Monday, 2 March 2009

Adam Smith in a few words

For a recent paper I wanted a short overview of the basic insight of the thinking of Adam Smith when I came across the following from a book by Eamonn Butler: Adam Smith - A Primer, London: Institute of Economic Affairs, 2007:
Smith “. . . realised that social harmony would emerge naturally as human beings struggled to find ways to live and work with each other. Freedom and self-interest need not lead to chaos, but − as if guided by an ‘invisible hand’ − would produce order and concord. They would also bring about the most efficient possible use of resources. As free people struck bargains with others − solely in order to better their own condition − the nation’s land, capital, skills, knowledge, time, enterprise and inventiveness would be drawn automatically and inevitably to the ends and purposes that people valued most highly. Thus the maintenance of a prospering social order did not require the continued supervision of kings and ministers. It would grow organically as a product of human nature.” (Butler 2007: 27-8).
The book is worth reading if you want to learn about the ideas and thinking of Adam Smith.


LaFemme said...

I'm beginning to think that Adam Smith was just as daft as the lefty loons who think that redistributing the wealth will cause peace and love to break out across the globe.
Free markets need an overlord just like courts need a judge.

Gavin Kennedy said...

There most certainly is an 'overlord just like courts need a judge' in Adam Smith's concept of a free market; it's called the rule of law, not men.

Smith was very emphatic on the need for society to be under a system of justice which punished transgressions against the law and was vigilant in the law being upheld against all persons, from the so-called 'high and mighty' through all to the 'meanest' poor.

'Lefty loons' are not known for their submission to the rule of law; they prefer the rule of men, i.e., themselves.

LaFemme said...

Pray tell what rules of law did the men of Wall Street submit to?

Gavin Kennedy said...

It is not a requirement of men and women in a free society to account for the laws that they submit to, but it is the business of the rule of law that all citizens and visitors account for the laws that they have not submitted to, when lawfully charged by due process, are tried in a court of law, and are found guilty, or acquitted.

La Femme is under a misapprehension that citizens (and visitors) in free society have to prove their innocence. Instead, the prosecution have to prove them guilty ‘beyond reasonable doubt’ in a court of law of specific crimes, not presumed allegations, ‘catch all’ assertions, and assumed guilt of ‘something’.

That is what is meant by the rule of law and not the rule of men.

If the men and women of Wall Street have committed crimes under law they should be charged and tried by jury and, if found guilty, they should be punished by lawful order of a judge.

LaFemme should tell us which system of justice she suggests as a better alternative – she has plenty to choose from surely, but none that is compatible with Liberty and the rule of law.

Greed and vile offences against common decency, and such like, unless illegal under law, are not chargeable offences under law, at least in North America and the UK. If they have committed chargeable offences the men and women of Wall Street should be charged forthwith.

LaFemme said...

Gavin, you sound like a pharisee. Stop with the gordian knot of legalese you're trying to hang me with and just address the real issues -- I'm not the enemy, after all. Who was Wall Street answerable to, was there an overlord, and if yes, then why didn't said overlord do his (or her) job, and what laws, if any, gave rise to this folly that has befallen us? And did Adam Smith have even the slightest idea of what to do in circumstances such as we find ourselves today?
PS, re the following comment of yours:
"La Femme is under a misapprehension that citizens (and visitors) in free society have to prove their innocence."
This was once true but the ground is shifting, rapidly, seismically, and people may be called to account in ways neither you nor I ever imagined.

Gavin Kennedy said...

LaFemme thinks I sound like a Pharisee; why not a Sadducee?
I think she should dismiss the rule of law only after much careful thought; that road leads to lynch-mobs, dark days, and much ‘gnashing of teeth’.

My points were about the fundamentals of the rule of law and the preservation of our liberties, of which I took her remarks to be too careless about.

LaFemme asks: ‘did Adam Smith have even the slightest idea of what to do in circumstances such as we find ourselves today?’

Well, he lived in turbulent times; two short rebellions in Scotland; a prolonged rebellion in the British colonies in North America, and the outbreak of the French revolution.

Smith stated his general stance on government in his Theory of Moral Sentiments (1759) thus:

““What institution of government could tend so much to promote the happiness of mankind as the general prevalence of wisdom and virtue? All government is but an imperfect remedy for the deficiency of these. Whatever beauty, therefore, can belong to civil government upon account of its utility, must in a far superior degree belong to these. On the contrary, what civil policy can be so ruinous and destructive as the vices of men? The fatal effects of bad government arise from nothing, but that it does not sufficiently guard against the mischiefs which human wickedness gives occasion to.”
(Theory Of Moral Sentiments, 1759: Book IV: p 187, Oxford University Press)