Talk:Adam Smith

"he relinquished his exhibition"

Could someone please tell me what this means?

and he relinquished his exhibition in 1746.

Thanks. -- Viajero 18:09, 1 Aug 2003 (UTC)

It means that he gave up his scholarship at Oxford and left the university. I think that, technically, at Oxford, an "exhibition" is a somewhat less generous grant to a student than a "scholarship." But it's the same idea. -- User:Eb.Hoop 11:00, 20 Oct 2004 (UTC)

Brits for or against mercantilism?

This reads inconsistently:

When the book, which has become a classic manifesto against mercantilism, appeared in 1776, there was a strong sentiment for free trade in both Britain and America. This new feeling had been born out of the economic hardships and poverty caused by the war. However, at the time of publication, not everybody was convinced of the advantages of free trade right away: the British public and Parliament still clung to mercantilism for many years to come. [italics mine]

Were the British public for or against mercantilism? -- Viajero 18:16, 1 Aug 2003 (UTC)

I think that the answer is "Both". The Public, American or British, are generally for free trade where they think it doesn't harm them, and for mercantilism, particularly its protectionist aspect where they think that it benefits them. For examples take a look at the historical UK Corn laws or the present day US/Canadian softwood lumber dispute, the US/Vietnamese catfish saga or the current debate about IT outsourcing to India, where the "Public" have been or are divided over the merits of free trade versus protectionism. -- Derek Ross | Talk

Quotes

I copied the quotes to Wikiquote. Perhaps we dont need the quote section here on Wikipedia now, or at least - not to that extent? --Piotr Konieczny aka Prokonsul Piotrus 11:12, 25 Jul 2004 (UTC)

Done. Of course, others may not agree with my choices, but oh well. Brutannica 01:39, 10 Sep 2004 (UTC)

Theory of Moral Sentiments

There is some material on this in the Biography section. Shouldn't it be moved down to the Works section? Brutannica 01:31, 10 Sep 2004 (UTC)

Adam Smith was a philosopher through and through! He was known as such throughout the 1700's long before the popularity of his Wealth of Nations took over. Smith's 1759 Theory of Moral Sentiments was not a one-time folly, abandoned after the Wealth of Nations in 1776. Smith worked on new editions of both books continually up till the 1790's. I encourage anyone interested to read Dr. James Otteson's 2004 book, Adam Smith's Market Place of Life. Otteson goes to great lengths explaining exactly how Smith saw the interaction of communities; and how individuals naturally and spontaneously build up codes of bahavior and morals. Only later did Smith extrapolate that theory into economic realities and principles. To look at Smith simply as an economist is to regard him only as half the man he really was. I have yet to see biographies or fans of Smith who have dared to fully understand both facets of this influential man. User:Eltharian, 19 March 2006

eh TMS was trash

NPOV ... what today is considered capitalism...

The last edit by 146.151.30.214 doesn't seem to respect NPOV. I'm not sure whether everyone considers corporate structure, government run by business interests, and economic emphasis on business rather than on workers as today's capitalism. But there is some valid point (not rechecked by me, tough) in mentioning that Smith never used the term capitalism...

It also does make sense to show differences between Smiths thoughts and some of his followers. I guess this is what the editor did intend. But this doesn't belong to the very first paragraph.

Here's the bigger part of the change.

It is often cited by pro-capitalist ideologies as helping to create the modern academic discipline of economics and providing one of the best-known intellectual rationales for capitalism. However, Smith never used the term capitalism in any of his works as it did not exist in his time, and in fact opposed much of what today is considered capitalism, such as the corporate structure, government run by business interests, and economic emphasis on business rather than on workers.

Could someone with more Smith knowledge than me, make this into its own sub-section? I will revert this change in a few days if it is still there...

I deleted then statement that Marx agreed with the iron law of wages as this is incorrect. The Iron law of wages states workers wages will equal the physical subsistence, Marx on the other hand said wages would equal "social subsistence" - social subsistence can be considerably different than physical subsistence.

