Paste your essay in here…Mr. Einfeldt
Amay Gupta, Shafee Syed-Quadri
World History 10 Honors, Period 4
21 September 2017
Adam Smith: The Father of Capitalism
Biography
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable” (Hauben). This quote by Adam Smith which he wrote in his widely known book, The Wealth of Nations, entails his views on society and how it cannot be successful if most of the people are suffering because of the economy. Adam Smith, the “Father of Capitalism,” was baptized on June 5, 1723. His actual birthdate is unknown, but what is known is that he was raised in a small village called Kirkcaldy, Scotland, raised by his widowed mother whose husband had died 6 months before Smith was baptized (Biography of Adam Smith (1723-1790)).
Smith went to the University of Glasgow when he was fourteen years old on a scholarship, and studied moral philosophy under Francis Hutcheson. Smith later attended Balliol College, Oxford in 1740, but as William Robert Scott has said, "the Oxford of his time gave little if any help towards what was to be his lifework” (Biography of Adam Smith (1723-1790)). Instead, Smith graduated with “an extensive knowledge of European literature and an enduring contempt for English schools” (Adam Smith), but this did not factor into the later part of his life. After graduation, Smith began to start his work as a philosopher, which included many things, from lectures to writing his most well known work, The Wealth of Nations. After writing his book and finishing his life’s work, he finally died on July 19, 1790, leaving behind no family, only his ideas which are still pillared strongly in the society we live in today.
Work as a Philosopher
Smith started giving a series of lectures that were incredibly well received, so much that he was made the first chair of logic in 1751 at Glasgow University, the same place he had gone when he was fourteen. He also became the chair of moral philosophy at Glasgow University in 1752, but then ¨left the academia in 1764 to tutor the young duke of Buccleuch” (Adam Smith). He lived and traveled throughout France and into Switzerland with the duke for two years, where he came “into contact with contemporaries Voltaire, Jean-Jacques Rousseau, François Quesnay, and Anne-Robert-Jacques Turgot” (Adam Smith), other famous philosophers in his time. After tutoring the duke, Smith used the life pension he had earned to retire in his old childhood village of Kirkcaldy, Scotland, and write The Wealth of Nations (Adam Smith), one of Smith’s most iconic works. It was published in 1776 as a set of five books, the same date the Declaration of Independence was signed and the date of his close friend David Hume’s death. Due to the popularity his book and his ideas had received, Adam Smith became the commissioner of customs. During the duration of his time in office, one of his most well known challenges was having to oppose smuggling, which was difficult for him because “he had upheld as legitimate activity in the face of "unnatural" legislation” (Biography of Adam Smith (1723-1790)) in The Wealth of Nations.
A Theory of Moral Sentiments is another famous writing by Smith, however it is focused on his moral, ethical, and philosophical beliefs rather than his economic principles (Adam Smith (1723-1790)). Written before The Wealth of Nations, A Theory of Moral Sentiments showcases Smith’s belief that morality stems from our ability to sympathize with others (Adam Smith (1723-1790)). According to Smith, trying to calculate the level of morality within a person will prove to be futile as it is a natural and abstract concept guided by the distinction between the rights and wrongs of behavior, not a solvable equation. Morality is something inherent, something that is encoded within our perception, but unfortunately is still susceptible to external factors of corruption, often times distorting our judgement in favor of immorality (Coase). Smith also believed that self-love is utterly unvirtuous and argued that if our “affections, which, by the very nature of our being, ought frequently to influence our conduct, could upon no occasion appear virtuous, or deserve esteem and commendation from anybody” (Adam Smith (1723-1790)).
The Wealth of Nations includes Adam Smith’s economic beliefs and ideas. Undeniably his most famous work, The Wealth of Nations consists of three economic concepts. These concepts are labeled as free market, productivity, and the division of labor. Smith believed that large jobs should be scaled down to many small compartments. He thought this would increase efficiency as many workers would be specialized in one area of production of the entire project. Productivity was also in reference to labor, however Smith defined productive labor as working towards “producing a tangible object” (Mueller). This meant that the work being put in was an investment to the long-term. This also stemmed from his idea of people working to earn money and benefit society, where a member of society creates something valuable to other people and receives money in exchange. An example of this is found in one of Adam Smith’s more famous quotes: “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” (Adam Smith (1723-1790)). In this quote Smith is saying that people, such as the butcher, brewer, or baker do not do their jobs simply because of their kindness. Instead, they do it for the money that they get as a payment for supplying society with their services. Smith also heavily believed in a free market, meaning the laws of supply and demand would be fully functional without the intervention of the government. Ideally it was to contribute to natural competition and economic transparency which would increase the buying power of the people, a fundamental concept of his ideal economy which he called capitalism.
