Inequality: “The godfather of free markets feared it would undermine the system he loved.”
Adam Smith has become such an icon that few venture to shatter the simplistic version of his ideas (outside of academia) known to most Americans. Few who hold this vision dear have actually read Smith’s Wealth of Nations, and if they have they read it from a modern perspective outside of the context in which Smith wrote it. And as a result, they misunderstand Smith’s ideas and his goals.
When it is read in context and with his other great work The Theory of Moral Sentiments, a different narrative emerges. David Lay Williams, in his article at Bloomberg View, explains some of the challenges to the dominate theory of Smith’s capitalism (self-interest, lassie-fare, the invisible hand, etc.) when the complexities of Smith’s worldview are factored in. In this article, Williams focuses mainly on Smith’s concerns about inequality.
What does Williams hope to accomplish by looking back on Adam Smith’s philosophy?
“First, it challenges arguments made by those who insist that inequality wouldn’t have been problematic for the intellectual founder of free-market capitalism. Second, Smith offers insights into the nature of economic disparity that should guide a more enriched contemporary discussion of the issue. Many of today’s critiques of inequality center on how it can stifle economic growth. This may be true. But as a professor of moral philosopher, this wasn’t the focus of Smith’s commentary. Third, Smith’s attention to inequality as opposed to poverty is a rejoinder to those who suggest inequality isn’t problematic in itself. Finally, Smith’s inability to offer a solution, one may argue, is manifested in our own failure to address inequality and its accompanying troubles. We have inherited a system that has made no provisions for a dilemma apparent at its very foundations.”
Please read the entire article here: Where Adam Smith and Occupy Agree: Inequality – Bloomberg View