Americans. These two fractors can effectively keep wages low while appropriate unemployment laws can force people to get whatever jobs they can.

    Agreed--except I don't understand your reference to unemployment laws. They have a phrase for the thing you describe, in globalization--"the race to the bottom". And that's what we see--capital always searching for cheaper labor and few labor laws.
    Last edited by matclone; 04-29-2007 at 09:18 PM.

  4. #31
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    Say a person has a choice between being on the street and accepting a job he doesn’t want. What choices does he have to bargain in a short term?

  5. #32
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    Say you don’t like any jobs available but unemployment laws say you have to accept whatever job is available after 4 months of unemployment. In this case, after 4 months you either accept whatever job or you are on your own.

  6. #33
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    There could be a lot of reasons someone has to take a job they don't want (debt being a big one in the U.S.). I don't see unemployment laws as being one of them. They're designed to give you time to find something.

  7. #34
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    Yeah but say a thorough search of jobs and/or additional training requires a year or longer. In this case, unemployment laws of only 4 months can effectively force you to take an undesired job and keep unemployments low, which people like Bush trumpet as success.

  8. #35

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    This has been a pretty neat exchange to read. I think it is important to remember Smith's background when discussing the Wealth of Nations. Smith was primarily a philosopher from Scotland. He was part of the utilitariam movement and published his Theory of Moral Sentiments, as well as numerous other works in logic and philosphy. Adam Smith was not an economist, per se; he was a philosopher -- a thinker. His entire world was theoretical, but his main goal was to let practicality shape his theory. That is where the utilitarianism comes in. Smith didn't come up with theories about how things happen. He observed how things naturally happened, then tried to explain them. He didn't come up with anything new. The Wealth of Nations introduced no new concepts. It repeated what everyone was naturally doing on their own and tried to explain it.

    Also, Smith was not the first to write down his observations. Petty wrote A Treatise of Tax in 1662 and Political Arithmetic in 1691; North wrote the Discourses on Trade in 1691; Turgot penned another book with a long French title in 1766. All those express the same market dynamics that Smith does. They all were published earlier than the Wealth of Nations.

    We could go on and on with the details, but you guys have covered those well already. I would just like to touch on a couple of things.

    First and foremost, Smith (and all the rest) declare that markets will form as part of human nature. They did not try to come up with a utopian system -- they simply tried to explain what they were already seeing and what was already being practiced. Market capitalism is not a system -- it is simply hatural human behavior. After all, that's what Smith did -- study and write on human behavior.

    Secondly, outsourcing of jobs to other countries is not against Smith's writings at all. In fact, Smith's writings support it. Smith did not write about human behavior only within political borders. Finding the most cost-effective labor may involve moving operations to other countries. Again, it all goes back to human behavior.

    I apologize for the horrendously long post. I hope it made at least some sense.

  9. #36
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    Secondly, outsourcing of jobs to other countries is not against Smith's writings at all. In fact, Smith's writings support it. Smith did not write about human behavior only within political borders. Finding the most cost-effective labor may involve moving operations to other countries. Again, it all goes back to human behavior.

    Smith made no such statements. Smith claimed all businesses would be able to maintain themselves in their own country without breaking any laws, without lowering any standards, and with all businesses having good and bad times.

    In fact, Smith ridicules the kind of conditions sweatshops in China have or Mexican illegals have in America. Smith felt all workers would have similar rights. There is no comparison between the conditions in sweatsahops in China and similar factories in America. Smith was against such differences.

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