Adam Smith free essay sample

Adam Smith is undoubtedly one of the most celebrated scholars of all time since his revolutionary theories on trade changed the way people engaged in commerce and ultimately the role of government in regulating trade within and without. Adam Smith was infuriated by the mercantile policies that sought to promote the accumulation of gold and silver and which emphasized strict government control on trade and the flow of resources and labor. In addition he did not view agriculture as the only means for society to satisfy its means and in his view such singular thoughts limited growth of all sectors. Smith believed in a system of natural liberty whose end he believed would be effective trade and significant expansion of trade through growth of sectors. He believed that human beings should be allowed to pursue their individual interest since in his own opinion this personal interest always ends up benefiting the whole of society. We will write a custom essay sample on Adam Smith or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This system also has the capacity to correct imbalances that might result out of free trade. This is because a reduction in the supply of a commodity would result into increased demand for that commodity resulting into an increased cost of the commodity leading to increased production of the same in order to reap the increased profit. This would in turn lead to an increase in competition among the suppliers lowering the price of the commodity. This competition among traders prevents monopolistic behavior that would lead to exploitation of consumers. Smith explained that for great productivity to be achieved, self interest would lead to division of labor giving rise to specialization to particular tasks. This in turn leads to great skill in the specialized tasks, saving of important time and much needed innovations. Smith felt that wealth of nations was influenced by the amount of trade that existed between the inhabitants of towns and those in farms. He saw it as being vital for such trade to exist to provide market for both their commodities. On those who felt that lack of government interference might lead some to other countries where labor is cheaper, he felt that they would be stopped from doing so due to their nationalistic feelings and this will be ultimately for the good of the countries. Work Cited Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 39. Chicago, Ill.: Encyclopaedia Britannica, Inc., 195 Adam Smith free essay sample Adams Smith was a famous professor of moral psychology who set out simple principles designed the free the self-interest of the average working man. Adam Smith is famous for his â€Å"The Wealth of Nations†, because it is one of the contemporary economic thoughts.   Adam Smith was born in a small village situated in Scotland. He was raised by a widowed mother until entering the University of Glasgow. He started studying at the University at the age of fourteen and such practice was usual in those times. Ten he attended Balliol College at Oxford. Smith graduated with proper knowledge in European literature and returned home. After delivering lectures, he became a chair of logic and moral philosophy at the University of Glasgow[1].In 1764 Adam Smith decided to leave academia and to each young duke of Buccleuch. Together they had been traveling for two years throughout Switzerland and France. It was an experience that â€Å"brought Smith into contact with contemporaries Voltaire, Francois Quesnay, Jean-Jacques Rousseau and Jacques Turgot†[2]. We will write a custom essay sample on Adam Smith or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Serving duke, Smith earned life pension and after retiring he wrote â€Å"The Wealth of Nation† being published firstly in 177. American Declaration of Independence was also signed this year. Later smith was appointed commissioner of customs, though that position was uncomfortable for him. It is known that Adam Smith had never been married. He died in 1790, July 19.Smith’s writings and ideas are likely to be the guidelines of bedrock of the American economic success. Smith provided information how to survive in capitalist country and to remain humane[3]. His ideas on economy and well-being are important for understanding the growing discomfort being experienced by American society.   Smith’s ideas were integral to the vision of the Founding Fathers. Therefore, his ideas found practical application in American nation. American dream nowadays is significantly magnified by globalization processes, technology developments, though social good is paid less attention[4].Actually, Adam Smith is respected for his attempts to explain the rational self-interest in terms of free-market economy ad how self-interest leads to economic development and well-being. Therefore, Smith ideas may seem as ruthless individualism concentrated on ethics and charity. It is admitted that Smith’s theory is based mostly on biology of human behavior. Factually, Adam Smith was the first to rationalize the human instincts and desires within the economic framework. Whybrow cites Smith arguing that contemporary society is driven by self-love and self-interest to achieve the desired outcomes. Most humans are hard-working and ingenious willing to achieve great social benefits. Smith asserts that it is the instinct of self-preservation. The essential