Quote:
|
Originally Posted by nature scene
yeah!
those people always exist though, in all systems. In socialist systems, they are the leaders and bureaucrats.
No, no, no, no, no. You couldn't be more wrong! Adam Smith crafted his treatise on the Wealth of Nations to illustrate all the reasons why nationalist economic systems don't work. The global economic system prior to Smith was one of mercantilism - in which nations hoarded gold and favored & protected their industries - often poorly performing ones. (we still have a lot of work to do in this area, as we continue to subsidize the hell out of a multitude of industries.)
You have to remember that he was writing in a time before global communication and travel was as easy as it is today. Back in his time, some global trading would have been much more difficult and much more expensive - the technology just didn't exist yet. He lived in an agrarian society, and his examples were skewed to that life. The principles that he argued have absolutely nothing to do with keeping economic systems within political boundaries.
Smith and David Ricardo showed us two things (among many more): first - that gold does not equal wealth, and second - the concept of comparative advantage. They showed us precisely why we shouldn't protect domestic industries if a peaceful trading partner could perform with lower opportunity costs. They both knew that nations are artificial, even though they didn't explicitly state it.
Smith was, on the other hand, very wary of capitalists - not the capitalist system though. He saw them as a necessary evil. He said we should always be concerned when capitalists meet together because it usually ends with them conspiring to raise prices. Smith also had some other anti-complete free market sentiments. Many people and economists agree with him, many don't.
|
Bollocks. Wrong, but most incredibly wrong about this comment "The principles that he argued have absolutely nothing to do with keeping economic systems within political boundaries".
Someone needs to dust off their Wealth of Nations. Yes, his thoughts are a product of his times. But he mentions society at key points, suggesting that by possessing capital people are led to investing their capital in their domestic (ie national) economies, even though market signals might suggest that they might get a higher return from investing in foreign industry. Smith's message is very different from the popular understanding of it; mainly that greed, including the following of market price for the sole purpose of maximising individual profit, is best both for individuals and their communities. Rather, his message is that our social consciences lead us to re-evaluate our self-interest, without our being fully conscious of the process.
He took for granted a social conciousness for the good of the nation, which is why capitalism today has no soul.