The conscience of capitalism? It was never very much. But what little there was seems to have begun and ended with Adam Smith.
As I have mentioned repeatedly, at its most basic, economics is an inalienable concomitance of production and distribution. It does not require rocket science or a PhD in ethics to grasp that the purpose of economics should be to fulfill the consumption-related needs and desires (physical and mental) of a population, individually and collectively. In other words, the wealth and resources of our world should be developed for the welfare and happiness of all. Both production and distribution must serve that end.
Adam Smith recognized the important role that distribution plays in any economy, but he failed to develop a scientific approach toward it. To conceal that lacuna - and perhaps to cozy up to the rich - he declared that the requirements of distribution are largely met automatically. (As discussed elsewhere, Smith's notion of distribution was that it is adequately - or almost adequately - managed by "an invisible hand", the work of Providence far more than any market force. This was expressed by Smith in both The Theory of Moral
Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).) Today, 250 years later, it is patently clear that either Adam Smith's "invisible hand" does not exist or it is not wielded for distributive justice to the extent that Adam Smith maintained.
Although Adam Smith mentioned "an invisible hand" only once in The Wealth of Nations (TWON), it is arguably the most well-known assertion that he made. Perhaps that is because an invisible hand is almost all that Smith offered on the subject of distribution. On the very few occasions when Smith talked about "distribution", he mostly referred to a "natural distribution" and never a "just distribution" or an "equitable distribution".
Though Smith repeatedly condemned the rapacious greed of the wealthy, he became almost apologetic whenever he discussed any methodology that might tend to reduce the huge gap in income and lifestyle between the rich and the poor. For example, while discussing a tax on the rent of houses, Smith said: "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." (V.2.71, TWON).
With such a beginning, is it any wonder that modern capitalist economists still tend to focus far more on production than distribution (assuming that they even consider distribution at all)? Talk about economic justice, and some wealthy capitalist economists merely laugh it off as idle speculation. Mention a principle like
production for consumption, and they will dismiss it as ill-conceived. What they won't tell you is that Adam Smith himself firmly endorsed that principle. Smith said: "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." (IV.8.49, TWON)
As a consequence of the mind-numbing influence of capitalist economics, only one out of two essential elements of economics has been developed. And even that one element has only been developed partially and, indeed, highly inadequately. A one-eyed focus on production, almost entirely ignoring its inalienable partner (distribution), is the consequence of capitalist dogma. Because of capitalist dogma, when Warren Buffett suggested taxing the rich, it was hailed as a new and noble idea. And when Bill Gates finally launched a charitable foundation and then chose to run it as a private business, he was hailed as a great philanthropist.
Adam Smith's notions of free trade conflicted with prevailing notions of mercantilism. But at the end of the day, free trade has proven to be no less elitist than mercantilism. Ultimately, both free trade and mercantilism fall under the dimension of economics that PROUT labels "commercial economy". Both free trade and mercantilism have their good and bad points. But commercial economy is only one dimension out of four in respect to a healthy economy. And a healthy economy is only one concern out of five in respect to a healthy society.
As I have mentioned repeatedly, at its most basic, economics is an inalienable concomitance of production and distribution. It does not require rocket science or a PhD in ethics to grasp that the purpose of economics should be to fulfill the consumption-related needs and desires (physical and mental) of a population, individually and collectively. In other words, the wealth and resources of our world should be developed for the welfare and happiness of all. Both production and distribution must serve that end.
Adam Smith recognized the important role that distribution plays in any economy, but he failed to develop a scientific approach toward it. To conceal that lacuna - and perhaps to cozy up to the rich - he declared that the requirements of distribution are largely met automatically. (As discussed elsewhere, Smith's notion of distribution was that it is adequately - or almost adequately - managed by "an invisible hand", the work of Providence far more than any market force. This was expressed by Smith in both The Theory of Moral
Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).) Today, 250 years later, it is patently clear that either Adam Smith's "invisible hand" does not exist or it is not wielded for distributive justice to the extent that Adam Smith maintained.
Although Adam Smith mentioned "an invisible hand" only once in The Wealth of Nations (TWON), it is arguably the most well-known assertion that he made. Perhaps that is because an invisible hand is almost all that Smith offered on the subject of distribution. On the very few occasions when Smith talked about "distribution", he mostly referred to a "natural distribution" and never a "just distribution" or an "equitable distribution".
Though Smith repeatedly condemned the rapacious greed of the wealthy, he became almost apologetic whenever he discussed any methodology that might tend to reduce the huge gap in income and lifestyle between the rich and the poor. For example, while discussing a tax on the rent of houses, Smith said: "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion." (V.2.71, TWON).
With such a beginning, is it any wonder that modern capitalist economists still tend to focus far more on production than distribution (assuming that they even consider distribution at all)? Talk about economic justice, and some wealthy capitalist economists merely laugh it off as idle speculation. Mention a principle like
production for consumption, and they will dismiss it as ill-conceived. What they won't tell you is that Adam Smith himself firmly endorsed that principle. Smith said: "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." (IV.8.49, TWON)
As a consequence of the mind-numbing influence of capitalist economics, only one out of two essential elements of economics has been developed. And even that one element has only been developed partially and, indeed, highly inadequately. A one-eyed focus on production, almost entirely ignoring its inalienable partner (distribution), is the consequence of capitalist dogma. Because of capitalist dogma, when Warren Buffett suggested taxing the rich, it was hailed as a new and noble idea. And when Bill Gates finally launched a charitable foundation and then chose to run it as a private business, he was hailed as a great philanthropist.
Adam Smith's notions of free trade conflicted with prevailing notions of mercantilism. But at the end of the day, free trade has proven to be no less elitist than mercantilism. Ultimately, both free trade and mercantilism fall under the dimension of economics that PROUT labels "commercial economy". Both free trade and mercantilism have their good and bad points. But commercial economy is only one dimension out of four in respect to a healthy economy. And a healthy economy is only one concern out of five in respect to a healthy society.
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