Adam Smith Class Review Qu.s Flashcards
what does DOL lead to?
productivity increase
why does he use stats? e.g. pin factory story
to seem scientific
How does Smith generalize his argument?
other industries besides the pin factory can have DOL and compares other countries
What are the mechanisms through which DOL increases productivity?
1) propels inventions
2) increases dexterity
3) saves time, notion of inventions is that if one person focuses on one task he will be an expert and will be able to invent and improve upon it
What kind of society does he imagine?
even the lowest ranks of people will be provided for and therefore disregards any potential conflict between those who have and those who have not
What is the division of labor a consequence of?
Human nature tendency to trade, barter and exchange, we want to exchange our surplus and DOL leads to surplus
What comparisons does he make between humans and animals to make his point?
animals get what they want by gaining favor, but humans don’t have time to do that so instead they appeal to the self love of others
relationship between market size and DOL
when the markets are expanded we have more people to trade with and can produce more surplus with further division of labor
what types of dependencies are left out of Smith’s analysis?
inventions - thought one person did the invention, no collectively made inventions, dependency amongst workers
What are the consequences of extreme division of labor?
stupidity and ignorance
Theory of Moral Sentiments
Smith was a moral philosopher before he became a political economoist
do markets foster or undermine morality?
both because repeated interaction between people incentivizes them to act morally, but greedy and wealth can also corrupt people to act immorally
Prudent man
industrious, frugal, sophisticated, saves money. This guy from TMS is the economic man from the Wealth of Nations
How does Smith define sympathy?
the pleasure of having sympathetic feelings
who is the impartial spectator?
he is a judge and a critic, we imagine him by looking at the real one - guessing what’s inside their head/judging/feeling. Impartial spectator owes his existence to real spectators and this guy is only imagined by the agent.
What are the two kinds of ways you can think about the other person?
you can put yourself in his or her shoes as yourself and also as the other person with his or her specific background
what is required of the spectator in order for sympathy to happen?
assuming there are only impartial spectators, as an agent I would only be trying to sympathize with you if i thought you were impartial
does it matter if spectator is actually impartial or not?
no, if I imagine you’re impartial that’s what matters
what is the sympathetic process?
if my feelings are in concordence with your feelings I am sympathizing, your reaction doesn’t have to make sense
why does the agent work harder for sympathy?
because he has more at stake and his feelings are real - but neither wants to be in solitude
how is moral life created
through the sympathetic process, iterative interactions between agents and spectators, trying to correct and align feelings
what is conscience? what is it a result of?
cumulative result of the interactions between the impartial spectator and the agent as a result of that cumulative interaction the agent leans whwat is approved of and what’s not and internalizes that this is conscience
what do we call the steps of the sympathetic process?
1) mutual recognition
2) mutual influence
3) concordance/alignment of sentiments
what is the role of resentment in justice
resentment means punishment, the impartial spectator decides if he approves of the level of punishment desired
what is the role of the impartial spectator in justice
disapproves of injury and approves or disapproves of the amount of resentment
what kinds of justice does Smith consider?
commutative, distributive, and comprehensive virtue of character
how is the Wealth of Nations related to justice
justice allows commerce to flourish
why should we care about markets and morality?
markets can both foster and undermine morality. they can corrupt morality - we can be greedy and corrupt. or create monopolies and have extreme division of labor. Markets can foster morality in repeated interactions because people know they will be punished.
what are the necessary virtues?
self command, benevolence, prudence
what is prudence?
the care of health and rank and reputation, things that make you happy
What are some of the characteristics of the prudent man?
save, give up immediate benefit for future, industrious, studious, frugal, all connect to being an economic man
how is the care for others ordered?
yourself, your immediate family, extended family and friends, others
why is self-command a virtue?
because using self command you bring your passions to the level the impartial spectator can go along with
Why is the prudent man of the TMS the economic man of the WN?
they share the same virtues, self command, saving, industrious, invests what he saves. by being industrious he can further commerce or industry.
what is the role of the impartial spectator in exchange?
determines a fair price “fair exchange value” therefore he instrumental in setting the natural prices
when does self interest emerge as a dominate factor in commercial societies?
because of impersonality of the market, people become strangers to each other
what do we mean by benevolent model?
self interest is no tthe dominate motive, trade is between us and us - not us and strangers.
In a commercial society malevolent model would emerge - what can we do to bring the malevolent model to commercial societies?
have institutions and justice in place
in the benevolent model self interest does not dominate
trade is between us and us, in commercial societies we often trade with strangers.
