I’m not well versed in Smith’s writings and I’m not good at parsing older English. What are your key takeaways or epiphanies from what was quoted?
It was written 100 years earlier than the Haymarket affair (1886) and 200 years before Thatcherism and the Miner’s strike (1979, 1984).
The disappearance of UK Coal, and much of the UK manufacturing sector, played no small part in the stagnation of UK wage growth since the 1970s.
When Adam Smith's maxim, that contract freedom not be infringed upon by government, was in force, in the late 1800s, unions could not single-handedly bankrupt industries, and wages, alongside industry, grew at their fastest rate in both US and UK history.
For example, thanks to the dominance of public sector unions, New York now has nearly 300,000 unionized public sector employees receiving over $100,000 a year:
https://www.forbes.com/sites/adamandrzejewski/2020/05/26/why...
NYS public school teachers with 35 years of experience receive a pension of $87,945 per year on average:
https://www.nydailynews.com/news/politics/pensions-retired-n...
When you amortize the average amount paid out in total in pension, over the work years, and add that to the other components of their annual compensation, this puts NYS public school teachers in the top 10% of income earners in the US.
It's also incredibly hard to fire New York state public school teachers:
https://www.the74million.org/article/investigation-nyc-tried...
Why this is so important was explained by Smith:
The real and effectual discipline which is exercised over a workman is that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence.
Without fear of dismissal, fraud and negligence multiplies, and thus we see growing inefficiency in the public sector, even as public sector unions direct an increasingly large share of economic output to their members:
https://ourworldindata.org/grapher/social-spending-oecd-long...
New York city is also one of the most expensive states to live in so any financial comparison would need to be relative to cost of living.
Which is besides the point that perhaps teachers should be remunerated well.
Only 75 public school teachers were fired in all of New York between 2015 and 2016, over a span of 16 months in total, coming to a rate of 56 teachers fired per year, for a work force of ~75,000 teachers. Now unless only super humans apply for teaching positions in New York, that points to an extreme lack of accountability for New York teachers.
In the real world, many people get hired for jobs they are not well suited for, or are not prepared to commit themselves to enough to do the job competently, and shortly thereafter, are let go.
>>New York city is also one of the most expensive states to live in so any financial comparison would need to be relative to cost of living.
Median income in New York is $67,000, and that's dragged up by the very high median income of the large bloc of public sector workers. So the public sector workers are the elite, even in relation to other New York residents. What's troubling is that the entire media is unionized too, so they share a common interest with the public sector unions in perpetrating the ideological narratives that keep unions in power.
Median household income is ~$64,000 in New York City:
https://www.census.gov/quickfacts/fact/table/newyorkcitynewy...
Consider where the wages of labor go. The major expenses are housing, taxes, transportation and healthcare.
Housing is artificially scarce. Zoning prevents new construction in areas with high demand, benefiting capital (i.e. landlords) who get higher rents. People who can't afford the higher rents have to live further from the city, increasing their transportation expenses (more money for Big Oil). Workers pay taxes but instead of going to some kind of UBI or anything else that would benefit workers, or just letting workers keep more of their money, most of it goes to things like the F-35 and buying the votes of retirees in the important swing state of Florida by enacting benefits which are really handouts to Big Pharma. And healthcare regulations are passed to make healthcare more expensive, i.e. more profitable, because of regulatory capture.
There's nothing in there that a labor union can solve by negotiating employee compensation with Walmart or Amazon. Because the problem is artificial scarcity, corruption and waste. At scale, if you negotiated everyone a raise, prices would just go up. Because everyone is still bidding on artificially scarce housing and paying for wasteful government programs and suffering the effects of regulatory capture.
But even when unions do try to lobby for something, it's typically just things to increase their own institutional power (e.g. trying to get Uber drivers into a union which is once again only negotiating employee compensation) instead of doing anything about the real problems that are sucking workers dry.
While in the US there has been much work by capital to undermine union political effectiveness to achieve that, it is not true, even in the US, that unions are stuck on negotiating with capital as an employer without engaging with capital’s political influence.
Capital is a measure of power. Capital's "corruption of the political system" is use of that power. I'm not sure it's coherent to conceive a world where Capital retains its power but not use it to shape the people and instruments that manage society.
If you’re operating a factory, you want housing, healthcare, etc to be cheap, so that you don’t have to pay your workers as much. If you’re a tiny group of people coming up with new ways to financialize housing, healthcare, etc. you want exactly the opposite.
I think of this division as something like “Industrial” vs “Financial” capital. Part of the reason the old labor movement isn’t relevant any more is that we don’t actually make stuff any more. “Industrial” capital is not at the seat of power any more.
The real problem with today’s unions is that the counterparty has changed. The people who are making houses expensive aren’t at the table negotiating with the unions; they have no employees! Unions are fighting the shrinking ghost of “Industrial” capital.
The reason for this shift is geographic. The stuff that actually gets made is made (under a yoke of hellish cruelty) at the periphery. There, housing is cheap! But the profits flow back here unevenly, to a tiny group of holders. And hence we are dominated by financial capital.
This is also the origin of the red/blue divide, roughly speaking: One is the local “Industrial” concentration and one is global “Financial” concentration. The third bloc, labor, were only really relevant when labor actually had a relationship (with the leverage inherent to that) with the dominant form capital. Now the two groups have predictably been crushed: the local concentration of capital and the union. They’re both sitting at the wrong table.
-- Adam Smith
-- Adam Smith
In reality during the last 200 years classical liberal tradition has thought more about markets and how they work then anybody else. Constitutional economics, institutional economics, law&economics, market process theory are partly built on Smith work and are explorations of the context of markets.
So I don't really know what you are referencing with 'Sure, but "proper functioning markets" in this case means competitive markets, not laissez-faire as such' as I don't know what definitions you for these words.
People like FA Hayek, Armen Alchian, Ronald Coase and many others have done a lot of work and all look back and build on Adam Smith. The idea of some people in this thread that modern libertarians only read the understand Adam Smith as 'invisible hand' is nonsense. 'Invisible hand' was adopted because it is a good shorthand for the idea of processes that are not centrally guided are very important.
There was also a lot of historical work done on English Common law and its evolution and how modern market relations evolved and actually functioned.
Don't skip the chapters ... just as Adam Smith is misunderstood, so is the American Revolution by those who have never bothered to examine it from the outside looking in.
It calls for unionization.
> People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible, indeed, to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.
Search the text[1] for this and you'll see it goes on a bit more and is preceded by some historical context.