Monday, December 1, 2008

Sounds Like Trouble: Obama Flunks Adam Smith 101

Barack Obama last week accused business leaders of being “tone deaf” about the economic challenges facing ordinary Americans and called on bank executives to forgo their Christmas bonuses.

Urging a new “ethic of responsibility” in US society, the president-elect said it was wrong for bankers who had gambled away other people’s money to be rewarded with huge bonuses.

In an interview with Barbara Walters on ABC, he said: “If you are already worth tens of millions of dollars, and you are having to lay off workers, the least you can do is say ‘I’m willing to make some sacrifice’.”

Obama doesn't get the Invisible Hand and Adam Smith, who wrote:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.
Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.
Every individual...generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only.
It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.
The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an author-ity which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a many who had folly and presump-tion enough to fancy himself fit to exercise it.
[The man of system] seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single pieces has a principle of motion of its own, altogether different from that which the legislator might choose to impress upon it.

1 comment:

  1. Interesting and apt Adam Smith quotes. BHO does not ascribe to Adam Smith.