Adam Smith: The Original Free Marketer

by Felix Johnson

Most who know anything about Adam Smith will likely know him as the father of modern economics, with his book The Wealth of Nations being held up as a masterpiece of free market thinking and theory. Almost equally as famous as his book is his example of the manufacturing of a pinhead, used to describe the division of labour and its effect on production. It is even printed on the £20 note, along with an image of Smith himself. However, the nature of this example is not as it seems, and much of Smith’s work has been either ignored or manipulated by free marketeers in order to present him as a figure who would support measures such as austerity - due to their more market-based principles.

Smith’s description of the effects of the division of labour and specialisation was not to promote it as a beneficial system that industry should attain, but rather to decry what it would cause. Workers, already likely underpaid and in poor conditions, would lose all variety in their jobs, performing the same task over and over again, reducing them to cogs in a machine. He therefore advocated that factories provide education to workers, to combat the dismality of workers. However, such an idea was rarely, if at all considered by factory owners. A fellow classical liberal, Wilhelm Von Humboldt, also spoke ill of workers being trained in monotonous, repetitive but efficient work - ‘Whatever does not spring from a man’s free choice, or is only the result of instruction and guidance, does not enter into his very being, but remains alien to his true nature; he does not perform it with truly human energies, but merely with mechanical exactness…we may admire what he does, but we despise what he is.’ The social aims of many classical liberals as a whole have also been reappropriated by market fundamentalists, paying no attention to their equality-based end goals.

His advocacy of free markets is also misrepresented. His support for them came from his belief that under the conditions of ‘perfect liberty’, there would be a natural tendency towards equality, not simply on the grounds of their possible opportunities for economic growth. We can see today that the markets do far from tend to inequality, and the vast stretch we see around the globe today between the rich and the rest of the world would likely increase under purely free market conditions, with large corporations gaining staggering power and control over the markets as well as the people. His advocacy of free markets also relates to his view of the state, which he regarded as instituted: ‘for the defense of the rich against the poor, or of those who have some property against those who have none at all’.

These and many more of his views, sharply opposed to those of his supporters today (eg, ‘The landlord’s right has its origin in robbery’), have been overlooked into obscurity, while his support of free markets and certain explanations of the effects of labour specialisation are still held up to this day. Though this position is not untruthful, it is dishonest in that it fails to account for his socially-oriented aims, and it is what allows those who promote him to simultaneously promote ideas of austerity, which are suffocating to those who Smith wanted to improve the lives of in a more equal society - the working poor. The University of Chicago even went to such lengths as to print a scholarly edition of The Wealth Of Nations, omitting many passages that belied his socially-oriented goals.