I recently was reading Adam Smith’s Wealth of Nation for a class, and I happened across a passage that stood out to me. We (the royal, populist, liberal-rabble we) have long been distrustful of the promises from capitalism’s admirers that ‘a rising tide lifts all boats’ and that the market’s ‘invisible hand’ will translate private greed into public good. Criticism of this notion doesn’t surprise me, except when it is coming from the founding father of capitalist doctrine.
There are three economic classes for Smith. Property holders, who live by rents, laborers, who live by wages, and employers, who live by profits. The interests of the first two are linked with the interests of society - their boats indeed rise and fall with the tides of general wealth. Employers, on the other hand, are different:
The plans and projects of the employers of stock regulate and direct all the most important operations of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity and fall with the declension of the society. On the contrary, it is naturally low in rich and high in poor countries, and it is always highest in the countries which are going fastest to ruin. The interest of this third order, therefore, has not the same connection with the interest of the society as that of the other two. (Book 1, Chapter 11, Conclusion)
He then ends with an uncommonly strong injunction against the employer-class:
The proposal of any new law or regulation of commerce which comes from this order (employers) ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous but the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Let us remember who the “employers” are in today's society; the big businesses, the congressional lobbyists, the international corporations - in a word, the people liberal-America has been railing against for years. Except this time it’s not liberal-America screaming, it’s Adam Smith. Conveniently, this passage from Smith is never quoted by the modern neo-conservative-free-market-demagogue; I wonder why... According to Smith it is in the interest of the employer class to destroy the country - no hyperbole added.
Let’s attempt to drag ourselves from the depressing rut of wealthist-exploitation and find the silver lining. I see the modern movement toward cooperative business as the response to precisely the danger Smith is spelling out. Cooperative ownership is an attempt, within capitalism (which I am personally a supporter of, in moderation), to create a business model which abolishes the employer class. By making the laborers and the property holders the collective-employers it links the interests of the employer class with the former two. Really, we are tying all the boats together. It’s the raft of cooperative business, we could say.
Join a co-op. Board the love-boat.