Posts Tagged ‘Adam Smith’
“The only advantage of not being too good a housekeeper is that your guests are so pleased to feel how very much better they are”*…
Roomba is on the rise, but is the humble carpet sweeper poised for a rebound? Edward Tenner considers…
Every so often technology critics charge that despite the exponential growth of computer power, the postwar dreams of automated living have been stalled. It is true that jetpacks are unlikely to go mainstream, and that fully autonomous vehicles are more distant than they appear, at least on local roads. And the new materials that promised what the historian of technology Jeffrey L. Meikle has called
“damp-cloth utopianism”—the vision of a future household where plastic-covered furnishings would allow carefree cleaning—have created dystopia in the world’s oceans.Yet a more innocent dream, the household robot, has come far closer to reality: not, it is true, the anthropomorphic mechanical butler of science-fiction films, but a humbler machine that is still
impressive, the autonomous robotic vacuum cleaner. Consider, for example, the Roomba®. Twenty years after introducing the first model, the manufacturer, iRobot, sold itself to Amazon in August 2022 for
approximately $1.7 billion in cash. Since 2013, a unit has been part of the permanent collection of the Smithsonian’s National Museum of American History.As the museum site notes, the first models found their way by bumping into furniture, walls, and other obstacles. They could not be programmed to stay out of areas of the home; an infrared-emitting
accessory was needed to create a “virtual wall.” Like smartphones, introduced a few years later, Roombas have acquired new features steadily with a new generation on average every year. (They have also inspired a range of products from rival manufacturers.) Over 35 million units have been sold. According to Fortune Business Insights Inc., the worldwide market was nearly $10 billion in 2020 and is estimated to increase from almost $12 billion in 2021 to $50.65 billion in 2028.…
Adam Smith might applaud the Roomba as a triumph of the liberal world order he had endorsed. Thanks to the global market- place for design ideas, chips, and mechanical parts, he might remark,
a division of labor—Roomba is designed mainly in the United States by an international team and manufactured in China and Malaysia—has benefited consumers worldwide. Smith would nonetheless
disapprove of the economic nationalism of both the United States and China that has made managing high-technology manufacturing chains so challenging.Yet Smith might also make a different kind of observation, high-lighting the technology’s limits rather than its capabilities…
Yet Smith might also make a different kind of observation, high-lighting the technology’s limits rather than its capabilities… Could household automation be not only irrelevant to fundamental human welfare, but harmful? As an omnivorous reader, Smith would no doubt discover in our medical literature the well-established dangers of sedentary living (he loved “long solitary walks by the Sea side”) and the virtues of getting up regularly to perform minor chores, such as turning lights on and off, adjusting the thermostat, and vacuuming the room, the same sorts of fidgeting that the Roomba and the entire Internet of Things are hailed as replacing. In fact the very speed of improvement of robotic vacuums may be a hazard in itself, as obsolescent models add to the accumulation of used batteries and environmentally hazardous electronic waste.
As the sustainability movement grows, there are signs of a revival of the humble carpet sweeper, invented in 1876, as sold by legacy brands like Fuller Brush and Bissell. They offer recycled plastic parts, independence of the electric grid, and freedom from worry about hackers downloading users’ home layouts from the robots’ increasingly sophisticated cloud storage…
Via the estimable Alan Jacobs and his wonderful Snakes and Ladders: “Adam Smith and the Roomba®” from @edward_tenner.
(Image above: source)
* Eleanor Roosevelt
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As we get next to godliness, we might spare a thought for Waldo Semon; he died on this date in 1999. An inventor with over 100 patents, he is best known as the creator of “plasticized PVC” (or vinyl). The the world’s third most used plastic, vinyl is employed in imitation leather, garden hose, shower curtains, and coatings– but most frequently of all, in flooring tiles.
For his accomplishments, Semon was inducted into the Invention Hall of Fame in 1995 at the age of 97.
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”*…
The story of how Adam Smith, a Scottish moral philosopher, pillar of the Scottish Enlightenment, and humanist, came to be the avatar of unrestrained capitalism…
How is it that Adam Smith in America wound up as the poster child for the “stark utopia” of the free-market order? How is it that he is the guy who is taken to have said that a good society is one in which all of the social power you exercise to command the work and attention of others is mediated through the market? A market society is one in which all the social power one exerts to attempt to command the aims of the work of society is deployed through your effective demand—and so is equal to your wealth times your personal intensity of desire that some commodity be made for your personal use. This is a fine thing to do, but only if the only end of society is to produce commodities for its individuals’ personal utilization, and only if the societal value placed on the happiness of an individual is proportional to his wealth.