Problem with invisible hand

I will delete the following passage, recently added by Wk_muriithi:

Even if it was possible to impose the implicit moral contract discussed above, it is unlikely that Adam Smith theory would ever work. This is because invisible hand only work in a perfect market, a condation that has never occured and will never occur. Some of the problem that makes the market imperfect are:-

• Information asymmetry - Its impossible for example, for even sophisticated buyer to be all knowing even where there is reasonable competition. A good real life example of this is in microprocessor market. Corporations can be assumed to be sophisticated buyers and are the main consumers of microprocessors. Despite this, Intel has been able to sell its inferior microprocessors at a higher price than its competitor, AMD.
• Natural monopoly - Some business like telecommunication, utility (water and power) railway are natural monopoly. Markets tend to badly at it. Witness the electricity fisco in USA sometimes back.
• Externality - Business tend to produce too much negative externalities (eg pollution) and too little positive externalities (eg research). Adam Smith argument ignore this facts and his theory is therefore not sustainable.

Aside from problems with the grammar and the POV tone of the proposed addition, nowhere in WoN does Smith posit a perfect market. His work is largely descriptive, studying how markets had historically worked in Europe and elsewhere. The famous "invisible hand" in WoN refers primarily to the observation that there is an unplanned connection between specialization/trade and the creation of wealth. I suspect that the author of this passage has limited first-hand knowledge of what Smith actually says in his book. For a recent critique of the common, incorrect use of the term "invisible hand" by free-trade critics, see Vernon Smith, "Human Nature: An Economic Perspective," Daedalus, pp. 67-76, Fall 2004. - Eb.hoop 15 Jun 2005, 15:45 (UTC).

I concede that i am a tad too opinionated and my spelling leave a lot to be desired. I am however surprised that you seem to be asserting "invisible hand" has nothing to do with pricing. I quote from the article

One of the main points of The Wealth of Nations is that the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by a so-called "invisible hand." If a product shortage occurs, for instance, its price rises, creating incentive for its production, and eventually curing the shortage. The increased competition among manufacturers and increased supply would also lower the price of the product to its production cost, the "natural price."

Boy, that sound to me like the supply - demand curves i see a lot in economics books. The curves attempt to demonstrate how market achieve optimal price. Are you for real when saying this has something to do with specialization? Would you be more specific on your understanding of what of what "invisible hand means? And if your assertion is true, don't you think the above paragraph is misleading and should be fixed? Can someone comment on this?

I agree that the paragraph from the article you quote is misleading. In WoN, the "invisible hand" refers generally to the fact that the people participating in a free market system achieve results for themselves and for society that are never part of their conscious motives. The price mechanism is one aspect of this general phenomenon, but it is not the only one, or even the most important in Smith's thinking. Smith's central point in WoN is that specialization and division of labor dramatically increase productivity and are the source of all wealth. Specialization is possible only if trade allows people to exchange what they specialize in making (e.g., pins) for everything else they need (e.g., food).

Here's the relevant quote from Vernon Smith's article: When Smith uses the metaphor of the invisible hand, he is referring to the essential insight that people in markets achieve ends that are not part of their intention; i.e., people achieve more efficient arrangements induced by the specialization-exchange nexus than is possible without that nexus. The more common, inappropiate, interpretation is illustrated in the following quotations from Joseph Stiglitz: "The argument of Adam Smith ... that free markets led to efficient outcomes, 'as if by an invisible hand,' has played a central role in these [information economics] debates ... The set of ideas that I will present here undermines Smith's theory and the view of government that rested on it. They have suggested that the reason that the hand may be invisible is that it is simply no there - or at least it is palsied."

Having read WoN, I agree with Smith that the common perception (repeated by Stiglitz) that the "invisible hand" refers simply to efficient pricing is quite wrong. Smith was arguing at a far more fundamental level that people like Stiglitz are today. We tend to forget that most of what Smith writes about in WoN is now received wisdom in economics and uncontroversial even to free-market skeptics like Stiglitz. I notice that the Wikipedia article on the invisible hand does a better job that this biography of explaining what Smith was talking about. - Eb.hoop 20:38 17 Jun 2005 (UTC).

