The Thinking of the Scottish Enlightenment Thinkers The theme of the "unintended and unanticipated consequences of social action" implies that social change occurs through social action without foreseeing the outcome. Scottish Enlightenment thinkers Adam Smith and Adam Ferguson, each provide their own theory of unanticipated effects of human action. Smith's theory is implicitly historicist; Ferguson's by contrast, is empirical and anti-historicist(Smith, 1998:30). In Adam Smith's, "Wealth of Nations", private and egoistic interests are converted into collective social good by an 'invisible hand' which advances 'the interest of society' without intending or knowing it(Smith, 1998:30-31). Smith illustrates this through his discussion of the development of the commercial society. "Smith described initially the structural forces which led to the decline of the feudal society and property and the necessary evolution of trade and manufacture"(Smith, 1998:30). This social change, in Smith's view, was "unintended and unanticipated consequence of social action". The key to understanding this transition, Smith argued, was the actions of two contending social groups, the rich barons whose concern was with social status and ornament led to their gradual impoverishment and more secular, and efficient merchant class whose manufactured goods brought the ruin of the great landowners(Smith, 1998:30). Thus, the social action of the merchant class brought upon the social change that was unexpected in feudal society. Therefore, this social change that Smith explains, illustrates his perspective of how social change was brought upon unintentionally by individuals serving their self-interest. Adam Ferguson viewed society functioning as a whole. Ferguson, in contrast to Adam Smith, developed no link between the social actions of individuals, as members of social groups, and the wider, collective historical process(Smith, 1998:30). "Man is a member of a community, 'part of a whole', his actions social because they are collective(Smith, 1998:30). Thus for Ferguson, social change through social action is not seen as the product of the actions of individuals alone. Instead, it is the efforts and social of the society as whole that is responsible for social change. There is nothing of Smith's individualism in Ferguson's concept of the unanticipated effects of social action, or the facile optimism that separated historical meaning from the human subjects which themselves constituted history(Smith, 1998:30-31).
Smith's Influential work, The Wealth of Nations, was written based on the help with the country’s economy who bases it off his book. Smith’s book was mainly written on how inefficient mercantilism was...
Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, (London: 1776), 190-91, 235-37.
The power of reasoning allows limitless inquiry into the nature of all things. Adam Smith an “enlightened” thinker utilizes reasoning to examine the wealth of nations, but in acting on this reasoning is he forcing his own sentiments into his argument, or is the reasoning creating the sentiments? Smith offers an exposition for his vision of a laissez faire economy, that is, capitalism in the modern sense. In a wider scope, Smith's account reveals his views on the nature of the human condition, and not a single theme is surveyed without an observation being made upon human tendencies and decisions. Arguably, these observations are shaped by his own sentiments.
Within The Wealth of a Nation’s, Smith accredits the nation’s wealth to individuals self-interest. Adam Smith states that self-interest is what controls the behavior of the people and the economy is “led by an invisible hand to promote an end which is no part of his intentions” (Wealth of Nations, Book 1, Chapter 7). For example, a drug dealer does not sell drugs based on good intention. Instead, a drug dealer sells drugs because it generates him or her a profit. If the drug dealer begins to sell low quality drugs at an unreasonable price, then people will not purchase drugs from the dealer. As a result, to maintain customers, it is in the best interest of the drug dealer to sell quality drugs for a reasonable price. Therefore, self-interest is beneficial to all member of society. In the drug dealer scenario, the drug dealer generates a profit and the customer increases his or her utility from the drug. Smith measures wealth as a flow of goods and services, which is based upon the productivity of labor. Smith posits that workers are most productive when there is a division of workers and they engage in specialization. An increase in labor productivity increases a firm’s output and leads to market expansion. To support market expansion, Smith suggests investing in machinery to make workers more productive. Eventually, a firm will increase capital
In the Humanistic Tradition the author, Gloria Fiero introduces Adam smith as a Scottish moral philosopher, pioneer of political economy, and a key figure in the Scottish Enlightenment. Smith also known as the Father of Political economy, is best known for one of his two classic works An Inquiry into the nature and causes of the Wealth of Nations. Fiero looks at Smith’s work because the division of labor is important. One thing Smith thinks is even more important for creating a wealthy nation, is to interact and have open trade with different countries. Fiero states,“It is necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter,
"Adam Smith." Adam Smith. Library of Economics and Liberty, 2008. Web. 4 Feb. 2011. .
Smith, Adam. "CHAPTER XI OF THE RENT OF LAND." An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Clarendon, 1976. 161. Print.
