Adam Smith
Adam SmithSome 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 acts. Lastly, when Smith developed the concept of the invisible hand he assumed that the economy would relatively remain unchanged. Let us start with my first hypothesis.
Self-interest is defined as regard for one�s personal advantage or benefit. We see and carry out this everyday. It is natural to look of one�s self first and Smith knew that, in fact he encouraged it. He observed that if everyone acted in his or her own best interests the market would automatically produce what the people demand. He knew this would work be more effective and efficient than any governing body or groups of planners to decide the Three Economic Problems: What to produce? How to produce it? For whom to produce? He knew because the people, the consumers would be making those decisions for themselves. Smith also noticed that self-interest lead to increased trade and bargaining. "It is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of" (Classic Readings in Economics, pg 7). "It is this same trucking disposition which originally gives occasion to the division of labour" (Classic Readings in Economics, pg 7). When Smith speaks of the division of labour he refers to the specialization of workers into certain trades. This happens because an individual discovers talents that he possesses and may be advantageous for him to further develop in order to increase his wealth. People perhaps imagine that goods will make them happier and seek them for that reason, but they are deluded. Adam Smith for one thinks the delusion is a good thing because without it people would not work. This desire to...
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