Thanks for response. I think you are in better position to understand what invisible hand means as you seem to have read WoN. I was basing my argument wholly on the above paragraph, but since you say its wrong, then my argument is consequently weak. And yeah, my skeptism on the WoN thing is heavily influenced by Stiglitz. He seem to think its bull.

POV

Smith's ideas on wealth, life and his open attitude towards his homosexuality made him one of the most ingenious men of his time.

Can we please have

1) a cite

and

2) some evidence supporting the assertion that homosexuality made Smith ingenious?

.......

I have removed this recently added section. It sounds like pure POV. Is it? Sources please: ''"Current understanding of the "free market" fails to take into account the government's critical role in maintaining a "free market economy" and preventing market distortions{{fact}}. According to Smith{{fact}} the government protects the "free market" by continually leveling the playing field{{fact}}, facilitating the free exchange of goods and services and breaking down barriers to production. It is the government's role to provide "public goods,"{{fact}} (things like a transportation system, utilities, fair trade laws) that enhances the commonwealth, yet are too inefficient or expensive to be provided by private sector. The government has other responsibilities as well, it is the government's job to ensure that no single producer -- or group of producers acting in unison -- accrue enough power or market share to artificually influence price or supply. In a true market economy, profits always hover near zero while workers are paid fairly for their productivity, since their labor is the true "Wealth of Nations.""'' --Mais oui! 06:12, 2 October 2005 (UTC)

I nowikied the templates so that this talk page does not show up in the NPOV disputes category. -- Kjkolb 18:36, 6 April 2006 (UTC)

This isn't a huge point, but this sentence:

"Smith's capacity for fluent, persuasive, if rather rhetorical argument, is much in evidence."

doesn't mean a whole lot. Translating it into more straightforward English, it says, "Smith often wrote fluently and persuausively, but rhetorically." "Fluent" goes without saying, and "rhetorical" is synonymous with "persuasive." So what we're left with is "Smith wrote persuasively"--which is probably better to cut, since it's more opinion than fact.

More POV

I deleted the last sentence of the following paragraph:

Smith vigourously attacked the antiquated government restrictions which he thought were hindering industrial expansion. In fact, he attacked most forms of government interference in the economic process, including tariffs, arguing that this creates inefficiency and high prices in the long run. This theory, now referred to as "laissez-faire", influenced government legislation in later years, especially during the 19th century. However, Smith criticised a number of practices that later became associated with laissez-faire capitalism, such as the power and influence of Big Business and the emphasis on capital at the expense of labour.

What does "emphasis on capital at the expense of labour" mean? In free-market capitalism, firms allocate capital and labour to maximize profits. Is the criticism that they held too much capital at the expense of profits? Or is it that some firms under laissez-faire capitalism had attrocious working conditions and poor human rights by today's standards? The former is what's implied by the statement, though I think the latter is what's meant.

I think the statement needs both clarification and justification (sources, please) before being added again.

FRSE??

What is this "FRSE" thing at the beginning? "Adam Smith, FRSE was a ..." It doesn't even make sense in the sentence. If it's an adjective, it should have a comma after it. And if it's some kind of title, shouldn't that come later in the article?

Fellow of the Royal Society (of England?). But I don't know where it should go. Ethan Mitchell 18:57, 10 May 2006 (UTC)

It means Fellow of the Royal Society of Edinburgh. Grammatically it should be treated like any other of the profusion of British honorary acronyms (MBE, FRS, CH, KBE etc.) That probably means putting a comma after it. Tamino 08:59, 11 May 2006 (UTC)

Tidied the paragraphs

The main article came out as a single block of text, due to "-" characters. I basically restored what was already there, without changing the text. --GwydionM 19:41, 12 January 2006 (UTC)

Could expand, should I expand?

