Adam Smith

Born: 1723. Died:1790.

Ideas

- Nature provide a basis in sentiment for virtue.

- When we adopt the role of impartial spectators, sympathy is the sentiment that is the basis for moral judgments.

- Acting from a sense of duty corrects for any lack of appropriate sentiment in particular instances.

- The deity has implanted powerful instincts (passions), which lead us behave in ways that are ultimately beneficial for all.

- Self-interest coupled with the predisposition to 'trade', 'barter', and 'exchange' provides a basis for the division of labor and economic development.

- In a market free from monopolies and self-serving public policies, competition among the self-interests of isolated consumers and producers produces a stable and expanding economy.

- The self-interested pursuit of wealth may not be individually satisfying but leads to an aggregate increase in wealth that is in the best interests of a nation.

Biography

Adam Smith was an important Scottish political philosopher and economist whose famous work Wealth of Nations (1776) set the tone for work on politics and economics for many people even through today. This was, in fact, the first comprehensive effort to study the nature of capital, the development of industry and the effects of large-scale commerce in Europe.

Adam Smith's fundamental argument was that individuals should be allowed to pursue their own private economic interests as much as possible and so long as they do not violate basic principles of justice. In this way, Smith thought, they would do much more to further the public good and public interests than if the same people were to try to help the public deliberately and intentionally.

Smith called this the invisible hand of the market - although everyone is acting in their own self-interest, they are led to achieve the good of all as if by an invisible hand of economic forces. Therefore, outside interference will inevitably lead to disaster. This became known as laissez-faire economic policy.

In 1759 he published the book Theory of Moral Sentiments, where he discussed the standards of ethical conduct that hold society together. This book was a compilation of ideas and lectures from his time as a professor of moral philosophy at the University of Glasgow.

Major Books of Adam Smith

- An Inquiry into the Nature and Causes of the Wealth of Nations, 1776
- The Theory of Moral Sentiments, 1759

Quotes from Adam Smith

- "To obey the will of the Deity is the first rule of duty." (from "The Theory of Moral Sentiments", 1759)

- "What institution of government could tend so much to promote the hapiness of mankind as he general prevalence of wisdom and virtue? All government is but an imperfect remedy for the deficiency of these." (from "The Theory of Moral Sentiments", 1759)

- "What can be aded to the happiness of the man who is in health, who is out of debt, and has a clear conscience?" (from "The Theory of Moral Sentiments", 1759)

- "What so great hapiness as to be beloved, and to know that we deserve to be beloved? What so great misery as to be hated, and to know that we deserve to be hated?" (from "The Theory of Moral Sentiments", 1759)

- "How selfish soever man may be supposed, there are evidently some princibles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though the derives nothing from it, except the pleasure of seeing it." (from "The Theory of Moral Sentiments", 1759)

- "The cruelest insult ... which can be offered to the unfortunate, is to appear to make light of their calamities." (from "The Theory of Moral Sentiments", 1759)

- "The love of praise is the desire of obtaining the favorable sentiments of our brethen. The love of praiseworthiness is the desire of rendering ourselves the proper objects or those sentiments." (from "The Theory of Moral Sentiments", 1759)

- "The intoxication of prosperity." (from "The Theory of Moral Sentiments", 1759)

- "That wealth and greatness are often regarded with the respect and admiration which are due only to wisdom and virtue, and that the comtempt, of which vice and folly are the only proper objects, is often most unjustly bestowed upon poverty and weakness, has been the complaint of moralists in all ages." (from "The Theory of Moral Sentiments", 1759)

- "This demigod within the breast appears, like the demigods of poets, thought partly of immortal, yet partly too of mortal extraction." (from "The Theory of Moral Sentiments", 1759)

- "Self-command, by which we are enabled to abstain from present pleasure or to endure present pain, in order to obtain a greater pleasure or to avoid a greater pain in some future time." (from "The Theory of Moral Sentiments", 1759)

- "Self-command is not only itself a great virtue, but from it all the other virtues seem to derive their princible luster." (from "The Theory of Moral Sentiments", 1759)

- "Place, the great object which devides the wives of aldermen, is the end of half the labors of human life; and is the cause of all the tumult and bustle, all the rapine and injustice, which avarice and ambition have introduced into this world." (from "The Theory of Moral Sentiments", 1759)

- "It is by changing places in fancy with the sufferer that we come either to conceive or to be affected by what he feels" (from "The Theory of Moral Sentiments", 1759)

- "Concern for our own happiness recommends to us the virtue of prudence; concern for that of other people, the virtues of justice and beneficence." (from "The Theory of Moral Sentiments", 1759)

- "A stranger to human nature, who saw the indifference of men about the misery of their inferiors, and the regret and indignation which they feel for the misfortunes and sufferings of those above them, would be apt to imagine that pain must be more agonizing, and the convulsions of death more terrible, to persons of higher rank than to those of meaner stations." (from "The Theory of Moral Sentiments", 1759)

- "When the authorized teachers of religion propagate through the great body of the people doctrines subversive of the authority of the sovereign, it is by violence only, or by the force of standing army, that [the sovereign] can maintain his authority." (from "The Wealth of Nations", 1776)

- "To found a great empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers." (from "The Wealth of Nations", 1776)

- "Civil government, so far it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all." (from "The Wealth of Nations", 1776)

- "The difference between the mot dissimilar characters, between a philosopher and a common street porter ... seems to arise not so much from nature, as from habit, custom, and education." (from "The Wealth of Nations", 1776)

- "People of same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise proces." (from "The Wealth of Nations", 1776)

- "The security of every society must always depend, more or less, upon the martial spirit of the great body of people." (from "The Wealth of Nations", 1776)

- "Money, says the proverb, makes money. When you have got a little, it is often easy to get more. The great difficulty is to get that little." (from "The Wealth of Nations", 1776)

- "We address ourselves, not to their humanity but to their self-love, and never talk to them our necessities but of their advantages." (from "The Wealth of Nations", 1776)

- "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable." (from "The Wealth of Nations", 1776)

- "The real price of everything... is the toil and trouble of acquiring it." (from "The Wealth of Nations", 1776)

- "The property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable." (from "The Wealth of Nations", 1776)

- "Wherever there is great property, there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his posessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labor of many years, or perhaps of many successive generations, can sleep a single night in security." (from "The Wealth of Nations", 1776)

- "With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches, which in thier eye is never so complete as when they appear to possess those decisive marks of opulence with nobody can possess bt themselves." (from "The Wealth of Nations", 1776)

- "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. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely." (from "The Wealth of Nations", 1776)

- "Every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it ... He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intentions. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good." (from "The Wealth of Nations", 1776)

- "The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of state." (from "The Wealth of Nations", 1776)

- "The word VALUE ... has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called "value in use"; the other,"value in exchange"." (from "The Wealth of Nations", 1776)

- "Where wages are high ... we shall always find the workmen more active, diligent, and expeditious, than where they are low." (from "The Wealth of Nations", 1776)

- "The man whose whole life is spent in performing a few simple operations, of which the effect too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become." (from "The Wealth of Nations", 1776)

- "I cannot express to you the pleaure it gives me to find that by the universa; assent of every man of taste and learning whom I either know or correspond with, [The Decline and Fall of Roman Empire] sets you at the very head of the whole literary tribe at present existing in Europe." (from the letter to Edward Gibbon, 10 December 1788)

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