The Economics Feature - Page A2
December 5, 1996 FORGOTTEN SPIRIT & DREAM OF 1776!
by Howard Hobbs, Ph.D., Economics EditorWASHINGTON DESK - There is renewed interest in a man named, Adam Smith. Smith died in the year 1790 at the age of 67 years. In 1776 he published the celebrated treatise An Inquiry into the Nature and Causes of the Wealth of Nations. Smith's work was the first serious attempt to study the nature of capital and the historical development of industry and commerce in America and among European nations.
The early American colonists like Thomas Jefferson, and George Washington read Adam Smith closely. They modeled the economy of the United States on Smith's ideas about what a decent democratic society should be: Small central government and free economic markets were a means to that end.
Today, Smith's Wealth of Nations remains a vital intellectual force in reforming the government of the United States. Smith's economics philosophy has found renewed interest in Europe, Asia, Russia and elsewhere.
At the time Adam Smith's philosophy was the model for the philosophy of American business and government, other influences were at play. It is not generally known that president Thomas Jefferson sought an alternative economic model. For example, it is a fact that Jefferson actually published a competing theory in a first American text on economics. The title of Jefferson's work is A Treatise on Political Economy, Georgetown, D.C., 1817.
Jefferson personally translated all 254 pages from the unpublished French manuscript into English and paid for all the printing and publication costs himself. The book was typeset by hand and printed on a Gutenberg Press owned by W.A. Rind & Co. Printers in Georgetown.
Although, the unpublished original work was in French by economist, Destutt de Tracy, president Jefferson's English translation freely expresses his own nuances and economic philosophy. Tracy was a liberal French nobleman, whose daughter was married to the son of Lafayette. Correspondence dated June 12, August 3, and September 28, 1809 between Jefferson and Tracy has been verified in the book by G. Chinard Letters of Lafayette and Jefferson pp. 287-288, and in Chinard's Jefferson et les Ideologues pp.43-45., Paris, 1924.
Analysis of the content of the economic theories expressed in Jefferson's translation, yield new insights into Jeffersonian beliefs. In the forward Jefferson writes, 'Adam Smith, first in England, published a rational and systematic work on Political Economy. In France, John Baptist Say has the merit of producing a superior work on the subject of Political Economy. The work of Destutt Tracy, now announced, comes forward with all the lights of his predecessors in the science and with the advantages of [my] further experience, more discussion and greater maturity of subject.'
Jefferson's translation states, 'The science of probability is not the same thing as the calculation of probability. It consists of the research of data and in their combination. The calculation consists only in the latter part: it may be very just, and yet led to results very false.'
President Jefferson makes his economics theory crystal clear when he writes in the preface, 'The science of probability is properly the conjectural part of each of the branches of our knowledge, in some of which calculation may be employed.'
Incidentally, the Noah Webster English Dictionary current in Jefferson's day defined 'conjecture' as a guess, to judge by guessing, supposition. So, today, the Clinton administration's guessing game has been outed with news revaluations on Wednesday that the administration has been presenting blatantly misleading inflation figures as justification for president William Jefferson Clinton's political economics. Clearly, president William Jefferson Clinton has lost faith in the American people and has become obsessed with concealing the true facts from the Nation.
Thomas Jefferson, however, appears never to have lost his faith in people or in the democratic process which he believed would result in the surfacing of a 'natural aristocracy of virtue and talents.' Like, president William Jefferson Clinton of today, Jefferson continued to distrust the wealthy. In Jefferson's case, that distrust continued up to the time of Jefferson's death.
Another characteristic that is common between William Jefferson Clinton and Thomas Jefferson is their inability to study the past to search for models with which to improve the future.
The liberal Jefferson,and his modern counter-part, William Jefferson Clinton, are so protective of government that they fear the great power of Smith's invisible hand. Instead, both Jefferson and Clinton practice liberal excesses at the expense of American taxpayers and to the detriment of the Nation in future generations.
Adam Smith's theories explained changes that had occurred in America and Europe's past. In 18th century Britain, feudalism had collapsed. Farm production rose, as did living standards. The same phenomenon occurred in America at about the same time.
Smith attributed the new wealth to the triumph of market operations in the buying and selling transactions, industrialization, the division of labor, and expansion of technology making increased productivity and wealth accumulation possible.
Those truths, the conservative mind of Adam Smith grasped, Jefferson's libertine philosophy and life-style rejected. The lesson, the truths, and the consequences endure.
It comes down to this - the government's police power enables it to regulate the market. Use of the police power of government to control and to regulate the activities of he American people is the essence of Thomas Jefferson and William Jefferson Clinton's political economics. Only in this way can 'wrong guessing' be concealed from the American people.
Adam Smith's The Wealth of Nations aimed to strengthen civic government against any Jeffferson or Clinton 'aristocracy' seeking special privileges at the expense of American taxpayers. Adam Smith was an austere Presbyterian Scotsman. He wanted society to be more civil, more benevolent, with exemplary morals. Smith wrote of elected leaders like William Jefferson Clinton, 'The vices of levity and vanity necessarily render him ridiculous, and are, besides, almost as ruinous to him as they are to the common people.' Smith wrote 'Government tax upon the wages of labor is absurd and destructive of free competition of the market.'
Adam Smith's pragmatic approach didn't include guessing games. Smith is needed as much today as he was in the fledgling United States of America in the year of its founding, 1776.
Today, more than 220 years later, the liberal Clinton White House practices a form administration based upon of Jeffersonian guessing. Fortunately, William Jefferson Clinton tends to repeatedly lose his bets and this attracts attention.
Conservatives, in their eagerness to move America toward less government and a more civil society, seem to appeal to the glory of the American Dream while they seem to have forgotten the obligation that is incumbent upon those who follow after the Spirit and the Dream of 1776.
Conservative leaders in Congress and our Nation's communities must meet the burden of presenting a coherent, workable, and well reasoned economic plan that will fulfill the Spirit & The Dream of 1776.
Nothing less will balance the books for the extravagance of FDR's 'New Deal government spending of America into fiscal oblivion. In the 1930's an average house cost only $1,500 and a good new Ford was only $600.
Income tax in the 1930's averaged about 3%. Well, in 60 years, the average price of a house is now $150,000 and the price if a Ford has risen to $32,000.
Income taxes now average more than 40% of the taxpayer's earnings. In the 1930's public assistance was a local function. Today the annual cash expenditure of the federal government for social welfare exceeds $844 billion. The annual state and local government social welfare cash expenditures exceed $589 billion.
The worst is yet to come. The National debt has grown to more than $5.2 trillion since William Jeffferson Clinton moved into the White House residence.
Get a copy of the American Almanac in paperback at the news stand. Find out for yourself! The American Dream of 1930 has morphed itself into today's American Nightmare on Elm Street!