Adam Smith and Capitalism
Adam Smith, a key figure in the development of capitalism, is known for his influential work "The Wealth of Nations." He advocated for free markets, the division of labor, and the concept of the "invisible hand" guiding economic activity. Smith's ideas laid the foundation for modern capitalist economies, emphasizing individual self-interest and competition as drivers of economic growth and prosperity.
8 Key excerpts on "Adam Smith and Capitalism"
eBook - ePubBetter Capitalism
Jesus, Adam Smith, Ayn Rand, and MLK Jr. on Moving from Plantation to Partnership Economics
- Paul E. Knowlton, Aaron E. Hedges(Authors)
- 2021(Publication Date)
- Cascade Books(Publisher)
...Chapter 7 The Father of Capitalism—Adam Smith A dam Smith (1723 – 1790) was the Scottish philosopher turned economist most famous for his 1 776 magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations (“Wealth of Nations”). In American universities and publications Smith is frequently considered the father of capitalism, certainly America’s version of capitalism, and Wealth of Nations is the capitalist’s bible. The enlightened mutuality of the kingdom of God is found in Smith’s work too. In fact, among Smith’s wide-ranging texts, mutuality serves as a keystone, a central concept representative of and shedding light on the larger body of work. Re-Thinking Adam Smith Preview Common but inaccurate understanding: Smith advocates for self-interest and self-interest only, because the “invisible hand” and laissez-faire turn self-interest in unregulated markets into social good. To follow Smith is to completely focus on one’s self-interest and ignore or even actively avoid seeking social good. Necessary correction: Don’t passively absorb over two centuries of second-hand portrayals about a significant person or his thought. Go to the source itself. What does Smith actually say? More accurate understanding (see for yourself): Smith does advocate for self-interest, and his view of self-interest inherently and inextricably includes concern for others and the common good. His own words declare that both individuals and governments can and should seek mutual benefit. Smith’s work centers upon and repeatedly emphasizes the mutuality of self-interest with other-interest and social good. Moral Sentiments Smith’s previous bestselling book was first published in 1759. The Theory of Moral Sentiments (“Moral Sentiments”), this thought leader’s masterpiece, written during the logic- and reason-centric Age of Enlightenment, is all but unknown to modern readers...
eBook - ePubHistory of Economic Thought
A Critical Perspective
- E. K. Hunt, Mark Lautzenheiser(Authors)
- 2015(Publication Date)
- Routledge(Publisher)
...Chapter 3 Adam Smith Adam Smith (1723–1790) was born in Scotland, where he lived most of his life. He attended Glasgow and Oxford Universities (1737–1746) and was a professor at Glasgow from 1751 to 1764. In 1759 he published one of his two major works, The Theory of the Moral Sentiments, a treatise on social and moral philosophy. He spent two years in France, from 1764 to 1766, where he interacted with many of the leading French intellectuals, including the Physiocrats Quesnay and Turgot. In 1776 he published his most important work, An Inquiry into the Nature and Causes of the Wealth of Nations (generally referred to as The Wealth of Nations). Smith is distinguished from all prior economists not only by his scholarship and breadth of knowledge, but also by his development of a complete and relatively consistent abstract model of the nature, structure, and workings of the capitalist system. He clearly saw that there were important interconnections between the major social classes, the various sectors of production, the distributions of wealth and income, commerce, the circulation of money, the processes of price formation, and the process of economic growth. He based many of his policy recommendations on the conclusions derived from his model. Such systematic models of capitalism, whether considered as a whole or in part, have characterized the writings of most of the important economists since Smith. Smith’s model is equally interesting whether one examines its logical consistencies or its contradictions...
eBook - ePubReflections on Commercial Life
An Anthology of Classic Texts from Plato to the Present
- Patrick Murray, Patrick Murray(Authors)
- 2014(Publication Date)
- Routledge(Publisher)
...Adam Smith (1723–1790) DOI: 10.4324/9781315870601-9 ADAM SMITH did not always succeed in properly conceptualizing modern commercial forms, but that did not keep him from being a brilliant, if uneasy, advocate of capitalism. Smith’s four stages of human history bear some resemblance to Aristotle’s forms of acquisition, but Smith’s narration ends on quite a different note: commercial, that is capitalist, society is the highest and final stage of social evolution. In a commercial society, as a rule, goods and services take the commodity form, labor takes the form of wage labor, and the economic initiative lies with capitalists, or “undertakers.” Sensing the intercon-nectedness of these forms, Smith simultaneously defends the capital form, the generalization of the commodity form, wage labor, and the nearly absolute use rights of private property owners. As the title of his famous book The Wealth of Nations suggests, capitalism s main draw for Smith was its remarkable capacity to generate “that universal opulence which extends itself to the lowest ranks of the people.” Smith believed, as had Locke, that, even if the resulting abundance was divided into preposterously unequal portions, the rising tide of wealth would lift the laboring poor of commercial societies—”that is, the great body of the people”—to heights of material comfort unimaginable to the rulers of “rude” societies. Further benefits of commerce, he said, were its tendencies to make society orderly and well governed. “Unintended consequences” is our dull revision of “the invisible hand,” Smith’s memorable phrase that appears but once in The Wealth of Nations. With it he crystallized a notion dear to Mandeville and Hume that settled into German Idealism by way of Kant’s historical essays, eventually reminted by Hegel as the “cunning of reason.” No one intends the happy consequences of commerce...
