Monday, April 30, 2007

A New Language for Economists - and for Presidents?

I come across a wodnerful array of Blogs posting pieces that refer to Adam Smith, many I have not heard of before. Mostly, they say something representative of ideas, not all misleading, about Smith and what he wrote about. Some regular ones write good sense about his ideas; a few regular ones remain instransigent in their attachment to false ideas about him.

Here's new Blog: Salon.com: Open Letters to George Bush("Letters to the president from his ardent admirer Belacqua Jones”):

We’re going to talk about the financialization of capitalism. It’s all part of a process in which we have gone from the capitalism of Adam Smith that was based on small producers and merchants to the age of monopoly capitalism. Financialization is a logical outgrowth of monopoly capitalism.

In monopoly capitalism (or Corporatism since monopoly capitalism really isn’t capitalism), profits accumulate and investment opportunities shrink in an increasingly controlled and saturated market. Profits become concentrated in the top one-percent of the population.


Comment
Well, whatever Belacqua Jones ends up calling it, we can agree that since the 19th century capitalism is a different phenomenon from the 18th-century commercial economy analysed by Adam Smith.

The common tendency is to call Smith a ‘high priest’ of capitalism, or some such silly title. He wasn’t. He applied moral philosophy, which in those days in Scotland included political economy (or ‘police’) to the long-run revival of the commercial age of subsistence, interrupted by the fall of Rome by the invasions of Germanic and other Eastern tribes, the after effects of which lasted a thousand years.

On these time scales, our modern age has difficulty contemplating them. The current inter-glacial could be several thousand years in arriving, and then last for 50-70 thousand years. How long the 24-hour news cycle will remain focused on the alleged problems of global warming is anyone’s guess – my hunch is not very long.

Now, whether President Bush ever reads Belacqua’s open letter is doubtful; whether he would appreciate the point made about Adam Smith and commercial society and capitalism, monopoly capitalism, and financialisation capitalism, and their distinctions, is an open question. I didn’t, and certainly Smith didn’t – he didn’t even know about capitalism, a word first used in print in 1854 in Thackeray’s ‘The Newcomes’.

For Presidents, such loaded terms are not operational politically. He’s got a couple of years to do in office – one of the amazing benefits of democracy, compared to dictatorships, is political bosses have limited terms in office in the USA, which should reduce the hyper-exaggerated impatience of opposition activists – and I don’t suppose he has much time to find out what the open letter means, or what should or could be done about it, if anything.

You can find it here – see what you make with it.

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