The Wealth of Nations by Adam Smith

Adam Smith: Father of Economics
by Jesse Norman
Published 30 Jun 2018

ALSO BY JESSE NORMAN Edmund Burke: The First Conservative The Big Society: The Anatomy of the New Politics BIBLIOGRAPHY WORKS BY ADAM SMITH Correspondence of Adam Smith, ed. Ernest Campbell Mossner and Ian Simpson Ross, Liberty Fund 1987 An Early Draft of Part of The Wealth of Nations, in LJ Essays on Philosophical Subjects, ed. W. P. D. Wightman and J. C. Bryce, Liberty Fund [1795] 1980 An Inquiry into the Nature and Causes of the Wealth of Nations, ed. R. H. Campbell, A. S. Skinner and W. B. Todd, 2 vols., Liberty Fund [1776] 1981 Lectures on Jurisprudence, ed. R. L. Meek, D. D. Raphael and P.

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In the words of the Chicago School economist Jacob Viner on The Wealth of Nations, ‘Traces of every conceivable sort of doctrine are to be found in that most catholic book, and an economist must have peculiar theories indeed who cannot quote from The Wealth of Nations to support his special purposes.’ So it has proven. One example of this tendency will suffice, and from Viner’s most famous student no less. In a famous article of 1977 for Challenge magazine, Milton Friedman, fresh from winning a Nobel Prize in the previous year, undertook to spell out ‘Adam Smith’s Relevance for Today’. For Friedman, Smith was ‘a radical and revolutionary’ in his own time—just as Friedman was in his.

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MYTH 3: ADAM SMITH WAS PRO-RICH The Wealth of Nations was published at a time when Scotland was in the early stages of one of the longest and most rapid periods of national economic growth ever recorded. Vast fortunes were being made by Scottish merchants and industrialists, and the book serves in part not merely to explain but to ratify and defend emerging ideas of a commercial system based on free markets. As a result, Smith’s name is often invoked today to justify extreme inequalities of wealth and income as the supposedly natural results of such a system. Yes, The Wealth of Nations is a hymn to the possibility of ‘universal opulence’—that is, material advancement for all sections of society.

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes
by Mark Skousen
Published 22 Dec 2006

My preference is the 1937 (latest reprint, 1994) Modern Library edition, edited by Edwin Cannan. The significance of The Wealth of Nations has reached such biblical proportions that a complete concordance was prepared by Fred R. Glahe (1993), economics professor at the University of Colorado. Oh, the wonders of computers! Did you know that the word "a" appears 6,691 times in The Wealth of Nations? A concordance is undoubtedly valuable, especially for scholars. For example, "de-5.1 recommend the book Adam Smith Across Nations: Translations and Receptions of The Wealth of Nations, edited by Cheng-chung Lai (2000), for a fascinating account of the influence of Adam Smith's book over the centuries.

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In Essays on John Maynard Keynes, ed. Milo Keynes, 132-41. Cambridge, UK: Cambridge University Press. Garrison, Roger B. 1985. "West's 'Cantillon and Adam Smith': A Comment." Journal of Libertarian Studies 7, 2 (Fall): 287-94. . 2001. Time and Money. London: Routledge. Glahe, Fred R., ed. 1978. Adam Smith and the Wealth of Nations: 1776-1976 Bi-centennial Essays. Boulder: Colorado Associated University Press. . 1993. Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations: A Concordance. Landam, MD: Rowman and Littlefield. Gordon, H. Scott. 1967. "Discussion on Das Kapital: A Centenary Appreciation."

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On March 9, 1776, the London printers William Strahan and Thomas Cadell released a 1,000-page, two-volume work entitled An Inquiry into the Nature and Causes of the Wealth of Nations. It was a fat book with a long title destined to have gargantuan global impact. The author was Dr. Adam Smith, a quiet, absent-minded professor who taught "moral philosophy" at the University of Glasgow. The Wealth of Nations was the intellectual shot heard around the world. Adam Smith, a leader in the Scottish Enlightenment, had put on paper a universal formula for prosperity and financial independence that would, over the course of the next century, revolutionize the way citizens and leaders thought about and practiced economics and trade.

The Classical School
by Callum Williams
Published 19 May 2020

It is little wonder that conservative economists have embraced Smith as one of their own. Newspaper columnists love drawing on Smith if ever they advocate tax cuts. The Adam Smith Institute, a libertarian think tank, was set up in 1977, a time when free-market philosophies were gaining intellectual ground. Homo economicus on the ropes Yet Smith’s outlook was more complex than the pithy quotations above suggest. It is here that one must do what Smith wanted us to do, and read the Wealth of Nations in conjunction with Moral Sentiments.4 If the Wealth of Nations is a blueprint for how the economy works, Moral Sentiments is a guidebook for how people navigate it.

