On the Wealth of Nations
Page 12
What an incredibly archaic opinion. Maybe Smith isn't fit for appearances on modern media after all. Unless you consider the pair of blue-blooded bums on the plush who ran for president of the United States in 2004.
Doubtless Smith would have positioned himself as being above vulgar politics. Perhaps he would have supported both Bush and Kerry. But he couldn't have expected much abstract justice from what either of them wanted to do to the Supreme Court: 'When the judicial is united to the executive power,' Smith wrote, 'it is scarce possible that justice should not frequently be sacrificed to, what is vulgarly called, politics.'16
Smith did have one concrete suggestion to improve the justice system: competing law courts, where 'each court endeavoured, by superior dispatch and impartiality, to draw to itself as many causes as it could.'17 This is a great idea – for a TV show. It's done wonders for Judge Judy, if not for the United States Court of Appeals.
'Of the Public Works and Institutions for facilitating the Commerce of Society'
Nothing about pork barrel politics has changed since the eighteenth century. This is clear from a statement that Adam Smith felt compelled to make: 'A great bridge cannot be thrown over a river at a place where nobody passes, or merely to embellish the view from the windows of a neighbouring palace.'18 He was using the verb cannot in the strictly political sense, its meaning unrelated to won't. The next words in Smith's sentence are 'things which sometimes happen'.
Smith made an incontrovertible pronouncement about the funding of public works: 'The greater part of such … may easily be so managed, as to afford a particular revenue sufficient for defraying their own expence.'19 And he made an incontrovertible pronouncement that there was no hope in hell of getting that funding to go where it was supposed to: 'In the progress of despotism the authority of the executive power gradually absorbs that of every other power in the state, and assumes to itself the management of every branch of revenue.'20
Smith understood the potential of privatization: 'Public services are never better performed than when their reward comes only in consequence of their being performed, and is proportioned to the diligence employed in performing them.'21 But his experience of the corporations that were contracted to perform British government services – such as the East India Company, the Halliburton of its day – left him too skeptical to suggest privatization: 'These companies … have in the long-run proved, universally, either burdensome or useless.'22
All that Smith could do about pork barrel projects was voice the kind of feckless common sense that never influences politics: 'they can be made only where that commerce requires them, and … their grandeur and magnificence, must be suited to what that commerce can afford to pay.'23 He would have been helpless to prevent the recent US highway transportation bill with its $200 million bridge in Ketchikan, Alaska (population 7,410). But at least Smith wouldn't have proposed a Millennium Dome in London or vast housing estates for malcontents in the suburbs of Paris or rebuilding slums below sea level so college kids have a place to get drunk during Mardi Gras.
'Of the Expence of the Institutions for the Education of Youth'
Any discussion of educational policy quickly turns into a blow-top session. Everyone's been stuffed with sixteen or twenty years of school, is full to the brim, and ready to spew. Smith was no exception, calling universities 'the sanctuaries in which exploded systems and obsolete prejudices found shelter and protection, after they had been hunted out of every other corner of the world'.24
Smith propounded his educational theories. He was in favor of more science: 'The proper subject of experiment and observation, a subject in which a careful attention is capable of making so many useful discoveries.'25 He was against subjects 'in which, after a few very simple and almost obvious truths, the most careful attention can discover nothing but obscurity and uncertainty'.26 He was referring to metaphysics, but we can substitute poststructuralist minority feminist gay literary criticism and take his point. He cited, approvingly, the ancient Greek curriculum of 'physics, or natural philosophy; ethics, or moral philosophy; and logic', maintaining that 'this general division seems perfectly agreeable to the nature of things.'27 Although I'm not sure where Auto Shop, Phys Ed, and lunch would fit in. And he denounced ontology, calling it 'this cobweb science',28 which was a relief to me because I got a D on that quiz in Introduction to Philosophy.
But reasonable opinions go only so far on educational issues. Smith was soon in controversial territory. He was opposed to making education wholly free, lest students get what they paid for. And he protested against government control of schools: 'An extraneous jurisdiction of this kind … is liable to be exercised both ignorantly and capriciously.'29 Smith, a teacher himself, knew what political pressure does to teachers:
The person subject to such jurisdiction is necessarily degraded by it, and, instead of being one of the most respectable, is rendered one of the meanest and most contemptible persons in the society. It is by powerful protection only that he can effectually guard himself against the bad usage to which he is at all times exposed; and this protection he is most likely to gain, not by ability or diligence in his profession, but by obsequiousness to the will of his superiors.30
Otherwise known as joining a teachers' union and voting for liberal Democrats.
Smith assailed compulsory education as well. 'There are no public institutions for the education of women,' he wrote, 'and there is accordingly nothing useless, absurd, or fantastical in the common course of their education.'31 You didn't catch eighteenth-century housewives bursting into angry tears during book group discussions of Are Men Necessary? They couldn't read.
