Obama’s Adam Smith Problem

American Thinker | Ed Kaitz | Nov. 1, 2008

Barack Obama has advanced the astonishing thesis that by “spreading the wealth around” he’ll somehow create a more benevolent society. But we’ve seen above that since benevolence can never be extorted by force the only thing Obama will succeed in doing is spreading suspicion, resentment, and poverty – the condition of any society whose lawmakers “push too far.” A vote for John McCain on Tuesday can help keep America in the good hands of the humble yet brilliant Scottish economist who, in his race to develop a solution to the problem of scarcity, never lost sight of man’s most important virtue: freedom.


German scholars in the nineteenth-century exercised a good amount of frustration over something they dubbed “das Adam Smith Problem.” To the consistency-minded Germans the brilliant yet humble Scottish economist and “father of capitalism” had nevertheless left a rather dubious literary legacy: two monumental and influential books that seem to argue in radically divergent and quite insurmountable directions. A consideration of this problem might help us to explain an astonishing and quite alarming deficiency in Barack Obama’s economics education. Simply put, it’s doubtful that Obama has ever even read the man whose influential theories of wealth creation he wishes to supplant.

Indeed, in the first of Smith’s books, The Theory of Moral Sentiments (1759), Smith makes a quite humane and often beautiful case for the power of human sentiment in the practice of social virtue. He binds humanity together at an extraordinarily deep level and demonstrates why “we sympathize with the natural resentment of the injured” when, for example, greedy industrialists “violate fair play” and “throw down” their competitors “in the race for wealth and honors.” Indeed, Smith seems to foreshadow the bleak finale expertly captured by Orson Wells in his Citizen Kane when he argues that the twilight years of greedy men will be filled with thoughts of “terror and amazement” at their prior conduct and make them outcasts from “the affections of mankind.”

Conversely, in his magisterial The Wealth of Nations (1776), Smith relentlessly drives another point: that our darker and asocial instincts of self-preservation, retaliation and competition nevertheless provide the potent and necessary ingredients to “rouse the industry of mankind.” In short, in his commanding treatise on capitalism it is self-interest and utility, not benevolence and sympathy that can solve the problem of economic scarcity: “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.” Indeed, what mystified German scholars was the quite sensitive and touching portrayal of human community in Smith’s first book and statements like the following in his second: “It is his own advantage, indeed, and not that of society, which he has in view.”

What gives? For years I’ve taken a rather morbid interest in the state of academia by asking my college students if they’ve ever even heard of Adam Smith. Invariably about two or three out of fifty mention something about “a Scottish guy.” When I ask about Karl Marx however every hand in the room goes up. By helping to shed some light on “das Adam Smith problem” though I hope that students might come to appreciate a man who more than any other in modern history has shaped the world in which we live. I also hope to demonstrate to students that it’s entirely possible to entertain a defense of Smith’s philosophy of life even against his harshest critics in these dire economic times.

The common theme in each of these thinkers is distaste for private property and self-interest and a glorification of an intellectual ruling elite. By eliminating private property and free trade each philosopher thinks he is “freeing” an individual from the kind of acquisitive mentality that creates division in society. Indeed, it was Jean-Jacques Rousseau, whose portrait hung above Karl Marx’s writing desk, who famously said that those not willing to free themselves from their attachments would be “forced to be free.” Mao Tse Tung did Rousseau one better when he quipped that the “voluntary” cooperation of class enemies would be “compelled” by the state.

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