After two centuries, Adam Smith remains a towering figure in the history of economic thought. Known primarily for a single work—An Inquiry into the Nature and Causes of the Wealth of Nationsthe first comprehensive system of political economy—Smith is more properly regarded as a social philosopher whose economic writings constitute only the capstone to an overarching view of political and social evolution. He was the son by second marriage of Adam Smith, comptroller of customs at Kirkcaldy, a small population 1, but thriving fishing village near Edinburghand Margaret Douglas, daughter of a substantial landowner. Pursuit was mounted, and young Adam was abandoned by his captors.
In other words, Smith is now known both as the founder of economics, and as an ideologue for the political Right. Yet, despite being widely believed, both these claims are at best misleading, and at worst outright false. He died in Julyjust as the French Revolution was getting into full swing.
His oft-quoted An Inquiry into the Nature and Causes of the Wealth of Nations was undoubtedly important in the eventual formation — in the next century — of the discipline of economics.
But even here things are not as straightforward as they appear. For The Wealth of Nations — a 1,page doorstopper that blends history, ethics, psychology and political philosophy — bears little resemblance to the ahistorical and highly mathematical nature of most current economic theory.
Ironically, Fox later admitted that he had never actually read it few subsequent non-readers of the book have showed such candour, despite plenty of them citing it.
Indeed, Smith suspected that those quickest to sing his praises had failed to understand the main arguments of his work. Despite this, his vocal political cheerleaders in Parliament continued to prop up the very system that Smith was railing against.
For it has been his fate to become associated with the strain of Right-wing politics that rose to dominance in the early s, and which continues to exert a strong influence on politics and economics today. Usually known as neoliberalism, this development is most famously associated with Ronald Reagan and Margaret Thatcher.
But it is in fact a movement with deep intellectual roots, in particular in the mid-century writings of the economists Friedrich Hayek and Ludwig von Mises. Later, the Chicago economist Milton Friedman and the British policy adviser Keith Joseph championed it during the s, as did the extensive network of academics, think tanks, business leaders and policymakers associated with the Mont Pelerin Society.
For while Smith might be publicly lauded by those who put their faith in private capitalist enterprise, and who decry the state as the chief threat to liberty and prosperity, the real Adam Smith painted a rather different picture.
According to Smith, the most pressing dangers came not from the state acting alone, but the state when captured by merchant elites. By this Smith meant the network of monopolies that characterised the economic affairs of early modern Europe.
Under such arrangements, private companies lobbied governments for the right to operate exclusive trade routes, or to be the only importers or exporters of goods, while closed guilds controlled the flow of products and employment within domestic markets.
As a result, Smith argued, ordinary people were forced to accept inflated prices for shoddy goods, and their employment was at the mercy of cabals of bosses. Smith saw this as a monstrous affront to liberty, and a pernicious restriction on the capacity of each nation to increase its collective wealth.
Yet the mercantile system benefited the merchant elites, who had worked hard to keep it in place. Smith pulled no punches in his assessment of the bosses as working against the interests of the public. As he put it in The Wealth of Nations: They then presented themselves as servants of the public by offering to run state-backed monopolies that would limit the inflow, and maximise the outflow, of goods, and therefore of gold.
By playing on jingoistic sentiments, the merchants inflamed aggressive nationalism, and blinded domestic populations to the fact that their true interests lay in forming peaceful trading relationships with their neighbours.
The peace and stability of the European continent was imperilled by the conspiracies of the merchants, who goaded politicians into fighting wars to protect home markets, or acquire foreign ones. After all, being granted militarily-backed private monopolies was far easier than having to compete on the open market by lowering prices and improving quality.
The merchants in this manner constantly conspired to capture the state, defrauding the public by using political power to promote their own sectional advantage. But in the passage of The Wealth of Nations where he invoked the idea of the invisible hand, the immediate context was not simply that of state intervention in general, but of state intervention undertaken at the behest of merchant elites who were furthering their own interests at the expense of the public.
The invisible hand was originally invoked not to draw attention to the problem of state intervention, but of state capture. Smith was, however, deeply pessimistic about the stranglehold that the merchants had managed to exert over European politics, and despaired of it ever being loosened.
History has to some extent proved him wrong on this score: But nobody should deny that merchant conspiracy, and the marriage of the state to what we now call corporate power, remain defining features of our present-day political and economic reality.
Does this, then, make Smith an early proponent of the political Left? No, and it would be a serious mistake to draw that conclusion. The truth is both more complex, and more interesting, than that. Although Smith was deeply critical of the way that the merchants conspired to promote their own advantage at the expense of the rest of society, he was under no illusion that political actors might successfully replace private merchants as the necessary conduits of economic activity.
Certainly, when merchants were allowed to rule as sovereigns — as the British East India Company had been permitted to do in Bengal — the results were disastrous. Under absolutely no circumstances, Smith thought, should merchants be put in charge of politics.
Politicians, according to Smith, were much poorer judges of where and how to allocate resources than the aggregated outcome of individuals spontaneously undertaking free exchange. As a result, in matters of trade it was usually folly for politicians to try to replace the vast network of buyers and sellers with any form of centralised command.
This, however, included precisely those networks structured around the profit-seeking activities of merchant elites. Effective politicians had to strike a balance between granting economic elites the liberty to pursue legitimate commercial activities, while also applying control when such activities became vehicles for exploitation.David Hume (/ h juː m /; born David Home; 7 May NS (26 April OS) – 25 August ) was a Scottish Enlightenment philosopher, historian, economist, and essayist, who is best known today for his highly influential system of philosophical empiricism, skepticism, and naturalism.
Hume's empiricist approach to philosophy places him with John Locke, George Berkeley, Francis Bacon and. Adam Smith, (baptized June 5, , Kirkcaldy, Fife, Scotland—died July 17, , Edinburgh), Scottish social philosopher and political schwenkreis.com two centuries, Adam Smith remains a towering figure in the history of economic thought.
Known primarily for a single work—An Inquiry into the Nature and Causes of the Wealth of Nations (), the first comprehensive system of political. Capitalism in flames, populism and nationalism on the march across Europe, a US president bent on demolishing free trade, a British shadow chancellor calling openly for the overthrow of capitalism.
The history of economic thought concerns thinkers and theories in the field of political economy and economics from the ancient world right up to the present day. Economics was not considered a separate discipline until the nineteenth century. Aristotle, the ancient Greek philosopher, grappled with the "art" of wealth acquisition, and whether property is best left in private, or public, hands.
Adam Smith was an 18th-century philosopher renowned as the father of modern economics, and a major proponent of laissez-faire economic policies. In his first book, "The Theory of Moral Sentiments," Smith proposed the idea of the invisible hand—the tendency of free markets to regulate themselves by means of competition, supply and .
Philosophy, which literally means "the love of wisdom," is one of the oldest disciplines in history. There are many ideas about philosophers and what they do.
Some have even considered the field to be a science that deals with logic and reason. Either way, many famous philosophers have made their contributions known to.