Adam Smith would oppose TTIP

"As among the different provinces of a great empire the freedom of the inland trade appears, both from reason and experience, not only the best palliative of a dearth, but the most effectual preventative of a famine; so would the freedom of the exportation and importation trade be among the different states into which a great continent was divided."

Adam Smith's The Wealth of Nations came out in 1776, the same year as the US Declaration of Independence, and is the book that tells us that unrestricted Free Trade makes us all richer.

Thanks to the saintly Adam Smith the world has been remade so that goods and money can flow freely round the world and there is no nearly no obstacle to getting, as Peter Mandelsen once put it, "filthy rich".

The next stage in this ongoing mission to unshackle the Invisible Hand is the Trans-Atlantic Trade and Investment Partnership. But what would the real Adam Smith have made of what is today being done in his name?

The Real Adam Smith

Mind you there was a lot about Adam Smith that people like the Adam Smith Institute don't like to tell you.

For a start his other famous book is "The Theory of Moral Sentiments" which is basically about being nice to people. That was ultimately what floated his boat. That trade turned out to be a means of making people happy was a very pleasant revelation to him.

For another thing he was opposed to the free movement of capital. To him trade was people exchanging real things for each other.Simply taking your money and running was not, for him, what it was all about.

He didn't like governments much, and so in that respect he would get on with his current fans, but why he hated them is a more interesting point. Here is something he wrote:

“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”

So his beef is not that the government taxes the "wealth creators" to waste money in the "workshy", but that they support the 1% against the 99%. Smith here sounds more like Joseph Stiglitz than Milton Friedman. Perhaps the Occupy movement should adopt him?

But what Smith hated more than governments was corporations, who he saw as restraining free competition and lax in their standards.

"The directors of such [joint-stock] companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.... Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company."

He also didn't believe in trade secrets, and so it's hard to imagine him defending treaties on intellectual property rights.

In Adam Smith's world, small traders and family businesses traded together in free and essentially local markets. It is a view of society that a Proudhon style anarchist would understand better than a Davos Set economist.

12th July 2014 is Stop TTIP day, and it's hard not to believe that the spirit of Adam Smith will be there.