Understanding How Adam Smith Favored Labor Unions

Executive Summary

  • How the anti-union big money interests cherry pick Adam Smith’s work.
  • Big money fashions a moral philosopher as an amoral Wall Street trader.
  • Adam Smith’s real view of labor.


Adam Smith understood the unequal treatment when companies combine to keep wages low vs. when labor combines to maintain high wages.

Cherry Picking Adam Smith’s Work

Adam Smith is almost never read by people who quote him. What quotes come from him is cherry-picked by elitist institutions such as The Hoover Institute and The Heritage Foundation to support their pro-corporate agendas.

Adam Smith Fashioned as an Amoral Wall Street Trader

Adam Smith is presented to us by conservatives as something like a Wall Street trader constantly extolling the virtues of the “free market.” The free market should always be in quotes, as very few free markets exist or are allowed to exist by the monopolies that control the economy and are divorced from all morality. Undiscussed by the elites is Adam Smith’s consistent moral discussions in all of his works, but in particular his book The Theory of Moral Sentiments.

Being immoral, The Hoover Institute, Exxon, and Goldman Sacks don’t seem to acknowledge that this book exists because it describes how people naturally empathize with those in need. And that it could lead people to strive to maintain good relations with their fellow human beings, and how this can serve as the basis to structure a system to benefit the most people. How inconvenient it must be that Adam Smith’s position at the University of Glasgow was not Professor of Economics but Professor of Logic and Moral Philosophy.


Adam Smith and Labor

Another view of Adam Smith which is not discussed is his view on labor. Elite institutions have not brought Adam Smith’s statements on labor to the masses because it does not fit with their interests. In the US, the current understanding of labor is that when companies use HR, manipulation, and intimidation of employees to keep wages low, this is the company’s right, is “good business,” and is just what companies do. Therefore when Wal-Mart or McDonald’s flies crack union-busting teams around the US in a private jet to wherever there is possible union activity, this is considered within their rights. However, when workers attempt to combine, this is seen as a form of socialism, leading towards a slippery slope to communism.

According to current US thinking, labor unions are a slippery slope to communism. However, there is a problem with this. Mainly, the Soviet Union nor China ever had the type of unions designed to negotiate higher pay for workers.

“In the case of the Soviet Union, the unions they did have, called Soviet Trade Unions “were government organizations whose chief aim was not to represent workers but to further the goals of management, government and the CPSU. As such they were partners of management in attempting to promote labor discipline, worker morale, and productivity. Although they were also empowered to protect workers against bureaucratic and managerial arbitrariness.” – Wikipedia

Thus, this thing which is a slippery slope to communism, did not, in fact, exist under communism. However, the fact that this is historically inaccurate does not bother the people that say it or repeat it because they are not historians but propagandists by trade. So far, the propaganda has worked.

So, in addition to being completely inconsistent (praising corporation’s efforts against workers, while criticizing workers), corporate America’s God, i.e. Adam Smith, did not agree with this. Adam Smith clearly saw no difference between companies “combining” to reduce wages vs. employees “combining’ to increase wages. And he did note that the activities were treated very differently during the time that he lived in the 1800s.

“We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate…Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people” In contrast, when workers combine, “the masters..never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen.” – A Wealth of Nations

There are many anti-monopoly and collusion quotes in Adam Smith’s works, such as the following:

“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.” – A Wealth of Nations


The more one reads Adam Smith, the more one sees many areas criticizing conservative business policies. For instance, Adam Smith was vehemently opposed to monopolies as “Monopoly is a great enemy to good management,” however, many of the companies that quote Adam Smith are…..you guessed it, monopolies. The fact that elites have been able to get away with misappropriating Adam Smith’s work demonstrates how weak the forces against corporate power are, how ineffectual academics is in contradicting false statements made by corporations and their think tanks, and how little Americans seem to read, and how easily they are propagandized.