by Rob Williams
Last year in his speech to the Labour conference in Manchester, Ed Miliband laid claim to rebuilding Britain as One Nation. The Labour leader cited as his inspiration a former Conservative Prime Minister, Benjamin Disraeli, who made a famous speech on One Nation Conservatism in Manchester’s Free Trade Hall which, reflecting the spirit of the times, is now a luxury hotel.
Miliband has hit the nail on the head on a number of big ideas. He understands that the squeezed middle, as well as the low paid, are feeling increasingly insecure, whatever claims of economic recovery there may be.
So this year, Miliband should go further. It is time for the left to reclaim the economist Adam Smith as one of their own. Adam Smith, of course, is usually considered to be the founding father of right-wing free market economics. In the UK, the Adam Smith Institute is reliably one of the most outrageous think tanks, an outrider of Thatcherism before it was invented.
Adam Smith was born in Scotland in 1723, and is usually seen as the founder of modern economics. The usual modern conservative’s view of Adam Smith is similar to the average 1970s socialist’s approach to Karl Marx. They probably haven’t read any of his work, but simply regurgitate someone else’s description of his writings. There is a persuasive argument that the Right have stolen Adam Smith’s identity in an audacious coup.
An increasing number of thinkers believe that Smith was a radical critic of the establishment of his day. They argue that, for Smith, prosperity was measured by a rise in living standards for the working class which sets Smith apart from other free market advocates who believed a low-wage economy was the key to economic development. Smith believed that economic policy should be secondary to moral and ethical concerns such as equality.
In his book, Chomsky on Miseducation, Noam Chomsky said,: “It’s quite remarkable to trace the evolution of values from a pre-capitalist thinker like Adam Smith, with his stress on sympathy and the goal of perfect equality and the basic human right to creative work, to contrast that and move on to the present to those who laud the new spirit of the age, sometimes rather shamelessly invoking Adam Smith’s name.”
In attacking the damage that growing inequality is doing to the country, Miliband can quote Smith directly,
“For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many.”
Adam Smith was certainly not anti capitalist, but he did have a through mistrust of capitalists. In The Wealth of Nations he states that, “whenever possible they will collude to corner the market, to raise prices, and to deceive the public.”
The left understands that an unequal society is not a happy one, despite George Osborne’s claims of a recovery. Adam Smith understood this in The Wealth of Nations:
“Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.”
Ed Miliband needs to make the unequivocal case for public investment. New homes, better hospitals, improved transport links, all can, and must be developed to wean the economy away from a reliance on consumer debt to pay for goods manufactured overseas. Miliband can be sure that Smith would have supported this, too:
“The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain.”
As the government continues to sell off and privatise public services that even Mrs Thatcher left alone, we really do need a new way of thinking. Challenging times need big ideas and Miliband needs to be bold. Gordon Brown attempted to place Smith’s work in the progressive tradition. Oxford academic, and author of Adam Smith, Radical and Egalitarian: An Interpretation for the 21st Century Iain MacLean, suggests that, if we take Adam Smith’s work as a whole, he can only be classed as an egalitarian and left-wing philosopher.
It is time for Ed Miliband to welcome Adam Smith back as a man on the left.
Robert Williams works in public affairs and as a journalist