I've written a left-wing criticism of Adam Smith, entitled Adam Smith: Wealth Without Nations. I could improve the biographical details, which are incomplete. But I might be seen as biased.

Smith was sent to London under the Snell Scholarship, an interesting and complex topic in itself. His friends included James Hutton the geologist and Joseph Black the chemist and physicist. Biographers of Smith don't seem to realise how important Hutton and Black were. They do notice a half-connection to James Watt. Black had a major influence on Watt, but whether Watt and Smith ever met is unknown.

Smith's political links were considerable; Edmund Burke, Lord Shelburne, Alexander Wedderburn and Viscount Townshend. He also received his post of Commissioner of Customs from Lord North.

I have added pages about the Snell Scholarship and also the Times obituary of Adam Smith.

--GwydionM 19:18, 12 January 2006 (UTC)

John Rae

The John Rae (explorer) linked to in the first section is not the correct one; however, neither is this John Rae (educator). There doesn't appear to be a Wikipedia article for the John Rae that wrote Life of Adam Smith in 1895, but I don't have much information on him to hand. Whilst on my travels, however, I discovered another John Rae, the economist who wrote Statement of Some New Principles on the Subject of Political Economy. I'll add articles for both of them, and knock up a disambiguation page at John Rae rob 19:38, 12 February 2006 (UTC)

Adam Smith Institute non-partisan?

"'The Adam Smith Institute; a world renowned non-partisan think tank based in the United Kingdom"'. We have 'Grunners' (Revision as of 11:49, 8 February 2006) to thank for this opinion.

This is perfectly ridiculous. They represent a a particular and partisan strand of New Right opinion. No doubt they regard it as 'objective truth' - so do all strong ideologues. But everyone else identifies them as New Right in the beginning and since teamed up with New Labout.

You could also question their right to the name of a man who died 200 years before they were founded.

What do other people think?

--GwydionM 17:11, 18 February 2006 (UTC)

PS, try Googling "Adam Smith Institute" and "Iraq". Some interesting stories. See also George Monbiot's opinion.

what?

--GwydionM 17:24, 18 February 2006 (UTC)

Smith's religious views

Smith's background was Presbyterian, though of the moderate wing, people who felt closer to the Church of England. For most of his career he was however a Deist, and recognised as such. I'd see it as sensible to include him in both categories.

--GwydionM 14:06, 3 June 2006 (UTC)

Adam Smith was gay?

In this edit:

[1]

The user LordRobert claims that Adam Smith was gay. I can find no corroborating source for this. Can anyone check? If this is not true, please warn LordRobert accordingly. -- ran (talk) 23:12, 27 August 2006 (UTC)

Woah. Um, sorry about that. I didn't type that. :S Either my accounts been hacked or someone on my computers been using my account. Either way, I'll change that now. Thanks for bringing that to my attention Ran. Sorry about that. And for the record; Adam Smith isn't gay that I know of. :S Again, Sorry LordRobert 07:43, 28 August 2006 (UTC)

Influence section

changed "influencing the writings of Marx and later economists." to removed Marx. as anyone who has read both knows, Marx was clearly not influenced by Smith!

I presume that's a joke! Much of Marx's Capital (and other writings) are based on Smith's (& Ricardo's) theories; Marx criticises quite a lot of Smith and Ricardo, but accepts a lot of it too. I've reinserted a link to Marx (specifically Marxian economics). For more, see Marxian economics which stresses the vital intellectual link between Smith and Marx. --Nmcmurdo 20:57, 31 October 2006 (UTC)

Cultural depictions of Adam Smith

I've started an approach that may apply to Wikipedia's Core Biography articles: creating a branching list page based on in popular culture information. I started that last year while I raised Joan of Arc to featured article when I created Cultural depictions of Joan of Arc, which has become a featured list. Recently I also created Cultural depictions of Alexander the Great out of material that had been deleted from the biography article. Since cultural references sometimes get deleted without discussion, I'd like to suggest this approach as a model for the editors here. Regards, Durova 17:55, 18 October 2006 (UTC)

OS Date?

