After listening to all the "invisible hand" bullshit from the Tighty Righties, I had assumed that Adam Smith was something of an asshole. Apparently, not so much, according to an article by Deborah Boucoyannis in the British Politics and Policy Blog:
A fair distribution of taxation was key to the soundness of the English economy in Smith. The rich, he claimed, should be taxed “something more than in proportion” to their wealth. “The inequality of the worst kind” was when taxes must “fall much heavier upon the poor than upon the rich.” The reasons were not moral. Bad taxes were simply bad economics.How's this for a progressive policy prescription?
In Smith, profits should be low and labor wages high, legislation in favor of the worker is “always just and equitable,” land should be distributed widely and evenly, inheritance laws should partition fortunes, taxation can be high if it is equitable, and the science of the legislator is necessary to thwart rentiers and manipulators.Capitalism puts the interests of Ownership and Labor into direct conflict, as from the point of view of Ownership, Labor is a cost to be minimized. They therefore have an incentive to use their economic power to influence outcomes:
Smith believed the interests of profit-seekers were structurally and thus permanently “directly opposite to that of the great body of the people,” because “the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries” (with a few exceptions, especially new economies). Accordingly, when the economy is sound, wealth concentration should not occur. Only when profit-seekers have rigged the system through legislation do concentrations occur. [emphasis by diarist]In Boucoyannis' view, Adam Smith believed that the recipe for maximizing the Wealth of Nations was very similar to the one modern Progressives believe will bring the greatest good to the greatest number. I wonder if neo-liberals will ever tire of being wrong.