In 1777, a correspondent told Adam Smith that the British loss at the Battle of Saratoga worried him. “If we go on at this rate, the nation must be ruined,” he said. But Smith was unconcerned. “Be assured, my young friend, that there is a great deal of ruin in a nation.” Supporting those distant colonies was not an economic proposition anyway. Smith published figures to that effect in The Wealth of Nations (1776). Getting out of what would become the United States was probably the best policy.He knew, in short, that it took more than battles lost or colonies abandoned to ruin a nation. President Obama and the Democrats know that too. But they have a more cynical take on Adam Smith’s adage.Over generations the U.S. has accumulated plenty of capital (and I don’t just mean our assets). Subconsciously, the president and his allies seem to have decided: “Let’s go ahead and spend that capital for our own political advantage.” The country will survive. “Social justice,” meaning equality, is what they say they want. If getting there means blowing some capital, well, only heartless right-wingers will object.
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