Why would this article have an old style date (Julian Calender). Its not even relevant to the article... - Wmgries

First / third scotsman

I am removing text which claims that Smith is the third Scotsman to feature on a Bank of England note. Firstly, this fact is uncited, and secondly, it was directly contradicted by the existing reference (the news article from the BBC News website). Nzseries1 15:02, 26 February 2007 (UTC)

The Adam Smith collage

should there be mention of the collage's in Leven, Kirkcaldy and Glenrothes named after him? Bencey 14:19, 27 February 2007 (UTC)

Date of Baptism

There are two dates of baptism on this page, one in the main body, and one in the right sidebar.

They do no match up. One says June 5th, the other June 16th.

They should at least be consistent within this wiki page, even if the actual date isn't known. —The preceding unsigned comment was added by 71.202.120.159 (talk) 04:16, 21 March 2007 (UTC).

Fixed! Nzseries1 17:07, 22 March 2007 (UTC)

Did Adam Smith say it?

In hundreds, perhaps thousands of sites you can read this quote attributed to the philosopher and economist Adam Smith (1723-1790):

  "The robot is going to lose. Not by much. But when the final score is tallied, flesh and blood is going to beat the damn monster." 
  See, e.g. http://www.quoteland.com/author.asp?AUTHOR_ID=378
        or  http://www.brainyquote.com/quotes/authors/a/adam_smith.html  

On the other hand, in many more sources you can read that the word "robot" was coined by the Czech writer128.183.218.130 17:57, 8 May 2007 (UTC) Karel Capek, in his play R.U.R (Rossum's Universal Robots) written in 1921.

  See e.g. http://en.wikipedia.org/wiki/Karel_Capek

So, either Adam Smith did not say those words or Karel Capek did not coin the word "robot".

Which one is true?

  V. Lumel, vlumel@gmail.com

THE BETRAYAL OF ADAM SMITH

THE BETRAYAL OF ADAM SMITH
Excerpt from
When Corporations Rule the World
2nd Edition(May 10, 2001)
by David C. Korten

(The excerpt is readily available throughout the net on dozens of sites so I assume it is not in any way shape or form an infringment of the copyright rules and regulations to re-state some of it's content in a general discussion area such as this.)

It is ironic that corporate libertarians regularly pay homage to Adam Smith as their intellectual patron saint, since it is obvious to even the most casual reader of his epic work The Wealth of Nations that Smith would have vigorously opposed most of their claims and policy positions. For example, corporate libertarians fervently oppose any restraint on corporate size or power. Smith, on the other hand, opposed any form of economic concentration on the ground that it distorts the market's natural ability to establish a price that provides a fair return on land, labor, and capital; to produce a satisfactory outcome for both buyers and sellers; and to optimally allocate society's resources.

Through trade agreements, corporate libertarians press governments to provide absolute protection for the intellectual property rights of corporations. Smith was strongly opposed to trade secrets as contrary to market principles and would have vigorously opposed governments enforcing a person or corporation's claim to the right to monopolize a lifesaving drug or device and to charge whatever the market would bear.

Corporate libertarians maintain that the market turns unrestrained greed into socially optimal outcomes. Smith would be outraged by those who attribute this idea to him. He was talking about small farmers and artisans trying to get the best price for their products to provide for themselves and their families. That is self-interest, not greed. Greed is a high-paid corporate executive firing 10,000 employees and then rewarding himself with a multimillion-dollar bonus for having saved the company so much money. Greed is what the economic system being constructed by the corporate libertarians encourages and rewards. [See An Economic System Dangerously Out of Control .]

Smith strongly disliked both governments and corporations. He viewed government primarily as an instrument for extracting taxes to subsidize elites and intervening in the market to protect corporate monopolies. In his words, "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all. Smith never suggested that government should not intervene to set and enforce minimum social, health, worker safety, and environmental standards in the common interest or to protect the poor and nature from the rich. Given that most governments of his day were monarchies, the possibility probably never occurred to him.

