• Adam Smith, JM Keynes and Paul Krugman

    From BOB KLAHN@1:123/140 to ALL on Sat Feb 8 17:03:24 2014

    Recently Paul Krugman quoted JM Keynes, as to the great failings
    of our economic system being failure to provide full employment
    and an arbitrary an inequitable distribution of income and wealth.

    Now that won't impress the right wingers, but they should listen
    to their patron saint, Adam Smith. While looking up something
    else I ran across a quote from Adam Smith, in which he said the
    workers should have a fair share of the wealth they produce, a
    principle Henry Ford adopted and it made him rich.

    What also impressed me was, Smith took the creation of wealth
    back to basic principles, to the fact that all wealth is created
    by the workman. From there he expanded to the "rent seekers" who
    got control of land or materials, and thus extracted a major
    portion of wealth from those who do the actual work.

    Even more, his world was one that is Utopia for the
    libertarian/right wing. Workers and owners both tried to
    establish their own unions, called cartels or conspiracies in
    restraint of trade today. In his day such management unions were
    legal, but labor unions were not. The end result was, workmen
    struggled to even survive, and owners enjoyed wealth.

    Adam Smith also explained violence by labor in the struggle as a
    result of desperation, all to often the result of union busting
    and impoverishment of workers.

    Smith also said something I never realized, that in his time
    England was a much more wealthy country than the US, but workers
    in the US were much better off, and the US was growing very fast
    compared to England. His explanations made it plain, the great
    gains being made in America were due to the fact that workers
    were much better off. Of course that is tied to the fact that
    Adam Smith understood that the workers were the real source of
    all wealth.

    That also explains why small business is the engine of economic
    success, and employment, in this country. Small Business
    develops when workers manage to accumulate enough wealth to
    provide their own land and materials to produce wealth. The
    lower the level of wealth accumulation the more the economy
    grows and wealth is created.

    In his time he reported that China was a very wealthy nation,
    but quite stagnant. The country was rich, but the people were
    poor. That is what is happening in China today, the GDP will
    soon exceed that of the US, but China will still be a poor
    country. The mass of the people are and will be poor, and those
    accumulating wealth are a small portion. This is a recipe for
    economic disaster.

    If you ever look at the GDP, and per capita GDP of Saudi Arabia,
    you will discover that Saudi Arabia is not a rich country, it's
    barely mediocre, or even at the high end of third world. The
    ruling class are floating in oil wealth, but the people are not.
    That is a recipe for violence and revolution, which is very
    likely why Saudi Arabia preaches fear of Iran and other
    countries, fear of other religions, and a fundamentalist form of
    Islam that preaches war on unbelievers, whether Muslim, Jew or

    Diverting a restless population with external enemies,
    popularized in "1984", is actually an ancient technique used by
    failing dictatorships.

    Hmmm... which seems to be what is going on in this country now,
    come to think of it.

    The US overtook the richest countries in the world duing the
    time when the income and wealth of the working class grew, and
    the gap between the rich and middle class narrowed. Today this
    country is going downhill as the middle class sinks and the rich
    take it all. Continued long enough and the US will become a
    third world country.

    What's worse it, that won't even hurt the 1%, and especially not
    the .1%. Not until they discover class warfare is not raising
    their taxes, but standing them against the wall. As some members
    of the "Patriotic Millionaires" have already pointed out.

    BOB KLAHN bob.klahn@bex.net http://home.toltbbs.com/bobklahn

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