The Wealth of a Nation

By Pia Varma

So what now? Before you reach for "The Dummies Guide to Getting America Back on Track" let me suggest another book. In fact, it happens to be the same book the Founding Fathers used when they were laying the foundation for this country. It’s called An Inquiry into the Nature and Causes of the Wealth of Nations, now simply referred to as The Wealth of Nations.

Enter Adam Smith: eccentric, reclusive and absent-minded. He never married, he lived with his mother and he often talked to himself. Yet he emerged as one of the leading intellectual heavyweights of the Anglo-Scottish Enlightenment. In fact, many call him the father of modern day economics.

In 1776, Smith published The Wealth of Nations, introducing the world to a brand new concept: Free Market Economics. That same year, across the pond, Thomas Jefferson, George Washington, John Adams and others were planning a revolution that would lead to the formation of what would become the wealthiest nation, a nation based entirely around Smith’s free market principles. But this wasn’t a coincidence.

The Scottish-born Smith had a profound influence on the Founding Fathers. Benjamin Franklin was his personal friend and James Madison was a big fan. Alexander Hamilton borrowed heavily from Smith in his own magnus opus, Report on Manufactures, and there are numerous references to Smith in the letters of Thomas Jefferson. Incredibly, George Washington’s signature was actually found in a 1789 edition of The Wealth of Nations.

Although Smith, himself, never ventured to the American colonies, there is no doubt that his ideas were being bounced around by these men over beers in Philadelphia’s City Tavern or in the debates at Constitution Hall.

But where did Smith’s ideas come from and what were they?

The forces that brought the ideas of Adam Smith to the Founding Fathers in Philadelphia had been set in motion centuries earlier, since the 14th Century re-emergence of Democracy and Republicanism in Italy. The simple concept that an individual could find truth without the aid of God and the Holy Roman Church had empowered the people of Europe, pulling them out of the Dark Ages and kick-starting a vibrant Renaissance.

Hungry for more knowledge, man leaped from one step of human pro-gress to another; the Renaissance became the Elizabethan Era, the Elizabethan Era was followed by the Age of Reason and the Age of Reason became the Age of Enlightenment. By the time the Age of Enlightenment rolled around, classical liberal ideas were in full force. New concepts such as inalienable rights and the acknowledgement of slavery’s immorality were being discussed in coffee houses and political salons across England, Scotland and America. Passions ran wild, and political activism was at its height. English author Thomas Paine had emigrated to the American colonies and was arguing for the rights of man. Edmund Burke and the radical Whigs in England were fighting against the abuses of King George III, just like their counterparts and allies in the American colonies.

By 1776, the stage was set for Adam Smith to introduce his free market ideas. The Wealth of Nations became an instant success, shattering the status quo and throwing a wrench into the power structure. Word about The Wealth of Nations travelled quickly from Scotland to England and throughout Europe, making its way across the Atlantic to the American colonies. The first edition was sold out in six months.

But what were these ideas that shook up the world? Essentially, Smith regarded Man as a rational being who, by acting in his own self-interest, would work to move society forward: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." In the same way, the Founders emphasized the individual’s right to his own life, liberty and pursuit of happiness. Jefferson promised in his first inaugural address that the U.S. government "shall leave [its citizens] otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned."

Smith wanted to find the right institutional framework that would turn his vision of a society where individuals traded freely into a reality. This framework became a Constitutional Republic, where laws protecting inalienable rights reigned supreme and no majority could vote those rights away. Both Smith and the Founders believed that this framework of laws would best enable individuals to "truck, barter, and exchange one thing for another," without interference from the state. The view of the world suggested in The Wealth of Nations is that monopoly power can’t exist without assistance of government.

Smith based his arguments on a very simple idea, that there exists an invisible hand guiding the economic development of society, and this invisible hand functions best when left alone. This invisible hand is made up of all productive members of society, and naturally spreads wealth and increases quality of life. When a government attempts to engineer markets with regulations, subsidies, protectionist policies, sanctions, special licenses, tariffs, taxes and stifling programs, it will always lead to unintended consequences. The Founders took note of this and made specific provisions and clauses in the Constitution, preventing the state from interfering in interstate commerce and promoting the general welfare of the people. They, too, under-stood that the economic system that provided the greatest good for the greatest number of people was the free market system.

