In his substack Noahpinion, Noah Smith offers five quotes
from The Wealth of Nations in order to show that Adam Smith was not really a wicked conservative (true) but a modern progressive (false), opposed to property and inequality and supporting progressive taxation. To support the latter claim, Noah offers:
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.
If Noah had actually read the book he is
quoting he would know that Smith starts his discussion of taxation with a series of maxims, of
which the first is:
The subjects of every state ought to contribute towards the
support of the government, as nearly as possible, in proportion to their
respective abilities; that is, in proportion to the revenue which they
respectively enjoy under the protection of the state.
Tax burden in proportion to revenue is a flat tax. The context of Noah's quote is a discussion
of a tax on the rent of houses, where the fact that it falls more than
proportionally on the rich is a disadvantage but not a decisive one. Saying something is “not very unreasonable” does not imply it
is desirable.
Another quote Noah offers to show that Adam shares the views
of a modern progressive is:
Wherever there is great property there is great inequality.
For one very rich man there must be at least five hundred poor, and the
affluence of the few supposes the indigence of the many.
Noah interprets this as “Adam Smith decries the existence of
inequality and poverty, blames property rights for this inequality …”
In fact, the passage continues:
The affluence of the rich excites the indignation of the
poor, who are often both driven by want, and prompted by envy, to invade his
possessions. It is only under the shelter of the civil magistrate that the
owner of that valuable property, which is acquired by the labour of many years,
or perhaps of many successive generations, can sleep a single night in
security.
...Where there is no property, or at least none that exceeds
the value of two or three days' labour, civil government is not so necessary.
Smith isn’t decrying the existence of inequality, he is arguing
that the existence of inequality makes government necessary to protect
property.
A third quote:
People of the same trade seldom meet together, even for
merriment and diversion, but the conversation ends in a conspiracy against the
public, or in some contrivance to raise prices.”
Noah does not quote the next two sentences:
It is impossible indeed to prevent such meetings, by any
law which either could be executed, or would be consistent with liberty and
justice. But though the law cannot hinder people of the same trade from sometimes
assembling together, it ought to do nothing to facilitate such assemblies, much
less to render them necessary.
Smith isn’t arguing for antitrust law, he is arguing against
government doing things that encourage cartel formation, the 18th
century equivalent of the 20th century cartelization of the airlines
by the CAB.
Noah’s conclusion:
Adam Smith decries the existence of inequality and poverty,
blames property rights for this inequality, advocates progressive taxation as a
remedy, and is innately suspicious of profit. He sounds more like Thomas
Piketty than Milton Friedman.
It is true that Smith, like most people, decries poverty.
All of the rest of the sentence is false. Adam Smith was an 18th
century radical who supported laissez-faire in large part because he thought it
resulted in less poverty than the alternative, not the 21st century
progressive of Noah Smith’s imagination.
The important lesson from this is the danger of believing
things you want to believe on the basis of quotations selected by people
who share your views. To have written what he did after actually reading The
Wealth of Nations Noah would have to be deliberately dishonest, which, so far
as I can tell, he is not. He is, however, saying
things in public which he has no good reason to believe are true — and are not.
This not the first, nor the second, time that I have found someone complaining that other people misrepresent Adam Smith while himself doing do.