Subj : Adam Smith, JM Keynes and Paul Krugman
To   : ALL
From : BOB KLAHN
Date : Sat Feb 08 2014 17:03:24


 Recently Paul Krugman quoted JM Keynes, as to the great failings
 of our economic system being failure to provide full employment
 and an arbitrary an inequitable distribution of income and wealth.

 Now that won't impress the right wingers, but they should listen
 to their patron saint, Adam Smith. While looking up something
 else I ran across a quote from Adam Smith, in which he said the
 workers should have a fair share of the wealth they produce, a
 principle Henry Ford adopted and it made him rich.

 What also impressed me was, Smith took the creation of wealth
 back to basic principles, to the fact that all wealth is created
 by the workman. From there he expanded to the "rent seekers" who
 got control of land or materials, and thus extracted a major
 portion of wealth from those who do the actual work.

 Even more, his world was one that is Utopia for the
 libertarian/right wing. Workers and owners both tried to
 establish their own unions, called cartels or conspiracies in
 restraint of trade today. In his day such management unions were
 legal, but labor unions were not. The end result was, workmen
 struggled to even survive, and owners enjoyed wealth.

 Adam Smith also explained violence by labor in the struggle as a
 result of desperation, all to often the result of union busting
 and impoverishment of workers.

 Smith also said something I never realized, that in his time
 England was a much more wealthy country than the US, but workers
 in the US were much better off, and the US was growing very fast
 compared to England. His explanations made it plain, the great
 gains being made in America were due to the fact that workers
 were much better off. Of course that is tied to the fact that
 Adam Smith understood that the workers were the real source of
 all wealth.

 That also explains why small business is the engine of economic
 success, and employment, in this country. Small Business
 develops when workers manage to accumulate enough wealth to
 provide their own land and materials to produce wealth. The
 lower the level of wealth accumulation the more the economy
 grows and wealth is created.

 In his time he reported that China was a very wealthy nation,
 but quite stagnant. The country was rich, but the people were
 poor. That is what is happening in China today, the GDP will
 soon exceed that of the US, but China will still be a poor
 country. The mass of the people are and will be poor, and those
 accumulating wealth are a small portion. This is a recipe for
 economic disaster.

 If you ever look at the GDP, and per capita GDP of Saudi Arabia,
 you will discover that Saudi Arabia is not a rich country, it's
 barely mediocre, or even at the high end of third world. The
 ruling class are floating in oil wealth, but the people are not.
 That is a recipe for violence and revolution, which is very
 likely why Saudi Arabia preaches fear of Iran and other
 countries, fear of other religions, and a fundamentalist form of
 Islam that preaches war on unbelievers, whether Muslim, Jew or
 Christian.

 Diverting a restless population with external enemies,
 popularized in "1984", is actually an ancient technique used by
 failing dictatorships.

 Hmmm... which seems to be what is going on in this country now,
 come to think of it.

 The US overtook the richest countries in the world duing the
 time when the income and wealth of the working class grew, and
 the gap between the rich and middle class narrowed. Today this
 country is going downhill as the middle class sinks and the rich
 take it all. Continued long enough and the US will become a
 third world country.

 What's worse it, that won't even hurt the 1%, and especially not
 the .1%. Not until they discover class warfare is not raising
 their taxes, but standing them against the wall. As some members
 of the "Patriotic Millionaires" have already pointed out.

BOB KLAHN bob.klahn@bex.net   http://home.toltbbs.com/bobklahn

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