2017년 12월 17일 일요일

[발췌: 아담 스미스] prodigals, projectors, etc.


1차 검색: 벤덤의 Defence of Usury

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※ 발췌 (excerpts):

출처 1: A History of Entrepreneurship (Robert F Hébert & Albert N. Link, Routledge 2009). 구글도서.

( ... ... ) In ^Wealth of Nations^, the entrepreneur is encountered in three different forms: the adventurer, the projector, and the undertaker. Smith speaks disparagingly of the first two and with unqualified approbation only of the undertaker, who he identified with "the prudent man"--a concept developed at length in ^Moral Sentiments^.

According to Smith,[:]

  • adventurers are those who hazard their capital on the most difficult of enterprises, spurred on by unbounded confidence in their success despite extraordinary risks. Smith (1976b [1776], vol.1, p. 128) attributed a measure of irrationality to this kind of behavior, because although "the ordinary rate of profit always rises more or less with the risk, it does not ... seem to rise in proportion to it, or so as to compensate it completely." Adventureres, therefore, are not stable agents in a theory of economic development; although a "bold adventurer may sometimes acquire a considerable fortune by two or three successful speculations;" he "is just as likely to lose one by two or three unsuccessful ones" (Ibid. vol.1, pp. 130-1).
According to ^Postlethwayt's Dictionary^, an established authority in Smith's day, projectors are of two types. One type is cunning, lawless, scheming, and cheating; the other possesses ingenuity and integrity and engages in honest invention. Postlethwayt added that because "there were always more geese than swans, the number of the latter are very inconsiderable, in comparison with the former." Owing, perhaps, to the inconsiderable number of honest projectors,
  • Smith (Ibid. vol. 2, p. 562) was critical of the first class of projectors, who devise "expensive and uncertain projects ... which brings bankruptcy upon the greater part of the people who engage in them," such as the "search after new silver and gold mines." In this way projectors are injurious to society because "every injudicious and unsuccessful projects in agriculture, mines, fisheries, trade, or manufactures, tends ... to diminish the funds destined for the maintenance of productive labor" (Smith, Ibid, vol.1, p. 341). 
Identifying projectors with prodigals, Smith (Ibid. vol.1, p. 340) minced few words in his judgment: "Every prodigal appears to be a public enemey, and every frugal man a public benefactor."
Follwoing Postlethwayt, however, Smith allowed that not all projectors and prodigals. Of the prudent man, Smith (vol 1, p. 215) said that:

[I]f he enters into any new projects or enterprises, they are likely to be well concerted and well prepared. He can never be hurried or ( ... ... )


출처 2: The Oxford Handbook of Adam Smith (Christopher J. Berry, Maria Pia Paganelli, Craig Smith, Oxford University Press 2013). 구글도서.

Consider Smith's analysis of the promoters of excessive risk in search of profits, whom he called 'prodigals and projectors'. This, by the way, is quite a good description of the dodgy entrepreneurs of credit swap insurance and sub-prime mortgages in the recent economic crisis. Smith's use of these terms were entirely pejorative. For example,[:]
  • by 'projector' Smith did not mean those who 'form a project', but specifically in its derogatory sense, apparently common from 1616 (so I gather from ^The Shorter Oxford English Dictionary^), meaning, among other things, ‘a promoter of bubble companies; a speculator; a cheat’. Indeed, Jonathan Swift's unflattering portrayal of 'projector' in ^Gulliver's Travels^, published in 1726 (50 years before WN), corresponds closely enough to Smith's deployment of that word.[주]3
In arguing against Smith's critique of the market economy, Bentham argued, among other things, that those whom Smith called 'projectors' were also innovators and pioneers of economic progress. As it happens, Bentham did not manage to persuade Smith to change his mind on this indictment, even though Bentham kept on hoping to do just that, and in one occasion convinced himself, with little evidence, that Smith's views on this had become 'at present the same as mine'. Smith knew the distinction between innovating and projecting well enough, and gave no real evidence of changing his mind on this subject. Now, more than two centuries later, the distinction remains sadly relevant as we try to understand the nature and causation of the crisis that has hit the world of finance.

Unwavering faith in the wisdom of the stand-alone market economy, which is largely repsonsible for the removal of the established regulations in the United States, tended to assume away the activities of prodigals and projectors in a way that would have shocked the pioneering exponent of the rationale of the market economy. As Smith warned, relying entirely on an unregulated market economy can easily pave the way for 'a great part of the capital of the country' being 'kept out of the hands which were more likely to make a profitable and advantageous use of it, and thrown into those which were most likely to waste and destory it' (WN II.iv.15: 357).


출처 3: Adam Smith: Essays on Adam Smith: Adam Smith and the Alleged French Connection (Michael Emmett Brady, Xlibris Corporation 2015). 구글도서.

( ... ... ) Unfortunately, Smith's main public policy pronouncement in the WN, that the central bank must maintain low, fixed rates of interest permanently in the future, combined with a policy of making sure that bank loans were made only to the sober, middle class job creators and not to the prodigals, projectors, and imprudent risk takers, such as John Law, Richard Cantillon, Andrew Dexter, Jr., J. P. Morgan, Andrew Mellon, Michael Milken, Ivan Boesky, Mitt Romney, and their modern couter parts, the private equity firms, hedge funds and commercial banks, like the Morgan-Chase of Jamie Dimon, seems to have eluded Vines and Morris. Smith's policy follows from his understanding that prodigals, projectors, and imprudent risk takers are dishonest and deceitful. Their behavior imposed huge costs on the rest of society. Smith's interest in maintaining a foundation of justice in society leads directly to the conclusion that unjust individuals should be denied the resources to impose their costs on others. Smith is definitely not attempting " ... to replace the pursuit of spiritual salvation..." with the "... the pursuit of material advancement." It is the other way around. Material advancement allows one to engage in other interested behavior. ( ... ... )


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