Abstract This paper relates that the influence of the famous Scottish economist AdamSmith on American fiscal policy was significant. The author points out that his foundational economic theories provided important guidance for the Founding Fathers as they formulated economic policies for the new nation. The paper notes that the publication in 1776 of Smith's book "An Inquiry into the Nature and Causes of the Wealth of Nations" introduced the science of political economy to the world.
From the Paper "The influence of the famous Scottish economist Adam Smith on American fiscal policy was significant, for his foundational economic theories provided important guidance for the Founding Fathers as they formulated economic policies for the new nation. The publication in 1776 of Smith's book, An Inquiry into the Nature and Causes of the Wealth of Nations, introduced the science of political economy to the world."
This paper examines the writings of AdamSmith and Karl Marx by reviewing their positions on joint-stock companies and AdamSmith's famous deer-beaver argument.
Abstract This paper explains that AdamSmith thought that the separation of ownership and control raised serious questions about the management of joint-stock companies and led him to analyze the agency problem. The author points out that AdamSmith and Karl Marx agree that an advantage of the joint-stock company is that it allows entrepreneurs to put together large sums of money and capital; furthermore, Marx concludes that the joint-stock form leads to a "tremendous expansion in the scale of production and enterprises, which would be impossible for individual capitals." The paper states that Karl Marx would have called AdamSmith's hunters simple commodity producers with each hunting with his own relatively simple weapon in a forest, which is open to all, and satisfying his needs by exchanging his excess catch against the products of other hunters.
From the Paper "Competition is another quantitative aspect of economics. One first needs to examine the conditions under which exchange ratios would correspond exactly to labor -time ratios. We begin with Adam Smith's famous deer-beaver example, "If among a nation of hunters, for example, it usually costs twice the labor to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days' or two hours' labor, should be worth double of what is usually the produce of one days' or one hours' labor.""
Abstract The paper offers an account of AdamSmith's early life, boyhood, his education, major influences as well as a review of his two major books; "Theory of Moral Sentiments" and "An Inquiry into the Nature and Causes of the Weath of Nations". The paper also analyzes the seeming contradiction in his theories of 'self-interest' and 'sympathy for others' and outlines Smith's views on the 'invisible hand,' mercantalism, slavery and colonialism. The paper concludes that AdamSmith is, without doubt, one of the most influential figures in the history of mankind.
Outline:
Early Life
Childhood and Early Education
College Education
Public Lectures at Edinburgh
University of Glasgow
Theory of Moral Sentiments
Traveling Tutor
The Wealth of Nations
'Self-Interest' and 'Sympathy for Others': Contradiction in Terms?
AdamSmith's Views on Mercantilism
Smith's View on Slavery and Colonialism
Conclusion
From the Paper "Adam Smith (1723-1790), Scottish philosopher and economist, is widely regarded as the father of modern economics and capitalism. His celebrated treatise An Inquiry into the Nature and Causes of the Wealth of Nations, considered as "the first modern work in the field of economics," contains a comprehensive defense of free market policies and gives a still-valid explanation of how rational self-interest and competition can lead to economic well-being and prosperity. Adam Smith's ideas on economics, formulated as they were in the later half of the 18th century, provided the ideological and intellectual background for the Industrial Revolution--the sweeping material transformation in Western society and many parts of the world that characterized the 19th century."
Abstract There have been numerous philosophers and even thinkers in economics who have put forward their theories. This paper discusses two major philosophers of economics, AdamSmith and John Maynard Keynes. It looks at how AdamSmith, known commonly as the father of modern economics, influenced the growth of economic theory and the evolution of modern, market-based societies. It also discusses how the second great revolution in economic thought was by John Maynard Keynes and how his theory of Employment, Interest and Money bestows to academia a different way of looking at the aggregate economic universe.
Outline
Introduction
AdamSmith John Maynard Keynes
Conclusion
From the Paper "Smith was in support of free trade. He derived his support for free trade among nations by centering it on the obvious desirability of trade among individuals: "It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy". Though Smith is usually thought to have relied on the Theory of Absolute Advantage to gain his support for free trade. According to Smith, free trade not only extended the extent of the market and, thereby, permitted greater division of labor; free trade also increased productivity by allowing countries to specialize in what they do well. In Smith's view of the workings of the market system, any short-run deviation of the market price from the long-run price would activate the forces of competition which would ultimately take the market price to its long-run level."
Abstract The paper explains AdamSmith's background and his moral and economic philosophy. The paper looks at how Smith perceives the nature of work and the relationship between working people and society at large.
Outline:
Background and History
Smith's Moral Philosophy
AdamSmith's Economic Philosophy:
Conclusion
From the Paper "Adam Smith (1723-1790), was a professor of moral philosophy at Glasgow University and a visionary economic political theorist who pioneered a capitalist theory that was to become known as laissez fair economics. His most influential written works were An Inquiry into the Nature and Causes of the Wealth of Nations, which he authored in 1776, fittingly, the same year as the birth of the United States, where his approach to economics was to be embraced and implemented more extensively than any other nation."
