rayj wrote: Adam Smith is often quoted as the guy all-for supporting the concept of 'division of labor'...however, in the same oft-quoted paper, he goes on to extrapolate the dangers of that same principle.
He does that often- praise free markets and then warn about unregulated markets, for another example. I think that because he was so religious, he found himself overestimating man's ability to contain his greed, because Smith seemed to think that men ( God's creations ) would behave honestly and fairly in an unregulated market, and that freedom to pursue wealth would translate to altruism, because the engine of wealth creation would improve everyone's lot the stronger it became.
Nice theory, but counting on men to behave is a lost cause. I think this is a dilemma faced by the religious over and over, and for me, the refusal of the religious to abandon God as their creator and accept man for what man obviously is verges on schizophrenic dementia. Man's bad behavior, which repeats itself over and over through history, points to man as flawed, but instead of accepting that, the religious say, "No, God made us good, but other men ( other unfaithful men or other non-Christian heretics ) have led us astray." Or they blame demonic influence for man's bad behavior. They need to face facts: man cannot be set free in an economy that glorifies greed. He must have a strong government that punishes the excesses of men.
Smith was profoundly religious, and saw the "invisible hand" as the mechanism by which a benevolent God administered a universe in which human happiness was maximised. He made it clear in his writings that quite considerable structure was required in society before the invisible hand mechanism could work efficiently. For example, property rights must be strong, and there must be widespread adherence to moral norms, such as prohibitions against theft and misrepresentation. Theft was, to Smith, the worst crime of all, even though a poor man stealing from a rich man may increase overall happiness. He even went so far as to say that the purpose of government is to defend the rich from the poor.
Here is a description of the way Smith imagined the universe operates:
* There is a benevolent deity who administers the world in such a way as to maximise human happiness.
* In order to do this he has created humans with a nature that leads them to act in a certain way.
* The world as we know it is pretty much perfect, and everyone is about equally happy. In particular, the rich are no happier than the poor.
* Although this means we should all be happy with our lot in life, our nature (which, remember, was created by God for the purpose of maximising happiness) leads us to think that we would be happier if we were wealthier.
* This is a good thing, because it leads us to struggle to become wealthier, thus increasing the sum total of human happiness via the mechanisms of exchange and division of labour.
Smith relies on a deity to supervise his proposed economy. That's a foolhardy allocation of responsibility.