The theory of market economics, in contrast to free-market ideology, specifies a number of basic conditions needed for a market to set prices efficiently in the public interest. The greater the deviation from these conditions, the less socially efficient the market system becomes. Most basic is the condition that markets must be competitive. I recall the professor in my elementary economics course using the example of small wheat farmers selling to small grain millers to illustrate the idea of perfect market competition. Today, four companies--Conagra, ADM Milling, Cargill, and Pillsbury--mill nearly 60 percent of all flour produced in the United States, and two of them--Conagra and Cargill--control 50 percent of grain exports.

In the real world of unregulated markets, successful players get larger and, in many instances, use the resulting economic power to drive or buy out weaker players to gain control of even larger shares of the market. In other instances, "competitors" collude through cartels or strategic alliances to increase profits by setting market prices above the level of optimal efficiency. The larger and more collusive individual market players become, the more difficult it is for newcomers and small independent firms to survive, the more monopolisitic and less competitive the market becomes, and the more political power the biggest firms can wield to demand concessions from governments that allow them to externalize even more of their costs to the community.

Given this reality, one might expect the neoliberal economists who claim Smith's tradition as their own to be outspoken in arguing for the need to restrict mergers and acquisitions and break up monopolistic firms to restore market competition. More often, they argue exactly the opposite position--that to "compete" in today's global markets, firms must merge into larger combinations. In other words, they use a theory that assumes small firms to advocate policies that favor large firms.

Market theory also specifies that for a market to allocate efficiently, the full costs of each product must be born by the producer and be included in the selling price. Economists call it cost internalization. Externalizing some part of a product's cost to others not a party to the transaction is a form of subsidy that encourages excessive production and use of the product at the expense of others. When, for example, a forest products corporation is allowed to clear-cut government lands at giveaway prices, it lowers the cost of timber products, thus encouraging their wasteful use and discouraging their recycling. While profitable for the company and a bargain for consumers, the public is forced, without its consent, to bear a host of costs relating to water shed destruction, loss of natural habitat and recreational areas, global warming, and diminished future timber production.

The consequences are similar when a chemical corporation dumps wastes without adequate treatment, thus passing the resulting costs of air, water, and soil pollution to the community in the form of health costs, genetic deformities, discomfort, lost working days, a need to buy bottled water, and the cost of cleaning up contamination. If the users of the resulting chemical products were required to pay the full cost of their production and use, there would be a lot less chemical contamination in our environment, our food and water would be cleaner, there would be fewer cancers and genetic deformities, and we would have more frogs and songbirds. If the full cost of producing and driving cars were passed on to the consumer we would all benefit from a dramatic reduction in urban sprawl, traffic congestion, the paving over of productive lands, pollution, global warming, and depletion of finite petroleum reserves.

There is good reason why cost internalization is one of the most basic principles of market theory. Yet in the name of the market, corporate libertarians actively advocate eliminating government regulation and point to the private cost savings for consumers while ignoring the social and environmental consequences for the broader society. Indeed, in the name of being internationally competitive, corporate libertarians urge nations and communities to increase market distorting subsidies--including resource giveaways, low wage labor, lax environmental regulation, and tax breaks--to attract the jobs of footloose corporations. An unregulated market invariably encourages the externalization of costs because the resulting public costs become private gains. In the end it seems that corporate libertarians are more interested in increasing corporate profits than in defending market principles.

The larger the corporation and the "freer" the market, the greater the corporation's ability to force others to bear its costs and thereby subsidize its profits. Some call this theft. Economists call it "economies of scale."

Neva Goodwin, ecological economist, head of the Global Development and Environment Institute at Tufts University, and an advocate of cost internalization, puts it bluntly. "Power is largely what externalities are about. What's the point of having power, if you can't use it to externalize your costs--to make them fall on someone else?"

