The basis of the United States capitalistic economy is the rationality of humans when it comes to bartering. Each person’s mindset is to get as much as they can for what they have through trade. Adam Smith, a Scottish sociologist, sparked the foundation of that economist thought. Smith theorized that with the division of labor, an economy can be perfected. However, an anthropologist named David Graeber disagrees with Smith. Graeber states that nowhere in the history of primitive economies has there been one based off of bartering. Essentially, Smith’s argument supports humans as homo economicus while Graeber’s argument supports the homo reciprocans term. Both theorists have an outstanding epistemology behind them, though Graeber has the benefit …show more content…
Smith’s epistemology divides into four categories: assumptions, categories, relationships, and procedures. His assumptions underlie his argument and include: humans are homo economicus, minimal state presence within the economy, and fair competition across economies. Homo economicus describes human thought process as rational, including when making decisions within the economy. Smith believed the rationality came from the pursuance of the greatest accumulation of wealth. The increases in wealth develop from increases in productivity (and not inefficiency) and is what makes a society civilized instead of savage. Smith theorizes that productivity comes from the division of labor, which facilities the “increase[s] of dexterity in every particular workman”, the “saving of time which is commonly lost in passing from of species of work to another”, and “the invention of a great number of machines which facilitate and abridge labour”. Smith’s least optimal work is unskilled, lazy, and with little creativeness. An example Smith uses is pin-making, where before the division of labor one uneducated worker could make no more than twenty pins. With the division, the 18 distinct operations were divided between 10 workmen and together they could make 48,000 pins in a day. However, Smith is not without his critics. David Graeber writes …show more content…
Graeber assumes that humans are homo reciprocans, communism is the basis of all social relations, and Adam Smith was not theorizing for future market economies. These assumptions create the categories of bartering versus gifting, rationality versus emotionality, and pre-money markets versus post-money markets. Anthropologists have found that no pre-market economy was based off of bartering and instead, “the response is to immediately hand [the item] over, accompanied by much insistence that this is a gift and the donor certainly would never want anything in return. In fact, the recipient now owes him a favor”. Graeber argues that Smith’s assumption of human rationality is wrong, and instead they use their moral relations and emotions to produce an economy. Another cause of the gifting economy is communist relations, where “people do not rely on exchange when trying to solve a problem, even inside a capitalist firm”. Graeber’s procedures in proving the gifting economy are anthropologists direct observation of two primitive economies: the Amazonian Nambikwara and the Gunwinngu of West Arnhem land in Australia. The Amazonian Nambikwara use meals, speeches, songs, and dances to facilitate trade between each other. In fact, the Chiefs of each small band “praises the other party and belittles his own”. These are all
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 begins his analysis of the market society with a look at the division of labor. He elaborates on the idea that the division of labor is essential for the growth of a civilization. Smith explains how for example, the production of pins can be done more efficiently with the breaking down and deconstruction of
Adam Smith justified the ethics of capitalism by stating that it did not benefit the common man. He felt that if the government interfered, there would be proper distribution of wealth and it would result to more efficient business.
Jean-Jacques Rousseau, in his work Discourse on the Origin of Inequality, gives his opinion on the topic of progression and how it has historically developed man from his natural state into a player in today’s civilized societies, including the economic structure and inequality that is present. Though, Adam Smith, based on his findings which he delineates in his works, Wealth of Nations, Theory of Moral Sentiments, and Lectures on Jurisprudence, would take issue with Rousseau’s philosophy on several accounts. In the philosophical spectrum of Hobbes to Rousseau in the discussion of man in his natural state, Smith falls in the middle, as he tends to agree and disagree with both philosophers on various aspects of the debate. Following a close reading of the text, Discourse on the Origin of Inequality, Smith would be very critical of Rousseau and the ideas he expresses.
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” This is a quote from the book Wealth of Nations, which Adam Smith wrote, addresses well about why and what reason people work for. The butcher, the brewer, or the baker does not cut, stir, or bake because they want to please the customer or to feed the poor, but to earn money and for their own happiness. Adam Smith, who fully understood the concepts of capitalism and free market system, became one of the most well respected economists throughout the world. Smith became famous because of his philosophy of economics. Because of his thoughts on economics, today he is well known as the “father of economics.”
