As Smith writes, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from our regard to their self-interest." Thus, the first law of the market is self-interest, or the profit motive.Ģ. Therefore, self-interest, or profit, motivates people to perform necessary tasks for which society is willing to pay. The desire for wealth permeates all human activity. How can society depend on capitalism, which is an unregulated market system? Smith replies with two laws of the market. He borrows heavily from the physiocrats, particularly Quesnay, from whom he takes the doctrine of laissez faire, or "leave it alone." However, the book is a masterpiece because it presents a comprehensive picture of economics - a revolutionary doctrine which views the economy as though it were a living organism.īriefly, these are Adam Smith's economic laws:ġ. The author refers to more than 100 authors in developing his arguments, including Locke and Hume. It is not actually original in the sense that its basic ideas are unique to Smith. The book's 900 pages are demanding reading, for Smith often belabors a point without drawing a conclusion. One critic calls it "a history and criticism of all European civilization." Among a host of topics, it discusses the origin and use of money, apprenticeship, statistics, waste, the military, foreign trade, landlords, the clergy, royalty, farming, and "the late disturbances in the American colonies." The Wealth of Nations, which resembles an encyclopedia, is far more than a mere textbook on economics. While traveling, Smith worked on his Wealth of Nations and completed the book in 1776, ten years after his return to Scotland. He was particularly impressed with Francois Quesnay, principal spokesman for the French physiocrats, who believed that wealth arises from production. Consequently, he was already well known before publishing his enduring masterpiece, An Inquiry into the Nature and Causes of the Wealth of Nations.ĭuring a three-year tour of Europe as traveling tutor of the stepson of Charles Townshend, Smith met the leading thinkers of the Age of Enlightenment, including Benjamin Franklin and Dr. He gained fame as a moral philosopher, and during his lifetime, his book The Theory of Moral Sentiments earned the critics' appraisal as his best work. Adam Smith (1723-90), a quiet, nervous, scholarly Scottish bachelor, taught first at Oxford University and then at the University of Glasgow.
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