A Man Ahead of His Time: Adam Smith
27 June 2017 | Pago Pago, American Samoa
It is Adam Smith's birthday. He is clearly the founder of analytical economics in my view and he systematized the classical macroeconomic model, many parts of which we all still use today. His book, An Inquiry into the Wealth of Nations was published in 1776 and was a great success. The intellectual world was so small then, he was reluctant to speak about the contents of his book publically for fear it would cuts into its sales.
Like most well informed about the business world, Smith had a low opinion about the honesty and trustworthiness of businessmen.
Again and again, Smith warned of the collusive nature of business interests, which may form cabals or monopolies, fixing the highest price "which can be squeezed out of the buyers" Enter stage right the world of the antitrust laws which has largely been gutted by businessmen and politicians working together.
If that wasn't enough, Smith also warned that businessmen will also try to dominate their political systems and create a conspiracy of businesses and those in government that works against the interest of consumers, with the former scheming to influence politics and legislation. This is the birth of the corruption of crony capitalism, one of our major problems today.
Smith states that the interest of manufacturers and merchants "...in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public."
Rather prescient for someone writing before 1776, I think...