imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Adam Smith as Philanthropist

by Rudolf Walther Friday, Feb. 23, 2018 at 6:43 AM

The market can only fulfill its technical function when its rules and mechanisms are politically fixed and governmentally monitored...Adam Smith's theory has nothing to do with neoliberals and market radicals who preach the sleek state, low taxes for businesses and low wages.


By Rudolf Walther

[This article published on 5/12/2017 is translated abridged from the German on the Internet.]

How the ingenious thinker Adam Smith and his works were intellectually misused by neoliberals for two centuries – a reconstruction by Rudolf Walther

Managers, politicians, and academics like to appeal to Adam Smith to justify the reigning capitalism with its excesses. He showed convincingly everyone benefits when every person only follows his own interests. He praised the market as "the invisible hand" that gives everyone an advantage. The baker sells bread out of egoism, not out of goodwill. Even in our day, very pointed quotations of this brilliant thinker are misused for dubious goals…

The "invisible hand" is part of the standard repertoire in the speeches of the German president. This supposedly beneficial invisible hand of the market and the egoism of individuals that should be the foundation for the well-being of everyone even trickle into everyday language.

The instrumentalization and trivializations of Smith's theory for market radical-neoliberal policy became increasingly rare in the last years thanks to new serious research. The dissertation by Bastian Ronge on The Adam Smith Project (2015) is an example. He emphasizes the connection between ethics, politics and the economy and the political and moral substantiation of economic theory and did not divide up the economist and moral philosopher Smith as happened in the past… "In gross distortion, Smith is often seen as that economist who assumed very realistically that the individual egoism in social coexistence on the market triggers general well-being by the works of an "invisible hand," wrote Karen Horn to the alliance of Catholic entrepreneurs in 2010.

A bestseller with its own strange life

Adam Smith, economist and enlightened person (1730-1790) was a professor of moral philosophy in Glasgow for twelve years from 1751… His masterpiece, An Inquiry into the Nature and Causes of the Wealth of Nations, was published in 1776. This book made Smith well-known and famous. It made him the founder and classical author of political economics. The book was quickly translated into all European languages…

The economy needs a moral foundation and published The Theory of Moral Sentiments in 1759. In this complex work, Smith tried to explain the anthropological foundations of human life together and to empirically demonstrate the paradoxical teamwork of self-interest and sympathy. The book about The Wealth of Nations published 17 years later focused on prosperity, profit, wages and other economic themes, not sympathy and moral judgments. A "sudden change" with Adam Smith occurred particularly in his German reception from the ethics book of 1759 to the economy book of 1776. The description of the two-faced Smith circulated: the philanthropist and the calculating economist.

This thesis turned out to be untenable upon a critical reading of both works by Smith – The Theory of Moral Sentiments and The Wealth of Nations. This began with the translation. In the Theory of Moral Sentiments, sentiment meant moral judgment, not feeling. Sympathy, the emotional basis for human communication, determines our way of making moral judgments. Sympathy is deeply anchored in human nature. According to Smith, the claim to equality and equal treatment of all persons is lodged in this natural disposition. Smith did not develop his thesis normatively but empirically and practically from his observations of the daily routine.

The first sentence of Theory of Moral Sentiments reads: "A person may be regarded as egoistic. However, certain principles in his nature obviously lead to sharing in the fate of others."

Smith started from a "harmony of sentiments" that is a gift of nature for all persons, not from an equality of interests between two actors. Persons act humanly with each other and with sympathy for the other. This argumentation is circular and is based on the principle of the mutual dependence of persons – as genuine social beings, not on an egocentric or self-centered principle.

Smith also argues on this basis in Wealth of Nations. He did not rely on narrow-minded, egoistic interests and profit calculations. His basic insight is "We do not expect our meals from the goodwill of the butcher, brewer or baker but from their regard to their own interest. We turn to their self-love, not to their humanity and speak of their advantages and never of our needs." These two sentences are mostly interpreted in an abridged and distorted way – namely in the horizon of ego-capitalism or market radicalism.

