Adam Smith's Wealth Of Nations Essay

740 words - 3 pages

Adam Smith (1723-90) was not the first to try to understand the market economy, but he may have been the most influential and eloquent observer of economic life. His observation that a person may be "led by an invisible hand to promote an end that was no part of his intention" became the guiding star of an investigation of the beneficial unintended consequences of voluntary exchange, an investigation that still continues strong after more than two hundred years. (Others had reached that insight earlier, as the excerpt from the Tao Te Ching of Lao-tzu in the readings indicates; interestingly, the writings of Lao-tzu were distributed by the anti-Nazi "White Rose" group in Germany to undercut ...view middle of the document...

" Smith follows up this observation with a dry remark that certainly rings true: "They whom we call politicians are not the most remarkable men in the world for probity and punctuality."

Enemies of free-market relationships tend to portray voluntary exchanges as "zero sum," that is, a gain to one party can come only at a loss to the other. But Smith showed how trade is based on mutual benefit, rather than conflict over fixed resources. The division of labor, so bemoaned by socialists as the source of "alienation," is seen as the foundation for an enormous system of social cooperation and wealth production. Among Adam Smith’s accomplishments in changing how people think about wealth was his redefinition of "nation"; not only privileged members of the court, but every human being counted as a part of a nation. Eliminating special privileges may be to the short-run detriment of special interests, but free markets and the attendant economic progress and growth are to the long-term benefit of all the members of society, including the least powerful, whose interests count as much as those of the powerful.

A common criticism of classical liberalism is that it focuses...

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