What Would Adam Smith Say About Rand Paul’s Presidential Bid?


    Libertarianism seems like a fresh alternative to the corporate Republican and Democratic parties, but this philosophy justifies greed, rampant individualism and isolationism. This is not a philosophy for a global economy.

    Yesterday’s announcement that Rand Paul would run for president as a Libertarian candidate was historic.

    Libertarians are a small, doctrinaire conservative faction that relies heavily on the political philosophies of Adam Smith, Herbert Spencer and John Locke. It is a complex political philosophy that relies heavily on the interpretation of justice and social liberties and, depending on the interpretation and political philosopher, can be either termed left- or right-wing.  For instance, on economic matters, libertarianism is associated with the right.

    It’s for these reasons—appeal to both left and right—that libertarianism seems like a viable political philosophy, especially compared to the corporate-military versions of today’s Democrats and Republicans.

    But on closer inspection, Libertarianism in a global world ripe with proven cases of corporate greed and larceny, this political philosophy has some significant shortcomings.

    In theory, according to the Stanford University philosophy department, Libertarianism “opposes laws that restrict consensual and private sexual relationships between adults (e.g., gay sex, extra-marital sex, and deviant sex), laws that restrict drug use, laws that impose religious views or practices on individuals, and compulsory military service. Second, in addition to the better-known version of libertarianism—right-libertarianism—there is also a version known as “left-libertarianism.”

    “Both endorse full self-ownership, but they differ with respect to the powers agents have to appropriate unowned natural resources (land, air, water, minerals, etc.),” according to Stanford University.

    This philosophy states that right-libertarianism holds that typically unowned resources, including insider trading information,” may be appropriated, for example, by the first person who discovers them, mixes her labor with them, or merely claims them—without the consent of others, and with little or no payment to them.”

    Alexander R. Cohen, an Ayn Randian who defends insider trading.
    Alexander R. Cohen, an Ayn Randian who defends insider trading.

    This is exactly the position endorsed by someone from the Ayn Rand institute in New York who I interviewed and said that insider trading should be legal.  I wonder if Paul endorses this position?

    Left-libertarianism, holds that unappropriated natural resources belong to everyone in some egalitarian manner. It can, for example, require those who claim rights over natural resources to make a payment to others for the value of those rights. “This can provide the basis for a kind of egalitarian redistribution.”

    However, Judge Andrew Napolitano, A FOX News commentator, said that there should not be anything such as the National Park Service, which charges a nominal fee to anyone who wants to

    Napolitano: Privatize the national parks and everything the government runs. Real Libertarianism in action.
    Napolitano: Privatize the national parks and everything the government runs. Real Libertarianism in action.

    see the Grand Canyon, the Alaskan tundra or the redwood forests.  Napolitano says all of this should be privatized. This unvarnished corporatism is why he is paid by FOX.  I wonder if Paul endorses this position?

    Misreading Adam Smith

    While Paul faces a tough road as he addresses issues about his previous positions about the benefits of American isolationism in the era of unprecedented globalization and excessive regulation in an era of a Wild West Wall Street, it may instructional for him to re-visit some of the best writings of his ideological mentor Adam Smith.

    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.

    The most recent elections in which Republicans won enough seats to theoretically 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.

    Adam Smith: Today, we have free markets in name only and Smith was more concerned about the public's general welfare than Rand Paul.
    Adam Smith: Today, we have free markets in name only and Smith was more concerned about the public’s general welfare than Rand Paul.

    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.

    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 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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