Monday, October 27, 2008

Adam Smith, Socialist

I truly do not understand the attack by the McCain campaign as a "socialist". People have recently dug up a recording of a radio interview where Obama discusses why the judiciary hasn't been used effectively to redistribute income (it appears Obama thinks the judiciary shouldn't be able to redistribute wealth, this is discussed it here), and attempted to blow it into a scandal.
The Politico
“That’s what change means for the Obama administration. They’re redistributing. It means taking your money and giving it to someone else.”

It seems we must classify all government spending as redistributionist, after all, it take private wealth and spends it on public goods. In such case, we must logically conclude what John McCain is this: anyone not an anarchist is a socialist.
Even if we are willing to give what McCain is saying the most charitable interpretation, it makes no sense. As Hendrik Hertzberg put it "The Republican argument of the moment seems to be that the difference between capitalism and socialism corresponds to the difference between a top marginal income-tax rate of 35 per cent and a top marginal income-tax rate of 39.6 per cent."
Further, if McCain is saying that taxation with intent to reduce inequality is socialist, then a lot of people have been socialist. Republican's are quick to remind us that Karl Marx said "from each according to his ability, to each according to his need." This is to misunderstand what Marx believed socialism is altogether. To him, it was about workers seizing the means of production... a far more radical shift than I would guess Obama has in mind.
The founder of communism believed in progressive taxation, but the founder of capitalism was no less enthusiastic .From Adam Smith's The Wealth of Nations:
""The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

No comments: