5 ms·

I'd suggest reading David Graeber. Smith's characterization of human economic behavior is... very narrow vs historical evidence.

dredmorbius 3y ago
With all due respect to Graeber, and acknowledgement of Smith's faults, far more of the apparent contradictions in Smith come from those who grossly misrepresent him, whilst at the same time strongly discouraging others from reading him directly. I'd compiled a set of quotes from Karl Marx and Adam Smith a ways back and encouraged people to tell which came from whom: <https://news.ycombinator.com/item?id=26127620 https://news.ycombinator.com/item?id=26127620> The "butcher, brewer, and baker" quote is most often seen in a form that ties it together with another passage hundreds of pages from it within Wealth. That construction was created in the early 20th century, more than 100 years after Smith wrote his work, by Jacob Viner, at the monopolist-defending University of Chicago. My understanding is that this was initially an exercise to show how much one could twist Smith's meaning by selectively editing his work. It's since come to be taken as a flat statement by Smith, as originally intended, when it is in fact no such thing. In fact, the chapter in which the vastly over-exaggerated and greatly misconstrued phrase "invisible hand" occurs, begins with a discussion of restraint of trade by monopoly interests, including of the previously-mentioned butchers: BY RESTRAINING, either by high duties, or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favorable to the woollen manufactures. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides toward it. Many other sorts of manufactures have, in the same manner, obtained in Great Britain, either altogether, or very nearly a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely, or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs. <https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_IV/Chapter_2 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_IV...> The late Gavin Kennedy's blog, "Adam Smith's Lost Legacy" covers this misrepresentation in depth: <https://adamsmithslostlegacy.blogspot.com/ https://adamsmithslostlegacy.blogspot.com/> (I'd need to hunt through that to find specific posts of note, though I'd encourage anyone reding this to go through it on your own.) There's a book of the same title: <https://link.springer.com/book/10.1057/9780230511194 https://link.springer.com/book/10.1057/9780230511194> Kennedy's hardly the only person to point this out. John Kenneth Galbraith made much of how Smith was misrepresented during his lifetime, and Steve Keen is amongst present-day economists doing similarly, if memory serves.
- dredmorbius 3y ago
  Since the post I'm responding to seems to be drawing negative attention, I'd like to make clear: I do respect Graeber, and think that his work on the origins of money in particular are far more credible than that suggested by Smith. Smith does best where he comments on that which he can observe directly. He's weak on ancient history and what we'd now call archeology and anthropology (Graeber's own specialisation), as well as on contemporary conditions he'd not directly witnessed --- the American Colonies, again, or China, come to mind. But in observing and commenting on actual trade, commerce, and politics of his own time and place, there's a great deal of wisdom. His commentary on prices suggests to me a number of classes of goods & services (commodities, assets, rents, wages, skilled / privileged work, public goods, capital stock) with distinct pricing tendencies, some of which behave poorly in open markets. His commentary on the components of wages is excellent (I've mentioned this numerous times over the years on HN). His commentary on the practices of privately chartered companies operating as empires and armies abroad are telling (and little commented on by the usual vociferous "champions" of Smith). It's useful to keep in mind that all authors and authorities have their strengths and weaknesses. The one shouldn't blind us to the other, either way. (Graeber also has his ... excessive enthusiasms, I'll put it. But he's also intelligent, a keen observer, and doesn't fall slave to orthodoxies and convention.)
  - dredmorbius 3y ago
    s/post/comment/

dredmorbius 3y ago

With all due respect to Graeber, and acknowledgement of Smith's faults, far more of the apparent contradictions in Smith come from those who grossly misrepresent him, whilst at the same time strongly discouraging others from reading him directly. I'd compiled a set of quotes from Karl Marx and Adam Smith a ways back and encouraged people to tell which came from whom: <https://news.ycombinator.com/item?id=26127620 https://news.ycombinator.com/item?id=26127620> The "butcher, brewer, and baker" quote is most often seen in a form that ties it together with another passage hundreds of pages from it within Wealth. That construction was created in the early 20th century, more than 100 years after Smith wrote his work, by Jacob Viner, at the monopolist-defending University of Chicago. My understanding is that this was initially an exercise to show how much one could twist Smith's meaning by selectively editing his work. It's since come to be taken as a flat statement by Smith, as originally intended, when it is in fact no such thing. In fact, the chapter in which the vastly over-exaggerated and greatly misconstrued phrase "invisible hand" occurs, begins with a discussion of restraint of trade by monopoly interests, including of the previously-mentioned butchers: BY RESTRAINING, either by high duties, or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favorable to the woollen manufactures. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides toward it. Many other sorts of manufactures have, in the same manner, obtained in Great Britain, either altogether, or very nearly a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely, or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs. <https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_IV/Chapter_2 https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_IV...> The late Gavin Kennedy's blog, "Adam Smith's Lost Legacy" covers this misrepresentation in depth: <https://adamsmithslostlegacy.blogspot.com/ https://adamsmithslostlegacy.blogspot.com/> (I'd need to hunt through that to find specific posts of note, though I'd encourage anyone reding this to go through it on your own.) There's a book of the same title: <https://link.springer.com/book/10.1057/9780230511194 https://link.springer.com/book/10.1057/9780230511194> Kennedy's hardly the only person to point this out. John Kenneth Galbraith made much of how Smith was misrepresented during his lifetime, and Steve Keen is amongst present-day economists doing similarly, if memory serves.

dredmorbius 3y ago
Since the post I'm responding to seems to be drawing negative attention, I'd like to make clear: I do respect Graeber, and think that his work on the origins of money in particular are far more credible than that suggested by Smith. Smith does best where he comments on that which he can observe directly. He's weak on ancient history and what we'd now call archeology and anthropology (Graeber's own specialisation), as well as on contemporary conditions he'd not directly witnessed --- the American Colonies, again, or China, come to mind. But in observing and commenting on actual trade, commerce, and politics of his own time and place, there's a great deal of wisdom. His commentary on prices suggests to me a number of classes of goods & services (commodities, assets, rents, wages, skilled / privileged work, public goods, capital stock) with distinct pricing tendencies, some of which behave poorly in open markets. His commentary on the components of wages is excellent (I've mentioned this numerous times over the years on HN). His commentary on the practices of privately chartered companies operating as empires and armies abroad are telling (and little commented on by the usual vociferous "champions" of Smith). It's useful to keep in mind that all authors and authorities have their strengths and weaknesses. The one shouldn't blind us to the other, either way. (Graeber also has his ... excessive enthusiasms, I'll put it. But he's also intelligent, a keen observer, and doesn't fall slave to orthodoxies and convention.)
- dredmorbius 3y ago
  s/post/comment/