Adam Smith 's Criticism Of The Corn Laws

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

Clay argued that the West, which opposed the tariff, should support it since urban factory workers would be consumers of western foods. In Clay’s view, the South, which also opposed high tariffs, should be supportive because of the market for cotton in northern mills. This last argument was a tough

Despite the flushed predictions of prosperity that had lured new settlers to the plains, the reality was more difficult. The farmers claimed that they did not have enough land, money, and transportation (Doc C). The farmers went into in a never ending cycle if they did not have a good harvest. As Booker Washington explains the farmers had no money so they had to borrow money from the banks which charged 12 to 30 percent interest. The interest the farmers were hit with was nearly impossible to repay so they had to mortgage everything and if the mortgage wasn’t paid the land was foreclosure which led the yeomen to become tenant farmers (Doc B). With periods of drought growing good crops was hard. Leading Economic Sectors shows how the farmers predicament of not being able to make a very

The Populists took major issues with the capitalists and monopolies of the era. In their party’s platform (Document A), the Populists say that the land is “concentrated in the hands of the capitalists.” This prevented the small farmer from living the American Dream of building a successful life for himself and his family. A common view for farmers was expressed by James B. Weaver in 1892 (Document F), who believed that the monopolies of the era were “organized to destroy competition and restrain trade.” These large scale farms caused overproduction, causing an “alarming fall in the price of wheat (Document E).” This price fall caused a chain reaction of events that all had the same effect, small farmers being crippled by loss of income.

In the late nineteenth century shortly after the Civil War and Reconstruction, farmers in the Midwestern United States found themselves in quite a predicament. During the second industrial revolution of the United States that contained mass introduction of: railroads, oil, steel, and electricity, the risk-taking entrepreneurs of this era took an adventure into the world of cutthroat capitalism. In just a little time, a handful of monopolies arose in all these industries which hurt both the consumer of the product and the producer of the material (Doc. F). Because of the corrupt politicians in Washington DC, the absence of regulation on the monopolies put into place by bribes and greed or moderation from them, and the devious ways of the

In the late 1800’s, America’s farmers faced deep financial insecurity with the fall of agricultural prices that kept them in poverty. Many farmers borrowed money from merchants and banks, and when it came time to repay their loans, they found themselves in the face of losing their land. Their financial troubles mainly attributed to the high freight rates that railroads charged the farmers in order to transport their crops, as well as high interest rates charged by loaners. This financial turmoil lead to the development of the Farmers’ Alliance, which advocated for lower interest rate loans by the Federal Government itself, so that way the farmers didn’t have to depend on independent banks and merchants for financial assistance. The Farmers’ Alliance eventually gained traction in politics and eventually formed itself into the People’s Party, or otherwise known as the Populist Party.

In the late 1800’s farmers in the West faced many difficulties. Some of those difficulties included the monetary policy, overproduction, and differential freight rates. These challenges led farmers to debt, and being unable to make a decent living. Quickly, farmers became very unhappy with their situation and saw it as the government’s fault. So that opens up the question of “were their complaints valid?”

In 1890 clergyman Washington Gladden wrote an article called “The Embattled Farmers”. In it he blamed the ruin of the farmers on “protective tariffs, trusts…speculation in farm products, over-greedy middlemen, and exorbitant transportation rates.”

The Market Revolution attempts to look at the United States in its most critical period. Beginning after the United States’ victory in the War of 1812, the focus shifts to how the United States will undergo rapid change with a new generation of Americans taking part in an emerging free market economy. The Market Revolution is written by Charles Sellers, a professor at the University of California, Berkeley. Sellers is an American history professor who has done extensive research of the nineteenth century United States. This century saw the transformation of the United States from an agrarian republic into an industrialized entrepreneurial power. Facing an identity crisis with the emergence of the free market as well as politics between the Federalists and Jeffersonian republicans is the beginning of Sellers’ thesis. With a focus on how the free market is responsible for this transformation, Sellers focuses on the family structure of the American society from subsistent farms

If the ideas of good economic were to exist in a three dimensional plane, Cass Sunstein wants the readers to believe that those who support the idea of Laissez-faire were only looking at the issues from a one or two dimensional model of the situation. Opponents of new dealers were not resentful of the existence of government or were the first to call on the government intervention in the areas that the government were more apt to guard certain freedoms better than the individual. With bestowal of the power, however, the framers specifically delineated its region and radius of

To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, and absurd tax upon the rest of their fellow-citizens.” (Adam Smith, Wealth of Nations (Amherst, New York: Prometheus Books, 1991), pages

Patel concludes that these systems favor the consumers rather than the producers. He uses Mexican corn as an example. The price of corn in the Mexican market collapsed due to U.S imports. The U.S corn farmers were significantly subsidized by their government, and the poor Mexican farmers had no way to compete. Patel accuses America of using its economic and political power to strong-arm Mexico and other countries under the guise of free trade agreements. With all of the evidence Patel presents on this topic, any reader would have a difficult time disagreeing with this assertion.

Since the early days of the United States, the Founding Fathers and other brilliant minds sought ways to understand and make sense of the inner workings of society and the economic market. Out of the many thinkers and developers of that time period, perhaps none made so great an impact on American society as the Scottish contemporary philosopher and political economist, Adam Smith—who is most known for his influential work, An Inquiry into the Nature and Causes of the Wealth of Nations, By the early nineteenth century, other streams of economic theory emerged from various individuals who were also influenced by the ideas of Smith. Some of these individuals included David Ricardo, Karl Marx and later John Maynard Keynes and Milton Friedman—each of whom contributed their own ideas on economic activity. However, it was Smith’s ideas on capitalism and his laissez-faire approach to free markets that have transcended other economic theories and continue to impact American economic thought to this day.

The aim of this paper is to discuss government intervention in the economy. Adam Smith, the founder of economics, stated that the free market is guided by the invisible hand, reduces government intervention and identifies three main functions of the government: national defense, administration of justice and public utilities. However, many issues emerged during the Great Depression, leading to the emergence of new theories about government intervention in society. Also discuss the role of government in a capitalist system and how Smith’s thoughts were misinterpreted in countries that undergone transition to capitalist systems

From a political point of view, Smith wrote that Government intervention should be kept to a minimum within society. From a mercantilist point of view this was a terrible suggestion, however Smith argued that government intervention in markets will cause a limitation in productivity, and therefore not maximise efficiency. However if left alone as discussed in the previous paragraph, each party will seek to maximise its own prosperity within the given constraints, in turn maximising the