Monday, October 25, 2010

Adam Smith: Pro-Tax

"The rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

Adam Gopnik's recent article in The New Yorker demonstrates that Smith, the father of capitalism, was far more concerned with the ability of producers to band together and promote unfair prices for consumers than he was about government interference in the market.  Indeed, he welcomed government interference insofar as it necessary to promote competition and protect consumers from wealthy businesses.

The interest of manufacturers and merchants "in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.  To widen the market and to narrow the competition, is always the interest of the dealers... and can serve only to enable the dealers, by raising their profits, above what they naturally would be, to levy, or their own benefit, an absurd tax upon the rest of their fellow-citizens."