The economist Adam Smith was our topic for the lecture this week and I found him, despite previous reservations about the theories of an economist in comparison to the philosophers we had previously studied, to be an extremely interesting subject.
Economics is often seen as the dismal science as it has all the empiricism of science and none of the excitement. Adam Smith was archetypally an empiricist though and had an objective way of looking at things, there was no metaphysics in Smith's theories, he simply looked at human behaviour with an economic mindset. His price mechanism theory suggests that what people are prepared to pay for gives us an idea of human behaviour; we can exactly measure what people 'want'. Smith is often seen as the founder of modern economics and his Wealth of Nations is relevant even to economists today. He was Scottish which is significant as Scotland was going through an enlightenment and even a renaissance period which included the last lectures subject Hume, of whom Smith was a contemporary; in fact, Smith published Hume's posthumous Dialogues Concerning Natural Religion. He was also a contemporary of James Watt.
Prior to Adam Smith there was mercantilism which was essentially a religious way of looking at economy. Pose the question, "Why is the UK richer than Africa?" to a mercantile and they would respond saying it was 'God's Will'; it links to the whole spirit of enterprise theory that suggests some people are just automatically better at enterprise than others. Empiricists like Smith however look solely at 'the facts'. Mercantilists were medieval thinkers and feudalistic types who believed in in enriching the state but Smith is liberal in a Hume style; economics is about enriching yourself. Smith asserts that he is objectively measuring human behaviour through economic science.
The Mercantile state began to decline with Elizabeth I when we began to move out in to the 'new world' of America and the exploitation of the countries we moved in to. The British were pirates really for a long time, building faster ships that could steal gold from the Spanish Galleons and with the main trade of sugar, tobacco, cotton and slavery from America, we began to compete with the Spanish in the market over in the 'new world'. Once the King lost the Civil War the mercantile state collapsed as the mercantile state would promote a state controlled economy which was no longer possible. The Civil War helped to abolish serfdom which in turn introduced free trade; this meant the stability in society was lost as people had to sell their trade to get by. At this point in history, Scotland had its own form of slavery with the Darien Scheme and on a similar theme, Jonathan Swift wrote his famous, A Modest Proposal. This all relates to the formation of England and the Battle of Culloden, the last major battle in Great Britain which was the end of tribal society. Waterloo makes us the number one country for a while but the Baptist war made slavery less profitable as the slaves rebelled. This points to the conclusion that it was not a moral act that caused us to abolish slavery, but a profitable one. A parliamentary reform bill granting more power to house of commons is then made and 1846, the repeal of corn laws is the end of the Mercantile system for good this time, (no really). Cheap bread essentially caused the ruin of British Agriculture.
Adam Smith though approves of all of this, to him it is just a new world, change of a global scale. He has thoughts on morality like his contemporaries and believes there is no such thing as good and evil, only desire. People only function for less pain and more pleasure. This is part of his theory on utilitarianism where you actively calculate the consequences of your actions; if you be honest to everyone all the time, you will be thought of as honest and might be given a job. In his Wealth of Nations he asks What is Wealth?, is it a sense of pride and accomplishments and so on? Well no. It all resolves to cash according to Smith. The only thing that money cannot bring is poverty. He also talks about the 'Hidden Hand of the Market' which actually comes across as a metaphysical concept, something Smith was mostly against. He says that the market is metaphysically sorting people into what they are good at like some sort of deranged sorting hat from Harry Potter. He uses the example of a pin factory where everyone does their own set job in order to create the final product of the pin; a kind of 'division of labour' theory where your skill means you specialise in a certain type of labour. Left to our own devices, we as people will use any relevant advantages to hand to make a living. To Smith, unemployment is impossible unless the government is actively trying to stop you from working. Trade and work promotes peace, civility, moderation, toleration, innovation, science and concern for others; therefore, it is ultimately a good thing. Well done Smith, shame you didn't just say that.
Until next time. Stay Classy Internet.
P.S. This blog rambled a bit but I put that mainly down to not entirely understanding Smith having never done economics ever. This is lamest of excuses however and to address the situation I'm hoping to do some reading into the subject.
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