VIEW FROM THE PODIUM

“NOTES ON QUOTES”

When I became Pi Gamma Mu's international president last October, I had a "tough act to follow."  Dr. Gordon E. Mercer, who is now a professor emeritus of political science and public affairs at Western Carolina University in Cullowhee, N. C., led the society from 2005 to 2011, and his presidency was a truly remarkable period for Pi Gamma Mu.  If anyone had not been a true believer in Dr. Mercer's industriousness and vision, any doubt would have been eradicated during the triennial international convention over which he presided in October in Washington, D. C.  That convention showcased a genuinely well-regarded and vibrant honor society.

Retirement in the case of Dr. Mercer is an elusive concept.  He continues to provide invaluable leadership and insight to our society.  Also, he and his charming wife, Marcia Gaines Mercer whose presence has enriched our conventions and board meetings over the years write a weekly column, "Notes on Quotes," for nine newspapers in North Carolina and elsewhere.  Other newspapers that would like to pick up the Mercers' column are welcome to contact them at [email protected].

In this edition of the Pi Gamma Mu Newsletter, I turn my column over to Dr. and Mrs. Mercer, as they discuss a quotation from Adam Smith's celebrated 1776 work, An Inquiry into the Nature and Causes of the Wealth of Nations.

Barry D.  Friedman
International President

The Wealth of Nations: Back to Basics

By Gordon E. Mercer and Marcia Gaines Mercer

“No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable.”

—Adam Smith, author, The Wealth of Nations (1776)

What would the world's greatest economist say about our economy today? Adam Smith (1723-1790) provided the foundational underpinnings of modern economics. His work, The Wealth of Nations, was, in his own words, "[a] very violent attack … upon the whole commercial system of Great Britain." There are almost no details about his early life except an account of his being captured by gypsies at the age of four and rescued by his uncle. Biographer John Rae is frequently quoted as saying that the rescue was a good thing, because Smith would have made a poor gypsy.

As we have attempted to move out of the recession, our guiding economist has been British economist John Maynard Keynes, who wrote The General Theory of Employment, Interest and Money, which calls for deficit spending in periods of recession. We have successfully implemented deficit spending. As we try to reboot our economy and create jobs, we wonder, are we asking the right question? 

Adam Smith was a popular professor at Glasgow University.  He asked the deep questions, such as: What are the factors that produce wealth in a nation? For Smith, wealth starts with the talent of labor and the division of labor, which enables people to specialize. Key underpinnings of wealth include technology, manufacturing, and agriculture, which enable trade. Surpluses produced in manufacturing beyond immediate needs produce trade and wealth.

These surpluses, when invested back within the country, create greater wealth and jobs. Smith thought that the invisible hand of self-interest along with competition guided economic systems to their most productive levels and that, even though people would do things for selfish reasons, this would promote the general welfare. He believed that in some cases the state had to regulate, where the general welfare was not being protected.

If Adam Smith asked the right question, how do we stack up as a nation? Smith would point out that we are losing our manufacturing leadership, which is the critical underpinning of national wealth. We have huge trade deficits in household goods, petroleum, and automobiles and a huge national debt. The destroyer of wealth has been our outsourcing of manufacturing and jobs. Smith was a fervent proponent of free trade, but he might point out that somewhere along the way free trade was corrupted and became the exporting of our manufacturing, jobs, and wealth. 

Building the wealth of our nation is a good idea, but we need to make a commitment. Our universities and community colleges need to prioritize manufacturing-technology programs. Western Carolina University graduates in manufacturing engineering have done exceptionally well. Small-business loan programs need to prioritize manufacturing. We need a U. S.  Department of Technology. In the policy area of immigration, we need to prioritize immigrants who could start manufacturing operations in the United States. We used this strategy in our space program. Every state needs to become a magnet for manufacturing recruitment on a global level.

Our leaders are currently spending their time debating Keynesian economics on taxation levels and spending levels. It isn't working. Both sides are failing to see the big picture of wealth creation.

Let's get the debate back to technology, manufacturing, jobs, and most importantly building wealth for our nation by becoming once again the manufacturing center of the world.