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Adam Smith, Smith does not think that utility should be the main judge of…
Adam Smith
The wealth of nations
Introduction
The wealth of a nation depends on production, and that depends on how many workers it has.
In a "civilized" nation, production is so sophisticated that even non-producers contribute to the economy.
Chapter 1
Work sophistication is attributed to work division, easily seen in small manufactories.
By dividing work into steps, production is increased.
Agriculture can't be divided into as many steps as industry, and thus agrarian countries aren't as reliable as industrial ones.
Production increases by having better workers and machines, and how easily workers adapt to changes.
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Chapter 2
Only humans are capable of work division, and we need constant cooperation through exchange in order to survive.
Due to our unique skillsets, we are capable of specializing.
Thus, when each one watches out for himself, we all benefit, though there can be problems.
Chapter 3
In "primitive" societies, there's little trade and thus little wealth. The larger the country, the larger the trade.
Sea trade is much faster and safer than land trade, helping countries such as England develop.
Chapter 4
To facilitate trade, currency is created, and metals are chosen for being easy to count and divide.
Pure metals can be heavy, hence coins.
Something, like water, can be useful (relative value), but worthless (trade value).
General
Bianchi
Smith was influenced by the physiocrats: French economists who theorized the market's ability to self-regulate (laissez-faire).
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The "Smith Problem" is the paradox between the king man from "Theory of moral sentiments" and the selfish one from WoN.
According to the Umschwungstheorie, Smith merely changed his mind between the two. Many disagree and most don't care.
TMS
Man is governed by passions, and seeks to avoid violent ones.
Passions can be imaginary (such as love), social, non-social, and selfish.
Imaginary are useless to third parties, social are good for society, non-social are usually negative but can be used in self-defense, and selfish are the middle ground between social and non-social.
God made an organised universe so that we could all live happily. Man is rational but also free to experience and learn.
The poor try to imitate the worst qualities of the rich, such as greed, but this creates a hierarchy based on respect.
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WoN
We want to be loved and so we develop virtues, which we learn from experience having our emotions tell us good from bad.
Mandeville, a Dutch moral philosopher who believed that bad virtues were good for society, influenced Smith
Smith however disagrees with some of the virtues Mandeville considered bad, such as excesses.
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