“Since therefore the knowledge and survey of vice is in this world so necessary to the constituting of human virtue, and the scanning of error to the confirmation of truth, how can we more safely, and with less danger, scout into the regions of sin and falsity than by reading all manner of tractates and hearing all manner of reason? And this is the benefit which may be had of books promiscuously read.” -- John Milton, Areopagitica (1644)

Capitalism As a Moral System: Adam Smith's Critique of the Free Market Economy

Capitalism As a Moral System: Adam Smith's Critique of the Free Market Economy - Spencer J. Pack This careful exposition of Adam Smith's major and minor works shows that Smith actually had severe misgivings about the moral desirability of the system of capitalism. Capitalism as a moral system troubled and disturbed him, but he nevertheless came out in favor of capitalism, because
1) the system of capitalism that Smith advocated was capable of generating continuous economic growth. It was capable of increasing the wealth of nations and the material well-being of the common people; and
2) as undesirable as the system of capitalism was, Smith felt that any other socioeconomic system which frail humans were capable of organizing would probably be worse than the system of capitalism. For Smith, human nature makes any other system inferior to capitalism.

The author attempts to demonstrate that Reagonomics flagrantly misused Smith's authority. Smith was not for deficit spending, increase in military spending, income redistribution schemes in favor of the rich, or dogmatic laissez-faire forms of capitalism. Smith himself was not an unequivocal supporter of the system of capitalism.

Chapts.2-3 detail Smith's Wealth of Nations. Because of this work, Smith is often considered to be the father of the economic theory of free trade.

Chapt.4 draws several obvious conclusions from WN and shows that Smith was not in favor of regressive tax schemes which tax lower-income people proportionally more than higher-income people.

Chapt.5 investigates Smith's TMS and shows that, for Smith, human happiness is largely a function of the status a person has in human society and not solely dependent on consumption.

Chapt.6 covers several methodological issues. It uses lecture notes from Smith's student to argue that Smith's presentation of WN may have been deliberately "Socratic" in nature. Smith may have deliberately used as "smooth and engaging" a writing style as possible to slowly win over his potentially hostile audience. It also argues that Smith had his own well-developed conception of science.

Chapt.7 explores Smith's "Lectures on Jurisprudence." It shows Smith had developed a 4-stage theory of socioeconomic development in which capitalism is only one stage.

For me, this rebuttal is almost too brief to be effective or persuasive. The chapters are short and the book is thin.

Overall rating: 3.5 / 5

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