Smith touted private schools. He claimed that 'those parts of education … for the teaching of which there are no public institutions, are generally the best taught.'32 As examples he gave 'a fencing or a dancing school'.33 But I've got three children and they spend enough time waltzing around taking pokes at each other.
In heated dispute with Smith on all these points was Smith. He advocated an educational requirement 'to be undergone by every person before he was permitted to exercise any liberal profession'.34 He called for taxpayer funding of schools: 'some attention of government is necessary in order to prevent the almost entire corruption and degeneracy of the great body of the people.'35 And he wanted national curriculum standards: 'Science is the great antidote to the poison of enthusiasm and superstition.'36
Neither of Smith's educational agendas has worked. That is, all the arguments he made against public education are true. And all the arguments he made in favor of public education haven't prevented the almost entire corruption and degeneracy of the great body of the people, at least when they're watching American Idol. Nor has science been a great antidote for enthusiasm, such as Iran's for building an atomic bomb, or for superstition. The lotto jackpot number last week was my locker combination in high school.
We get as confused reading what Adam Smith wrote about education as he got writing it. Doubtless part of the confusion was due to the fact of Smith's being a teacher and knowing the truth about school. 'No better method, it seems, could be fallen upon of spending, with any advantage, the long interval between infancy and that period of life at which men begin to apply in good earnest to the real business of the world,'37 he wrote. The secret to education is that we don't know what else to do with the kids.
'Of the Expence of the Institutions for the Instruction of People of all Ages'
Adam Smith may have been first to realize that politics needs a euphemism for 'church'. There's something very contemporary about 'Institutions for the Instruction of People of all Ages', giving equal weight to pottery classes, yoga, mass, and shul. Smith was unreservedly in favor of separation of all these things and state.
Articles of faith, as well as all other spiritual matters … are not within the proper department of a temporal sovereign, who, though he may be very well qualified for protecting, is seldom supposed to be so for instructing the people.38
&nbs
p; Except, in the case of the future King Charles, in matters of organic farming.
And yet, as with education, Smith felt the need to explore additional policy options. On the one hand, separation of church and state was definitely good. On the other hand, maybe the government should fund religion. (It was this kind of thing that would cause Harry Truman to plead for a one-armed economist.) Smith quoted David Hume about how the 'interested diligence of the clergy is what every wise legislator will study to prevent'.39 If a preacher has to support himself, he'll need, said Hume, 'to excite the languid devotion of his audience. No regard will be paid to truth, morals, or decency in the doctrines inculcated. Every tenet will be adopted that best suits the disorderly affections of the human frame.'40 Therefore, according to Hume, what the government should do with 'spiritual guides' – in order to avoid an al-Qaeda – 'is to bribe their indolence, by assigning stated salaries to their profession'.41, 42
But that would mean underwriting all sorts of oddballs such as hymn-blabbing Methodists, congregation-dunking Baptists, and who knows what. So, on yet a third hand, maybe the Church of England ought to be preserved. 'This system of church government,' Smith wrote, 'was from the beginning favourable to peace and good order.'43
Probably there wasn't anything to be done about the separation of church and state anyway. Smith claimed that a government with no official religion was something 'such as positive law has perhaps never yet established, and probably never will establish in any country'.44 Then, in the next paragraph, he explained just how positive law could establish it, 'provided those sects were sufficiently numerous, and each of them consequently too small to disturb the public tranquillity … and if the government was perfectly decided both to let them all alone, and to oblige them all to let alone one another'.45 That was how we got separation of church and state in America, a country founded by religious lunatics.
Smith was also unreservedly for freedom of belief, though not in a way calculated to please believers:
The teachers of each little sect, finding themselves almost alone, would be obliged to respect those of almost every other sect, and the concessions which they would mutually find it both convenient and agreeable to make to one another, might in time probably reduce the doctrine of the greater part of them to that pure and rational religion, free from every mixture of absurdity, imposture, or fanaticism, such as wise men have in all ages of the world wished to see established.46
This sounds like the joke about what you get when you cross a Jehovah's Witness with a Unitarian – somebody who goes door-to-door for no reason.
And Smith had a kind of praise for fundamentalist Christians that would infuriate all of them, from Ralph Reed to Al Sharpton:
A man of low condition … is far from being a distinguished member of any great society … His conduct never excites so much the attention of any respectable society, as by his becoming the member of a small religious sect. He from that moment acquires a degree of consideration which he never had before.47
And don't get Smith started on Roman Catholicism: 'The most formidable combination that ever was formed against the authority and security of civil government, as well as against the liberty, reason, and happiness of mankind.'48
It wouldn't be a good idea to send Adam Smith out on the campaign trail, drumming up the religious vote.