But that is simply not the case…
Brad DeLong (@delong) considers (his one-time student) Glory Liu‘s (@miss_glory) Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism: “The Adam Smith Americans Have Imagined.”
See also: “The misunderstood Adam Smith gets both credit and blame for modern capitalism” (source of the image above)
* “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.” – Adam Smith, The Wealth of Nations
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As we read more closely, we might recall that it was on this date in 1996 that a critic of the industrialization rationalized in part by the revisionist understanding of Adam Smith’s thought, Theodore John (“Ted”) Kaczynski was apprehended. From 1978 to 1995, he had killed three people and injured 23 others in a nationwide bombing campaign against people he believed to be advancing modern technology and the destruction of the environment.
A math prodigy, Kaczynski had begun a career as a professor of mathematics at Berkeley– but abruptly resigned and retreated to rural Montana… from whence he waged his domestic terror campaign and where he wrote his manifesto, the essay Industrial Society and Its Future.
Kaczynski was the subject of the longest and most expensive investigation in the history of the Federal Bureau of Investigation up to that point. The FBI used the case identifier UNABOM (University and Airline Bomber) to refer to his case before his identity was known, which the media turned into the “Unabomber.” In 1995, Kaczynski sent a letter to The New York Times and promised to “desist from terrorism” if the Times or The Washington Post published his manifesto. At the urging of Attorney General Janet Reno, the Post did. Kaczynski’s brother David recognized the prose style and reported his suspicions to the FBI, which led to Kacynski’s arrest.
Kaczynski—maintaining that he was sane—tried and failed to dismiss his court-appointed lawyers because they wanted him to plead insanity to avoid the death penalty. In 1998 he struck a plea bargain under which he pleaded guilty to all charges and was sentenced to eight consecutive life terms in prison without the possibility of parole.
“A fair day’s-wage for a fair day’s work: it is as just a demand as governed men ever made of governing.”*…
As low-wage employers struggle to find workers, it seems as that labor– which has been left behind over the last several decades, as the economic benefits of growth have flowed to executives and owners– may be about to have its day. But will it? And what might that mean?
In her first statement as Treasury Secretary, Janet Yellen said that the United States faced “an economic crisis that has been building for fifty years.” The formulation is intriguing but enigmatic. The last half century is piled so high with economic wreckage that it is not obvious how to name the long crisis, much less how to pull the fragments together into a narrative. One place to start is with the distribution of national income between labor and capital (or, looked at another way, between the wage share and the profit share of national income). About fifty years ago, the share of income going to labor began to decline, forming a statistical record of the epochal collapse of working class power. Episodes of high employment in the 1990s and the late 2010s did not reverse the long-term pattern. Even today, with a combination of easy money and fiscal stimulus unprecedented since World War II, it is unclear what it would take to reverse the trend in distribution.
Few would seriously dispute that hawkish Federal Reserve policies have played a direct role in the decline of the labor share since the 1970s. This is the starting point for thinking about monetary policy and the income distribution, but many questions remain. Today’s expansionary program extends beyond monetary policy to include fiscal stimulus and even industrial policy, but the first sign of an elite rethinking was the Fed’s dovish turn around 2016. (The Fed chair then was Yellen, whose current tenure as Treasury Secretary has been marked by close coordination with her successor, Jerome Powell.) In a fundamental sense, the entire Biden program hangs on the Fed: low interest rates made possible a reevaluation of the cost of massive government debt, which has in turn opened new horizons for a would-be activist government.
If the age of inequality was the product of a hawkish Fed, could a dovish central bank reverse the damage? Today, there is more reason to speak of a “pro-labor turn” than perhaps at any time over the last half century. But history is not so easily reversed. The new policy regime is not a simple course correction to decades of misguided neoliberalism. There is evidence that the current experiment was made possible by a recognition that workers had suffered a secular defeat—specifically, that they had lost the ability to increase or even defend their share of the national income. What would happen if labor became stronger?…
Tim Barker (@_TimBarker) explores: “Preferred Shares,” in Phenomenal World (@WorldPhenomenal).
On a related note: “The economics of dollar stores.”
[Image above: source]
* Thomas Carlyle
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As we re-slice the pie, we might send acquisitive birthday greetings to Claude-Frédéric Bastiat; he was born on this date in 1801 (though some sources give tomorrow as his birthday). An economist and writer, he was a prominent member of the French Liberal School. As an advocate of classical economics and the views of Adam Smith, his advocacy for free markets influenced the Austrian School; indeed, Joseph Schumpeter called him “the most brilliant economic journalist who ever lived”… which is to say that Bastiat was a father of the neo-liberal economic movement that’s been central to creating the situation we’re in.
“He got his fat dreams, he got his slaves / He got his profits, he owns our cage”*…
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”
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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
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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.
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