Economics - Adam Smith - The Wealth of Nations (Complete and Unabridged) - Mcgraw-Hill
Adam Smith and the Birth of Modern Economics. Economics is... The study of what, how, and for whom a...
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Transcript of Adam Smith and the Birth of Modern Economics. Economics is... The study of what, how, and for whom a...
Adam Smith and the Birth of Modern Economics
Economics is ...
The study of what, how, and for whom a society produces
Smith provided revolutionary ideas on these three questions
The Setting
Western Europe: 1500-1750
Hobbes' Leviathan (1651)
Along comes Adam ... Chair of Moral Philosophy, University of
Glasgow (1751), Scotland Travels throughout Europe on a
personal tutoring assignment First big hit
The Theory of Moral Sentiments (1759) In 1766 begins "writing a book to pass
the time ..." An Inquiry into the Nature and Causes of the
Wealth of Nations (1776)
Smith's Questions Inspired by Newton's laws of motion and
planetary behavior "...the greatest discovery that was ever made..." Smith sought equivalent laws for the
organization of society What fosters innovation and growth? What if government removes all the rules? What happens if individuals serve their self
interest? What is a country's true source of wealth?
Smith's Answers
"But the principle … of bettering our condition… comes with us from the womb, and never leaves us till we go into the grave."
Smith's Answers
"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…"
Smith's Answers
"Division of labor is the great cause of the increase of public opulence … and not to the quantity of gold and silver, as is foolishly imagined."
Smith's Answers
Society's best possible outcome occurs under a laissez-faire government structure
The "Forgotten" Smith
Competition required to offset the potential vices of self-interest
In defining "self-interest", Smith emphasized the role of moral and ethical decision making
Smith argued for strong government in areas of judiciary, education, and national security
Implications for Today?
Business and technological innovation
Economic and financial crises Growing inequality
Tax structures Climate change