Michael Perelman: Why Adam Smith Advocated Controls Over Workers

Posted on June 21, 2014 by Yves Smith

Yves here. In this post, Michael Perelman continues his discussion of Adam Smith’s The Wealth of Nations. Here, he focuses on the contradiction between Smith’s laissez faire attitude towards commerce and the need he saw for extensive control of the behavior of workers.

By Michael Perelman, a professor of economics at California State University, Chico

Military Discipline, Market Discipline

Smith addressed two kinds of controls to maintain social and economic order – controls over the market and controls over the workers. Smith’s call for market controls are minimal compared to those that control people. This imbalance should not be surprising considering Smith’s interest in molding the human personality to fit the needs of a market society.

Smith’s suggested controls of personal behavior are vastly more far reaching than one might expect after reading the first part of The Wealth of Nations, where volunteerism promises a world of harmonious prosperity. People’s response to the grain trade suggested that markets were not changing personal behavior the way Smith preferred.