Q3

I can clearly imagine a scene in Saving Adam Smith, where Richard, Julia, and Harold (as Smith) go out together to see Michael Moore’s film in the theatre. Harold would be bubbling over with excitement and waving his hands exasperatingly as they left the building. Smith would be shocked and horrified to learn that contemporary Americans would consider him to be the father of our current economic system. I believe that he would tell Richard that his concept of free market capitalism was based on a moral foundation that included empathy and compassion—nothing even remotely similar to the impersonal and unfeeling, corrupt system that Moore portrays in the film.
In particular, Smith stressed that while the market itself is impersonal, people must never be. From the reading, I understood Smith to be a compassionate and transpersonal thinker—he recognizes that money is a means to an ends (which is h describes as peace of mind) and not an end in itself. Clearly, Moore shows the goals of the current financial system is t make as much money as possible without considering the consequences—that people, the environment, and even our entire way of life are in danger—and certainly without thinking about the moral meaning of the process or its results.
Smith viewed capitalism as the system of trade in which workers added value to goods and earned the benefits from their labor when they traded their goods with others in a free and open market. Smith’s economy was founded on the idea that people used their minds and hands to create capital goods that were of value to society as a whole. These goods were then traded amongst community members in an equitable way, allowing both the producer and consumer to benefit.
Even though individuals were mot...

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...oving the risk, as was the case with the subprime fiasco, there is no longer any incentive to sell good meat, creating the problem of moral hazard. Thus, the butcher will sell “bad” meat at “good” meat prices with no consequences for his actions.
Both Moore and Smith would agree that deregulation of the banking system has led to disastrous consequences and new rules and legislation should be created to prevent this type of large scale crisis from occurring again in the future. While Smith did not support extensive government intervention in the market, he did foresee the possibility for abuse of the system and conceded that limited government was necessary for the roper functioning of the market. Accordingly, there is a clear need for pragmatic oversight of the market to prevent abuses and excessive greed that could potentially devastate our entire financial system.