The falsification consists in that ideologies short-circuit this passage quoted a million times. From their view, Smith considers self-love, self-interest or egoistic selfishness as the first and only motive and as the crucial driving force of economic conduct. That was not Smith's perspective in any passage of his 1000 page book. Smith focused on the anthropological basis of human conduct and never on motives. In the sociable life together, sympathy leads people to exchange sentiments and feelings with each other. "The inclination to barter and exchange one thing for another" is part of their economic conduct. The key to understanding the central passage quoted above is the existential prerequisite of every life: self-preservation, not the interest or motive of the butcher or baker. "Give me what I want and you shall have what you want," Smith said. The civilizing improvement in a division of labor exchange society is that everyone need not and cannot produce what he and they need for survival. The pressure for cooperation and mutual aid is the shared basis of exchange societies and does not arise from egoistic calculations.

The market needs political rules

The second field on which Smith's theory was trivialized and distorted – particularly by propagandists of the social market economy and liberalism after 1945 – is the understanding of the market. That Smith wanted to free the economy from the corset of state tutelage and from the feudal tradition that granted economic privileges to the aristocracy is uncontested. However, contrary to the liberal and neoliberal market radicalism, Smith only wanted to take away the privileges from "courtiers, landowners and rich persons." "In his theory of the `commercial society,' the market should not govern in contrast to the ideas of apologists who praised the market as a "spontaneous order" (Friedrich A. Hayek). According to Smith's ideas, "everyone is liberated by exchange and is a trader in a certain way in the commercial society liberated from crass forms of oppression and rule." On top of everything, Smith was clear that a pure market economy cannot ensure a just distribution since "there was never a fair and equal distribution of labor power in a big society." For Smith, societies could not survive where the large part of the population is poor. The state must intervene in a balancing way and provide for education since the forced division of labor ensures that persons who do simple work remain "dumb and restricted."

With good reasons, Smith was an engaged advocate of free trade and pleaded for a "natural system of liberty" ("a natural system of economic freedom"). He said little about its functioning but was very critical about its deficits. In one passage, Smith spoke about "an invisible hand" ensuring that goals are fulfilled by the market mechanism.

These goals were not intended by the actors themselves but correspond to both self-interest and general interest. The market can only fulfill its technical function of coordination – and this is the second point – when its rules and mechanisms are politically established and governmentally monitored…

Let's return to the invisible hand. For over 200 years, "the invisible hand" was cited to confiscate the thinker Adam Smith for a policy that devalues the state and sets the market above all things. The current thesis is that the market automatically produces optimal results only when it is not regulated by the state and not disturbed by union demands. With the former chancellor Ludwig Erhard (time in office 1963 to 1966), the father of the "German economic miracle," the "invisible hand," assured the "pre-stabilized harmony" between private and general interests, as he wrote in 1939!

While present-day economics understands the economy as a chaotic system standing above society, detached from society and ideally functioning according to its own rules, the economy for Smith was a political economy bound in a moral- and legal system.

His "natural system of economic freedom" was part of the larger system of public administration" that gave an authority to the "natural striving for justice" against the "natural selfishness and rapacity" of the rich.

Free trade may not decay to laissez-faire

Smith defended free trade but not the propaganda for physiocratic theory under the slogan of "laissez-faire" that demanded all freedom for grain merchants and landowners. "The interest of the merchants opposes the public interest." He also defended private property. "The property that everyone has in his own labor is the original foundation for all other ownership and so is "the most sacred and inviolable." Smith added: "Hindering the worker from using his strength and skillfulness without hurting his neighbor is a violation of this most sacred property." "Wherever there is massive property, there is a violation of this most sacred property." Wherever there is sacred property, there is much inequality." But he had little in common with those apologists who transfigured capitalism as a market economy and denounced the social state as a "comfortable stall feeding" like Wilhelm Ropke (1899-1966), one of the intellectual founding fathers of the so-called social market economy. In his opinion, the political economy did not have the task of offering prescriptions on how the rich can become richer and the poor poorer. Rather "ample income for people is the first necessity and raising sufficient revenue for the state to fund public services is the second necessity." Adam Smith's theory has nothing to do with neoliberals and market radicals who preach the "sleek state," low taxes for businesses, low wages, and market, market, market. Quite the contrary!!