At the time, this was an extremely revolutionary idea. Before Smith came along, nation-states had been laboring under a mercantilist system, believing that there was a finite amount of wealth in the world, which must be gobbled up as quickly as possible. In their view, life was a zero sum game; only winners and losers. Spain, England, Portugal, France and others were in constant competition. Wars were waged and marriages and other alliances were formed in this quest for power, dominance and wealth. The primary goal was to have a favorable balance of trade; exports greater than imports, with the difference being settled in gold or IOUs. To a mercantilist, wealth equaled gold and a favorable balance of trade meant more gold.

Smith stated that it is incorrect to think that the wealth of a nation depends upon its holdings of precious metals. Rather than Spain and England competing with each other to grab up resources, it would be in each of the countries’ best interests for them to both be thriving nations. It would mean more customers for their goods and services. Nations could trade with one another and everyone would win. The Founders adopted this worldview and made it the bedrock of U.S. foreign policy.

Smith called this concept Absolute Advantage. He argued that if England can produce a commodity such as cotton at a lower cost than Spain, and if Spain could produce another commodity, such as grain, at a lower cost than England, then each country should stick to doing what it does best and trade; costs go down and quality goes up.

But the idea of Absolute Advantage is not limited to the foreign trade. It also applies to trade within a country. Smith explained that a major contributing factor to the wealth of a nation was the productivity of labor. He went on to say that productivity of labor depended on the division of labor. In the same way that nation-states should stick to doing what they do best, so, too, should individuals specialize in a skill or craft and trade with one another. As labor becomes more divided and specialized, productivity increases and costs go down. The Founders implemented a system of government that enabled individuals to fill needs in the market and contribute to the wealth of the nation.

But, today, America is at a crossroads, choosing between the free market system advocated by Adam Smith and the Founding Fathers and mercantilist policies that dominated the world for centuries. In many ways, Americans still hold on to mercantilist ideas. Our leaders desperately try to protect domestic industries with tariffs, subsidies and other protectionist policies, hoping it will maintain our status as a world leader. They have been on a mission to create shovel-ready jobs for the hundreds of thousands of people who are out of work as opposed to allowing the invisible hand of the market to determine labor needs.

It’s unclear which direction America will take in the future. But the simple reality is that the Founding Fathers adopted the ideas in The Wealth of Nations when they laid the foundation for America, and the United States of America went on to become the wealthiest nation.

You can’t really argue with results.

 



<< Return to the September 2010

Legal scholar and famed criminal defense attorney Alan Dershowitz has a message for partisans dividing America: "A plague on both your houses." He voted for Hillary Clinton. He endorsed Joe Biden. He's a man who is basically the Forrest Gump of American judicial history.

Look up a big court case over the past few decades, and you'll probably see him standing in the background. He's represented notorious clients like Mike Tyson, Patty Hearst, Harry Reems, Harvey Weinstein, Jeffrey Epstein, and yes, Donald Trump. It's made him a target for both the left and right.

Alan also describes himself as a "civil libertarian," and that's probably why he and Glenn Beck get along despite their opposing political views. His story is like a history lesson, spanning half a century, and it just might be the key to bridging the political divide.

On this week's podcast, Alan explained that while he's a strong defender of the Constitution, he's never been a big fan of the Second Amendment. In the past he's called it absurd and outdated, and even today, he admits that he wouldn't have ingrained it into our Constitution if he was a framer. However, with the whole Bill of Rights under attack, he's now fully in defense of our right to bear arms. Because if the Second Amendment changes, any amendment could be next.

"I'm now a supporter of the Second Amendment. I don't want to change it. I don't want to change one word of it, because I'm afraid that if I get to change the Second Amendment, other people will get to change the First Amendment, and the Fifth Amendment," Alan said. "So, I am committed to preserving the Bill of Rights, every single word, every comma, and every space between the words."

Watch a clip from the full interview with Alan Dershowitz below:

Watch the full podcast below, on Glenn's YouTube channel, or on Blaze Media's podcast network.

Want to listen to more Glenn Beck podcasts?

Subscribe to Glenn Beck's channel on YouTube for FREE access to more of his masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, or subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

Investigative reporter David Steinberg joined the radio program Monday, to explain how a new video may provide enough evidence to begin a FBI investigation into alleged illegal practices by Minnesota Rep. Ilhan Omar's campaign.

In the video, which was produced and released by Project Veritas, residents of Omar's community describe campaign teams that not only conduct illegal ballot harvesting practices but also pay people for their blank absentee ballots.

