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Title: Poor Adam Smith Author: Anarcho Date: October 3, 2015 Language: en Topics: libertarianism, capitalism, Britain Source: Retrieved on 24th April 2021 from https://anarchism.pageabode.com/?p=917
After proclaiming that Britain rejected Labour because it was too
left-wing, as smugly asserted as it was false, the right-wing media
happily praised George Osborne’s first all-Tory budget and its attempt
to steal Labour’s clothes. The Tories are proclaiming themselves the
real workers party while simultaneously subjecting actual workers to new
restrictions on our ability to organise and defend our interests and
reducing their income. They think that re-branding the Minimum Wage the
“National Living Wage” will fool enough people.
The rhetoric is astounding in its audacity. Forgetting their own
anti-union laws require a secret ballot to take place, they proclaim
union “bosses” pronounce strikes. The “unions” go on strike, not the
workers who are their membership. Indeed, elected union officials are
the only people habitually proclaimed “bosses” these days while actual,
and so unelected, bosses are subject to more pleasing euphemisms like
“leader” (accurate descriptions like “Senior Management” are
increasingly being replaced by delusional ones like “Leadership Team”).
The Tories know that their laws actually bolster the power of well-paid
union bureaucrats (a far more accurate name than bosses) to stop the
strikes needed and desired by their members to counter the power and the
abuses we face by our employers and managers.
It is clear enough. If a worker knows their place, does what they are
told, respects their betters then the Tories will reward the poorest
amongst them by increasing the minimum wage (but not by enough to cover
the cuts in Tax Credits). If a worker is even slightly rebellious,
remembers that they are a person and refuses to sell their liberty along
with their labour then the full might of the state awaits them. The road
to private serfdom is well travelled.
This is all done in the name of Adam Smith. Yet based on The Wealth of
Nations, it should be clear that he would have despaired at what has
been done in his name and would have been in conflict with the
right-wing think tank that has the gall to append “Institute” to his
name.
Take, for example, the fact that every year, to quote the Adam Smith
Institute, it “calculates Tax Freedom Day – the first day of the year
when the average person stops working for the government and starts
earning for themselves.” This year was May 31^(st). Yet Adam Smith was
very clear that workers do not work “for themselves” when they are
wage-workers:
“Masters of all sorts… frequently make better bargains with their
servants in dear than in cheap and find them more humble and dependent
in the former than in the latter… Nothing can be years, more absurd,
however, than to imagine that men in general should work less when they
work for themselves, than when they work for other people. A poor
independent workman will generally be more industrious than even a
journeyman who works by the piece. The one enjoys the whole produce of
his own industry; the other shares it with his master.”
Our misnamed Institute feigns to believe that working for society they
are part of (in the shape of taxes) is bad while working for a boss is
equivalent to working for yourself. Unlike Smith, it forgets the grim
reality of wage-labour and how it turns workers into servants of a
master just as it also forgets that Smith also wrote that “every tax,
however, is to the person who pays it a badge, not of slavery, but of
liberty”. Moreover, with characteristic and cutting understatement, he
noted that it “is not very unreasonable that the rich should contribute
to the public expence, not only in proportion to their revenue, but
something more than in that proportion.”
Then there is the mantra of the “wealth creators” to whom we must
genuflect towards. These all-powerful beings to whom we must bow appear
to be fragile creatures who cannot take even the slightest criticism or,
for that matter, acknowledgement of reality. They are, in the public
discourse, equated to the wealthiest few or, when the speaker is being
generous, to all employers. No wealth, it appears these days, is
produced by the people who do the work, those who create the actual
wealth of the world: products and services.
Strangely this narrative coexists with the demonisation of strikes by
transport workers for harming the economy by stopping low-paid workers
getting to work. How can this be the case when the “wealth creators”
rarely take public transport? If the mantra were anything other than
self-serving rhetoric then how could any strike harm the economy?