complement is the instinctual curiosity meaning the desire to explore new places. Success of market society depends on individuals’ democracies and liberties as well as the freedom of expression. Adams summarized the keys to social improvements suggesting they were curiosity, self-interest, self-preservation, material gains and expressed ambitions.Adam Smith wrote: â€Å"How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others and render their happiness necessary to him though he derives nothing from it except the pleasure of seeing it†[5]. As it is mentioned above, Smith was rather interested in explanation of self-interest. Therefore, he strongly objected to idea that self-interest or self-love was â€Å"was a principle which could never be virtuous in any degree†[6].Smith though that life of humans would be tough and difficult if humans’ â€Å"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†[7]. He considered the notions of sympathy and self-interest ethical and stated they complemented each other. He explained that â€Å"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[8]†. Therefore, charity alone was unable to improve the quality of living. Further, self-interest could remedy and essentially improve living: â€Å"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 †[9].Smith argued that a person earning money would benefit not only himself, but also benefit society as earning income in competitive market suggested that he produced something valuable for to others. Smith claimed that it was necessary to direct industry in such a way that it would produce the greatest values to be able to promote economic well-being. â€Å"The Wealth of the Nations: reveals the ideas of causes and consequences of American prosperity. According to Smith, the main reason of prosperity is globalization and division of labor. Smith’s famous example of prosperity is based on pins.The central idea of Smith was to find out how labor and other resources should be applied the best to give individual am opportunity to benefit. Smith argued that individual would invest any resource such as land or labor in order to receive the highest return on it. Therefore, usage of resources should yield an equal rate of return. Otherwise, re-allocation should take place. This idea is central proposition to economic development. Using equality of returns, Smith tried to explain the difference in wage rates. Smith claimed that wage rates would be higher for traders, because they had to learn much and they wouldn’t be motivated in getting that job if they weren’t compensated by high wages. Actually, human capital is based on this concept.Also wage rates should be higher for people whose jobs are associated with dirtiness and danger – butchering, coal mining, hangman, etc. they perform odious job and, thus, should be compensated higher.    Briefly speaking, differences in wages rates should be based on differences in work peculiarities. Smith’s theory , for example, in Smith’s fourth book of â€Å"The Wealth of Nations† he â€Å"tells Great Britain that her American colonies are not worth the cost of keeping†. He explained that British imperialism suggested excessively high costs[10].It is known that Adam Smith was against mercantilism stating that the practice of artificial maintenance of trade surplus wouldn’t improve nations’ well-being and would erroneous effort. Smith assumed that the main advantage of trade was that it provided new markets for surplus of goods and services at less cost from abroad. In such a way he launched succession of free trade economists who worked out the concept of comparative advantage (David Ricardo and John Stuart Mill). Adam Smith also realized the role of government in economic performance of the country. He claimed that the government had to enforce grant patents and contracts in order to stimulate emergence of new ides and inventions. Smith also admitted that government should pay attention to public roads and bridges, because it wouldn’t be worthwhile for individuals to provide[11].It is interesting to note that Smith in contrast to other believers, Smith promoted the idea of retaliatory tariffs. He thought it would ensure certain benefits for the country: â€Å"The recovery of a great foreign market will generally more than compensate the transitory inconvenience of paying dearer during a short time for some sorts of goods†[12]. Due to the fact that his economic ideas lasted longer than that of other economists’, Smith is considered alpha and omega of economic and political science. His study was one of the most systematic and comprehensive and his economic ideas are the basis of classical economic theory.BibliographyHenderson, David. (2002). Biography of Adam Smith. Retrieved February 24, 2007, from http://www.econlib.org/Library/Enc/bios/Smith.htmlLandry, Peter. (1997). Adam Smith. Retrieved February 24, 2007, from http://www.blupete.com/Literature/Biographies/Philosophy/Smith.htmMuller, Jerry. (1995). Adam Smith in his Time and Ours: Designing the Descent Society. USA: Princeton University Press.Muller, Jerry. (2002). The Mind and the Market: Capitalism in Western Thought. USA: Anchor Books.Teichgraeber, Richard. (1986).   Free Trade and Moral Philosophy: Rethinking the Sources of Adam Smith’s Wealth of Nations. USA: Anchor Books.Whybrow, Peter. (2006). Adam Smith’s American Dream: of Desire and Debt. New York: The City University of New York.