Adam Smith: Pernicious Effects of Gain
on Friday, April 21, 2017Adam Smith Money Quote saying retailers complain of the high cost of wages but never of profits. Adam Smith said:
“Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people” — Adam Smith
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In this quote, Adam Smith is criticizing merchants and business owners for only focusing on the negative effects of high wages on goods prices and sales, while ignoring the negative impacts of their own high profits. By “high profits”, Smith is referring to large profit margins that businesses earn by paying workers relatively low wages.
He notes that the employers “complain much” about high labor costs raising prices, but “say nothing” and are “silent” about how their own profit-seeking behaviors also contribute to increasing consumer prices. Smith suggests it is hypocritical for employers to solely blame workers’ wages, and not acknowledge how profits also play a role in determining overall production and pricing.
The quote aims to highlight the one-sided and self-serving nature of business owners who scapegoat high wages but do not reflect on the “pernicious effects” or harms that may also stem from prioritizing high profits.