—Noam Chomsky, Class Warfare
Even today—in blithe disregard of his actual philosophy—Smith is generally regarded as a conservative economist, whereas in fact, he was more avowedly hostile to the motives of businessmen than most New Deal economists.
—Robert Heilbroner, The Worldly Philosophers
"Smith has an account of the nature of moral judgment, and its development, that is richer and subtler than Hume's; he offers a prototype for modern Aristotelianism in morality; he brings out the importance of the imagination to moral development as few other philosophers have done; he is an early and forceful promoter of the notion that history is guided largely by unintended consequences; and he derives from these views an unusual variant of liberal politics. Few of these contributions are spelled out with the clarity and tight argumentation that contemporary philosophers demand of their canonical figures, but Smith compensates for this weakness by the humanity and thoughtfulness of his views, by their detachment from metaphysical commitments, and by an abundance of historical and imaginative detail. The richness of his ideas, and their quiet plausibility, earn him a place among the most important of modern moral and political philosophers."
His first major work, the Theory of Moral Sentiments, "consists largely of what Smith himself calls 'illustrations' of the workings of the moral sentiments—short vignettes, elegantly described, that attempt to show what frightens us about death, what we find interesting and what dull or distasteful about other people's love affairs, how moral luck factors into our assessment of various actions, or how and why we deceive ourselves. To some, this provides the detail and psychological acuity that they find lacking in most moral philosophy; to others, it seems something more properly taken up by novelists or empirical psychologists, not the business of a philosopher."
Is there any wonder why he's a favourite of mine?? Besides being a brilliant portrayer of human personalities, he had by far the best grasp among famous philosophers on the significant roles that competition and cooperation play in our lives. He didn't have modern findings from behavioural economics and game theory to flesh out and support his ideas, but that's only because he had to invent their forerunners first as the father of economics. Rather than continue on about him myself though, I found so many great quotes from the man that I should leave time for them to speak for themselves before I get to my own analysis of his main philosophical ideas.
In every part of the universe we observe means adjusted with the nicest artifice to the ends which they are intended to produce; and in the mechanism of a plant, or animal body, admire how every thing is contrived for advancing the two great purposes of nature, the support of the individual, and the propagation of the species.
This disposition to admire, and almost to worship, the rich and powerful, and to despise or, at least, neglect persons of poor and mean conditions, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments.
Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.
The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from these rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal to the banking company which attempts it.
The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever.
All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.
It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
Every tax, however, is to the person who pays it a badge, not of slavery but of liberty. It denotes that he is a subject to government, indeed, but that, as he has some property, he cannot himself be the property of a master.
No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable. It is but equity, besides, that they who feed, cloath and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.
With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches, which in their eye is never so complete as when they appear to possess those decisive marks of opulence which nobody can possess but themselves.
How many people ruin themselves by laying out money on trinkets of frivolous utility? What pleases these lovers of toys is not so much the utility, as the aptness of the machines which are fitted to promote it.
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.
The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.
Adam Smith (1723-1790 CE) was a Scottish moral philosopher, a pioneer of political economics, and one of the key figures of the Scottish Enlightenment. The Wealth of Nations is considered his magnum opus and is the reason Adam Smith is widely cited as the father of modern economics.
The Wealth of Nations expounds that the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by a so-called "invisible hand.” Smith opposed any form of economic concentration because it distorts the market's natural ability to establish a price that provides a fair return on land, labor, and capital. He advanced the idea that a market economy would produce a satisfactory outcome for both buyers and sellers, and would optimally allocate society's resources. Smith believed that when an individual pursues his self-interest, he indirectly promotes the good of society. Nevertheless, he was wary of businessmen and warned of their "conspiracy against the public or in some other contrivance to raise prices.” Again and again, Smith warned of the collusive nature of business interests, which may form cabals or monopolies, fixing the highest price that can be squeezed out of the buyers. Smith also warned that a true laissez-faire economy would quickly become a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. Smith was similarly wary of the Division of Labor, about which he said, “In the progress of the division of labor, the employment of the far greater part of those who live by labor, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently only one or two. ...The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.” A huge debt is owed to Smith for our understanding of the modern economy and how it can provide wealth for all in staggering abundance as compared to the past. Smith also seemed to have an excellent grasp of the need to balance competition with cooperation, and of the need for regulation of the economy for its maximum benefit. If only free market advocates really understood the father of their ideas. Or perhaps they do and still seek to exploit it.
In The Theory of Moral Sentiments, Smith critically examined the moral thinking of the time and suggested that conscience arises from social relationships. His aim in the work is to explain the source of mankind's ability to form moral judgments, in spite of man's natural inclinations toward self-interest. Scholars have previously perceived a conflict between The Theory of Moral Sentiments and The Wealth of Nations; the former emphasizing sympathy for others, while the latter focuses on the role of self-interest. In recent years, however, most scholars regard the works as emphasizing different aspects of human nature that vary depending on the situation. Smith was no extremist. He understood the need to balance the short-term and long-term, self and society, and competition and cooperation. A true giant in the evolution of human knowledge.
Needs to Adapt
Not that much is known of his personal life, but Adam Smith was "described by several of his contemporaries and biographers as comically absent-minded, with peculiar habits of speech and gait, and a smile of 'inexpressible benignity'. He was known to talk to himself, a habit that began during his childhood when he would smile in rapt conversation with invisible companions. According to one story, Smith took Charles Townshend on a tour of a tanning factory, and while discussing free trade, Smith walked into a huge tanning pit from which he needed help to escape. He is also said to have put bread and butter into a teapot, drunk the concoction, and declared it to be the worst cup of tea he ever had. According to another account, Smith distractedly went out walking in his nightgown and ended up 15 miles (24 km) outside of town, before nearby church bells brought him back to reality." Reading through some the ideas he came up with during these wanderings though, maybe we should all get so wrapped in our thoughts from time to time.