Adam Smith's Wealth of Nations Essay

3. Explain the view of capitalism that was expressed in Adam Smith’s Wealth of Nations.

In his Wealth of Nations, Adam Smith celebrated capitalist society. The central thesis of The Wealth of Nations is that capital is best employed for the production and distribution of wealth under conditions of no governmental interference, or laissez-faire, and free trade. In Smith's view, the production and exchange of goods can be stimulated, and a consequent rise in the general standard of living attained, only through the efficient operations of private industrial and commercial entrepreneurs acting with a minimum of regulation and control by governments. To explain this concept of government maintaining a laissez-faire attitude toward commercial endeavors, Smith proclaimed the principle of the "invisible hand": Every individual in pursuing his or her own good is led, as if by an invisible hand, to achieve the best good for all. Therefore any interference with free competition by government is almost certain to be injurious. The division of labor is another crucial component of capitalist society. According to Smith, division of labor benefits society in three ways:

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

Smith believed that self, self-interest, and self-determination, all were mechanisms where individuals are motivated to gain wealth and power for individual gain and group gain. Smith believed that ‘self' is a matrix of reason and passion (Levine, 1998). Furthermore, Smith believed that sympathy leads to empathy, and our individual self-determination leads to accumulation of wealth that benefits others as well as us (Levine, 1998). Examples of this concept are evident in our current economic society today. We see Bill Gates and Microsoft providing technology to communicate more efficiently, Henry Ford's posterity changing the transportation market, and many others who impact man with their accumulation of wealth.

On the other hand, Smith believes that at the state of nature, man actually tends towards harmonious relationships of bartering and are willing to work together instead of apart. He utilizes individual power to give him leverage in transactions. His creation of social order is not to control this tendency, but rather to create a system in which it can flourish, which he calls the division of labor. In this, each man finds his place in the social order, produces something in particular, and a lot of the transaction costs from bartering are worked past. Unlike Hobbes, he believes that social order simply adds to the ability of man’s power towards transaction.

The market model of economy, developed by Adam Smith entails a freely flowing economy that places little or not restriction on occupation allowing individuals utmost rights. America took on an ethos of a mixed economy of market and command that struck a successful economic equilibrium. American economy also changes with different periods of history. The Civil War had lit the spark of industrialization needed to enhance the American economy. Technology advanced by leaps and bounds and free labor was done away with to make room for Industrialization and Adam Smith’s market model of capitalism. Capitalism was a promoter of the entrepreneur and individual success. It was only natural that during this time of private interest the gap between rich and poor would be greatly widened and a state of disorder might arise. Capitalism was a new ideology and drastic labor problems and social disorder arose because Americans were simply adjusting to (and taking advantage of) the new system.

Can greed and self-interest benefit our society’s economy? majority of people would say, but one man by the name of Adam Smith would’ve disagreed. he believed that profit motive even greed could be good for the economy. This very theory spiraled an onset of controversies and debates. However, his theory shined in the right light; justified is the best solution for the economy.

If a man had no hope of property, Smith thought, he would obviously work badly. He based his beliefs from experience of all ages and nations. "Work done by freemen comes cheaper in the end than that performed by slaves." That sentence was immensely influential in the slave labor plantation system. Smith's interpretation was taken exceptionally serious because unlike most who were opposes to slavery based on factors such as religion and moral belief, Smith never mention moral or religion regarding slavery as a factor in his book "Wealth of Nations".

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.

An important aspect of Smith's views, were taxes. In one of Smith's many opinions regarding human nature, he explains that the rich, once placed in a position of power, maintain that power through their dealings within a civil government which employs men of inferior wealth, to protect the wealthy lands of the rich. In layman’s terms a community with the bare minimum has little violence since there is nothing to fight over, but one with plush property and wealth, has a plethora of people fighting over one another. This is where Smith's views of taxes comes into play. In his world, the government would impose taxation, with the intentions of discouraging improper or luxurious behavior which he believed did not benefit society as a whole. (Smith, pp.18-20) When discussing human nature in the sociological spectrum, Smith likens humans to animals, or dogs in particular. The typical reliance of animals, once they're matured,on no one but themselves (becoming independents), is a characteristic that humans do not follow. I believe Smith's

- Control and regulate the various economic conditions such as inflation through the management and

He was trying to say is that commercial society is a civilization where everyone is a merchant: a dealer, trader, and seller. Throughout the book, Smith starts having an agreement and disagreement on commercial society, which is a commercial society deforms human nature. However, continuing reading his book, there are more benefits of a commercial society than the drawbacks. A commercial society does not damage human nature, instead improves human nature by acting on one’s self-interest to bring positive benefits to society, connects and aids members of society together through trade and

In Wealth of Nations, self-interest seems to be synonymous with selfishness, and be the driving force of capitalism and the necessary ingredient for personal and economic wealth. This is, however, and partial and superficial view. Although in Wealth of Nations Smith does declare that human’s primary motive for most actions is self-love, all of their actions are still made within the moral parameters of society, which were created because of sympathy. A man, for example, will not pursue his self-interest at any cost to the people around him. He has to be ethical and fair in his interactions in order to be seen as morally and socially acceptable. In this way an understanding of, and cooperation with the sympathetic nature of society proves to further one’s self-interests. Therefore, to act morally and sympathetically is in fact an act out of self-interest.

At eighteenth century, the cost of increasing development of capitalism is anomie: people chasing material life insanely even sacrifice others’ benefits. Because of this, Adam Smith, a successful philosopher and economist, released that the original morality principle was not suitable for that society anymore, and it needed to build another new theory system to suit the developing society. He wrote two masterpieces that proposed his ideas: The Theory of Moral Sentiments, which discusses the human development by analysing the human emotion, and The Wealth of Nations, which summarises the development of capitalism and it is also a foundation for today’s economy. This essay will analyse the self-interest, plays as a motivator role in morality and economy field, and benefits the development in that society. Moreover, will suggest some limitations of Smith’s idea.

La ciencia económica se cimienta sobre los intentos de dar respuesta a la pregunta planteada en el siglo XVIII por A. Smith. El economista ingles se indagaba sobre las condiciones y procesos de la coordinación mercantil entre individuos descentralizados ¿Es viable un orden social que funcione respetando el egoísmo de los individuos? Adam Smith estaba convencido que una organización económica liberal era la ideal para permitir obtener un resultado óptimo, pues a pesar, de que los individuos están motivados por intereses propios, la “mano invisible” los empuja a obtener resultados y