What of Smith? He was clear that labour (physical and mental) applied to
nature produced the wealth of nations. In fact, the “produce of labour
constitutes the natural recompense or wages of labour.” However, once
“stock has accumulated in the hands of particular persons, some of them
will naturally employ it in setting to work industrious people… in order
to make a profit by the sale of their work, or by what their labour adds
to the value of the materials.” Thus the “value which the workmen add…
resolves itself in this case into two parts, of which one pays their
wages, the other the profits of their employer upon the whole stock of
materials and wages which he advanced.” Why? Simply because the employer
“could have no interest to employ them, unless he expected from the sale
of their work something more” than their wages.
Wealth, in short, does not create itself. Workers are the real wealth
creators. Thus “the labour of a manufacturer adds, generally, to the
value of the materials which he works upon, and of his master’s profit.
Thus a “man grows rich by employing a multitude of manufacturers”. This
implies that their “interests are by no means the same. The workmen
desire to get as much, the masters to give as little as possible.” Smith
also noted how masters make “better bargains” when workers are “more
humble and dependant”.
Which brings us to the Tories new proposed anti-union laws. The new
Business Secretary, Sajid Javid, was keen to quickly proclaim his “free
market” credentials by denouncing “rules and regulations” by the state
on companies. Yet, simultaneously, he is seeking to create new rules and
regulations for the voluntary, democratic organisations of labour. Why?
He explained: “We are clearly on the side of business”. The contraction
is as palpable as it is oblivious to the average Tory.
What of Adam Smith? “Whenever the legislature attempts to regulate the
differences between masters and their workmen,” wrote Smith, “its
counsellors are always the masters. When the regulation, therefore, is
in favour of the workmen, it is always just and equitable; but it is
sometimes otherwise when in favour of the masters.” Unsurprisingly,
then, there are “no acts of parliament against combining to lower the
price of work; but many against combining to raise it.” The Tories have,
since 1979, been keen to proclaim the “free market” while passing act
after act of parliament to make it harder for workers to combine to keep
more of the value we create in our own hands, to lower the amount we
have to “share” with our employers.
The results are as obvious as they are predictable. While the Tories
proclaim the need is to reward “hardworking” families the reality is,
due to the anti-union laws, most of us work hard because our wages are
too low. Indeed, the tax credits the Tories wish to end exist to
countermand the fall in wages as a share of GDP that has accompanied
Thatcher’s neo-liberal revolution. Least we forget, workers kept between
58% and 64% of the wealth we create in the 30 years leading up to 1979.
Since then it has gone steadily down to its current 51% – a figure which
classes as “pay” the large (and increasing) wages of a company’s Chief
Executive Officers when it should, more accurately, be included in
profits (as a reward for prioritising shareholders over employees or
investment).
This is unsurprising for to regulate strikes is to regulate wages.
“Whenever the law has attempted to regulate the wages of workmen,” Smith
stated, “it has always been rather to lower them than to raise them.”
The rise of the Minimum Wage promised by the Tories is less than that
possible if workers withdrew our labour in pursuit of a better life, a
decision which is ours alone and should be governed by the rules of our
own voluntary and democratic associations and not the capitalist state.
Yet this appropriation of Labour’s clothes produced much grumbling by
employers. Smith would not have been surprised: “Our merchants and
masters complain much of the bad effects of high wages in raising the
price and lessening the sale of goods. They say nothing concerning the
bad effects of high profits. They are silent with regard to the
pernicious effects of their own gains. They complain only of those of
other people” for “high profits tend much more to raise the price of
work than high wages.” Smith’s worldview is alien to our bosses:
“Servants, labourers, and workmen of different kinds, make up the far
greater part of every great political society. But what improves the
circumstances of the greater part can never be regarded as an
inconveniency to the whole. No society can surely be flourishing and
happy, of which the far greater part of the members are poor and
miserable. It is but equity, besides, that they who feed, clothe, and
lodge the whole body of the people, should have such a share of the
produce of their own labour as to be themselves tolerably well fed,
clothed, and lodged.”
It must be remembered that when Smith was writing Parliament was elected
by a tiny minority, the wealthiest property owners. Legislation, in such
circumstances, could be expected to favour their interests against the
general population and so the less regulation the better for the many.
