PUBLISHED WORKS
Adam Smith is often referred to as the "founding father of economics." Many of his beliefs and concepts are now considered the standard theory about markets in economy. Throughout his life, Smith published two books,Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. Both of them are of great importance.
The Theory of Moral Sentiments - Published in 1759
In this book, Smith followed the views of his mentor, Francis Hutcheson, who divided moral philosophy into four parts: Ethics and Virtue; Private rights and Natural Liberty; Family rights (Economics); and State and Individual rights (Politics). Smith, however, divided the moral system into Nature of Morality and Motive of Morality.
The Theory of Moral Sentiments argued that morality cannot be calculated. It is hidden in our social nature that we feel show care and concerns for other people. Through a lot of experiences and guidance to build up a system of behavioral rules is called morality. The book includes punishments and rewards, justice, conscience, moral rules, and virtues that drive people’s lives. Adam Smith suggests there are rules against immoral acts in our society called justice. We cannot force people to do good, but can only force people to obey those rules in order to let this society to survive. Nature has given us self-criticism, which is called conscience that reminds us of importance of other people. Through nature we obtain moral rules as moral standards to guide us. Adam Smith ended his book with the topic on people with virtues. Such people, he stated, would have the qualities of prudence, justice, beneficence, and self-command.
Reference: http://www.adamsmith.org/the-theory-of-moral-sentiments http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments
The Theory of Moral Sentiments argued that morality cannot be calculated. It is hidden in our social nature that we feel show care and concerns for other people. Through a lot of experiences and guidance to build up a system of behavioral rules is called morality. The book includes punishments and rewards, justice, conscience, moral rules, and virtues that drive people’s lives. Adam Smith suggests there are rules against immoral acts in our society called justice. We cannot force people to do good, but can only force people to obey those rules in order to let this society to survive. Nature has given us self-criticism, which is called conscience that reminds us of importance of other people. Through nature we obtain moral rules as moral standards to guide us. Adam Smith ended his book with the topic on people with virtues. Such people, he stated, would have the qualities of prudence, justice, beneficence, and self-command.
Reference: http://www.adamsmith.org/the-theory-of-moral-sentiments http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments
Click PPT below for specific quotes in the The Moral Sentiments!
adam_smith.ppt |
Wealth of Nations - Published in 1776
In The Wealth of Nations, Adam Smith introduced the idea of laissez-faire, which means the absence of a government's interference in a free market. Smith believed that a nation's wealth and well-being could only be achieved through a free market. His arguments were in terms of both economic efficiency and justice.
In his book, Smith also underscored the idea of division of labor. In free markets, productivity and efficiency are determined by how much workers put into their labor. Instead of having all the workers work on the same tasks, Smith believed that a division of tasks and specialization of work increased productivity. Smith also mentioned his concern that governments under a free market must give the people as much freedom to seek their own production as possible because only when they are free, there will think of the best products to progress human society. He also coined the term Invisible Hand that means we all benefit from each other's self-interests.
Reference: http://www.humanities.mq.edu.au/Ockham/y6402.html
In his book, Smith also underscored the idea of division of labor. In free markets, productivity and efficiency are determined by how much workers put into their labor. Instead of having all the workers work on the same tasks, Smith believed that a division of tasks and specialization of work increased productivity. Smith also mentioned his concern that governments under a free market must give the people as much freedom to seek their own production as possible because only when they are free, there will think of the best products to progress human society. He also coined the term Invisible Hand that means we all benefit from each other's self-interests.
Reference: http://www.humanities.mq.edu.au/Ockham/y6402.html
LEGACY on ECONOMICS
Adam Smith's beliefs and concepts still resonate in world economics today. His invisible hand continues to be a powerful force. Smith overturned the miserly view of mercantilism and gave economists today a vision of plenty and freedom for all. The free market he envisioned, though not yet fully realized, may have done more to raise the global standard of living than any single idea in history. Smith's advocation for no government interference and freedom for markets has really sparked the Industrial Revolution. People were driven by their self-interest for better lifestyles. As a result, new innovations were created, jobs became abundant, and people's standard of living increased. Smith's ideas also made international trade prosper and freer. Today, a lot of countries still practice capitalism and value self-interest as work motivations.
For example, in the United States, a free market is still in practice and individual companies are often driven by their self-interests. The company Google resembles much of a laissez faire government. Google's work environment is very free and casual. It has various entertainment and rest zones. Bosses do not pressure their workers or restrain them like a government can in a country. Like Smith's laissez-faire, workers at Google are able to use this freedom for creative innovations.
(These pictures show how Google's system is very similar to that of Adam Smith's laissez-faire government - free and motivated by self interest)
For example, in the United States, a free market is still in practice and individual companies are often driven by their self-interests. The company Google resembles much of a laissez faire government. Google's work environment is very free and casual. It has various entertainment and rest zones. Bosses do not pressure their workers or restrain them like a government can in a country. Like Smith's laissez-faire, workers at Google are able to use this freedom for creative innovations.
(These pictures show how Google's system is very similar to that of Adam Smith's laissez-faire government - free and motivated by self interest)