"As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He 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. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."-Adam Smith, Wealth of Nations, 1776.
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"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. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."-Ditto.
What then of an individual who does not economically act from self-interest? He does not as frequently promote societal interests.
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.-- That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed..."-American Declaration of Independence, 1776.
Do groups have the right to pursue happiness or is the right an individual one only? From context, the more reasonable reading seems to be that it is an individual right. If so, then, not having the God-given right, may groups still pursue group happiness? It would seem to me they may if permitted to by the government, whose purpose it is to secure this right. If the right is individual then government need not secure it. If government need not secure a right may it prohibit its exercise? It seems to me it may.
Does an individual have the right not to pursue happiness? No, it follows that he does not. The right to a thing does not imply a right to its negation. The individual may do otherwise, pursue group happiness for instance, but it is not a right and the Government may alienate it. Does the individual therefore have an obligation to pursue happiness? No. He may pursue happiness, which he has a right to, but he may not, subject to government sanction.
Democracy and hidden-hand economics are consistent with one another. Individual action in both the economic and political spheres. But, as things have evolved, individuals do bandy together in groups to promote group interests in both economics (trade unions, chambers of commerce) and politics (parties). That is, individuals have a tendency to the social, a tendency so pronounced that it is akin to instinct. And, as it has turned out, Americans do have the right to act in groups for both economic and political purposes. Is this evolution reflection of some flaw in the charter documents? Undeniably. Smith's statements were in the context of domestic economic activity, that is, they were support for tariffs. Understood in that context, his statement that "every" individual capitalist seeks to support "domestic industry" is floridly absurd as characterization of capitalist intent or act. Understood in that context, the entire statement is wrong. Tariff-based economics manifestly did not augment "the annual revenue of society" see obituary, Smoot-Hawley. Smith went far beyond domestic economics however. He purported to describe the behavior of homo sapiens economus. His statement, that "By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it," is a general statement, a modest statement, not a statement of economics law, an observation, anecdotal, but even that far it is facile. There is a "hidden hand" in capitalism, one that does augment the "wealth of nations," in fact capitalism is the greatest wealth-augmenting machine ever invented. But that is not how Smith uses the term "hidden hand." Capitalism is a machine, it knows neither morality nor immorality, it simply makes money. Smith, though makes it the hidden hand of a Righteous God leading the self-interested, self-loving brewer, butcher and baker to unintended "social good," "benevolence!" Smith's statements are not good explanations of general capitalist behavior but they are better at that than as he intended them, as argument in support of domestic tariffs.
So, Adam Smith sucks.
Turning to the Declaration of Independence, I have written so frequently and so critically of the Dec. of Ind. that I will only summarize: (1) Those truths are not Truths and they are not self-evident. (2) There is no Creator. (3) She did not endow us with any rights. (4) Men, frequently women, give all the rights we have. (5) Those vary from woman to woman, nation to nation, government to government. (6) The right to life, that is the right not to be murdered, is a right worthy of the name. Every woman, man, nation, government, secures that right in very similar, not identical, ways. (7) The right to liberty, not so much. (8) The P.o.H. is not a right worthy of the name. (9) Governments are not instituted by consent of the governed, demonstrably not. As a statement of fact that is wrong. As a prescriptive, that has attained the status of "universal." Even governments that are the opposite claim the status, see Democratic People's Republic of Korea, et al. So, that one caught on. "Consent of the governed" was inspired verbiage. Nothing about elections! That is the most far-sighted thing in the Dec. of Ind. You can have government by consent of the governed without democracy, see People's Republic of China.
What about this idea of democracy, though, of one man-one vote? Very much like Smith's economics, no? Individualized. The faith that the authors of the Declaration of Independence put in the common man is truly inspiring. It was anything but self-evident. Nearly everyone in the world thought the common man too ignorant, too self-interested, to vote responsibly, which meant at the time and still does, to vote for the common good of the group, the nation. As it turns out, American voters do vote their self-interest, frequently their economic self-interest ("It's the economy, stupid.") and that has conduced to the general good. It has produced more happiness; In Smithian terms, democracy has produced more political "wealth." Has American democracy produced morally good government? Better. It has produced morally better government. The people in a democracy have the right, indeed, as above, it is almost considered an obligation, to ignore self-interest and vote for the good of the country. The hand of Goodness, if goodness it is, is not hidden in a democracy, as Adam Smith absurdly contended it was in economics.
Why then, why then was not political democracy extended to the work place in America? Why was there no "economic democracy?" Democracy is older than capitalism. Why, when democracy had worked for 100 years in America, was it not extended to the corporation? Every business, every office--even a government office--in America is run as an autocracy, if not a dictatorship. There is not one business in America that is run by anything remotely approaching political democracy. Why? "It's not efficient." Really. You don't say that about voting for president do you? "It's not efficient" is the most common answer one gets if one gets any answer at all; it's usually just a response, a laugh and a dismissal, not an answer. If, as is the consensus among economists and political scientists, if democracy and capitalism are consistent ideas, that do seem in practice, to go together, then why is there no work place democracy? Why have the people not withheld their "consent" from economic autocracy and dictatorship? I don't know.
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