What Adam Smith Would Say About the Upcoming Elections?

Adam Smith, author of The Wealth of Nations, is mistakenly depicted by most right-wing economic commentators and economists as the cheerleader for free markets, anti-regulation advocate and a proponent for the triumph of selfishness in the marketplace.

Unfortunately, this is all wrong.

Adam Smith

Adam Smith

The upcoming elections in which Republicans may win enough seats to control the U.S Senate and push through their laissez faire, pro-corporate and privatization agenda, relies heavily on this intentional misrepresentation of Smith’s political-economic philosophy.

Betting that the average voter would succumb to misinformation and intentionally vote against their own economic self-interests, Republicans have perpetuated the Adam Smith revisionist theory as being another highly-regarded economist who hates government regulation, taxation, welfare, unions, and equal rights.

Unfortunately, since the Adam Smith brand has passed into the public domain (he died in 1790), no one can correct the propagandizing of his work today.

So with that in mind, here is what Smith wrote about the connection between wealth and societal and personal happiness, ideas which dominated the bulk of his theoretical work as seen in The Theory of Moral Sentiments, (published 1759), a book he revised six times.

The Pursuit of Happiness

Smith began teaching as a moral philosopher at Glasgow University in 1748, which pre-dates the advent of economics. As a philosopher, he addressed the role of human self-interests, the blind pursuit of wealth and how humans (as social, thinking animals) derive happiness in society. As Edward Kleinbard writes in We Are Better Than This, Smith “expected adults to have a strong ethical compass and a commitment to the happiness and tranquility of the entirety of the society in which they lived.”

These ideas are omnipresent in his best-known work, The Wealth of Nations (1776), and were never jettisoned in favor of “the invisible hand” (a deux ex machina idea that he only mentioned three times in all of his written works, according to Kleinbard ) and anti-state sentiments. Kleinbard also notes that Smith’s use of the “invisible hand” refers to God (“the Author of nature”) and dovetails with Smith’s view that societal happiness and mutual prosperity of all citizens is God’s intent.

As a philosopher, Smith incorporated ideas which are not present in today’s economic discussions. He addressed income inequality when he wrote: “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” (Book One, Chapter 8)  In contrast, happiness is considered an “externality,” and with a few exceptions, is not mentioned in political-economic policy discussions, since it is considered soft and does not fit into an Excel spreadsheet.

He also foresaw the need for advancing local trade and employment more than international trade; and, as such, became perhaps the first critic of off-shoring, and by extrapolation, evading domestic corporate taxation.

So as we enter the last week before mid-term elections, and the Republicans elevate economic self interest, privatization, anti-regulation, anti-benefits programs, and institutionalized income inequality, let them do it without mentioning any connection to Adam Smith. The man deserves to have his pro-happiness and economic equality reputation unscathed by opportunists.

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Chuck Epstein

Chuck Epstein

Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry.

He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial.

He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site, www.mutualfundreform.com, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).

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