Adam Smith Was a Socialist
I hate politics. I cannot stand the maneuvering to avoid discussing issues, and instead focus on name calling. The latest idiocy is the entire Socialist meme, which, having seen the banking industry nationalized, is a bizarre charge to make these days.
It is especially odd, given the nature of wealth distribution in a capitalist system that has any form of taxation. Most economists would regard it as unexceptionable.
It can be traced to Adam Smith's "Wealth of Nations” (1776), his seminal treatise on capitalism. As Steve Coll pointed out in a The New Yorker column:
"The necessaries of life occasion the great expense of the poor. . . . The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. . . . It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
-Adam Smith, quoted in the New Yorker, October 27 2008
Smith’s notion of reasonableness did not anticipate the Fox News Channel, however. Last Tuesday, [Joe the Plumber] appeared on that network, where he denounced Obama’s comments as “socialist.” He said that Obama “scared me,” because he “wants to distribute wealth.” Wurzelbacher also granted an interview to the advocacy group Family Security Matters, whose advisory board includes the conservative talk-radio hosts Laura Ingraham and Monica Crowley. By means unknown, Joe’s story of ambition and resentment reached the campaign of Senator John McCain."
I wish people would focus on the more mundane things, like How are we to regulate Wall Street, what should our economic and tax policy be, what should we do about energy, the war, etc.
Or, we could simply name call.
Source:
Overtaxed
Steve Coll
The New Yorker, October 27, 2008
http://www.newyorker.com/talk/comment/2008/10/27/081027taco_talk_coll
The Big Picture is moving! The new post here
Thursday, October 30, 2008 | 02:30 PM | Permalink
| Comments (110)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef010535c7f790970c
Listed below are links to weblogs that reference Adam Smith Was a Socialist:
Comments
Vote Kang and or Kodos.
Posted by: AUL | Oct 30, 2008 2:43:50 PM
When you say you want to raise capital gains tax rates even though you know it will lower revenue because it's "fair"....you're a socialist.
Posted by: Robert | Oct 30, 2008 2:43:58 PM
Vote Kang and or Kodos.
Posted by: AUL | Oct 30, 2008 2:44:18 PM
OBAMA IS A MUSLIM TERRORIST SOCIALIST ATHEIST!!!
It's kind of entertaining to say even though I support and volunteer for him.
How about immigration, social security, and education? It's amazing how cultural issues have such an outsized impact on elections.
I saw an interview where President Clinton said the reason cultural issues are so important in Presidential elections is because most people have lost confidence in the ability of government to fix problems. So, instead, they vote on cultural issues because then at least you see some tangible results that politicians can't screw up.
Very sad.
Posted by: John | Oct 30, 2008 2:44:28 PM
Vote Kang and or Kodos.
Posted by: AUL | Oct 30, 2008 2:45:37 PM
Robert,
When did Obama ever say that? This notion that lowering capital gains taxes always increases revenue based on a supercharged expansion of the tax base has little evidence to support it. The evidence supporting this idea is academic. The evidence against it is empirical.
Posted by: John | Oct 30, 2008 2:49:50 PM
Notice also that Smith refers to the "public expense". Please define that. If we look to the founding fathers they defined what was the public expense. Basically anything that every American benefits from. Like national defense etc. Not wealth transfers.
Posted by: Robert | Oct 30, 2008 2:51:19 PM
There are a lot of people in media being paid huge sums of money to make sure your "wish" never comes true.
Posted by: AGG | Oct 30, 2008 2:52:28 PM
"When you say you want to raise capital gains tax rates even though you know it will lower revenue because it's "fair"....you're a socialist."
Robert,
Did you even read the article? Do you even think anymore? Or are you just hoping to devalue the insight of anybody who would deign to touch your bottom line? The point is, the wellspring of Capitalism accepted that some distribution of wealth was necessary, reasonable and acceptable in a civilized economy. Everytime a murmur is made to move the needle towards the left, you call it Socialism. It's absurd, intellectually lazy, counterproductive and just plain old lame.
Posted by: Jeff | Oct 30, 2008 2:53:42 PM
Robert,
You must be one of those fortunate fellows with that fascinating mental flexibility to discern capital gains from regular income. When you pay 15% on capital gains and a working stiff pays 22% on one tenth that amount in wages, it's not wealth transfer. No, no, no it's the way things should be, right? The rich get richer and the smaht guys keep taking the rest of us to the cleaners. Sell to someone else, pal.
Posted by: AGG | Oct 30, 2008 2:59:56 PM
I don't see the words 'government' or 'taxes' in Adam Smith's quote.
Posted by: Veeder | Oct 30, 2008 3:00:32 PM
It seems to me there's a fundamental difference between saying, on the one hand, "We need roads and a military and it is only right and proper that those with more should contribute more to their creation," versus, "We should increase taxes on the rich so that we can then give this money to the poor and/or middle class in the form of 'tax rebates' for those who already don't pay taxes."
Posted by: Derek | Oct 30, 2008 3:00:43 PM
Jeff:
Did you hear what Obama said???? He said he would do the economically wrong thing because it was fair. Get your head out of your ass.