Background: Development of Division of Labor

Adam Smith (1723-1790), the founder of political economy, was the first to understand the importance of the division of labor and describe it in all its facets in the first chapter of his 1000 page book on the Wealth of Nations from 1776. A worker not familiar with modern machinery could "make one needle daily and certainly not 20 needles." In detail, he then described the division of labor production of pins. "The important trade of manufacturing pins is divided into 18 different steps." In this divided work cycle, 48,000 needles could be manufactured daily by ten workers.

Smith focused on technical and economic progress and its social costs that are notoriously omitted by today's speakers and managers. "A person who spends his whole life executing a few simple operations […] has no opportunity to exercise his intelligence and stimulate his inventiveness […]. The ossification and paralysis of his spirit prevent any free noble or tender sentiment and makes him unable to join in a rational communication." Adam Smith said that in 1776.

Report this post as:

Local News

Summer 2018 National Immigrant Solidarity Network News Alert! J10 11:58PM

Watch the Debate: Excluded Candidates for Governor of California M30 10:20PM

Change Links June 2018 posted M28 12:41AM

The Montrose Peace Vigil at 12 Years M22 1:01PM

Unity Archive Project M21 2:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 3:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 2:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 1:57PM

California police agencies violate Brown Act (open meetings) M02 1:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 4:47PM

Change Links May 2018 A27 1:40AM

Worker-Owned Car Wash on Vermont Closed A26 10:37PM


lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

More Local News...

Other/Breaking News

Le capital ou l'épouvante permanente J15 11:30PM

Authoritarian Capitalism and Digital Demagogue J15 3:08AM

The Shortwave Report 06/15/18 Listen Globally! J14 4:23PM

Autisme sociétal J13 10:53PM

Georgias Poultry Justice Alliane Helps Workers in SE J13 8:50PM

Greedy Animal Researchers Hide Truth About Alzheimer's From Public J13 3:59PM

Austerity Policy as Momentous Mistake J12 5:19PM

Abrégé de la connerie J12 1:35PM

May 2018 Honduras coup update J10 7:30PM

Neoliberalism and Authoritarianism - A Symbiotic Pair J10 7:50AM

La société au TOUT dégueulasse J09 11:48AM

New Low Power Fm is being planned 4 hopi people AZ J07 9:56PM

The Shortwave Report 06/08/18 Listen Globally! J07 4:24PM

Asylum Seekers Heinously Abused By Trump, Sessions, Kelly, Nielsen, Miller Etc J06 5:15PM

Neoliberalism or New Freedom for Corporations J06 5:29AM

Neocon Black Op Of Monica Lewinsky, Linda Tripp, Lucianne Goldberg, Isikoff, Drudge J05 12:01PM

De GLI-F4 au E579, E585 J05 1:43AM

Orthodromie succincte J03 2:16AM

Cape Cod: From Colonial Plunder To Atomic Revenge J01 11:05PM

Israeli Manipulation Of US 2016 & Other Elections J01 3:44PM

G7 Hurricane Debt Relief Caribbean/Small Islands J01 10:46AM

Trade War and Zero Deficit Myth J01 12:33AM

The Shortwave Report 06/01/18 Listen Globally! M31 4:28PM

Paraphysique des perturbateurs attentionnels M31 3:25PM


Paraphysique de la mort M29 11:49PM

police crimes M29 6:08PM

Why has the US gone mad? M29 3:24AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy