Adam Smith

Encyclopedia : A : AD : ADA : Adam Smith

For other people named , see view] • [ talk] • [ edit]

There has been considerable controversy as to whether there is a contradiction between Smith's emphasis on sympathy in his Theory of Moral Sentiments and the key role of self-interest in The Wealth of Nations. Economist Joseph Schumpeter referred to this in German as [das 'Adam Smith-Problem']. In his Moral Sentiments Smith seems to emphasize the broad synchronization of human intention and behaviour under a beneficent Providence, while in The Wealth of Nations, in spite of the general theme of "the invisible hand", Adam Smith makes the claim that, within the system of capitalism, individuals acting for their own good tend also to promote the good of their community. Creating harmony out of conflicting self-interests, he finds many more occasions for pointing out cases of conflict and of the narrow selfishness of human motives. Yet it would be inaccurate to describe the Adam Smith of the Moral Sentiments as rejecting selfishness as an important factor in many human motives, for he writes that:

Thus self-preservation, and the propagation of the species, are the great ends which Nature seems to have proposed in the formation of all animals. Mankind are endowed with a desire of those ends, and an aversion to the contrary; with a love of life, and a dread of dissolution; with a desire of the continuance and perpetuity of the species, and with an aversion to the thoughts of its entire extinction. But though we are in this manner endowed with a very strong desire of those ends, it has not been entrusted to the slow and uncertain determinations of our reason, to find out the proper means of bringing them about. Nature has directed us to the greater part of these by original and immediate instincts. Hunger, thirst, the passion which unites the two sexes, the love of pleasure, and the dread of pain, prompt us to apply those means for their own sakes, and without any consideration of their tendency to those beneficent ends which the great Director of nature intended to produce by them.

Adam Smith himself cannot have seen any contradiction, since he produced a slightly revised edition of Moral Sentiments after the publication of The Wealth of Nations. Both sets of ideas are to be found in his Lectures on Jurisprudence. He may have believed that moral sentiments and self-interest would always add up to the same thing.

Some scholars have given another explanation: Adam Smith was trying to illustrate the complicated economy with two simple dimensions. It was the people who, due to historical limitations, emphasized the "wealth" part. In the future, due to the change of world economy, the emphasis may well change.

Influence

The Wealth of Nations, one of the earliest attempts to study the rise of industry and commercial development in Europe, was a precursor to the modern academic discipline of economics. It provided one of the best-known intellectual rationales for free trade and capitalism, greatly influencing the writings of Marx and later economists.

There has been some controversy over the extent of Smith's originality in The Wealth of Nations. Some argue that the work added only modestly to the already established ideas of thinkers such as Anders Chydenius (The National Gain (1765)), David Hume and the Baron de Montesquieu. Indeed, many of the theories Smith set out simply described historical trends away from mercantilism and towards free trade that had been developing for many decades and had already had significant influence on governmental policy. Nevertheless, Smith's work organized their ideas comprehensively, and so remains one of the most influential and important books in the field today.

Smith was ranked #30 in Michael H. Hart's list of the most influential figures in history.

Major works

• The Theory of Moral Sentiments (1759)
• The Wealth of Nations (1776)
• Essays on Philosophical Subjects (published posthumously 1795)

Notes

See also

• Liberalism
• Contributions to liberal theory
• Capitalism
• History of economic thought
• Anders Chydenius
• The National Gain
• William Petty

Works on Smith

• Muller, Jerry Z., 1995. Adam Smith in his Time and Ours: Designing the Decent Society. Princeton Univ. Press.
• ------, 2002. The Mind and the Market: Capitalism in Western Thought. Anchor Books.

External links

General