Posted by: Robert | Oct 30, 2008 3:03:44 PM
For the record, my bottom line is about $500 per week. I have zero capital gains. Barry says we should examine evidence and forget about name calling. Fine. I'll put up the tax policies of the fastest growing countries in the world versus your western european failures any day of the week.
Posted by: Robert | Oct 30, 2008 3:06:30 PM
It is imperative to understand what the terms mean to grasp the name-calling.
Redistribution of wealth from the rich to the poor = Marxism
Redistribution of the wealth from the poor to the rich = Capitalism
Redestibution of facts from real to fantasy = Foxism
Posted by: Winston Munn | Oct 30, 2008 3:07:10 PM
If we were smart enough or any of us actually became adults, we would not need to discuss all these problems, as we would have corrected them way before now. Maybe in 2005 when half the country noticed their neighbors selling houses for a 20% gain in one year? Naw...that's normal, we will be fine. Or, maybe in 2003 when we invaded a country that hated al Qaeda almost as much as us to destroy al Qaeda (the fact they are part of the same religion does not make them allies). Naw...that makes perfect sense. Or, maybe when interest rates were almost zero we should have thought, "hmmm...this is rare, maybe we should look into........naw."
Posted by: Chad | Oct 30, 2008 3:07:30 PM
And the winner for proving Barry's point goes to: Robert!
Posted by: inthewoods | Oct 30, 2008 3:08:44 PM
Okay, so I guess the answer is that you are going to devalue the opinion of anyone who would deign to touch your bottom line. Knowing that, I am happy to continue trumpeting economic wrongness and you continue hoping against hope for the repeal of capital gains taxes. Query: If the capital gains tax rate was brought down to 10% for a few years (e.g., in a McCain administration) and did not produce the desired increase in revenue and a politician came around wanting to raise it back to 15%, would such politician be... a socialist?
Posted by: Jeff | Oct 30, 2008 3:10:12 PM
Hey folks, Robert here wants us to "define" public expense. I love these people who get sniffy about definitions. Are you a tax accountant, Robert? A corporate rectal orifice does not define public expense but it certainly defines you. Yeah, I know, it's name calling but what the hell, everybody else is doing it.
Posted by: AGG | Oct 30, 2008 3:10:19 PM
Barry: I think many of the commenters here are making your point for you, so why even bother with political posts?
One thing that nobody's pointing out - we're not even PAYING FOR the two wars (read: military) we're fighting now. They're both being waged on borrowed money and taxes have actually been significantly reduced on the wealthy during a war for the first time in this nation's history, I believe. If the Right believes in defense spending so much, and theoretically it is their interests that are protected so much by having a strong defense, then why don't many of those wealthy wingnuts want to PAY for these ventures now instead of kicking the can down the road to our kids and their kids, and so on? That's utterly shameful, selfish, and immoral (not very "Christian" either for those psuedo-holy rollers) IMHO. There's no way of getting around that no matter how ignorant or ideological one might be.
Posted by: Mannwich (artist formerly known as Jeff M.) | Oct 30, 2008 3:12:50 PM
If I was Joe the Plumber I would be careful talking about wealth redistribution. The guys from Columbus might want to talk about those taxes he owes them. Of course we now know that Joe doesn't have a lot of wealth to redistribute.
Joe the Plumber. Failin' Pailin. More heroes of the McCain campaign.
Posted by: leftback | Oct 30, 2008 3:16:11 PM
I don't see the words 'government' or 'taxes' in Adam Smith's quote.
Posted by: Veeder | Oct 30, 2008 3:00:32 PM
Veeder, obviously, understands that Reading Is Fundamental.
Well done, Veeder.
Posted by: Mark E Hoffer | Oct 30, 2008 3:17:11 PM
IMO... Government guaranteeing equality of _opportunity_ is good and should be encouraged and developed. Guaranteeing equality of _outcome_ on the other hand is an abomination.
The main question in my mind about Obama would be regarding this difference, and given his association with modern activist educators and educational theory, I have to wonder if even if he means well, whether he just has a bunch of junk ideas about education in his head or is cozy with flakes.
For me, at this point, it's about either voting Obama or staying home, and I'm strongly leaning towards staying home _again_. I believe he's very intelligent, but some of the smartest folks I know are the biggest dumbasses, because they have mistaken knowledge for wisdom, and fail to evidence any sort of Socratic humility.
Posted by: Dr. Kenneth Noisewater | Oct 30, 2008 3:20:28 PM
To answer the first post by AUL -
Why should Capital Gains get any advantage in the tax law - it has no special qualities of income - other than holding period. Since My pension plan has an average of 20 years holding - shouldn't I get Capital Gains Rates? Or some special treatment?
AUL be lucky you get some break you don't deserve. 2ndly John McCain and his followers are pathetic in their drowning. It will be a landslide to remember!!!
Posted by: paul | Oct 30, 2008 3:21:59 PM
Jeff M.,
Robert could care less about deficit spending for wars or financing low capital gains taxes. Oh but if the big bad nasty government has to pay for medicare or social security with deficits then he will howl like a kicked hound dog. Principled behavior and right wing thinking are always in conflict. Jack Daniels helps though, doesn't it, Robert?
Posted by: AGG | Oct 30, 2008 3:24:25 PM
