Wednesday, July 1, 2009

Personal Economics--Rule I

"‘Ye heve read, ye have heard, ye have thought,’ he said, ‘and the tale has yet to run:
"By the love of the body that once ye had, give answer--what ha’ ye done?’"

"It is not from the benevolence of the butcher, the brewer, and the baker that we expect our dinner, but from the regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages."
Adam Smith

The first rule of personal economics is derived from the work of Adam Smith. It is a rule of classical economics and is imbedded in much of his writings including the famous quote above. It is important to remember again that Adam Smith was a professor of Moral Philosophy. He believed that what was right was also, in the long run, at least, also what was smart. He is saying here that in the ordinary transactions of life, we do not judge men by their intentions or their thoughts or their hopes or anything else. We judge men the way God judges us--by their works. He does not say that we should do this, he says that in a free and reasonable society that is how we do judge them. When was the last time you were standing in line at the grocery store and the man in front of you held up a loaf of bread and said to the clerk, "If you can prove to me that the man who grew the wheat that went into this bread, the man who milled the wheat, the man who baked the flour, the man who packaged the bread and the man who delivered it to your store were all good Presbyterians, I will buy this loaf of bread."? We would probably think a man who said that was crazy. In the most peaceful interactions we have with others, that is how we do judge them. The reason for this is that most reasonable men in a free society recognize that it is simple justice to be judged by their works. This is the first rule of personal economics--"Judge others the way God judges you, by their works".
Unfortunately, while few of us wish to be judged personally by our works. We wish to be judged by our intentions or our nationality or our ancestry or in some other way that gives us an advantage over others. Politicians frequently play on this desire and try to get us to judge others in almost any way other than their works.
A favorite example of mine stems from a series of ads done by the comedian, Bob Hope, when I was a teen-ager. Because he frequently entertained American troops, he was known as a kind of super-patriot, so the American Ladies Garment Union hired him to do a series of ads for them. The gist of the ads was that when buying a garment i.e. a shirt, a dress, a tie, a pair of slacks, etc., you should not judge the person, or his garment, by his works, i.e. the quality or price of garment. That should be a secondary consideration. Before everything else, you should "look for the union label". If you do that, you can be sure that the person making your garment did not make it in their garage or basement. Union officials usually refer to people who make things in such places as "working in a sweat shop". You can also know that the person making the garment was a genuine American, or, at least, was working in America. You could have the comfort of knowing that the person making your garment was not living in Asia or South America or Europe or some other place where foreigners live. Finally, you could know that your garment--and this is probably most important of all--was not made by a man.
In Adam Smith’s day, feudalism was disappearing, but one aspect of it remained--what was called Mercantilism. The Mercantilists were very suspicious of foreigners. They should not be traded with. By sending goods to a country they were very sneakily trying to get gold out of the country. They were creating an "inbalance of trade" and trying to destroy a country’s wealth, i.e. its gold reserves. Adam Smith was simply saying we should judge the man across the river, or channel, or mountain range who happens to speak a different language, the way we judge the man next door or the man who runs the local bakery--by his works.
Rule I simply says that we don’t judge a man by his attitude, his nationality, his religion, his outlook, we judge him by his works.

1 comment:

Jeanine Gee said...

I really like these writings on Natural Law and economics. I can't wait for the next post. You should expand on some of the Newton stuff. It was clear that you knew more of the history and I would like to hear it. I will have to call you about it, but in writing is always better.