Adam Smith and reality

Adam Smith was a moral philosopher. An Inquiry into the Nature and Causes of the Wealth of Nations, written 1776, is a follow up to The Theory of Moral sentiments (1759). Unfettered capitalism, as proposed by today's neoliberals, would have been unacceptable to the 'Father of Capitalism'.

Smith clearly states in Wealth of Nations, government should regulate business which always seems to evolve into monopoly. On the other hand, the people should beware of instances when government and business create laws, as these will not benefit society but business.

Given Wealth of Nations is cumbersome reading, very few 'students of Smith' actually realise the rational economic actor-homo economicus  -is a moral economic being. Wealth of Nations is advanced Theory of Moral Sentiments. Thus, progressive taxation and the support of infant industries are seen as essential to all economic progression. All actors who use capital to support the domestic sector realise the greatest value through the ' invisible hand'.

Adam Smith emphasizes that wealth is a function of  labour and not the amount of gold plus silver at hand. In Zimbabwe, with 80% unemployment rates, they is no real wealth. To grow the economy, domestic resources should support local industrialisation. Futhermore, tax and policy should not disadvantage the masses but truly uplift. Thus economics has a morally scientifc foundation at its classical root.

Marx & Zimbabwe

Dissecting the dynamics of the world economy is a complex task. Karl Marx spent 20 years writing up the full first part of Das Kapital. Those 20 years of writing just gave us Volume 1 of Kapital. Marx studied mathematics, philosophy and other classical economists inluding-  D. Ricardo, J. Mill even Adam Smith. Marx strongly believed 'the anatomy of civil society is to be found in political economy'. It was Marx's plan to give us 6 full parts of Kapital. Apart from Kapital 1, the other published volumes of Kapital are syntheses of notes he left behind.

Marx gives us an alternative economic theory, however his death meant he could not personally defend the position of his theory. Kapital is a cumbersome read and as such it is no surprise very few get the essence of Karl's opus.Marx himself warned against false socialism which would seem more attractive than a benevolent democracy. The last century saw various systems masquerading as following the Marxist ideal.  Leninism, Stalinism, Sovietism and Nazism all pretended to follow Marx-however they completely missed the point. Marxism emphasised the authority and power of the worker.Marx did not sanction state dictatorship. Marx repeatedly emphasised that 'everything should be questioned', they was no freedom of speech in so called socialist economies. Pure Marxism is a continuous critical process-a growing dialectical argument. It is freedom of thought. The worker has the power to negotiate and realise the surplus created in production. In socialist economies the workers had no clear right to the fruit of their labour. This last contradiction guaranteed the fall of the Soviet Union.

Zimbabwe has had its fair share of Marxists. Growth With Equity, the economic policy document, had a pro-people agenda. At many points the document misses the Marxian ideal of worker participation.