Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Help us build a better Ontario September 14, 2017
    If you live in Ontario, you may have recently been selected to receive our 2017 grassroots poll on vital issues affecting the province. Your answers to these and other essential questions will help us decide what issues to focus on as we head towards the June 2018 election in Ontario. For decades, the CCPA has […]
    Canadian Centre for Policy Alternatives
  • Does the Site C dam make economic sense for BC? August 31, 2017
    Today CCPC-BC senior economist Marc Lee submitted an analysis to the BC Utilities Commission in response to their consultation on the economics of the Site C dam. You can read it here. In short, the submission discussses how the economic case for Site C assumes that industrial demand for electricity—in particular for natural gas extraction […]
    Canadian Centre for Policy Alternatives
  • Ontario's middle and working class families are losing ground August 15, 2017
    Ontario is becoming more polarized as middle and working class families see their share of the income pie shrinking while upper middle and rich families take home even more. New research from CCPA-Ontario Senior Economist Sheila Block reveals a staggering divide between two labour markets in the province: the top half of families continue to pile […]
    Canadian Centre for Policy Alternatives
  • Join us in October for the CCPA-BC fundraising gala, featuring Senator Murray Sinclair August 14, 2017
    We are incredibly honoured to announce that Senator Murray Sinclair will address our 2017 Annual Gala as keynote speaker, on Thursday, October 19 in Vancouver. Tickets are now on sale. Will you join us? Senator Sinclair has served as chair of the Truth and Reconciliation Commission (TRC), was the first Indigenous judge appointed in Manitoba, […]
    Canadian Centre for Policy Alternatives
  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Adam Smith did not wear an Adam Smith necktie

OK, so this is not about the Canadian economy. But I woke up this morning with that phrase about Adam Smith ties in my head and had to track it down – the Adam Smith tie being the burkha of free market fundamentalists, and as a result, a fitting gift to guest speakers at Fraser Institute functions.

The quote comes from an economist named Herbert Stein, a former Chair of the President’s Council of Economic Advisors in the Nixon administration, writing in the Wall Street Journal, April 6, 1994, who reflects on what Adam Smith, way back in 1776, actually said in The Wealth of Nations:

[T]he people who wear the Adam Smith tie are not doing so to honorliterary genius. They are doing so to make a statement of their devotion to the idea of free markets and limited government. What stands out in WofN, however, is that their patron saint was not pure or doctrinaireabout this idea. He viewed government intervention in the market with great skepticism. He regarded his exposition of the virtues of the free market as his main contribution to policy, and the purpose for which his
economic analysis was developed.

Yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system. He did not wear the Adam Smith necktie.

These cases were numerous, and some of them are surprising. I give here a list, certainly incomplete, largely derived from Viner’s article on Smith written for the sesquicentennial of the WofN. (The parentheses are mine.)

The government could legitimately do the following:

— Protect the merchant marine and give bounties to defense-related manufacturing industries.

— Impose tariffs on imports in order to bargain for reduction of tariffs by other countries.

— Punish, and take steps to prevent, dishonesty, violence and fraud. (Does this include the SEC, and would prevention of violence justify measures to assist ghetto youth?)

— Establish indicators of quality of goods, such as the sterling mark for silver. (Does this justify the Food and Drug Administration, the Federal Trade Commission and the Consumer Product Safety Commission?)

— Require employers to pay wages in cash rather than in kind. (Could the government conversely require employers to pay part of wages in the form of health benefits?)

— Regulate banking.

— Provide public goods, such as highways, harbors, bridges and canals. (What about railways, airlines?)

— Run the post office. (Also telephone, the information highway?)

— Grant patents and copyrights.

— Give a temporary monopoly to a trading company developing commerce in new and risky regions. (Is this industrial policy, managed trade?)

— Require children to have a certain level of education.

— Provide protection against communicable diseases.

— Require the streets to be kept clean. (Environmentalism?)

— Set a ceiling on interest rates.

— Impose discriminatory taxation to deter improper or luxurious behavior.

Enjoy and share:

Write a comment





Related articles