My Lesser Known Book
It surprises some allies to learn that, prior to writing this book, I wrote Adam Smith’s Wealth of Nations: a 21st Century Translation and Commentary.
I wrote that book accidentally. By this, I mean that I set out to understand economics from a solid footing. I did not intend to write a book. However, once I had finished distilling Smith and making my own separate observations in the form of endnotes, a book existed.
That footing was not self-evident. Given that there exist whole “schools” of economics which hold each other in contempt, I had made several observations:
- Economics is not a science. In no field of science do there exist multiple schools which so differ in their worldviews that the schools themselves detest each other. (Yes, individuals and even small groups may do so, but that tends to be transitory.)
- Some “schools” may have more in common with religion than with science. In particular, this is so when predictions consistently fail to materialize yet followers remain devout.
- To properly understand the field, I needed to see if there was any common ground. To my relief, I discovered that all of the “schools” continue to revere Adam Smith, centuries later. (Aside: I later discovered that some who revere him also willfully ignore or distort key arguments of Smith.)
I simply set out on what became a two-year project, to carefully read and completely understand An Inquiry into the Nature and Causes of the Wealth of Nations, as the book was originally named. This involved reading each paragraph at least twice, and usually three or four times; on rare occasions, as many as six. (Having done so, I now believe that there are two pp’s in the book which no one has ever understood, as they are incomprehensible.)
With that tiny problem acknowledged, the book has much to say which remains trenchant and timely, yet remains little-known. For example, his section on the proper treatment of colonies could help to guide today’s evolving US/China relations.
Smith understood technology much better than has been appreciated, while remaining ignorant (as did everyone) of its inherent exponential rate of change until Kurzweil established this.
Smith thought the idea of balance of trade to be an oxymoron, and had no problem with governments engaging in multi-generational programs of borrowing. He never would have compared a government to a household, as some of his devotees are wont to do.
Smith thought paper money to be a perfectly fine tool of commerce, and the oft-quoted invisible hand was intended as a metaphor; a concept of which Smith was well aware. (In an Appendix, I hosted a “debate” between two professional economists regarding this question. While I strived to be even-handed–please pardon the pun–I came down squarely on the side of Prof. Gavin Kennedy.)
Smith proposed Four Maxims of Good Taxation. While he considered taxation to be essential, the chasm between his remarkably commonsensical Maxims and today’s extant systems of taxation is breathtaking. The Maxims also offer guidance in designing an effective system of taxation for a new society from scratch, using modern technology.
Smith considered “the Masters” to be an ever-present danger to the body politic, needing strong public institutions to check their avarice. Most crucially, he did not invent his system–only later called capitalism–for the sake of the rich and powerful. He invented it in the fond hopes that its widespread adoption would lead us to a world of ,”universal opulence”; a world in which the common person could enjoy freedom and prosperity.
Knowing that this was Smith’s ultimate goal, and that he was and is the ultimate touchstone in economics, I breathed a sigh of relief as I attempted to extrapolate from his thinking to a world of sustainable technological abundance.
I reference fundamental arguments of Smith’s in A Celebration Society, albeit doing so in a more critical light than I deemed appropriate in my rewrite of his book. (Again, most of what he argued remains relevant today.) In particular, I came to the understanding that his conception of wealth as arising from a confluence of labor, land, and capital–while highly reasonable in the context of his times–is today outdated, and that a far more robust paradigm beckons.