Adam Smith Flashcards
What is Adam Smith’s lifespan?
1723-1790
What is Adam Smith’s nationality?
British/Scottish
What book did he write, and when?
An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
What is the Legacy of Adam Smith’s work?
Smith has a large effect on classical liberalism, and economists such as Hayek.
He was a pioneer of political economy, and a key figure during the Scottish Enlightenment.
He is also known as ‘‘The Father of Economics’’ or ‘‘The Father of Capitalism’’.
Adam Smith is seen as the first serious thinker of liberal politics, which downplays the state in favour of marketing
He is the founding father of economic individualism
What is the Relevancy of Smith’s work (and classical economists in general)?
Smith’s studies helped promote domestic trade and led to more efficient and rational pricing in the product markets based on supply and demand.
Classical economic theory helped countries to migrate from monarch rule to capitalistic democracies with self-regulation.
How does Smith view wealth?
He believes wealth is produced. It is a function of labour productivity
How does Robbery affect Wealth (according to Smith)?
Robbery doesn’t take away wealth, it moves from one person to the other
What is the Source of wealth (according to Smith)?
Labour is the source of wealth
What is meant by Division of LAbour?
The division of labour is the separation of tasks in any system so that participants may specialise.
What is technical division of labour?
This means division of labour within a particular enterprise
What is meant by social division of labour?
This means division into occupations.
How can humanity be divided?
Into 3 component classes:
- Master class – own the means of production
They have certain revenue reading to profit - Landlords- own the land
(the soil on which the factory is built)
Their revenue is rent - Working class- give their labour to the production process
Their revenue is wage
What is political economy in terms of Smith?
- Political economy is the sign of state and legislation
- Science of law making, government, statesmanship
- Political economy in terms of Smith is political science .
How does Smith view violence/political force?
Two subjects are not the same, but they are. equal. So who sets the rule of engagement? The strongest? The fittest?
Who makes the law? Who punished the wrongdoer? Who sets the game?
- Political violence should be absent from the exchange so there’s no political coercion
- Things should be in self interest, not because they’re forced to make that decision
How does Smith view Public Policy?
Every issue regarding the manufacture is a meta for public policy
Those who can monopolise, or organise the market using cartels. Putting in forms of protectionism. It protects their own interests but hinders commerce society
There needs to be order/law/facilitation/punishment, to give Order and prevent trouble