Abstract This essay tries to absolve AdamSmith from left-wing criticism that he has established the mode of greed in Western societies. It lays stress on the fact that Smith's theory concerning the "invisible hand" was a scientific observation, and that it expressed natural law, something that is beyond the capacity of humans to control. To this end, the paper considers various issues raised in 'The Wealth of Nations', discusses how they were relevant to Britain and the world at the time of publication, and also how they continue to be relevant to this day. Furthermore, the paper points out that left-wing criticism derives from a misreading of Smith, and is due to a conflation of Smith's theories and capitalism. It argues that capitalism existed well before the time of Smith, and its course has nothing to do with Smith's discoveries. The underlying theme is that Smith's theory expresses freedom in economic life.
From the Paper "The first thing to keep in mind when discussing Adam Smith's theory of the "invisible hand" is that Smith was foremost a moral philosopher and a social scientist, and by no means an economist in the modern sense. The modern economist usually functions in the capacity of a social policy advisor who is politically motivated. It is true that Smith offers advice to governments towards achieving prosperity, but this is only in the capacity of a moral philosopher. The substance of his findings is that economic life is governed by a simple principle, and his advocacy derives from the understanding that is it unwise to intercede in the path of natural law. This is the principle of laissez faire, that governments should not impose their designs of the economy of a country, and that even the cleverest idea is bound to be detrimental to prosperity, compared to that which comes naturally."
Abstract This paper discusses the underlying theory of AdamSmith's book "The Wealth of Nations", explaining that Smith saw labor, not money, as a nation's greatest asset. The paper further explains that this view strongly reflected the economic situation of the time brought about by the Industrial Revolution and then goes on to explain that Smith saw competition as a natural outcome of the specialization bred by the division of labor. Next, the paper explains how Smith's views were later elaborated upon by other economic theorists and how these theorists, as well as Smith, ultimately influenced the political philosophies of capitalism, socialism and even communism.
From the Paper "1776 was not only the year of the American revolution, more meaningful to us in this country, of course, but also the publication of "Inquiry into Nature and Causes of the Wealth of Nations, by Adam Smith, who had spent most of his years either in France, or working on moral issues as a professor in Scotland. The book has set the standard for what has become the modern science of political economy. Its basic contention is that "national progress is best secured by the freedom of private initiative within the bounds of justice." (Enc. Am., p. 111) Before Smith, the basic economy of the Western world was built around agriculture. This was the beginning of the industrial Revolution, and the old economic ideas were becoming outdated. For example, the economists who preceded Smith believed that the farmer was the only true producer, and the landlord (whether it was the farmer or another landowner) was the manager and superintendent of production. The step that was taken prior to Smith was the recognition that it would be more efficient for a single farmer to hire some help, especially craftsmen who were specialists in the things the farmer was inefficient in. This, then, was really the beginning of "labor" recognized as an important aspect of a nation's wealth."
Abstract This essay compares the philosophies in AdamSmith's "The Background to the Wealth of Nations" and Karl Marx's "Communist Manifesto" & "Das Kapital". The way in which both Smith and Marx agreed upon the importance of capitalism for unleashing productive powers, amongst other similarities, is discussed. In addition the contradictions in their philosophies, such as their reasons for expanding markets, are also highlighted.
From the paper:
?Smith and Marx both agreed that capitalism required expanding markets. Smith believed this was so because jobs could not be divided too much without a large market. The money that went to paying wages came from profits. There always had to be an expanding market, so that there could be more profits or else there would not be more jobs.?
Abstract While the aristocracy was controlling the social and economic activity of most European nations in the years leading up to 1776, AdamSmith was imagining the possibilities of a yet to be established free enterprise economic system. The culmination of these thoughts was the 1776 publishing of his famous book, "An Inquiry into the Nature and Causes of the Wealth of Nations". This paper gives examples of how AdamSmith's ideas have influenced modern economics. Areas of his influence are examined from modern taxation policy, to modern price controls.
From the Paper "Adam Smith's principle that government intervention is detrimental to society can be clearly observed in the modern world by observing price controls. Dr. Michael Zimmer, professor of Economics at the University of Evansville, points out that you do not need to look far to see the clear and concise examples of countries plagued by this phenomena. Zimmer asserts that countries enforcing strict price controls fail to supply enough goods to satisfy the demand of the public. He points out a clear case of this being demonstrated in the Korean Peninsula. Here we can observe that North Korea is dreadfully poor, while across the border South Korea (a country without strict price controls) is one of the most prosperous countries on the planet. South Korea's prosperity is clearly due to their promotion of free enterprise and their lack of price controls."
Abstract This paper explains that the more politically incendiary words of Marx and Engels regarding communal ownership and AdamSmith's notion of an invisible capitalist hand, which sets all excesses of the market right, are what are remembered best by history. The author points out that Marx and Engels saw all of human society in a continual cycle of polarized class warfare between the haves and the have-nots. The paper relates that AdamSmith's defense of Capitalism, written in praise of industrialization, saw the division of labor as a boon from the consumer's and the capitalist's point of view, if not the workers.