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Marx would surely have incorporated them into the later volumes of Capital if he had lived long enough. Ricardo had been looking forward to meeting Jean-Baptiste Say, but was ultimately left underwhelmed. Harriet Martineau seemed to know pretty much everybody. Even if they did not know each other personally, the 20 were constantly criticising and critiquing each other. Adam Smith published the Wealth of Nations in 1776 in opposition to the “mercantile system” of Jean-Baptiste Colbert, France’s finance minister from 1661 to 1683. John Stuart Mill at first slavishly adhered to Ricardo, but would later come to reject much of what he had written. Alfred Marshall, the final economist profiled in this book, constantly referred to Sir William Petty, one of the first.

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Empirical evidence was hard to get hold of, was unreliable, and, thanks to David Hume, there were lingering doubts as to whether it was possible to draw general statements from the analysis of data. According to Schumpeter, Petty’s guiding principle that “generalisations [be] the joint product of figures and reasoning” fell out of fashion with Adam Smith (who does not once namecheck Petty in the Wealth of Nations). David Ricardo had no time for empirical research. Karl Marx believed that data and statistics were grubby–and did not bother with the question of whether his analysis of capitalism was in any way testable against the real world. If Petty had come back to life in 1900 he would have been disappointed with the progress that his profession had made.

Visions of Inequality: From the French Revolution to the End of the Cold War
by Branko Milanovic
Published 9 Oct 2023

Would the advancing societies in the feudal stage move to become commercial societies? We just do not know, and Smith does not tell us. 3 . Page references for Books I–IV are to Adam Smith, The Wealth of Nations, edited with notes and marginal summary by Edwin Cannan, preface by Alan B. Krueger (New York: Bantam Classics, 2003), based on 5th ed. as edited and annotated by Edwin Cannan in 1904. Page references for Book V are to Adam Smith, Of the Revenue of the Sovereign or Commonwealth (Book V of The Wealth of Nations, 1776), ed. D. N. Deluna (Altoona, AL: Owlworks / Archangul Foundation, 2009). 4 . Smith, Wealth of Nations, Book II, ch. 3, 436. 5 .

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The “they” here refers to a group he had just called a “sect of men of letters,” clearly the physiocrats. Smith, Of the Revenue (Book V of The Wealth of Nations), ch. 2, 113. 19 . According to Cannan, “it is plain that Smith acquired the idea of the necessity of a scheme of distribution from the physiocrats.” Edwin Cannan, “Introduction,” in Adam Smith, Lectures on Justice, Police, Revenues, and Arms, Delivered in the University of Glasgow by Adam Smith; Reported by a Student in 1763, ed. Edwin Cannan (Oxford: Clarendon Press, 1896), xxxi. Quoted in Maurice Dobb, Theories of Value and Distribution since Adam Smith: Ideology and Economic Theory (Cambridge: Cambridge University Press, 1973), 56n.

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f In Ricardo, capitalists receive their income only after rent is taken by landlords and wages have been paid to workers. (Technically, in Quesnay, wages are paid even earlier, as an advance.) CHAPTER TWO Adam Smith: “Progress of Opulence” and an Implicit Theory of Income Distribution In today’s terms, Adam Smith could be considered a development economist. His objective in The Wealth of Nations was to describe and argue for government policies that would lead to the maximum “opulence” for a population. He was among the first to develop a stadial theory of development, proposing that societies evolve from a primitive state (“rude state of society”) to a pastoral, then an agricultural or feudal, and eventually a commercial state. 1 Similarly, he divided societies into those advancing, stationary, and declining in wealth.

The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)
by Phil Thornton
Published 7 May 2014

With 40 per cent of the UK economy taken by the state in the form of social security benefits, the National Health Service and the education system among others, it is clear we have moved a long way from The Wealth of Nations. Chapter 1 • Adam Smith25 What you should take away Adam Smith is justifiably known as the father of economics and his reputation will last long after he has disappeared from British banknotes. The Wealth of Nations has become the template for all the major textbooks that have followed it up to the present day. His key ideas, which influence modern thinking within economics and business, include: • Real wealth is the sum of the annual produce of the land and labour of the whole country rather than the monetary wealth it hoards.

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Readers can dip in and out: each chapter is a self-contained story about one original thinker and their impact on the development of economic thinking. CHAPTER 1 Adam Smith– the ‘founding father’ of economics 1 2 The Great Economists ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’ Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book 1, ch. 2 Every Briton should know who Adam Smith is – or least what he looks like. This is not because he is a celebrity or a national treasure but because since 2007 his face has adorned the £20 banknote.

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Townshend was the stepfather of the teenaged Duke of Buccleuch, and he persuaded Smith to Chapter 1 • Adam Smith7 resign his chair at Glasgow and become his tutor. The first 18 months of this role was spent in France, where Smith met and debated with the elite of French thinkers at the time, including Voltaire. On their return to London, Smith spent the following ten years writing the five-volume The Wealth of Nations, which was published in 1776. One of the reasons for starting The Great Economists with Smith is that The Wealth of Nations laid out for the first time a comprehensive economic theory of the world. The full title gives a big clue: the book aims to establish how societies can become commercially successful.