He postulated that a free market economy was entirely natural and was consistent with human nature as each person has a drive to improve their own lives. Each man pursuing his own interests and competing would make society better by guaranteeing a fair price for goods and services while also spurring constant economic innovation to keep pace with growth. In Smith 's mind, competition was responsible for keeping the prices of goods and services low because if a person was unhappy with a business they could simply choose to patronize another establishment. Unequal distribution of power was viewed as an imperfection in Smith 's ideal system so he left government intervention as an option if the inequality became detrimental to the free market. This theory, known as the 'invisible hand ' was, to Smith, the ideal system for the flourishing of a society because it allowed for capitalism with minimal intervention from the government. Smith saw the functions of society and the economy as outcomes of individuals, he put a great premium on the actions of individuals acting purely out of self interest as the catalyst for economic success and the well being of society. Smith 's individualistic view was summed up in his most popular work The Wealth of Nations. He wrote, “It is not from the benevolence of the butcher, the brewer, or the baker, that we
Smith believed that the unexpected result when people pursue economic gain is to promote public interest. Smith wrote document C, “The Wealth Of Nations”. In this Smith writes, “As every individual, endeavours as much as he can both to employ his capital.” Smith believes this would be a better economic system. People get wealthy making the whole country wealthy. He believed in self reliance.
The Enlightenment was an age of reason in the 18th century that brought about many changes in intellectual life. Philosophers of the Enlightenment had a commitment to spread the use of reason from nature to human society by creating concepts of human rights, progress, and tolerance. Many great historians have attempted to recover knowledge to give their perspectives on the era and to establish elaborate descriptions of past events. While some mostly focused on the rise and history of the ideas, others were more concerned with the social and cultural context of these ideas. Some Enlightenment historians consist of Peter Gay, Dena Goodman, and Fredrick Artz. Each individual has taken a different approach on the Enlightenment with the intentions of educating their readers about such a great intellectual era.
Smith's formulation transcends a purely descriptive account of the transformations that shook eighteenth-century Europe. A powerful normative theory about the emancipatory character of market systems lies at the heart of Wealth of Nations. These markets constitute "the system of natural liberty" because they shatter traditional hierarchies, exclusions, and privileges.2 Unlike mercantilism and other alternative mechanisms of economic coordination, markets are based on the spontaneous and free expression of individual preferences. Rather than change, even repress, human nature to accord with an abstract bundle of values, market economies accept the propensities of humankind and are attentive to their character. They recognize and value its inclinations; not only human reason but the full panoply of individual aspirations and needs.3 Thus, for Smith, markets give full expression to individual, economic liberty.
Adam Smith is widely regarded as the father of modern economics and one of the greatest economists throughout the course of history. He is mainly famous for a two books that he wrote, these two books are considered thee base and infrastructure of the world of economics. The two books he wrote were, “The Theory of Moral Sentimental” and “The Wealth of Nations”. But although Adam Smith was such a great economic philosopher, he wasn’t a very good foreteller or future predictor. The economic scenario now is very different from the economic landscape of the 1700’s. Giant super-corporations can now govern the flow of the market, unlike Smith’s time’s. Even though elements of Smith’s ideas have changed over time, some of his beliefs remain important factors in economics to this day. One of those truly unique philosophies is the “Invisible Hand”.
Economists Thomas Robert Malthus and David Ricardo. Although differences of opinion were numerous among the classical economists in the time span between Smith’s Wealth of Nations (1776) and Ricardo’s Principles of Political Economy and Taxation (1817), they all mainly agreed on major principles. All believed in private property, free markets, and, in Smith’s words, “ The individual pursuit of private gain to increase the public good.” They shared Smith’s strong suspicion of government and his enthusiastic confidence in the power of self-interest represented by his famous “invisible hand,” which reconciled public benefit with personal quest of private gain. From Ricardo, classicists derived the notion of diminishing returns, which held that as more labor and capital were applied to land yields after a certain and not very advanced stage in the progress of agriculture steadily diminished.
The division of labour described by Adam Smith in The Wealth of Nations is a product of individual self-interest. This is representative of Smith’s methodological individualist interpretations of human nature. Adam Smith deduces that the division of labour is beneficial to the individual, as it is in one’s own interest to work less whilst still engaging in tasks that are to their own specialities. Highly specialized work is beneficial for nations to grow economically whilst allowing individuals to further pursue their own rational self-interest. To further explain the concepts that Smith proposes I will first explain what rational self-interest in regards to human nature and how the division of labour emerges from self-interest. Secondly, I
Adam Smith’s The Wealth of Nations argues for a system of political economy that separates economy – the creation and distribution of wealth – from governmental interference. In Smith’s view, the economy of a nation grows as a direct consequence of private business ventures in the interest of each individual owner. Regulation by the government hurts the economy, and the progress of society is derived from the flow of the market. Things should be left in their natural states, thus maintaining a “natural order” of society. The basis of Smith’s thesis is that this natural order is driven by Man’s self-interest.