From the Paper "In contrast, Chapter 7, Volume 1 of "Capital", Marx suggests that it is really the production of the labor in crafting goods that conferred the value upon the material means, turning it the metal by the worker's sweat and toil into a pin. Throughout this capitalist enactment of conferring value upon raw materials, the factory owners did nothing but provide the raw materials, pay the labor and while away the day. The capitalist owners experienced no wear or tear upon his or her body, by simply owning the factory and hiring the workers to work at the factory. The worker worked harder than the property-owning capitalist, but made less money in profit."
Abstract This paper examines how "The Wealth of Nations" is undoubtedly a great work, even though AdamSmith's theory of value and distribution represents one of his lesser contributions to economic thought. It discusses how Smith's riddle of the diamond water paradox clearly describes the reasons for his support of an objective theory where he failed to grasp the concept of marginal utility. It also shows that while some commentators argue that Smith purports a cost-of-production theory for value rather than a labour theory, his emphasis is clearly on labour as he measures the cost-of-production in terms of labour.
From the Paper "In the 17th century, William Petty abandoned the idea of subjective value and attempted to appoint an objective theory of 'natural value', the actual price of any commodity fluctuating around a natural price. Natural value, according to Petty, was deduced using the factors of production (land and Labour). Adam Smith's publication, The Wealth of Nations, in 1776 signified the beginning of the Classical School, which also directed value debate towards an objective theory. Smith contemplated, but discarded the notion that demand is a function of 'utility'. The utility argument suggests that the more useful something is, the more satisfaction it gives consumers, consequently, they will pay more for it."
Abstract This paper explains that, in the area of market behavior, AdamSmith believed that the availability and cost of labor, rather than the seasonality of weather, contributes to the overall economic picture in his assertion that "labor, not nature, was the source of value." The author points out that, in the area of wealth distribution, Smith was not nearly as interested in the rise of this middle class of shopkeepers as in his promoting the idea that entire nationals can profit. The paper relates that, in the area of future growth, Smith believed that everybody gradually became better off as the division of labor increased and made the community wealthier.
Table of Contents
The Behavior of the Market
Income Distribution
Future Growth
From the Paper "It seems obvious, then, that the look into the future was one of constant (and perhaps consistent) pessimism for Ricardo who saw the "wealth" of the nation as being the land, and the land's productivity being stretched thinner and thinner, and the results becoming more expensive. For Smith, he tended to perhaps overlook this struggle of land, landlord and a rising bourgeoisie in favor of the greater good for the greatest number of people in the long run. Ricardo's future sees the capitalist as being squeezed on two fronts: higher wages to be paid to the workers, and second having to pay increased rent for the land, because land has become dearer."
Abstract The paper examines Heilbroner's treatment, in "The Worldly Philosophers", of two diametrically opposing views on economics; those of the capitalist, AdamSmith and those of the father of socialism, Karl Marx. The paper notes the differences between the two theories and highlights the weaknesses of Marx's theory. The paper relates that so far Smith has been right, but Smith never envisioned the techno-age nor global economy. The paper emphasizes how Marxism involves, in actual practice, a personality cult and a praetorian guard to stay in power, with China, the world's greatest socialist state, as an ironic example of the inequality of wealth among society.
From the Paper "Heilbroner says that The Wealth of Nations is by no means a textbook; Smith is writing to his age and not to his students (53). It is not a particularly original work. The ideas espoused had been around for a long time, with Smith exploring the thoughts of men such as Locke, Turgot, Hume and others, but is still a product of genius.
"So what was this grand new creation? How did it reconcile catch 22? If man only works for his own advantage how does a society remain viable? As Heilbroner asks, what keeps it from flying apart by centrifugal force? How does society get all of the necessary tasks accomplished which it needs to survive? Basically men will gravitate to the work needed to be done for the availability is its own incentive."
Abstract The paper begins with an introduction from "Wealth of Nations", explaining Smith's view that human nature is to trade and barter between resources. The paper continues with a number of subjects in the economics field, showing how AdamSmith's theories relate to them. These topics include protectionism, political uncertainty and infrastructure.
From the Paper "In Wealth of Nations, Adam Smith recognized that human beings have a natural propensity ?to truck, barter, and exchange one thing for another.? Smith saw the free trade of goods across borders as an extension of this human instinct. People exchange products and services as "free agents" in pursuit of their own individual interests. In the process, people become part of an international economy, connected across national borders, as if guided by an ?invisible hand.?"
Tags: economics, protectionist, infrastructure, barter, invisible, hand
Abstract This paper examines AdamSmith's "Wealth of Nations", which remains perhaps the most famous economics text in all of human history. The author notes that it has been a source of wisdom for governments in search of sound economic policies, a practical guide for many people in search of personal economic prosperity, and has had a profound impact on the leaders of powerful movements that contributed to the emergence of modern capitalism. Despite the fact that some of Smith's ideas have not withstood the test of time, the legendary status of "Wealth of Nations" is fully justified, for its influence in modern times on economic theory has not been surpassed.