Corporate libertarians tirelessly inform us of the benefits of trade based on the theories of Adam Smith and David Ricardo. What they don't mention is that the benefits the trade theories predict assume the local or national ownership of capital by persons directly engaged in its management. Indeed, these same conditions are fundamental to Adam Smith's famous assertion in The Wealth of Nations that the invisible hand of the market translates the pursuit of self-interest into a public benefit. Note that the following is the only mention of the famous invisible hand in the entire 1,000 pages of The Wealth of Nations.

By preferring the support of domestic to that of foreign industry, he [the entrepreneur] intends only his own security, and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Smith assumed a natural preference on the part of the entrepreneur to invest at home where he could keep a close eye on his holdings. Of course, this was long before jet travel, telephones, fax machines, and the Internet. Because local investment provides local employment and produces local goods for local consumption using local resources, the entrepreneur's natural inclination contributes to the vitality of the local economy. And because the owner and the enterprise are both local they are more readily held to local standards. Even on pure business logic, Smith firmly opposed the absentee ownership of companies.

The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own .... Negligence and profusion, therefore, must always prevail, more or less in the management of the affairs of such a company?

Smith believed the efficient market is composed of small, owner-managed enterprises located in the communities where the owners reside. Such owners normally share in the community's values and have a personal stake in the future of both the community and the enterprise. In the global corporate economy, footloose money moves across national borders at the speed of light, society's assets are entrusted to massive corporations lacking any local or national allegiance, and management is removed from real owners by layers of investment institutions and holding companies.

It seems a common practice for corporate libertarians to justify their actions based on theories that apply only in the world that by their actions they seek to dismantle. Economist Neva Goodwin suggests that neoclassical economists have invited this distortion and misuse of economic theory by drawing narrow boundaries around their field that exclude most political and institutional reality. She characterizes the neoclassical school of economics as the political economy of Adam Smith minus the political and institutional analysis of Karl Marx:

The classical political economy of Adam Smith was a much broader, more humane subject than the economics that is taught in universities today.... For at least a century it has been virtually taboo to talk about economic power in the capitalist context; that was a communist (Marxist) idea. The concept of class was similarly banned from discussion.

Adam Smith was as acutely aware of issues of power and class as he was of the dynamics of competitive markets. However, the neoclassical economists and the neo-Marxist economists bifurcated his holistic perspective on the political economy, one taking those portions of the analysis that favored the owners of property, and the other taking those that favored the sellers of labor. Thus, the neoclassical economists left out Smith's considerations of the destructive role of power and class, and the neo-Marxists left out the beneficial functions of the market. Both advanced extremist social experiments on a massive scale that embodied a partial vision of society, with disastrous consequences.

If corporate libertarians had a serious allegiance to market principles and human rights, they would be calling for policies aimed at achieving the conditions under which markets function in a democratic fashion in the public interest. They would be calling for an end to corporate welfare, the breakup of corporate monopolies, the equitable distribution of property ownership, the internalization of social and environmental costs, local ownership, a living wage for working people, rooted capital, and a progressive tax system. Corporate libertarianism is not about creating the conditions that market theory argues will optimize the public interest, because its real concern is with private, not public, interests.

In Praise of Competitive Markets When the necessary conditions are met the market is a powerful and efficient mechanisms for allocating resources. What we now have is not a market economy. It is increasingly a command economy centrally planned and managed by the world's largest corporations to maximize financial returns to top managers and the wealthiest shareholders at the expense of the rest of society. If the corporate libertarians were to bear serious allegiance to market principles and human rights, they would be calling for policies aimed at achieving the conditions in which markets function in a democratic fashion in the public interest. They would be calling for measures to end subsidies and preferential treatment for large corporations, to break up corporate monopolies, encourage the distribution of property ownership, internalize social and environmental costs, root capital in place, secure the rights of workers to the just fruits of their labor, and limit opportunities to obtain extravagant individual incomes far greater than their productive contribution.

Corporate libertarianism is not about creating the market conditions that market theory argues will result in optimizing the public interest. It is not about the public interest at all. It is about defending and institutionalizing the right of the economically powerful to do best serves their immediate interests without public accountability for the consequences. It places power in institutions that are blind to issues of equity and environmental balance.