Rich Canadian Bloggers and Nigerian 'Tea-leafs'

May Day brings the usual flurry of Blog posts about labour. Even in the richest continent in the world, North America, which I was sorely tempted to comment upon in one particular case from a gentleman ‘libertarian communist’ in Canada writing from a country that enjoys the conditions of the alleged ‘downtrodden masses’ of Canadian workers, whose connection to extremes of poverty seen in Africa, Asia and parts of South America seems somewhat remote.

It’s amazing how a loss of perspective on what real poverty is like can lead educated people in the rich countries to imagine that a family with the appurtenances of among the best living standards in the world are somehow on the brink of starvation and cataclysmic alienation, not seen anywhere in their country except in the desperate lives of the victims of severe drug and alcohol abuse (both of which cost more to sustain for a month than the annual income of a landless peasant in Sudan, to mention only one of many places).

However, I resisted the temptation as you can see, but you can read Le Revue Gauche here.

Instead, I noticed an editorial, no less, in the Nigerian Tribune (Ibadan), close to the financial news and the usual indicators of modern consumption, and thought it was about the desperate poverty of the landless or unemployed, the victims of a corruptly managed economy. Here is a single paragraph from it:

“Nigerian Workers Still Searching for Succour”

“BUT as most social scientists like Adam Smith have postulated, the real wealth of any nation is not in the tangible resources like gold, silver or crude oil. The wealth of a nation is not in the quality or arability of its land. The real wealth can only be found in the quality of its human resources. A highly cultivated human resource, in terms of good and quality education, highly enhanced salary package and functional social amenities, will, without doubt, be highly motivated and resourceful and very productive. Conversely, a workforce that is poorly remunerated will only produce a very low yield. In both cases, the society is at the receiving end. In other words, the quality (and lack of it) of any workforce will translate into the prosperity (and otherwise) of that particular society.”

Comment
I picked this paragraph because the editorial drags Adam Smith into its serious rant against the rulers running Nigeria, if that is the word for it (I think the cockney slang for thief, as in ‘tea leaf’, is more closely associated with the nature of too many in the enterprise known as ‘government’ and officialdom in that country – if they are ‘running’ anything it’s more like ‘running off’ with the loot).

I accept that not everybody is a ‘tea-leaf’ in the government administration of Nigeria, but too many are ‘tea leafs’ and too many of their rivals for office want to graduate to becoming ‘tea-leafs’ as soon as possible.

But that is not my main point. Some of the ideas in the editorial that are linked to Adam Smith are not quite correct. For instance:

“the real wealth of any nation is not in the tangible resources like gold, silver or crude oil.”

Smith’s criticism of the ideas behind mercantile political economy were about the notion that ‘wealth’ consisted of money, which in those days was in the form of gold and silver coinage and bullion. He said ‘no'; money was not ‘wealth’. He defined wealth as the annual output of the ‘necessaries and conveniences (and amusements)' of life, i.e., the real goods produced by labour and capital each year. Their money equivalents facilitated exchange, that’s all. They were not wealth because wealth was a flow not a stock or money.

A country that aimed to fill strong-boxes of gold and silver (or today, treasury bonds) and considers that it has achieved real results was fooling itself, argued Smith, because the policies that accumulated money as wealth were quite different from the policies that created employment for productive labour, and from the division of labour, greater output. In fact, Smith showed that the pursuit of nominal money inhibited real growth and, crucially, the spread of opulence to the labouring majority.

In this context, of course, crude oil output is real wealth.

“The real wealth can only be found in the quality of its human resources.”

Again this misdirects the emphasis placed on labour by Smith. Labour, as human capital (he was one of the earliest to recognise the importance of investment in human capital), is important if as resources they are going to help a country ‘progress to opulence’, but they are not real wealth in themselves. They help produce real wealth, in association it must not be forgotten, with capital-stock. Without both together, wealth is not produced, as the stagnant economies of many countries amply, though sadly, demonstrate.

The editorial writers develop their points to argue for higher remuneration for labour and a higher standard of living because such recognition of the quality of labour ‘will translate into the prosperity (and otherwise) of that particular society’. But, I fear that the editorial writers have got the direction of causation the wrong way round – and Smith would have told them so too – ‘highly enhanced salary package and functional social amenities’ are funded by prosperous societies and are not (and certainly not ‘without doubt’) initiated by somehow ‘enhancing’ the salaries of labour.

If only it was that easy, then many countries might not be in the mess they are. But editorials on 1st May are not written with an eye for scholarly exactitude. They are written to rally/curry favour with/assuage consciences/have a go at others/sound concerned, and so on. Fine.

But if they must drag in Adam Smith, they should present his ideas as he intended.