Father of Modern Economic Thought
In his seminal book Wealth of Nations Adam Smith analyzes key economic policies that would lead to the prosperity of a nation. In large part his wisdom still applies today.
Karl Marx was formed by the work of Smith and Hegelian Zeitgeist historic darwinism. Capitalism is a jackal expression to express the need for a just society where all can prosper (and not only a select few). This view of justice is based on the illusion of equality of all people and it created a lot of suffering. In the ultimate we are created different and all life has sacred dignity – but this does not mean that we are able to create justice for all at all times. Not the fact that one is rich, one is beautiful, one is able and some are more or less or not at all skilled matters most, but how we react to injustice. Can we be compassionate, can we mourn, can we accept, can we celebrate one another, can we see that we are all related.
Being the king in your castle with all materials wealth, can you say that this is happiness?
Being the sick person without means, can you say that this is only suffering?
It is no surprise then, that religions ask us to give to others.
We are them. They are us.
But this is wisdom and helpful only, if it comes from a consciousness of freedom and love.
Key insights of Adam Smith
1. The more productive people are working in a state, the more prosperous this state will be.
2. Productivity of workers is enhanced by specialization (example of the pin factory).
3. Government laws that prohibit growth of the market hurt specialization, and thereby keep living standards from rising. Smith opposed laws that restricted trade or laws that created monopolies.
4. Productivity of workers is enhanced by raising their wages.
5. Productivity of workers is enhanced by publicly funded education.
6. The role of markets is exquisitely analyzed by Smith. Self-interest leads people to carry out private activities that lead to social betterment, as if by an “invisible hand.”
7. Smith diffentiates self-interest from greed or selfishness. He addresses in his book The Theory of Moral Sentiments.
8. Smith favored not laisser-faire, but a limited type of government. Government should be concerned with those functions in society, that would cause greater harm when not taken on by a central government. Examples are schools, garbage collection, military defense.
