Friday, September 10, 2004
Adam Smith Censored? [Updated!]
[Warning: this post is off-topic (viceless)!] One of the links on our sidebar is to the blog of the Adam Smith Institute, a British thinktank that espouses free markets. They have a moderated comments section; you can post a comment, and if it passes muster, it will eventually appear. I have commented on a couple of prior posts, and my comments received the necessary imprimatur.
Yesterday I saw this post arguing against interest-rate ceilings. I sent a comment that pointed out the irony, in that Adam Smith himself favored interest rate ceilings! I included the relevant passage from Volume I, Book 2, Chapter 4 of the Wealth of Nations:
The legal rate...though it ought to be somewhat above, ought not to be much above the lowest market rate. If the legal rate of interest in Great Britain, for example, was fixed so high as eight or ten per cent. [when market rates are 3-4 per cent], the greater part of the money which was to be lent, would be lent to prodigals and projectors, who alone would be willing to give this high interest. Sober people, who will give for the use of money no more than a part of what they are likely to make by the use of it, would not venture into the competition. A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it, and thrown into those which were most likely to waste and destroy it.Anyway, my comment has yet to be posted, of course. Surely ASI will want to remedy this extremely serious oversight, no? Remember what Adam said in The Theory of Moral Sentiments: "Society may subsist, though not in the most comfortable state, without beneficence; but the prevalence of injustice must utterly destroy it." [Update, September 16: Feeling a bit guilty for my snarky post. The ASI kindly sent along an e-mail explaining why the comment wasn't posted -- it was accidental -- even though they certainly didn't have to post the comment in any case and also didn't have to take the time to send an explanation. Good folks, those ASI-ers. It was me who was being unjust, and hence threatening societal destruction. Sorry.]