In the case of the Tories and their bosses charter, the less regulation
of organised labour the better for, as Smith suggests, the state is
hardly neutral:
“the inequality of fortune… introduces among men a degree of authority
and subordination which could not possibly exist before. It thereby
introduces some degree of that civil government which is indispensably
necessary for its own preservation… to maintain and secure that
authority and subordination… to defend their property and to support
their authority. Civil government, so far as it is instituted for the
security of property, is in reality instituted for the defence of the
rich against the poor, or of those who have some property against those
who have none at all.”
Unsurprisingly, the fall in labour’s share in national income has
produced increasing poverty and lower social mobility. Before the
crisis, back in 2007, Cameron proclaimed that we “can make British
poverty history, and we will make British poverty history.” The year
before he had opined, rightly for once, that “poverty is relative – and
those who pretend otherwise are wrong”. He wanted “this message to go
out loud and clear: the Conservative party recognises, will measure and
will act on relative poverty.”
Fast-forward to 2015 and Cameron’s Conservative party decided to abolish
the Child Poverty Act which was based on the international poverty
measure of people living at less than 60% of a nation’s median income.
Why? Because its’ relative measure has been discovered to be unsuitable.
So poverty is now no longer related to income and so the 64% of children
formerly considered to be poor disappear and no longer bother the
government even if they have to visit the local food bank.
Who would have guessed that this would have done by simply abolishing
child poverty targets? Anyone with a brain in their heads (because he is
a Tory and anyone who believed him clearly has not been paying
attention). Relative income is what counts. How else to judge a
society’s progress? Measuring a British child against one in Afghanistan
or one living in the Middle Ages? As Smith, recognised that poverty is a
relative and not absolute thing:
“By necessaries I understand not only the commodities which are
indispensably necessary for the support of life, but whatever the custom
of the country renders it indecent for creditable people, even of the
lowest order, to be without. A linen shirt, for example, is, strictly
speaking, not a necessary of life. The Greeks and Romans lived, I
suppose, very comfortably though they had no linen. But in the present
times, through the greater part of Europe, a creditable day-labourer
would be ashamed to appear in public without a linen shirt, the want of
which would be supposed to denote that disgraceful degree of poverty
which, it is presumed, nobody can well fall into without extreme bad
conduct…Under necessaries, therefore, I comprehend not only those things
which nature, but those things which the established rules of decency
have rendered necessary to the lowest rank of people.”
We can safely assume that the Tories pretence is a proactive act to
mitigate the impact of their policies by hiding it as well as avoiding
the embarrassment of the Tories of the 1980s with unemployment of seeing
rising figures and then having to adjust the criteria to artificially
lower them.
If the Adam Smith Institute were serious in honouring the memory of
Smith then they would be calculating not Tax Freedom day but Wage
Freedom day – the day when workers started to work for themselves rather
than “share” the product of their labour with capitalists, landlords and
bankers. It would be denouncing the Tories plans to further regulate the
labour market by quoting Smith on how those regulations are in the
interests of the masters and not the servants. It would also be
protesting the state-enforced privileges of limited liability for
joint-stock companies.
It is unlikely to do that for would defeat its purpose which is not to
defend freedom but rather capitalism. “The justice that Adam Smith would
like to establish,” Proudhon wrote in the conclusion of System of
Economic Contradictions, “is impracticable in the regime of property.”
He quoted Smith on the root of this impracticality:
“In that original state of things, which precedes both the appropriation
of land and the accumulation of stock, the whole produce of labour
belongs to the labourer. He has neither landlord nor master to share
with him.
“Had this state continued, the wages of labour would have augmented with
all those improvements in its productive powers to which the division of
labour gives occasion. All things would gradually have become cheaper.
They would have been produced by a smaller quantity of labour”
Genuine libertarians wish to ensure that workers do not “share” the
product of our labour with the owning class by reuniting workers with
their means of production or, to quote Proudhon, “a solution based upon
equality – in other words, the organisation of labour, which involves
the negation of political economy and the end of property.”