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Posts Tagged ‘Adam Smith

“He got his fat dreams, he got his slaves / He got his profits, he owns our cage”*…


slave ship

Plan, profile and layout of the slave ship The Séraphique Marie


For a generation, the relationship between slavery and capitalism has preoccupied historians. The publication of several major pieces of scholarship on the matter has won attention from the media. Scholars demonstrate that the Industrial Revolution, centred on the mass production of cotton textiles in the factories of England and New England, depended on raw cotton grown by slaves on plantations in the American South. Capitalists often touted the superiority of the industrial economies and their supposedly ‘free labour’. ‘Free labour’ means the system in which workers are not enslaved but free to contract with any manufacturer they chose, free to sell their labour. It means that there is a labour market, not a slave market.

But because ‘free labour’ was working with and dependent on raw materials produced by slaves, the simple distinction between an industrial economy of free labour on the one hand and a slave-based plantation system on the other falls apart. So too does the boundary between the southern ‘slave states’ and northern ‘free states’ in America. While the South grew rich from plantation agriculture that depended on slave labour, New England also grew rich off the slave trade, investing in the shipping and maritime insurance that made the transport of slaves from Africa to the United States possible and profitable. The sale of enslaved Africans brought together agriculture and industry, north and south, forming a global commercial network from which the modern world emerged.

It is only in the past few decades that scholars have come to grips with how slavery and capitalism intertwined. But for the 18th-century French thinkers who laid the foundations of laissez-faire capitalism, it made perfect sense to associate the slave trade with free enterprise. Their writings, which inspired the Scottish philosopher Adam Smith’s Wealth of Nations (1776), aimed to convince the French monarchy to deregulate key businesses such as the sale of grain and trade with Asia. Only a few specialists read them today. Yet these pamphlets, letters and manuscripts clearly proclaim a powerful message: the birth of modern capitalism depended not only on the labour of enslaved people and the profits of the slave trade, but also on the example of slavery as a deregulated global enterprise…

[Adam] Smith became far more influential than his teacher. As his own version of laissez-faire ideas came to seem like common sense in the following century, the pioneering Gournay Circle was largely forgotten. Their sense that the slave trade was a prime example of free trade in action disappeared. Yet the writings of Gournay and Morellet reveal that modern capitalism is entangled with slavery in multiple, profound ways. Slave labour supplied the cotton, sugar and other vital commodities. The profits from the sale of slaves created fortunes on both sides of the Atlantic. And, in a disturbing paradox, the founding fathers of laissez-faire saw the slave trade as a showcase of liberty.

The chilling tale of a “secret ingredient” in capitalism-as-we-know-it and of the 18th-century thinkers behind the laissez-faire economics that power it: “Slavery as Free Trade.”

* Richie Havens, “Fate”


As we face history, we might recall that it was on this date in 1789 that partisans of the Third Estate, impatient for social and legal reforms (and economic relief) in France, attacked and took control of the Bastille.  A fortress in Paris, the Bastille was a medieval armory and political prison; while it held only 8 inmates at the time, it resonated with the crowd as a symbol of the monarchy’s abuse of power.  Its fall ignited the French Revolution.  This date is now observed annually as France’s National Day.

See the estimable Robert Darnton’s “What Was Revolutionary about the French Revolution?


Storming of The Bastile, Jean-Pierre Houël



“There are people who have money and people who are rich”*…



Every January, to coincide with the World Economic Forum in Davos, Oxfam tells us how much richer the world’s richest people have got. In 2016, their report showed that the wealthiest 62 individuals owned the same amount as the bottom half of the world’s population. This year, that number had dropped to 42: three-and-half-dozen people with as much stuff as three-and-a-half billion.

This yearly ritual has become part of the news cycle, and the inequality it exposes has ceased to shock us. The very rich getting very much richer is now part of life, like the procession of the seasons. But we should be extremely concerned: their increased wealth gives them ever-greater control of our politics and of our media. Countries that were once democracies are becoming plutocracies; plutocracies are becoming oligarchies; oligarchies are becoming kleptocracies.

Things were not always this way. In the years after the second world war, the trend was in the opposite direction: the poor were getting richer; we were all getting more equal. To understand how and why that changed, we need to go back to the dying days of the conflict, to a resort in New Hampshire, where a group of economists set out to secure humanity’s future.

This is the story of how their dream failed and how a London banker’s bright idea broke the world…

The true story of how the City of London invented offshore banking – and set the rich free:  “The real Goldfinger: the London banker who broke the world.”

* Coco Chanel


As we agree that “fair’s fair,” we might spare a thought for David Ricardo; he died on this date in 1823.  A political economist, he developed a a labor theory of value in his seminal Principles of Political Economy and Taxation, published in 1817; he was instrumental in the development of theories of rent, wages, and profits; and at a time of mercantilist sentiment, he introduced the theory of competitive advance and advocated free trade.  Indeed, most economists rank Ricardo as the second most influential economic thinker working before the 20th century, after Adam Smith.

220px-Portrait_of_David_Ricardo_by_Thomas_Phillips source


Written by LW

September 11, 2018 at 1:01 am

“Everybody wants to save the Earth; nobody wants to help Mom do the dishes”*…


Adam Smith once famously observed…

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.

Theory of Moral Sentiments, 1759

He is a member of a stream of observers of the human condition, stretching back to the ancient Greeks, who believe that an innate goodness is at work in us all.  But is it so?

Behavioral economists have revolutionized the standard view of human nature. No longer are people presumed to be purely selfish, only acting in their own interest. Hundreds of experiments appear to show that most people are pro-social, preferring to sacrifice their own success in order to benefit others. That’s altruism.

If the interpretations of these experiments are true, then we have to rip up the textbooks for both economics and evolutionary biology! Economic and evolutionary models assume that individuals only act unselfishly when they stand to benefit some way. Yet humans appear to be unique in the animal kingdom as experiments suggest they willingly sacrifice their own success on behalf of strangers they will never meet. These results have led researchers to look for the evolutionary precursors of such exceptional altruism by also running these kinds of experiments with non-human primates.

But are these altruism experiments really evidence of humans being special? Our new study says probably not…

Read more– and draw your own conclusion– at “Does behavioral economics show people are altruistic or just confused?

[TotH to Mark Stahlman]

* P.J. O’Rourke


As we calculate the angles, we might spare a thought for Johannes Schöner; this is both his birthday (1477) and the anniversary of his death (1547).  A priest, astronomer, astrologer, geographer, cosmographer, cartographer, mathematician, globe and scientific instrument maker, and editor and publisher of scientific texts, he is probably best remembered today (and was renowned in his own tine) as a pioneering maker of globes.  In 1515 he created one of the earliest surviving globes produced following the discovery of new lands by Christopher Columbus.  It was the first to show the name “America” that had been suggested by Waldseemüller– and tantalizingly, it depicts a passage around South America before it was recorded as having been discovered by Magellan.  In his roles as professor and academic publisher, he played a significant part in the events that led up to the publishing of Copernicus’ epoch-making “De revolutionibus” in Nürnberg in 1543.



Written by LW

January 16, 2015 at 1:01 am

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