'Of Taxes'
Adam Smith did a lot of thinking about taxes, eighty-odd pages worth. He began with four sensible maxims of taxation: taxes ought to be inexpensive to collect, be levied when taxpayers are best able to pay them, be proportionate to the revenue that taxpayers 'enjoy under the protection of the state',49 and be 'certain, and not arbitrary'.50
The last maxim is the most sensible and therefore the least observed. The boggling complexity of tax law and the ceaseless fiddling with taxes, even by legislators who would lower them, violate Smith's principle that 'a very considerable degree of inequality … is not near so great an evil as a very small degree of uncertainty.'51 It's a principle that applies to practically everything, as anyone who is in love or waiting for a check in the mail knows.
Smith was opposed to inheritance taxes, which are almost as arbitrary, if not as uncertain, as death. And they can hardly be said to be levied at a time when the taxpayer is best able to pay them, because he's dead.
Smith did not see a consumption tax as a panacea: 'All taxes upon consumable commodities … tend to reduce the quantity of productive labour.'52 He wouldn't have favored introducing a VAT in the United States. Just the fact that it is in use elsewhere is an argument against it. 'There is no art which one government sooner learns of another, than that of draining money from the pockets of the people,' wrote Smith.53
Smith was against corporate taxes because 'The proprietor of stock is properly a citizen of the world,'54 and 'a tax which tended to drive away stock from any particular country, would so far tend to dry up every source of revenue, both to the sovereign and to the society.'55 Also, Liechtenstein might end up as a world power. And it could hardly help but have territorial ambitions.
Smith made a sensible argument in favor of property taxes – but only on Republicans with inflated house values in nice neighborhoods: 'Nothing can be more reasonable than that a fund which owes its existence to the good government of the state, should be taxed peculiarly.'56 And, since government was instituted for the defense of the rich against the poor, he called for progressive taxation: 'It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion.'57 But only if the government makes the poor knock it off with the graffiti and turn down the rap music.
Smith objected to certain taxes on libertarian grounds:
It would have been impossible to proportion with tolerable exactness the tax upon a shop to the extent of the trade carried on in it, without such an inquisition as would have been altogether insupportable in a free country.58
We're very proud of our modern liberty, but that sentence indicates we may have dropped a few freedoms while we were stooping to pick up all the new ones.
And Smith had one really brilliant tax idea, a surcharge on 'the persons who have the administration of government'.59 He felt that they were 'generally disposed to reward both themselves and their immediate dependents rather more than enough'.60 St Andrews was founded in 1754, so golf junkets with lobbyists were already available. 'The emoluments of officers, therefore, can in most cases very well bear to be taxed,' wrote Smith.61 He predicted this would be 'always a very popular tax'.62
Nonetheless, thinking about taxes leads to bad thinking. Think what you would do to the IRS auditor if not for the laws of God and man. And those who would recommend taxes are led as far astray as those who would avoid paying them. Smith's preferred method of raising revenue was a luxury tax. This would be imposed not only on the frivolities of the rich but on 'the luxurious [but] not the necessary expence of the inferior ranks of people'.63
Let us consider, on evidence that Smith himself provided, what the eighteenth century considered a poor person's 'necessary expence' to be:
It may indeed be doubted whether butchers meat is any where a necessary of life. Grain and other vegetables, with the help of milk, cheese, and butter, or oil, where butter is not to be had, it is known from experience, can, without any butchers meat, afford the most plentiful, the most wholesome, the most nourishing, and the most invigorating diet.64
And let us further consider what, in Smith's words, that plentiful, wholesome, nourishing, invigorating diet actually consisted of:
The circumstances of the poor through a great part of England cannot surely be so much distressed by any rise in the price of poultry, fish, wild-fowl, or venison, as they must be relieved by the fall in that of potatoes.65
And potatoes don't hurt poor people a bit:
The chairmen, porters, and coal-heavers in London, and those unfortunate women who live by prostitution, the strongest men and the
most beautiful women perhaps in the British dominions, are said to be, the greater part of them, from the lowest rank of people in Ireland, who are generally fed with this root.66
In the eighteenth century the poor had not yet been elevated to their present status as a valuable source of fads, fashions, and illegal drugs. The inferior ranks were openly considered inferior, rather than secretly and guiltily considered inferior. Even as decent a man as Adam Smith accepted this inferiority without giving it a decent thought. Smith, in his role as policy advisor, wrote the following without any apparent sense that he was contradicting the most important parts of The Wealth of Nations:
Upon the sober and industrious poor, taxes upon [luxuries] act as sumptuary laws, and dispose them either to moderate, or to refrain altogether from the use of superfluities which they can no longer easily afford. Their ability to bring up families, in consequence of this forced frugality, instead of being diminished, is frequently, perhaps, increased by the tax'.67
Perhaps. But the subject of taxes can push a person beyond being merely wrong. Smith was starting to sound slightly demented when he proclaimed, 'Every tax, however, is to the person who pays it a badge, not of slavery, but of liberty. It denotes that he is subject to government, indeed, but that, as he has some property, he cannot himself be the property of a master.'68 And Smith must have been completely out of his head when he wrote about income received by a landowner for renting land: 'Though a part of this revenue should be taken from him in order to defray the expences of the state, no discouragement will thereby be given to any sort of industry.'69