eBook - ePubThe Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes
Adam Smith, Karl Marx, and John Maynard Keynes
- Mark Skousen(Author)
- 2015(Publication Date)
- Routledge(Publisher)
...In fact, Adam Smith had little regard for the men of vested interests and commercial power. His sympathies lay with the average citizens who had been abused and taken advantage of over the centuries. Now they would be liberated from sixteen-hour-a-day jobs, subsistence wages, and a forty-year life span. Adam Smith Faces a Major Obstacle After taking twelve long years to write his big book, Smith was convinced he had discovered the right kind of economics to create “universal opulence.” He called his model the “system of natural liberty.” Today economists call it the “classical model.” Smith’s model was inspired by Sir Isaac Newton, whose model of natural science Smith greatly admired as universal and harmonious. Smith’s biggest hurdle would be convincing others to accept his system, especially legislators. His purpose in writing The Wealth of Nations was not simply to educate, but to persuade. Very little progress had been achieved over the centuries in England and Europe because of the entrenched system known as mercantilism. One of Adam Smith’s main objectives in writing The Wealth of Nations was to smash the conventional view of the economy, which allowed the mercantilists to control the commercial interests and political powers of the day, and to replace it with his view of the real source of wealth and economic growth, thus leading England and the rest of the world toward the “greatest improvement” of the common man’s lot. The Appeal of Mercantilism Following a long-standing tradition in the West, the mercantilists (the commercial politicos of the day) believed that the world’s economy was stagnant and its wealth fixed, so that one nation grew only at the expense of another. The economies of civilizations from ancient times through the Middle Ages were based on either slavery or several forms of serfdom. Under either system, wealth was largely acquired at the expense of others, or by the exploitation of man by man...
eBook - ePub50 Economics Classics
Your shortcut to the most important ideas on capitalism, finance, and the global economy
- Tom Butler Butler Bowdon(Author)
- 2017(Publication Date)
- Nicholas Brealey Publishing(Publisher)
...1776 The Wealth of Nations “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.” “To prohibit a great people … from making all that they can of every part of their own produce, or from employing their stock and industry in the way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind.” In a nutshell The wealth of a nation is that of its people, not its government, and that wealth is achieved through the division of their labor and the ever-greater specialization of their skills. The foundation of all future prosperity is current savings. In a similar vein Milton Friedman Capitalism and Freedom Ayn Rand Capitalism: The Unknown Ideal David Ricardo Principles of Political Economy and Taxation Max Weber The Protestant Ethic and the Spirit of Capitalism CHAPTER 45 Adam Smith I n the eighteenth century, the words “capitalism” and “economics” had not yet been invented. Economic matters were seen as part of their political and social contexts, hence the term then used, “political economy”. Adam Smith was not the first political economist by any means (he was inspired, for instance, by the French “physiocrats,” early thinkers on economic matters including Turgot, Condorcet, and Quesnay), but by identifying economics as a field of study in its own right, separate to politics, philosophy, law, and ethics, The Wealth of Nations established a new discipline. It was the first book on economics to really catch the public’s attention, and is as much as anything else a great work of literature...