Smith’s text in his book seems to be characterized by fact-heavy tangents, tables and supplementary material that combine hard research with generalities, showing his commitment to give proof for what seem like never-ending observations about the natural way of economics. Smith’s Wealth of Nations Books I and II focus on the idea of the development of division of labor, and describe how each division adds to the fortune of a given society by creating large surpluses, which can be traded or exchanged amongst the members of Labor. The division of labor also fuels technological innovation, by giving a lot of focus to specific tasks, and allowing workers to brainstorm ways to make these tasks quicker or more efficient, increasing maximum output. This, again, adds to efficiency and increases surpluses so that the surplus items may be traded or re-invested somewhere else. Near the end of the case, technologies are likely to improve, foreshadowing them to become even greater efficient.
David Graeber is a world renowned anthropologist and activist whose views on history and the economy have been labelled somewhat controversial. In his acclaimed novel Debt: The First 5000 Years, Graeber sets out with a goal to demythologize the current culture’s view on the concept of debt. Within the first pages, Graeber introduces the central theme of the novel, writing “what, precisely, does it mean to say that our sense of morality and justice is reduced to the language of a business deal?” And adding, “what does it mean when we reduce moral obligations to debts? What changes when one turns into the other?
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”.
Schneider asks, does this practice rob peoples of their culture, or simply generate a new kind of survival market culture? In seeking “to recognize and question Eurocentric imaginings of the world,” the discipline of anthropology complicates the right of tourists to judge the commodities of indigenous communities, as it questions the right of a global economy that forces peoples to produce such commodities to survive (Schneider 83).
Adam smith argues that the amount of labor used in production of a commodity determines its exchange value in a primitive society; however, this changes in an advanced society where the exchange value now includes the profit for the owner of capital.
Smith presents the first and arguably most important aspect of social organization based upon self-interest as the division of labor. He asserts that the division of labor occurs naturally in society as “the consequence of a certain propensity in human nature … the propensity to truck, barter, and exchange one thing for another” (21). This propensity arises from man’s “almost constant occasion for the help of his brethren,” (21) an idea illustrated by the fact that in both Smith’s and modern times, the number of truly self-sufficient individuals are few. This “trucking disposition gives occasion to the division of labor,” and Smith makes the example of a hunter who, in trading arrows with others, can acquire whatever he needs and will be encouraged to “apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent … he may possess for that … business” (23). At this point, Smith is making an assumption: that men will always choose to do something that will provide them with more over some...
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
Aristotle argues that retail trade, which is the buying of goods from one party and selling those goods to another party at a profit, is not natural because the objective of trade should only be to meet the “requirements of self-sufficiency” and not to make a profit, especially when at the expense of the other party involved (Aristotle, 128). He denounces the use of money in trade as unnecessary and as a means of promoting economic inequality. In this form of acquisition, man views wealth as the amount of currency he obtains, which he believes to have no limit. Regardless of currency’s perceived limitlessness, Aristotle asserts that wealth derived from money is of no worth because currency is “useless for any of the necessary purposes of life” (129). Money, according to Aristotle, is a “non-entity” that is inherently subject to change as it could become worthless if another form of currency becomes favored (Aristotle, 129). Wealth should not be able to be counted in abundance through the use of currency, as true wealth and in fact, all wealth is limited. However, Aristotle states that the seemingly limitlessness of wealth from retail trade promotes man’s belief to “keep [his] wealth in currency” as his “anxiety about livelihood” rather than well-being creates an
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's Wealth of Nations was published in 1776, coincidently the same year as the Declaration of Independence, is considered by many economic scholars to be the early framework of capitalism. Smith’s “invisible hand” metaphor explains how the motivation of the individual, a strong workforce and a decentralized market are the driving forces for economic prosperity. According to Dr. Crowley: