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I just posted the paper I will give tomorrow at the History of Economics
meetings. The Ideological Fraud of Adam Smith, beginning with the pin
factory. I hope you enjoy reading what a fraud he was.
I just posted the paper I will give tomorrow at the History of Economics
meetings. The Ideological Fraud of Adam Smith, beginning with the pin
factory. I hope you enjoy reading what a fraud he was.
http://michaelperelman.wordpress.com/2014/06/20/the-ideological-fraud-of-adam-smith-beginning-with-the-pin-factory-2/
Here is the start:
8, 1763, while he was explaining to his Glasgow students the importance of
the law and government:
They maintain the rich in the possession of their wealth against the
violence and rapacity of the poor, and by that means preserve that useful
inequality in the fortunes of mankind which naturally and necessarily
arises from the various degrees of capacity, industry, and diligence in the
different individuals. [Smith 1762 1766, p. 338]
In order to justify this inequality, Smith told his students that an
ordinary day labourer ... has more of the conveniences and luxuries than an
Indian [presumably Native American] prince at the head of 1,000 naked
savages (Smith 1762 1766, p. 339). But then the next day, Smith suddenly
shifted gears, almost seeming to side with the violent and rapacious poor:
The labour and time of the poor is in civilized countries sacrificed to
the maintaining of the rich in ease and luxury. The landlord is maintained
in idleness and luxury by the labour of his tenants. The moneyed man is
supported by his exactions from the industrious merchant and the needy who
are obliged to support him in ease by a return for the use of his money.
But every savage has the full enjoyment of the fruits of his own labours;
there are no landlords, no usurers, no tax gatherers [T]he poor labourer
... has all the inconveniences of the soil and season to struggle with, is
continually exposed to the inclemency of the weather and the most severe
labour at the same time. Thus he who as it were supports the whole frame of
society and furnishes the means of the convenience and ease of all the rest
is himself possessed of a very small share and is buried in obscurity. He
bears on his shoulders the whole of mankind, and unable to sustain the
weight of it is thrust down into the lowest parts of the earth from whence
he supports the rest. In what manner then shall we account for the great
share he and the lowest persons have of the conveniences of life? [Smith
1762 1766, pp. 340 41]
Smith's train of thought is confusing. First, the law is needed to
constrain the fury of the poor; then the market provides for the poor very
well; followed by the wretched state of the people who worked on the land
the least fortunate of the workers. For his grand finale, after decrying
the small share of the poor, Smith curiously veers off to ask what
accounts for the great share that these same people have. His answer
should come as no surprise to a modern reader of Adam Smith The division
of labour amongst different hands can alone account for this (Smith 1762
1766, p. 341).
By March 30, Smith was confident enough about his success in finessing the
challenge of class conflict that he became uncharacteristically unguarded
in openly taking notice of the importance of workers' knowledge:
But if we go into the work house of any manufacturer in the new works
at Sheffield, Manchester, or Birmingham, or even some towns in Scotland,
and enquire concerning the machines, they will tell you that such or such
an one was invented by some common workman. [Smith 1762 1766, p. 351]
Smith was too careful an ideologue to include such material in his
published work without any hand wringing about inequities and the
importance of workers' knowledge. Instead, he introduced readers of The
Wealth of Nations to his delightful picture of the division of labor in his
simple pin factory:
... a workman not educated to this business (which the division of labour
has rendered a distinct trade), nor acquainted with the use of the
machinery employed in it (to the invention of which the same division of
labour has probably given occasion), could scarce, perhaps, with his utmost
industry, make one pin in a day, and certainly could not make twenty. But
in the way in which this business is now carried on, not only the whole
work is a peculiar trade, but it is divided into a number of branches, of
which the greater part are likewise peculiar trades. One man draws out the
wire, another straights it, a third cuts it, a fourth points it, a fifth
grinds it at the top for receiving the head; to make the head requires two
or three distinct operations; to put it on, is a peculiar business, to
