‘Grand statues will not overcome destructive statutes.’

Ivor Tiefenbrun writes in The Scotsman (16 February), in its regular ‘Column that Puts Business First’, under the heading, ‘Prophet of capitalism deserves to be honoured in his native land’. I am sure Adam Smith would have preferred he wrote his piece for a ‘Column That Puts Consumers First’!

Ivor Tiefenbrun writes a trenchant piece blasting governments for their regulatory red-tape interference in business and their marked obsessions with imposing on businesses collectivist solutions to social problems. Ivor Tiefenbrun, the founder and owner of Linn Products Ltd, is a successful and celebrated entrepreneur in Scotland’s manufacturing sector, specialising in electronic entertainment systems. He knows what he talks about on business.

Tiefenbrun is also enthusiastically supportive of the project, sponsored by the Adam Smith Institute, to have a 20ft statue of Adam Smith erected in Edinburgh’s High Street, opposite where Smith worked as a Commissioner of Customs and a few hundred yards up the High Street from where Smith lived until he died in 1790. The Statue is to be erected by public subscription and I trust that Mr Tiefenbrun puts his money where his mouth is and has sent his donation to ASI to help to make the project successful (I shall look for his name on the plinth when it is erected – as he may look for mine).

However welcome are Tiefenbrun’s sentiments for Smith, I have a caveat. I shall excuse the heading of Smith being a ‘Prophet of Capitalism’ on the likely grounds that it was written by a worldly-wise and weary sub-editor, who has seen it all and forgotten nothing. Prophets and cartoons are in the news at present and generally they are people believed by the gullible to be divinely inspired to foretell the future.

Smith did not qualify as being a Divine (he abandoned an ecclesiastical career in 1746 to become a teacher, not a preacher) and he most certainly did not predict the future. He wrote about 18th-century Britain, did not foresee ‘capitalism’, which manifested itself in the 19th century and for which the word itself was first put into use as late as 1854, and he did not write from the point of view of producers:

“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it. But in the mercantile, trhe interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production and not consumption, as the ultimate end of object of all industry and commerce.” (WN IV.viii.49: page 660).

He was not hostile to business, provided it behaved itself by trying to monopolise markets and increase prices to consumers. He believed that well-managed competitive enterprises ran by free owners (within the law) benefited consumers. He had no doubts that free commerce provided a better deal for consumers.

I emphatically agree with Ivor Tiefenbrun when he writes:

“The views of Adam Smith, in particular the idea that wealth can be both created and destroyed, is till not widely understood or accepted. Weslth can only be created by the imagination and labour of free men and women. It is destroyed by excessive government taxation on regulation and, in particular, by wealth redistribution and constraints on legitimate personal or business freedom.”

I liked the particularly apposite ending in Ivor Tiefenbrun’s article:

‘Grand statues will not overcome destructive statutes.’

[PS to all: ASI is still looking for donations for Smith’s statue in minimum units of GBP5,000, at http://www.adamsmith.org]