Adam Smith and the Reasoning Behind his Thoughts on the Wealth of Nations

Adam Smith born 1723-1790 a Scottish philosopher and Economist. Defending the morals of acceptability of pursuing one's self- interest quoted in Document C “Every man is left perfectly free to pursue his own interest in his own way.” Smith gains into the general utility of society knowns as the the invisible hand argument. In the Wealth of Nations smith reveals the interests of merchants and manufacturers were opposed to those of society and had a tendency of pursuing their own interest. Smith wasn’t one to let religious attitude stop his thinking. He believed that more wealth to common people would benefit a nation's economy and society as a whole, stated in the The Wealth of Nation. Smith’s main

The pivotal second chapter of Adam Smith's Wealth of Nations, "Of the Principle which gives occasion to the Division of Labour," opens with the oft-cited claim that the foundation of modern political economy is the human "propensity to truck, barter, and exchange one thing for another."1 This formulation plays both an analytical and normative role. It offers an anthropological microfoundation for Smith's understanding of how modern commercial societies function as social organizations, which, in turn, provide a venue for the expression and operation of these human proclivities. Together with the equally famous concept of the invisible hand, this sentence defines the central axis of a new science of political economy

In The Wealth of Nations, published in 1776. Smith advocated that the production of wealth would increase if people were allowed to pursue their self-interest, with little intrusion from government. In serving their own interests, people would serve the public interest, unconsciously, as if guided, as he said, by an "unseen hand." Capitalism is built on self interest, it’s a system of give me more and can never inspire admiration. Today there seems to not be a better alternative to capitalism, but anti-market feelings persist. The current market system is more proficient at constructing wealth and fulfilling desires than any other system currently known. Capitalism encompasses the legal, political, economic and cultural systems all working together to create wealth

Called the Father of Modern Economics, Adam Smith was an enormous advocate for private markets. He supported an economic system based on the decision making by individuals instead of the government. Smith felt that no one person or a group is fit to make decisions for a whole population of people and that the population knows how to make decisions for its welfare. In Smith’s mind, people work to supplement their own lives, and when people seek individual economic gain then they unexpectedly promote society and stimulate the economy subconsciously. If people earn more money by working harder then almost all people will work harder. Smith insinuates that people are naturally self preserving and by default selfish; but to a point. Everyone has something that they want and in this world most things can be obtained if a person has enough money. Smith believes that every man should be free to

Adam Smith, an Enlightenment economist, advocated for a laissez-faire approach to the economy, leaving the citizens the right to control their economic system. He recommended that the government deregulate trade and allow people to be “perfectly free to pursue his own interest in his own way.” (Doc C) Since people work for their own benefit, Smith argued that the workers, while striving for their own economic gain, would ultimately benefit the entire society, “led by an invisible hand,” (Doc C) which would equate the supply and demand of the free market. By giving people the right to decide how the

“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.” This is a quote from the book Wealth of Nations, which Adam Smith wrote, addresses well about why and what reason people work for. The butcher, the brewer, or the baker does not cut, stir, or bake because they want to please the customer or to feed the poor, but to earn money and for their own happiness. Adam Smith, who fully understood the concepts of capitalism and free market system, became one of the most well respected economists throughout the world. Smith became famous because of his philosophy of economics. Because of his thoughts on economics, today he is well known as the “father of

Adam Smith and Karl Marx are two of the most influential individuals in human history. While they did not rule any empires or command any armies, the power of their ideas significantly influenced and transformed the world in which we live today (Heilbroner, 11). The ideas of Adam Smith formed the intellectual foundation of the classical economics that paved way to the modern economics, capitalism and subsequent transformation of the human society. On the other hand, Karl Marx was a qualified critic of the capitalism arguing that the internal contradictions within the capitalism would eventually lead to its supplantation by Communism. The ideas of Karl Marx, rightly or wrongly understood, played a significant role in the Communist movement of 20th century. This paper examines and contrasts the views of these two important thinkers and aims to find the value of their insights to our modern society.

controlled the society he lived in. In the process, he provides an exposition for his vision

In The Wealth of Nations (WN), Adam Smith assumes that human behavior is fundamentally based on self-interest and that, when controlled, allows individuals and society to prosper. Though not superficially evident, in The Theory of Moral Sentiments (TMS)—an earlier work—he maintains his assumption, and, in this case, holds that at least some self-interest is present in humans, specifically through prudence, a human virtue grounded in self-interest. Concerning the consequences of excessive self-interest, however, Smith becomes inconsistent, as he implies that they are permanent in WN but self-correcting in TMS. While in TMS Smith claims that the innate desire for approval and praise causes people to restrain their self-interest, in WN, he believes that the same inherent restraining mechanisms are no longer effective, as monopoly power, fueled by excessive self-interest, is insurmountable. Hence, Smith, though consistent in his agreement on the presence of self-interest, is inconsistent in discussing the remediation of its consequences, as he prescribes self-interest in TMS but only describes (and criticizes) it in WN.

is when the division of labour has been once thoroughly established, it is but a small part of a man’s want which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other’s men’s labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society (Smith, 2003, p. 37).

Smith’s vision of a free market based economy, greed and similarly undesirable behaviors of the self would be held in check by the powerful human need for love and neighborly social acceptance, resulting in the provision of universal opulence for all.” (Whybrow, 2007). Smith stated that in our free market society, there is a give and take, which is the driver for existence and survival (Whybrow, 2007).

Sympathy and self-interest, when examined superficially, seem like conflicting notions. For this reason, Adam Smith is often criticized for writing two philosophical books – one about the human nature to exhibit sympathy, and one about the market’s reliance on our self-interest – that contradict each other. Through careful examination of Smith’s explanations, however, these two apparently separate forces that drive human behavior become not only interwoven, but symbiotic.

Some say he was absent-minded or even oblivious, but I rather like to think of it as frequent states of profound thought. The man I refer to is Adam Smith and after having read the assigned excerpts and a few other passages from his The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations I not only hold him in a new light, but I have arrived at three heavily debated conclusions. First, he believed that self-interest is the singular motivation that effectively leads to public prosperity. Second, although Smith feels that the one’s pursuit of self–interest should be their primary concern, he knew that humans are inclined to take interest in and enjoyment from kind and charitable

The purpose of this paper is not to fully resolve the new “Adam Smith Problem,” but to contribute to its scholarship. I argue that the concept of sympathy is implied in WN because it is an original principle of mankind’s constitution. According to my reading of Smith, sympathy functions as a mechanism of moral judgement, an instinctive sensation or fellow feeling which motivates action and becomes a motive for action, and lastly sympathy functions as a sense or mode of perception. Thus, my thesis is summarized as follows: The original principle of sympathy is assumed to function in WN, therefore, one can read TMS and WN as one, congruent text. Sympathy creates rules according to which mankind are effected in their experience. WN observes and

The advent of the ideal of capitalism is often attributed to Adam Smith. Sometimes called “The Father of Economics,” Smith was an 18th century moral philosopher from Scotland. Smith is perhaps most known for writing the book “An Inquiry Into the Nature and Causes of the Wealth of Nations.” In this book Adam Smith considers and advances the ideas of the division of labor, the invisible hand, the pursuit of self-interest, the proper role of government and the idea of a Laissez-Faire (or noninterventionist) economy. Each of these ideas were considered heavily during the establishment and development of the United States. Because of their adoption into the new American government, the United States became the forerunner to the free-market.