Blog Outrages!

Articles

The Business,  30 January 2005

‘Proof that capitalism is a triumphant force’

Business Platform by John Blundell

Extract:

‘So I submit, capitalism – the consequence of freedom of contract and freedom to trade – is a triumphant force that ennobles its participants.  I am making no new claim.  Adam Smith taught us all we needed to know in his magisterial Wealth of Nation.  What this fascinating book allows us to see is just how subtle yet simple is the recipe for happiness.  Domestic mercantilism is more dangerous than international terrorism.’

My response:

Adam Smith ‘knew nothing of capitalism’

Sir – John Blundell’s excellent summary of the Heritage Foundation’s Index of Economic Freedom is marred by his claim that Adam Smith ‘taught us all we need to know” about capitalism.

That Smith critiqued mercantile policies is true; that he wrote anything about capitalists or capitalism is not.   Of the phenomenon, or the word, capitalism, Adam Smith knew next to nothing.  The first recorded reference to capitalist was in 1792 (Smith died in 1790) and the reference to capitalism was much later in 1856.  Smith knew nothing of the industrial revolution – a 19^th not an 18^th century phenomenon. The monopolists he derided were either large chartered trading companies or those of small manufacturers in the shape of journeymen tradesmen and mechanics.

Modern capitalist economies are superior to all state dominated and kelptocratic rivals, but the, albeit, lesser evils of capitalist private monopolies and oligopolies ought not to be excused even by implication as being sanctioned by Adam Smith or of being part of his “magisterial” legacy.

Professor Gavin Kennedy