Quote 8: ‘Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only’Īlthough self-interest is an essential part for economic prosperity, it is not seen as an antagonist of benevolence. Its efficiency thus will contribute to economic prosperity. Through specialization, production processes become faster and of higher quality. The division of labor is seen as an essential aspect to the efficient production of goods. Quote 7: ‘It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people.’ If the government leaves the market to its own, this invisible hand will guide the economy to its development. This is what is popularly known as the ‘Invisible Hand Theory’, where perfect competition leads to the lowering of prices and the increase in quality of products which will be beneficial to society. Smith argues that self-interest unintentionally promotes the economic well-being of others. I have never known much good done by those who affected to trade for the public good.’ Quote 6: ‘By pursuing his own interest (the individual) frequently promotes that of the society more effectually than when he really intends to promote it. Self-interest which is seemingly detrimental to society will be the driving force for development in a capitalistic society. It is from self-interest that people work and produce, thus, self-interest will be necessary for humanity’s survival and economic well-being. Smith sees that trade is necessary for survival, and it is self-interest that drives the exchange of goods. Quote 5: ‘It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest’ The freer the market, the more competition there will be, the greater the chances of market equilibrium”this will bring forth economic prosperity in his view. Smith’s inclination in economics is that of promoting free markets and free trade, thus minimal or even no government intervention and control. Quote 4: ‘In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so.’ He was against mercantilism which favored export but not the import of goods”a view which did not support free markets and free trade. Production was viewed in Smith’s time as a way of storing up wealth, but Smith as seen above, is against this notion. Thus, one should not produce for the sake of producing but should have in mind its end”consumption. In trade, Smith argues, one should be mindful of supply and demand. Quote 3: ‘Consumption is the sole end and purpose of all production and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.’ It is through free trade that society is to accumulate and redistribute wealth. He goes on further that trade is necessary in our everyday affairs” thus the reason for his book”to understand the wealth of nations and to discuss economic prosperity and its causes. In the Wealth of Nations, Smith remarks that trade is a unique human trait. Quote 2: ‘Man is an animal that makes bargains: no other animal does this – no dog exchanges bones with another.’ He further expressed dissatisfaction with Oxford’s academic quality and rigor. Smith early in his academic life has showed great talent but is disappointed with English Universities like Oxford in comparison with Scottish ones he was happy with his days at Glasgow. ‘In the University of Oxford, the greater part of the public professors have, for these many years, given up altogether even the pretence of teaching.’
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