Mischievous MisQuotations Do Not a Case Make

Ten Thousand Days, a Blog by C. J. Stone with the catch sub-heading: “Ten thousand days, that's exactly 366 lunar months, or just over 27 years. It's how long I have left to live, if I'm lucky that is. Just to remind me that every day counts. Updated every Sunday”. Already at 43, the author is counting the months to the proverbial 'three-score and ten'.

“Adam Smith is famous for having extolled the virtues of the free market.
He is supposedly Gordon Brown’s favourite writer, hence – probably – his appearance on our English £20 note, despite the fact that he was Scottish”.

Comment
The Bank of England was founded in 1694 by William Patterson, a prominent and wealthy Scotsman living in London. It is the central bank of the United Kingdom of Great Britain and Northern Ireland and as such its bank notes are legal tender throughout the UK, and not just England. Unfortunately, this is not the only slip of ignorance by its author and much worse follows.

C. J. Stone continues:

“In other words, the so-called free market is based around the need of producers to accrue wealth, not the need of consumers to get a fair deal.

This is still the case. There is still no such thing as the free market. It is a system entirely rigged to serve the interests of certain groups with wealth enough to buy influence over government.

“It cannot be very difficult to determine who have been the contrivers of this whole [mercantile] system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers, whose interest has been so carefully attended to [; and among this latter class our merchants and manufacturers have been by far the principle architects” (WN IV.viii.54: p 661)]

Comment
C. J. Stone is economical with the truth. He has doctored Smith’s quotation by dropping the key word ‘mercantile’ (placed in square brackets by me) and he dropped the last part of the sentence (restored by me in square brackets), and gave no references for where in Wealth Of Nations it resides. C. J. Stone may not know the full quotation – he may have got it from a book of quotations that slips in political messages for the unwary – but in this case, the context is most important.

Smith’s Book IV in Wealth Of Nations is a polemic against ‘mercantile political economy’, which was the commercial system dominating the British economy, before 1707 applying separately to Scotland and England; after 1707 to both countries together. This was not the commercial system that Smith advocated.

Mercantile governments favoured policies that aimed to strengthen the power of the state, to accumulate gold and silver bullion, and perhaps more important, to fund colonies in America over which monopolistic powers could be enforced so that they exchanged their produce exclusively for manufactured goods from Britain, and excluded all other countries. It was these mercantile policies that were ‘contrived’ by ‘producers’ (i.e., those merchants and manufacturers who gained from the monopolies), to which the antidote was competition from the freedom of Britain and the American colonies to trade with whomsoever they wished. It was most decidedly not a charge laid against commerce and it is disingenuous of C. J. Stone to imply that it was, or that it holds sway today in relatively, but by no means exclusively, competitive economies.

C. J. Stone continues:

“In other words, the so-called free market is based around the need of producers to accrue wealth, not the need of consumers to get a fair deal.

This is still the case. There is still no such thing as the free market. It is a system entirely rigged to serve the interests of certain groups with wealth enough to buy influence over government.”

Comment
C. J. Stone, if he reads Wealth Of Nations, would learn that ‘wealth’ is not mere money, which is one of the mercantile fallacies that Smith criticises. Wealth to Smith is the annual output of the products of ‘land and labour’, ‘the necessities, conveniences, and amusements of life’. Producers (even monopolists) can only accrue their revenues by providing consumers with the ‘necessities, conveniences, and amusements of life’. Smith writes, close to where C. J. Stone misquotes him (he only needs to turn back one page – if he had quoted direct from Wealth Of Nations?):

‘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’ (WN IV.viii.49: p 660). If he believes that the ‘system is entirely rigged’ for other purposes, he has identified a political problem, and the advocates of free-trade competition will, no doubt, to have C. J. Stone join their ranks.

In case C. J. Stone has another solution to the problem of ‘rigged’ markets, such a socialist administration of the economy, I simply refer him to the experience of having states run the economy. Whatever their intentions, and I have no evidence, historically or current, that suggest such socialist planners are any different or more competent than the dispersed administrators of capitalist firms, the empirical results show the consumers get a worse deal under socialist planners than even the most incompetent or corrupted capitalist economy.

When some Polish people visited Australia after the fall of Communism, they were reported to have visited a supermarket store in a Sydney suburb and to have wept at the rows of packed shelves with goods for sale in contrast to shops in Warsaw where meat was rationed, most shelves were empty, and the staff was surly, etc.

C. J. Stone continues:

‘Or, to quote Adam Smith again: “The vile maxim of the masters of mankind, all for ourselves and none for other people.” ’

Comment
C. J. Stone rewrites the quotation once again because the actual quotation as written by Adam Smith states:

‘All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind’ (WN III.iv.10: p 418).

If context mattered to C. J. Stone, he would know that Smith in this passage is commenting on the way in which Feudal Lords unintentionally let go of their absolute local power (after near on a thousand years of domestic warfare, rapine, serfdom and slavery across Western Europe, following the fall of Rome in the 5th century) by the slow and gradual appearance of commerce from around the 15th century that induced them to exchange their awesome power of tyranny over people for ‘diamond buckles perhaps, or something and frivolous and useless’, resulting in their giving up their armed ‘retainers’, and their lands too to satisfy their petty greed.

This happy outcome was brought about, write Smith, by ‘the silent and insensible operation of foreign commerce and manufacturer’ (WN: Ibid). I would have thought this was something that C. J. Stone would have applauded instead of misquoting Smith; but where ‘ignorance predominates, vulgarity asserts itself’ (or so I was taught at school).