Adam Smith the anti-corporate activist

Thanks for Harper’s for reminding us what the grandfather of economics thought about groups like the Canadian Council of Chief Executives, the Chamber of Commerce, the Board of Trade, the Recording Industry Association of America, PhARMA and all of the other thousands that are part of the “business industry”:

The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

–Adam Smith, An Inquiry into the Nature and Cause of the Wealth of Nations, vol. 1, pt. xi, p.10 (at the conclusion of the chapter)(1776)

3 comments

  • Many progressive thinkers seem to be looking at how the Thatcherite economists selectively exploited part of Adam Smith’s reflexions on the ‘free market’.

    At Bread’n’Roses, a thread was started on this very topic, here:

    http://www.breadnroses.ca/forums/viewtopic.php?t=20993

  • Smith also thought corporations themselves were troublesome forms of legal entity – and should only be used for businesses with highly repetitive and homogenous tasks that required minimum discretion for management.

  • The Guardian weekly recently ran an interesting piece (July 13, by Larry Elliot) arguing that Adam Smith would not even have approved of the creation of corporations as a legal entity (with limited liability, etc.). “This total exemption from trouble and from risk, beyond a limited sum, encourages many people to become adventurers in joint stock companies who would, upon no account, hazard their own fortunes in any private co-partnery.” So much for corporate property rights being the Holy Grail of economic development.

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