Steinberg told Glenn that, if these charges prove to be true, the federal government could bypass Omar's friend and protector, Minnesota Attorney General Keith Ellison. Could 2020 be the beginning of the end for Omar's political career?

Watch the video below to catch Glenn's conversation with David Steinberg:

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Mike Fratantuono is the manager of Sunset Restaurant in Glen Burnie, Maryland. He wrote in the Washington Post's COVID-19 series about the recent, heartbreaking loss of his business, a restaurant that has been in his family for "four generations and counting."

"I know this virus is real, okay? It's real and it's awful. I'm not disputing any of that," Mike wrote. "But our national hysteria is worse. We allowed the virus to take over our economy, our small businesses, our schools, our social lives, our whole quality of life. We surrendered, and now everything is infected."

On the radio program Monday, Glenn Beck reacted to Mike's letter, which he shared in full, adding his hope that those in government are ultimately held responsible for what he called the biggest theft of the Western world.

"This is the biggest theft of, not only money, but of heritage and of hope," Glenn said. "The United States government and many of the states are responsible for this, not you. And hopefully someday soon, we'll return to some semblance of sanity, and those responsible for this theft, this rape of the Western world, will be held responsible."

Watch the video below for more details:

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To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

We did our homework over the weekend; we did the research so we can tell you what is likely coming from Senate Democrats regarding President Trump's Supreme Court Nominee Amy Coney Barrett. Based on our research and the anonymous people who have already come forward to talk about Coney Barrett's youth, these are the main shocking things you can expect Senate Democrats to seize on during the confirmation process…

A man has come forward under the banner of "#MenToo," to say that in second grade, Amy Coney Barrett and her best friend at the time, cornered him at a birthday party at Chuck-E-Cheese and "injected him with a full dose of cooties." Which, if true, would obviously be disqualifying for serving on the highest court in the land.

Then there's a woman who says when she was nine-years-old, she lived on the same street as Amy Coney Barrett. She alleges that Coney-Barrett borrowed her VHS tape of Herbie Goes Bananas and did not return it for at least six months. And then when she did finally get the tape back, the woman says Coney Barrett did not even bother to rewind it. The FBI has interviewed at least two witnesses so far who say the tape was indeed not rewound and that it was very upsetting to the owner of the tape. Again, if true, this is troubling – clearly not the kind of integrity you want to see in a Supreme Court justice.

Apparently, in their elementary school days, they liked to drink milk – and lots of it.

The same neighbor also dropped a bombshell allegation about the drinking problem of Amy Coney Barrett and her closest friends. Apparently, in their elementary school days, they liked to drink milk – and lots of it. The neighbor says she "frequently" witnessed Coney-Barrett and her friends chugging entire cartons of milk – often Whole Milk, sometimes Chocolate Milk, occasionally both at the same time through a funnel.

Unfortunately, shooting-up cooties, injurious rewinding, and potential calcium-abuse are not even the worst of it.

A third person has now come forward, another man, and this is just reprehensible, it's hard to even fathom. But he alleges that in fourth grade, when they were around ten-years-old, Amy Coney Barrett and a group of "four or five of her friends" gang-GRAPED him on the playground during recess. He alleges the group of friends snuck uneaten grapes out of the cafeteria and gang-GRAPED him repeatedly in broad daylight. In other words, and I hate to have to spell this out because it's kind of graphic, but the group led by ten-year-old Amy Coney Barrett pelted this poor defenseless boy with whole grapes. He recalls them "laughing the whole time" as they were gang-GRAPING him.

He recalls them "laughing the whole time" as they were gang-GRAPING him.

Obviously, even if just one of these allegations is half-true, no Senator with a conscience could possibly vote to confirm Coney Barrett. When there is a clear pattern of destructive childhood behavior, it always continues into adulthood. Because people do not change. Ever.

Fortunately, for the sake of the Republic, Democrats plan to subpoena Coney Barrett's childhood diary, to see what, if any, insights it may provide into her calcium habits, as well as her abuse of illicit cooties and the gang-GRAPING incident.

We will keep you posted on the latest, but for now, it looks like Democrats will find plenty in the reckless pre-teen life of Amy Coney Barrett to cast doubt on her nomination. And if not, they can always fall back on her deranged preference for letting babies be born.

[NOTE: The preceding was a parody written by MRA writer Nathan Nipper.]