Was Adam Smith a socialist? Even if the question may seem absurd, in my opinion it deserves to be asked. Not so much for the answer, which will surprise no one (no, Adam Smith was not a socialist), but in an age where we attach wrong labels to everything and anything (think of the word woke), reflection is called for.
A little history
Before going any further, I believe it is important to refresh our memory. Adam Smith, an 18th century Scottish economiste century, is considered “the father of capitalism”. Inspired by the operations of a pin factory, he wrote The Wealth of Nationswhich elaborates the concepts of division of labour, productivity and market economies.
Smith was greatly influenced by some of these predecessors, notably Mandeville, one of whose key ideas was that “from private vices springs the common good”. For him, our institutions should not be built on the virtues of citizens, but on their vices. Indeed, the justice system, the government, our banking systems, etc., were all founded so that societies could guard against the baseness of men.
However, he was not advocating a society where the vices would outweigh the virtues: he was only reacting to what he observed. In his eyes, corporations should not be the libertarian paradise advocated by today’s ultra-capitalists, where everyone should be free to do what they want, regardless of the morality of those actions. Instead, he encouraged us to take off our rose-colored glasses, to stop believing that everyone would contribute to society out of sheer altruism, and to build our institutions accordingly.
modern capitalists
Now back to Adam Smith. When we reread his essays, we see the same type of reflection. Smith did not aim to develop a system that would allow individuals to accumulate as much wealth as possible. Conversely, he observed the characteristics that allowed Nations to create wealth, with the main conclusion that it is the accumulation of the pursuit of individual interests that allows this creation of wealth.
In his words, “it is not from the benevolence of the butcher, the brewer or the baker that we expect our supper, but rather from the care they bring to the search for their own interest. We do not defer to their humanity, but to their selfishness. Again, Smith is not promoting selfishness, he is observing what he sees. And it is this nuance that modern capitalists, men like Peter Thiel and Elon Musk, fail to tell us.
If everyone knows Musk, Thiel is still unknown to the general public. With Musk, he co-founded PayPal, in addition to being an early investor in Facebook. Today, among other things, he dedicates his immense fortune to transhumanist research and to promoting politicians like Donald Trump.
In 2014, Thiel launched Zero to One. Notes on Startups, or How to Build the Future, which in my opinion is one of the most important books of recent years. This book is essential reading not because it offers a new vision or solutions to our modern problems, but rather because it is a candid and uninhibited game plan for any aspiring capitalist. . Unsurprisingly, his proposals are the opposite of what Adam Smith proposed.
Smith was greatly influenced by some of his predecessors, notably Mandeville, one of whose key ideas was that “from private vices springs the common good.
While Smith advocated a system of exchange free from economic privileges, monopolies and artificial scarcity, Thiel tries to shape a very different world. For him, competition is the enemy of capitalism. Since the greatest amount of capital must be accumulated, competitors “steal” opportunities.
In a capitalist system, we do not fight to evolve on the market: we want to become the market. That’s why companies like Facebook are trying to kill any companies that might jeopardize its supremacy, either by buying them out or by copying their competitive advantage to make them obsolete. Whereas classical liberalism aimed to understand and mitigate market imperfections, modern capitalism seeks to exploit them.
So, socialist or not?
So, was Adam Smith a socialist? Of course not: his key idea was private property. But that did not prevent him from adopting positions that came very close to what we consider today to be on the left of the political spectrum.
For him, intelligence had little to do with people’s wealth. Only the social conditions of the poor kept them in ignorance. Thus, he advocated the establishment of a “small school” system accessible to all which would be mainly financed by state money in order to reduce social inequalities.
A popular quote, often attributed to Kierkegaard, says that “when we are labelled, we are disowned.” This is exactly what seems to be happening with ideological currents: the communism of the Soviet Union was only a distortion of the writings of Marx, just as modern capitalism has nothing to do with the vision of Adam Smith.
We should stop sticking to labels.