A Marketer Buys a Fallacy About Adam Smith

ChaosScenario (here)
has this piece on “The Integrity of Marketers Throughout History”. Don’t get me wrong, Thomas Sowell’s ‘A Conflict of Visions’ is a good read.

It’s the quote from Wealth Of Nations and the Blog author’s comments that are problematical:

“Last week I finished reading Thomas Sowell's excellent treatise, A Conflict of Visions, and I came across this little quote by famed philosopher Adam Smith that reminded me that the reputation marketers have for being dishonest is well earned.
"The proposal of any new law or regulation of commerce which comes from this order [merchants and businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." -Adam Smith, Wealth of Nations, (1776)

Smith's disclosure here is particularly remarkable when we reflect that he advocated a laissez faire economic system, or a system that operates with minimal government intervention.
What can we do to reverse thousands of years of negative experience? Should that even be our goal, or should we simply tend to our own houses, allowing (as Smith suggested) the laws of supply and demand weed out the stragglers and reward the achievers? - Cam Beck.”

Comment
Almost right and almost as wrong.

Adam Smith never ‘advocated a laissez faire economic system’. That was the French Physiocrats, or some of them, whom he visited in 1764-6. Nor is it quite true he advocated “a system that operates with minimal government intervention.” His was not a 'nighwatchmen state' (that was said mockingly by a Lassell, a socialist; and picked up by the 19th century 'Manchester School' of laissez faire promoting campaigners.

These are post-mid 1960’s insertions by neoclassical economists misreading Wealth Of Nations, or rather not reading it at all, but just believing what their tutors told them (most of whom hadn’t read Wealth Of Nations either – we know this because he never mentioned laissez faire once in anything he wrote and they would not knowingly assert that he did if they knew it wasn’t true, would they?).

The quote is about ‘merchants and manufacturers’ imbued with the mercantile political economy of the mid-18th century, who try to persuade the legislature (government) to adopt ‘any new law or regulation of commerce’ to institute monopolies or protection from competition in this or that product market.
It is not about ‘marketers’ as we know them today. It’s about monopolists seeking to narrow the competition, raise prices and ensure higher profits, common enough occurrences in the Adam Smith’s day.

He was not opposed to government intervention as a matter of principle as such. He certainly didn’t think any individual, government minister or official could make production, pricing or marketing decisions for anybody at all. He saw specific roles for government and states them in Book V of Wealth Of Nations; he was not sure about whether publicly-funded activities should be managed by the state or by private persons. Officials could be lazy and incompetent; private individuals could be duplicitous and negligent. He left that question unanswered.

Hence, “Cam Beck” is off target on these issues.