Friday, July 22, 2022

The History of the World, Vol. 5

A multi-column series originally published in 2016

Image by OpenClipart-Vectors from Pixabay 

This is a weekly column consisting of letters to my perspicacious progeny. I write letters to my grandkids — the Stickies — eventual selves to advise them and haunt them after they've become grups and/or I'm deleted.

Trigger Warning: This column is rated SSC — Sexy Seasoned Citizens — Perusal by kids, callowyutes, or grups may result in a debilitating meltdown.  


Featuring Dana: Hallucination, guest star, and charming literary device 

"The historian is an unsuccessful novelist." -H.L. Mencken

Dear Grandstickies & Great-Grandstickies (& Gentlereaders),

I'm spending the summer in a cabin on a beautiful lake somewhere in the Swiss Alps, working on my memoirs, and trying to decide if this column will resume post-Labor Day. The market has found me wanting; I'm buying most of my own coffee just now. So be it, I remain an unrepentant supporter of capitalism. 

My big brother Eddie is currently my only financial patron so I'm starting to feel like Van Gogh... without the world-class talent, but with both ears. I'm also considering publishing only when the spirit moves me. Cranking out columns week after week, while enjoyable, is hard work — well, intellectually speaking — at least for me. 

{It sure ain't roofing or the like you whiney b...}

In the meantime, I'll be republishing mostly gently (but occasionally heavily) edited columns with updated statistics and fun facts in [brackets].

In the year 1776 after a few hundred thousand years of most H. sapiens just scraping by and often killing each other while simultaneously avoiding being killed by a somewhat bloodthirsty Mother Nature, two really cool things happened. The American experiment was launched and Mr. Smith published a book.

Adam Smith was, and is, a well-regarded absent-minded professor type with a first-rate mind. He gave up his day job, as a popular professor at Glasgow university in 1764, to tutor and travel with a young Scottish nobleman (road trip!). They spent a couple of years touring continental Europe and met several leading thinkers of the day (e.g. Benjamin Franklin) and Mr. Smith was given a life pension by the grateful nobleman that enabled him to spend the next ten years or so working on his magnum opus, “An Inquiry Into the Nature and Causes of the Wealth of Nations.”

In other words, he set out to discover the best policies a given nation should pursue so that everyone could make a buck.

Warning: do not try to read The Wealth of Nations unless you enjoy the writing style of 18th-century academics (I’m thinking this is a relatively small group of folks) and you’re much smarter and more patient than I am (I’m thinking this is a relatively large group of folks). The commas and semicolons seemingly reproduce themselves as you try and decipher the text. Find a commentator or two that you trust to render Mr. Smith’s ideas into modern English.

In Mr. Smith’s defense, it ain’t easy to be one of the founders of a field of study (modern economics). Also, I must warn any kneejerk anti-capitalists that beating up on Mr. Smith because you think he was just another greed-head will make you look goofy as he’s well known for his belief that accumulating wealth and material goods won’t make you happy.

Before inventing modern economics, his thing was exploring morality and ethics, figuring out how we should treat each other, how we could all get along. He wrote a book titled The Theory of Moral Sentiments that is still highly regarded. Incidentally, both it and The Wealth of Nations were best sellers in their day and literally changed the world.  

He wanted to figure out what the optimal system was for a free people to attain whatever level of economic security they thought was necessary and appropriate to keep the wolf from the door. He also warned the world about crony capitalism and rent-seeking, two of the monsters currently attempting to strangle America to death. And although he was financially quite successful, he quietly and discreetly gave away most of his money and lived simply. I highly recommend P.J. O’Rourke’s, "On The Wealth of Nations.” Mr. O’Rourke is not an economist, which is not necessarily a bad thing. He was, however, very smart, very funny, and lived in the real world. I highly recommend any of his books, essays, and articles.

“Economic progress depends upon a trinity of individual prerogatives: pursuit of self-interest, division of labor, and freedom of trade,” says O’Rourke, stating the fundamentals of Smith’s thought. That’s it? That’s all it takes for a country to be prosperous?  Everdamnbody? Yup. Well, more or less. The rule of law is also an essential component if you think that it’s important that everdamnbody should have to play by the same rules and bullies should be spanked.  

Disclaimer: I’m an unrepentant wild-eyed free marketeer and I don’t care for the word capitalist because of the tendency of well-meaning, progressives, socialists, and communists to frequently use it as an epithet. Also, I describe myself as a sorta/kinda or bleeding heart libertarian, primarily because I’m all for the rationally designed safety net I mentioned earlier and many libertarians think that’s wrong-headed or impossible.

Aside: Communism, in spite of its adherent's claim that it would work if ever done properly, is an obvious dead end, often literally. Socialism is a great idea, all we have to do is change human nature first and lock up all the screwballs like me that are obsessed with personal freedom. Progressivism and/or democratic socialism, or how to have your cake and eat it tooism, is the current flavor of the month for the utopianists of the world. Many people want the benefits of a free market combined with a big, juicy welfare state with millions of rules and unionized bureaucrats, but someone else, preferably the evil rich, should pay the bill. Unfortunately, there aren't nearly enough of them. More on the resulting mess later.

Back to Adam Smith. Smith’s work contradicted a widely held belief of his time, mercantilism. This is the belief that a nation’s wealth is determined by how much gold, silver, cash, ginormous TVs, etc. it can accumulate, after all, there’s only so much wealth to go around. Therefore, you should export for the cash and block, or at least penalize, imports. This view of the world, which currently is enjoying a comeback, leads otherwise clear-thinking people to believe in the Boarding House Pie Fallacy.  

Say you're living in a boarding house. It’s dinner time and Mrs. McGillicuddy is serving up her famous caramel apple pie for dessert. Since there’s only so much pie to go around, and fat Frank is at the table, it behooves everyone to employ a strategery that will ensure an equitable portion of pie. Mr. Smith (not to be confused with Mrs. Smith's pies), contends that boarding house wisdom has limited applicability. There’s an easier and more effective way to get what you want that has the added benefit of not having to impose high tariffs (which begat high prices) and over-regulate anyone — the pursuit of self-interest, division of labor, and freedom of trade. Skilfully employed these three ensure that everyone can have their own pie.

To be continued next week...

Poppa loves you,
Have an OK day

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Feel free to comment and set me straight on Cranky's Facebook page. I post my latest columns on Saturdays, other things other days. Cranky don't tweet.


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