Neoliberalism is far deadlier in underdeveloped countries, where it is wreaking havoc like Ebola.
Production and the reproduction of wealth are, therefore, central to Smith’s doctrine on development. Despite this, he posited that the capitalists, if unchecked, will disrupt societal development. First, that their desperation to acquire monopoly position restraints free competition; reduces the employment of productive labour; negatively affects the quality of commodities; discourages commerce; kills initiative; and decreases state revenue.
Two hundred and thirty-four years ago, Adam Smith, a Scottish philosopher and political economist died on 17 July, 1790. Born in 1723, Smith is generally eulogised as the “Father of Capitalism,” “Father of Economics,” and for “putting economic development on the map as a subject for general analysis.”
The ‘founders’ of the United States (US) viewed his ideas as a critical work of national wealth, statecraft and societal development. Karl Marx benefited immensely from Smith’s ideas in the evolution of Marxism.
But since the late 1970s, neoliberal forces who claim to have Smith in their DNA, have turned economics upside-down and inside-out. They have mathmaticalised and statisticalised economics to make it appear scientific, but expelled the logic, orderliness, consistency, and predictability that makes mathematics and statistics scientific. Neoliberalism is more of abracadabra, mysticism, and witchcraft. It is not a problem-solving, but problem-aggravating ism.
Yet, it has emerged triumphant due to its application of crude and naked power. Neoliberalism was imposed globally through deceit and crude force. Its major forces, which control the international financial institutions – the United Nations, World Trade Organisation (WTO), amongst others – use these institutions to globalise neoliberalism. Like Fela Anikulapo’s song “Zombie,” it has only one way: “there is no alternative” to neoliberalism.
They further undermined subjects that seriously challenge the ‘intellectual’ bases of neoliberalism. These include the ‘Economic Doctrines/Thoughts,’ ‘Economic History,’ ‘Economic Sociology’ and ‘Political Economy,’ to which Smith paid tireless attention in his works. These were systematically wiped out from the curricular of tertiary education institutions. Yet, these were the subjects Smith organically interrogated in his books: The Theory of Moral Sentiments (TMS) (1759); An Inquiry into the Nature and Causes of the Wealth of Nations (TWN) (1776); Lectures on Police, Revenue, and Arms (1763); and Essays on Philosophical Subjects (1795), amongst others.
Although Smith never used the term ‘development’, but in his TWN, he used ’improvement’ to connote ‘development.’ To him, development arose to manage the crisis brought about by the breakdown of subsistence economy, which is manifested in the emergence of division of labour (DOL). Development, to Smith, means the: increase in the productive activities of a nation; growth of national wealth; and improvement in the standard of living of the citizenry.
Smith advocated that individuals should be encouraged to pursue their legitimate business, but not at the expense of society. For, society: “cannot subsist among those who are at all times ready to hurt and injure one another.” Therefore, individuals must control their do-or-die desperation for profit, otherwise the state must administer social justice.Development, he argued, occurs in a “natural order” and in an “unnatural and retrograde order.” The first occurs naturally, instinctually, spontaneously, and independently of human intentions. It began from agriculture, on to manufacturing and, then international trade. It first arose from the countryside to the towns, which it supplied with the “means of subsistence, and the materials of manufacture.” Thus, it predated and preceded towns.
Smith preferred this order because it is less risky. The landlord’s land is “under his view and command, and his fortune is much less liable to accidents… The capital of the landlord… is fixed in the improvement of his land… (which) seems to be as well as secured as the nature of human affairs can admit of.”
The second is the opposite of the first and was brought by human interference. Yet, Smith argued, that the “unnatural and retrograde order” has contributed to development. For example, that international trade widens the market, expands productivity, increases profits, sharpens competition, develops DOL/technology, grows the national wealth, and improves citizens’ welfare.
Production and the reproduction of wealth are, therefore, central to Smith’s doctrine on development. Despite this, he posited that the capitalists, if unchecked, will disrupt societal development. First, that their desperation to acquire monopoly position restraints free competition; reduces the employment of productive labour; negatively affects the quality of commodities; discourages commerce; kills initiative; and decreases state revenue.
Secondly, that monopoly profits adversely affect the mobility and allocation of resources; destroys the initiative and frugality of the capitalists; hinders their incentive and capacity to earn; retards capital accumulation; negatively affects the wealth of nation; and disastrously disturbs societal development.
Thirdly, that capitalists’ payment of low wages affects workers’ health, obstructs industrial peace; decreases labour productivity; and stagnates the development of DOL/technology. Therefore, he posited, the interests of capitalists are: “always in some respects different from, and even opposite to, that of the general public.”
Smith, accordingly, recommended that: “The proposal of any law or regulation of commerce which comes from this order, 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 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.”
He argued for “liberal” wages, while neoliberalism is against the payment of living wages, except when workers threaten the system. Neoliberalism is for cowboy capitalism, while Smith was for a state that is capable of disciplining and, does discipline, all classes. Neoliberalism is for a state which doggedly stands for monopoly capitalism.Smith advocated that individuals should be encouraged to pursue their legitimate business, but not at the expense of society. For, society: “cannot subsist among those who are at all times ready to hurt and injure one another.” Therefore, individuals must control their do-or-die desperation for profit, otherwise the state must administer social justice.
Man, he wrote, must: “humble the arrogance of his self-love, and bring it down to something which other men must go along with.” For: “In the race for wealth, and honours, and preferements, he may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if he should jostle, or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play, which they cannot admit of.”
Smith opposed state participation in economic enterprises. Rather, he advocated that the state should focus on providing security, justice, and orderly development. It should particularly create a conducive atmosphere for free enterprises to exist, facilitate the perfect operation of the market, and encourage the development of DOL/technology. Free competition, he argued, allows the attainment of modest wealth, and makes it difficult for the capitalists to easily amass great wealth, without alertness, creativity, drive, innovation, and industry.
But Smith equally advocated that the state must ensure workers are well paid because they are the creators of wealth. The payment of poor wages, he argued, affects workers’ health; disturbs industrial peace; reduces national wealth; and obstructs development.
In contrast, the payment of “liberal” wages gives workers additional incentives to work dedicatedly; build a healthy, industrious labour force; improve their standard of living; produce and reproduce a healthy working class; and increase the wealth of nation.
Smith was for the integrated development of agriculture, manufacturing, and trade, in which the capitalists and workers grow and develop. Not so neoliberalism, which focuses on capital at the expense of labour. In contrast to neoliberalism, he was for the flourishing of free enterprise, not super monopoly capitalism.
He argued for “liberal” wages, while neoliberalism is against the payment of living wages, except when workers threaten the system. Neoliberalism is for cowboy capitalism, while Smith was for a state that is capable of disciplining and, does discipline, all classes. Neoliberalism is for a state which doggedly stands for monopoly capitalism.
Neoliberalism is far deadlier in underdeveloped countries, where it is wreaking havoc like Ebola.