The Scottish economist and political philosopher, Adam Smith, is the "Father of the Free Market and Free Enterprise system." He has been the guiding light of modern American economic thought and action since the start of the 19th century. And his economic principles have been the very foundation on which the American free enterprise and market systems are built. So it was a big surprise to many that the Republican Party saber rattlers led by Mitt Romney literally jumped down President Barack Obama's throat for making an economic statement about free enterprise and business development that, I believe, had ole Adam smiling in his Pink Gin.
Blinded by their collective loathing for anything President Obama says and does these folks jettisoned their very basic conservative economic beliefs by leveling heavy criticism at the president whose statement on business and the market was 100 percent in line with Adam Smith's. Here's what the president said:
"Look, if you've been successful, you didn't get there on your own. You didn't get there on your own. I'm always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something--there are a whole bunch of hardworking people out there. If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business--you didn't build that. Somebody else made that happen. The Internet didn't get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together."
Look, we can go back to the times when the American South could not survive without slave labor. When ingenious men had the time to think and create because their plantations where producing agricultural crops on the backs of thousands of Black people that they did not have to pay. This same community of unpaid labor would build those houses, roads and bridges that bright and educated men conceived but could not make operational without free coerced labor. Collective Black labor laid the foundations for modern America.
And oh yes, the touted American railroad system. Conceived by a few white men and built on and by the blood, sweat and tears of thousands of "yellow n-word" Chinese labor. What the president meant was that social infrastructural development is a collective activity. That's what the labor movement at its core is all about.
But back to Adam Smith, President Obama and the Republicans' claque section. No sooner had the president made the above statement than his political enemies were jumping all over him accusing him of not being supportive of the free market system and suggesting that this was because he was not patriotic and thus un-American. But even by Republican standards this amplification of a packaged untruth was not just a quantum leap but an object lesson in hypocrisy and ignorance. Plain and simple, those fictional arguments would have been amusing if President Obama's statement did not go to the heart of what Adam Smith meant, and how the free market system is supposed to work.
Maybe Republicans need to rethink their relationship with Adam Smith. That's because from a reading of his economic works he's never been against government or its role in regulating the free market and enterprise system precisely to protect "we the people" -- the vulnerable public. In fact, in Smith seminal work, "The Wealth of Nations," he forcibly makes a point of protecting the free market from the control and corruption of the few (today's 1percent) that actively work to circumvent and escape the rules of the market for greed.
This manipulation and control of the free market system was uppermost on the minds of not only Smith but Karl Marx, V.I. Lenin and David Hume. Smith worried that this cabal of oligarchs would fix prices, fees and taxes (Barclays Bank, J.P. Morgan Chase, AIG et al) and by control of the system create a mechanism to avoid paying into the public coffers or contributing as much as they wanted (Mitt Romney's out sourcing, off-shore banking and Swiss Bank accounts).
In fact, when Republicans rail against government regulation they are deliberately abandoning Adam Smith who argued for government to intervene directly on behalf of consumers against the very people today who are raping the system and reaping its benefits for themselves. For him the laissez-faire capitalist economy if and when left alone becomes a tangled cliquist web of producers against consumers, of sellers against buyers, and holds the malleable and submissive state hostage to special interests.
But it is easy to understand why Republicans and Mitt Romney would attack the president and by so doing forsake the founder of the free market system and its staunchest advocate. Maybe today they think that Smith was misguided and utopianistic because he felt that a sovereign state had to serve the interests of the people and protect them from the small, rich and well-organized financial oligarchs.
Infact, as they [Republicans] continue to object and obstruct any improvement in the minimum wage and thus run counter to Smith's philosophy because he was all for higher wages for workers. Smith believed that the real wealth of any society was predicated on how that wealth was disseminated among the populace. This is how he put it: "the high price of labor is the essence of public opulence." Decent wages -- not a starvation wage -- fairness in the marketplace, government protection of the vulnerable, and regulation -- not control -- of the free market, is the "essence" of a prosperous country, according to Smith.
Try telling that to Mitt Romney and the Republicans. Thing is, President Obama hit a really raw nerve because these people want to continue to hoodwink and confuse Americans into believing that "the market will regulate itself" and that higher wages for workers means businesses will not invest in the economy resulting in job loss and that that will create a depress economic situation and spawn high unemployment. That's so much nonsense and the kind of spin that protects the wealthy by demonizing the poor and working class.
I have news for you. The rich and super rich buy yachts, planes, million dollar cars, palatial homes, diamonds and $1,000 bottles of champagne -- they don't spend it with or on poor people and are as far removed from the daily sufferings of "we the people" as night is from day. There is no "trickle down" effect. That too is a hustler's myth. And to the extent that they give to charity it is for tax write off (pay lower taxes) purposes and not because "they love us." That does not mean I'm anti-rich or anti-free enterprise. But it does mean that I am critical of the abuses and corruption in the system that allows 1percent of the American population to own and control 80percent of the wealth of the society.
This man-made and created imbalance is not good for democracy. And I believe that the free market system is capable of delivering the kind of society where all benefit and have a decent standard of living; where we take care if the most vulnerable amongst us. The fact is that for all Mitt Romney and the Republican Party's attacks against President Obama and his statement on business and business development, they conveniently omit that for Smith the free market is the end-result of regulation -- not over regulation.
As for the rich in society? Here's Smith again.
"They [the rich] should contribute to the public expense not only in proportion to their revenue but something more than in that proportion."