Perspective on Government
Smith was strongly against the idea of mercantilism, or “the practice of artificially maintaining a trade surplus on the erroneous belief that doing so increased wealth” (Biography of Adam Smith (1723-1790)). He believed that mercantilism went against the primary advantage of trade, which was the opening of new markets. This led to an increase in surplus goods and provided a few commodities from other countries, which, simply put, is the exporting and importing of goods. This caused the United States to procure some goods at a lower price than if they were provided by the U.S. Using this, Smith started a succession of economists who believed in free trade, as well as creating a path for David Ricardo and John Stuart Mill to publicize their theories of comparative advantage about a generation later (Biography of Adam Smith (1723-1790)).
While Adam Smith is usually looked at as a person who believed government had no place in economy, Smith did in fact believe that government had an important part to play in the economy, just not as a direct, overpowering entity. He believed their involvement should come in the form of enforcing contracts, patents, and copyrights, all in an attempt to ensure the authenticity of new ideas or inventions (Adam Smith). In addition, Smith also believed the government should perform retaliatory tariffs. He agreed that these tariffs were justified, but he was also extremely sceptical. “He argued that causing additional harm to one's own citizens is a high price to pay that tends not to compensate those who were harmed by the foreign tariff while also hurting innocent others who had no role in formulating the tariff policy” (Biography of Adam Smith (1723-1790)). Aside from intervening when an issue of credibility is present, Smith advocated for the construction of public works (roads, bridges, etc.) to be provided by the government simply because he believed it would not be worthwhile for a group of individuals to complete such tasks (Adam Smith (1723-1790)). He did, however, believe the costs for these societal necessities should come from the taxpayer’s dime (Adam Smith (1723-1790)).
Perspective on Individual Rights
Smith believed that every human mind was fueled by self-interested motives. He argued that even though society benefits because of reciprocity, the ordinary man was concerned about himself before others. To validate his point, Smith gave the example of a man expressing more sorrow for losing his little finger, compared to the pain that would be conveyed if the entire country of China was decimated (Coase). So, for the betterment of the community, Smith believed that paying taxes was not only fair and just, but considered “a badge of liberty” (Hauben). To live in the United States of America, citizens must pay a tax. This of course happens in almost every other country, but Smith decided to put the label of “liberty” on the U.S.’s tax to make citizens more willing to pay, which helped provide funding for the government.
Smith did however completely agree that everyone should think of themselves before others. “Every man. . . is first and principally recommended to his own care; and every man is certainly, in every respect, fitter and abler to take care of himself than of any other person” (Coase). Smith commented about the care we should then provide our family, as they “are naturally the objects of his warmest affection… He is more habituated to sympathize with them” (Coase). However, due to Smith’s ideal of capitalism, by taking care of themselves and their family, people contribute to society by providing their services. Smith’s idea of capitalism includes people's’ individual rights, by having people take care of themselves and their families first, but he uses that to also benefit society.
Perspective on Education
Smith believed education was extremely important. His life’s work was spent passing on his knowledge, either as a professor, tutor, or influential public figure (Mueller). He gave lectures on his ideas, and wrote his books The Wealth of Nations and A Theory of Moral Sentiments solely to pass on his ideas. A lot of Smith’s perspective on education was influenced by his early life, as he grew up in a country that had one of the highest literacy rates in Europe at the time. Smith also agreed with the concept of directly paying the teacher or master, which was implemented at the time, and not the funding of an institution or school. Similar to his views on government, Smith despised any form of corruption coming from the teachers. He didn’t want the money they earned be a factor in neglecting the job of teaching. Although collegiate education was one of higher standard, Smith did not feel that it was necessary for everyone. A simple basic understanding on reading, writing, and accounting was all that Smith hoped for in every person.
Works Cited
“Adam Smith.” Library of Economics and Liberty, www.econlib.org/library/Enc/bios/Smith.
html.
“Biography of Adam Smith (1723-1790).” American History, Arts Faculty of the University of
Groningen, www.let.rug.nl/usa/biographies/adam-smith.
Hauben, Michael. “The Real Voice of Adam Smith.” The University of Michigan Computing
Club , www.ais.org/~hauben/Michael_Hauben/Collected_Works/Articles/adamsmith.txt.
Mueller, Paul. “Adam Smith on Public Policy: Education.” Libertarianism.org, 17 Nov. 2015,
www.libertarianism.org/columns/adam-smith-public-policy-education.
Smith, Adam. “The Wealth of Nations.” The Wealth of Nations (Smith), www.marxists.org/
reference/archive/smith-adam/works/wealth-of-nations/index.htm.
Coase, R. H. “Adam Smith's View of Man.” The Journal of Law & Economics, vol. 19, no. 3, 1
Oct. 1976, pp. 529–546. JSTOR. “The Theory of Moral Sentiments.” Adam Smith
Institute, www.adamsmith.org/the-theory-of-moral-sentiments/.