Was Adam Smith a socialist?

[GodLike1001]

A friend told me adam smith, the man who defined modern capitalism, had some socialist values.

can anyone confirm or deny this?

[ContrarianLemming]

Capitalists like to out him as being one of there big heroes, but in reality he most definitly wasn't a capitalist, he was a critic of many of it's features. He was around before modern capitalism.

a socialist? that's a stretch, he was against division of labour though.

[Kotze]

He was critical of landlords and regarded very high interest rates not as efficient market magic but as usury.


As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.

Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground.

In countries where interest is permitted, the law, in order to prevent the extortion of usury, generally fixes the highest rate which can be taken without incurring a penalty. This rate ought always to be somewhat above the lowest market price, or the price which is commonly paid for the use of money by those who can give the most undoubted security.

All quotes are from Wealth of Nations.

I don't claim that believing these things makes you a socialist, but he surely wasn't the kind of usual asshat that nowadays claims to be for "free markets" (whatever that means, their understanding of that term often entails protectionism through patents for instance, but I digress).

[GreenCommunism]

i think at some point he talked about the problem in the market of too high profits, that it undermines society and the market too.

[RebelDog]

He was definitely not the figure all the right-wing free-marketeers like to think he was. Here is excerpts from Chomsky's book 'Class Warfare' where he dispels some of the right-wing myths about Smith. This should give you a proper picture of what Smith was actually advocating.



He's pre-capitalist, a figure of the Enlightenment. What we would call capitalism he despised. People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn people into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits.

He did give an argument for markets, but the argument was that under conditions of perfect liberty, markets will lead to perfect equality. That's the argument for them, because he thought that equality of condition (not just opportunity) is what you should be aiming at. It goes on and on. He gave a devastating critique of what we would call North-South policies. He was talking about England and India. He bitterly condemned the British experiments they were carrying out which were devastating India.


He also made remarks which ought to be truisms about the way states work. He pointed out that its totally senseless to talk about a nation and what we would nowadays call "national interests." He simply observed in passing, because it's so obvious, that in England, which is what he's discussing -- and it was the most democratic society of the day -- the principal architects of policy are the "merchants and manufacturers," and they make certain that their own interests are, in his words, "most peculiarly attended to," no matter what the effect on others, including the people of England who, he argued, suffered from their policies. He didn't have the data to prove it at the time, but he was probably right.


http://www.chomsky.info/books/warfare02.htm

[danyboy27]

he worked on the labor theory of value.

but he also created the false idea that an invisible hand was controling the market, regulating it...

enuf said.

[Kotze]

In Wealth of Nations, the famous "invisible hand" bit only occurs once. His claim there has very little to do with what is nowadays understood under that term.


He can know better the character and situation of the persons whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress. (...) By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Adam Smith's purpose here in Book IV, Chapter II is to argue against mercantilism, against the idea that you can make your country wealthier by imposing tariffs and other restrictions on imports. The problem with his argument is that mercantilism is correct (unless you are a very small country), at least in the absence of retailiation.

So Smith, ingeniously, argues that the biases toward home production that mercantilist goals would suggest should be incorporated into economic decision-making are already present in the market because of what modern economists would call political failures and psychological failures. Smith does not argue that the market maximizes wealth because there are no external benefits to home production and merchants are rational. Instead, Smith argues that the market maximizes national wealth because merchants' psychological propensities plus the inability of foreign governments to commit to the rule of law together match the external benefits to others in the national community of merchants' committing their capital at home.

[Wolf Larson]

the invisible iron fist. he was no socialist- he simply advocated public education because the division of labour would churn out mindless zombies.

[IllicitPopsicle]

No one has said Smith was socialist - what has been said is that he was an Enlightenment thinker, and that he was/would be critical of modern capitalism.

[Lyev]

In Wealth of Nations, the famous "invisible hand" bit only occurs once. His claim there has very little to do with what is nowadays understood under that term.Yeah people go on and on about the invisible hand way too much, but it's definitely a precursor to this notion of a "self-regulating" free-market, that will automatically fall into place. But, as people of said, whilst Smith was nowhere near socialist, he wasn't actually a die-hard free-marketeer either. And his work, along with Ricardo's, was the starting point for Marx economically, similar to the way Marx was inspired by Feuerbach and Hegel.

[Adil3tr]

He was a Utopian capitalist. He thought if everyone worked and sold and ought on the market rainbows and sunshine would appear. Really, he didn't believe it himself, he secretly gave large sums to charities. Guess the "invisible hand" wasn't so effective after all.