eBook - ePub- John Kenneth Galbraith(Author)
- 2001(Publication Date)
- Mariner Books(Publisher)
...leaf166 The Founding Faith: Adam Smith’s Wealth of Nations 1 [ from Annals of an Abiding Liberal] More thirty-five years after this was written—years that have included Ronald Reagan, Margaret Thatcher and now George W. Bush and Dick Cheney—Adam Smith remains undiminished in the scholarly eye and, as here told, is by no means the exclusive possession of conservatives. … It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. —Wealth of Nations A DAM SMITH, not to put too fine an edge on matters, was Scotland’s greatest son. Wealth of Nations is his greatest and almost his only book. As Karl Marx is much too valuable a source of social insight to be left as the exclusive property of the Communists, so Adam Smith is far too wise and amusing to be relegated to conservatives, few of whom have ever read him. Smith was born in 1723 in what was then the small port town of Kirkcaldy on the Firth of Forth across from Edinburgh. The endur ing exponent of the freedom of trade was the son of the local collector of customs. After study at the evidently excellent local school, he went on to the University of Glasgow and then to Oxford (Balliol College) for six years. Returning to Scotland, he became, first, professor of logic and then, in 1752, professor of moral philosophy at the University of Glasgow. This chair he resigned in 1763 to travel on the Continent as the well-paid tutor of the young Duke of Buccleuch, a family possessed to this day of a vast acreage of dubious land on the Border. In Europe Smith made the acquaintance of the Physiocratic philosophers and economists Quesnay and Turgot, as well as Voltaire and other notable contemporaries, and used his time and mind well...
- Adam Smith(Author)
- 2021(Publication Date)
- Strelbytskyy Multimedia Publishing(Publisher)
...Adam Smith An Inquiry into the Nature and Causes of the Wealth of Nations Illustrated The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith. By reflecting upon the economics at the beginning of the Industrial Revolution, the book touches upon such broad topics as the division of labour, productivity, and free markets. The Wealth of Nations is the second most cited book in the social sciences published before 1950, behind Karl Marx's Das Kapital. TABLE OF CONTENTS INTRODUCTION AND PLAN OF THE WORK. BOOK I. OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE. CHAPTER I. OF THE DIVISION OF LABOUR. CHAPTER II. OF THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR. CHAPTER III. THAT THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET. CHAPTER IV. OF THE ORIGIN AND USE OF MONEY. CHAPTER V. OF THE REAL AND NOMINAL PRICE OF COMMODITIES, OR OF THEIR PRICE IN LABOUR, AND THEIR PRICE IN MONEY. CHAPTER VI. OF THE COMPONENT PART OF THE PRICE OF COMMODITIES. CHAPTER VII. OF THE NATURAL AND MARKET PRICE OF COMMODITIES. CHAPTER VIII. OF THE WAGES OF LABOUR. CHAPTER IX. OF THE PROFITS OF STOCK. CHAPTER X. OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK. PART I. Inequalities arising from the nature of the employments themselves. PART II.—Inequalities occasioned by the Policy of Europe. CHAPTER XI. OF THE RENT OF LAND. PART I.—Of the Produce of Land which always affords Rent. PART II.—Of the Produce of Land, which sometimes does, and sometimes does not, afford Rent. PART III.—Of the variations in the Proportion between the respective Values of that sort of Produce which always affords Rent, and of that which sometimes does, and sometimes does not, afford Rent. Conclusion of the Digression concerning the Variations in the Value of Silver. Conclusion of the Chapter. BOOK II...
eBook - ePubFair Economics
Nature, money and people beyond neoclassical thinking
- Irene Schoene(Author)
- 2015(Publication Date)
- Green Books(Publisher)
...3. “Adam Smith could save the world,” they claim. “Adam Smith could save the world,” UK politicians claim. From the newest backbencher to the ‘big beasts’ – from Conservative and Labour chancellors to a Liberal business secretary, politicians generally concur with this view. Adam Smith’s ideas, laid down in The Early Writings of Adam Smith (EW), The Theory of Moral Sentiments (TMS) and An Inquiry into the Nature and Causes of The Wealth of Nations (WN), seem indeed to rule the world – until today. 1 All of his three publications will be discussed in this study, as Smith is perceived to be the ‘classical’ economist and the ‘father of economics’. However, despite the seemingly universal claim that Adam Smith could save the world, is it really helpful to refer to the 18 th century, when a political economic vision for our own century, the 21 st, is needed? Why look back when we could look forward? Whilst no physicist would dare merely repeat 250-year-old ideas, having instead to consider the latest findings of science, economists are still basing their ideas on Adam Smith’s insights and still recommending them to politicians. Indeed, Adam Smith’s theories are still treated as facts about how the world works today and always has. Moreover, the belief that Adam Smith could offer to us, 250 years later, an understanding of how to solve the environmental and financial crisis we suffer from today, suggests a lack of familiarity with his real writings. Indeed, few will even know what such a reference to Adam Smith means, although most of us come across his picture nearly every day – on a £20 note. 2 This note gives us his lifespan – from 1723 to 1790 – and the following text: “The division of labour in pin manufacturing: (and the great increase in the quantity of work that results)”...
