Im not a fan of Adam Smith or his theories, however, the so called Capitalist system outlined in The Wealth of Nations was actually a reaction against the stagnant system of economic Mercantilism, which was really the first wave of Globalism. The spice trade, the sugar trade, the slave trade, all of these things flourished under the system of imperialistic conquest and colonialism which came to dominate the 17th century. Vast corporations, called joint-stock companies at the time, drained enormous amounts of wealth from entire continents. The owners made enormous profits, while the people that actually did the work of collecting the furs, tea leaves, or ivory, often made just enough for themselves to survive on. The owners of these companies, then as now, didnt have to lift a finger in order to accumulate vast piles of wealth at the expense of the many. In essence, Adam Smith was arguing that instead of working for large corporations, each SKILLED worker could sub-contract out their labour for a greater percentage of the wealth. He thought that this would improve both the quality of produced goods as well as the price, through competition between those smaller workshops. Adam Smith was against the existence of large corporations, which he predicted would eventually start fusing into fewer and fewer numbers, until there was only one or two corporations that had a monopoly on virtually everything. This would be a return to the days of Mercantilism, which was the tyranny Adam Smith was so set against. Was the USSR a Communist system? WAs it a Capitalist system? No, it was a Corporatist system. The USSR was one corporation which made everything and employed everybody, which is where we are heading today. If there ever was a Capitalist economic system in North America, it died in 1975 when real wages ceased to rise with the costs of inflation. At that point, the people who actually did the work could afford to buy less and less of the goods and services they actually produced themselves. This was the reason why Henry Ford paid his workers a higher salary than other automotive manufacturers. He wanted them to be able to buy the things they produced themselves. What has come to replace the so called Capitalist system? Well, were all back into the age of Mercantilism again. A small handful of wealthy families has laid claim to the resources of the planet as their exclusive property, and they demand the absolute obedience of every other person on the Earth. They insist that being able to rake in enormous profits is a right, given to them by a God which is in all likelihood Mammon. Is this an endorsement of Capitalism, Libertarianism, or Anarcho-Capitalism? No. Capitalism is itself a deeply flawed system even as Adam Smith describes it. Adam Smith was against the use of any Government regulation, such as meat inspection, safety standards, etc. He was even against such things as selling hazardous products. His idea of regulation was to let the Invisible hand of the market drive consumers away from a shoddy product, since those who were injured, poisoned or maimed would serve as an example to others when it came to making consumer choices. The point that I am making is both the U.S.A. and the U.S.S.R. failed to escape the archaic system of Mercantilism even in their pursuit of radically different economic systems both designed to break free of it.
Posted on: Wed, 29 Jan 2014 11:05:59 +0000
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