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems
by Linda Yueh
Published 4 Jun 2018

Introduction: Great Economists on Our Economic Challenges 1.    Adam Smith, 1979 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations, eds. R. H. Campbell, A. S. Skinner and W. B. Todd, Oxford: Clarendon Press, bk II, ch. 3, para 2. 2.    Alvin H. Hansen, 1939, ‘Economic Progress and Declining Population Growth’, American Economic Review, 29(1), pt I, pp. 1–15. 1 – Adam Smith: Should the Government Rebalance the Economy? 1.    Adam Smith, 1979 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations, ed. R. H. Campbell, A. S. Skinner and W. B. Todd, Oxford: Clarendon Press, bk IV, ch. 2, para. 10. 2.    

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Perhaps their insights can help guide our economic future too. 1 Adam Smith: Should the Government Rebalance the Economy? Widely viewed as the seminal figure in economics, Adam Smith witnessed the beginning of the Industrial Revolution, which fundamentally changed the Western world. During this time and in the decades that followed, Britain became the world’s first industrialized economy. This extraordinary period formed the backdrop to one of the most influential books in economics. Adam Smith’s magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations, took a decade to write. It sets out the concept of the ‘invisible hand’, which refers to the unseen market forces that set prices by equating supply and demand.

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Stein, Oxford: Clarendon Press ________, 1979 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, eds. R. H. Campbell, A. S. Skinner and W. B. Todd, Oxford: Clarendon Press Solow, Robert, 1956, ‘A Contribution to the Theory of Economic Growth’, Quarterly Journal of Economics, 70(1), pp. 65–94 ________, 1957, ‘Technical Change and the Aggregate Production Function’, Review of Economics and Statistics, 39(3), pp. 312–20 Sperber, Jonathan, 2013, Karl Marx: A Nineteenth-Century Life, New York: Liveright Stewart, Dugald, 1793, ‘Account of the Life and Writings of Adam Smith’, read to the Royal Society of Edinburgh and published in Adam Smith’s posthumous Essays on Philosophical Subjects of 1795, London and Edinburgh: T.

The Great Economists: How Their Ideas Can Help Us Today
by Linda Yueh
Published 15 Mar 2018

Notes Introduction: Great Economists on Our Economic Challenges 1. Adam Smith, 1979 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations, eds. R. H. Campbell, A. S. Skinner and W. B. Todd, Oxford: Clarendon Press, bk II, ch. 3, para 2. 2. Alvin H. Hansen, 1939, ‘Economic Progress and Declining Population Growth’, American Economic Review, 29(1), pt I, pp. 1–15. Chapter 1 – Adam Smith: Should the Government Rebalance the Economy? 1. Adam Smith, 1979 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations, ed. R. H. Campbell, A. S. Skinner and W. B. Todd, Oxford: Clarendon Press, bk IV, ch. 2, para. 10. 2.

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Perhaps their insights can help guide our economic future too. CHAPTER 1 Adam Smith: Should the Government Rebalance the Economy? Widely viewed as the seminal figure in economics, Adam Smith witnessed the beginning of the Industrial Revolution, which fundamentally changed the Western world. During this time and in the decades that followed, Britain became the world’s first industrialized economy. This extraordinary period formed the backdrop to one of the most influential books in economics. Adam Smith’s magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations, took a decade to write. It sets out the concept of the ‘invisible hand’, which refers to the unseen market forces that set prices by equating supply and demand.

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Joseph Schumpeter, 1997 [1954], History of Economic Analysis, London: Routledge, pp. 472–3. 12. Adam Smith, 1979 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations, eds. R. H. Campbell, A. S. Skinner and W. B. Todd, Oxford: Clarendon Press, bk IV, ch. 2, para 12. 13. Ricardo, Works and Correspondence, IV, p. 23. 14. Ibid., p. 21. 15. King, David Ricardo, p. 88. 16. Ricardo, Works and Correspondence, IV, pp. 28, 32. 17. Ibid., p. 35. 18. Ibid., p. 33. 19. Ibid., p. 41. 20. Ricardo Hausmann and Federico Sturzenegger, 2007, ‘The Missing Dark Matter in the Wealth of Nations and Its Implications for Global Imbalances’, Economic Policy, 22(51), pp. 470–518. 21.

How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World and Everything in It
by Arthur Herman
Published 27 Nov 2001

William Robertson used Smith’s lectures on natural law and the four-stage theory of civil society for his own history of Europe—so much so that Smith privately accused him of plagiarism! All this shows that long before he published his Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith was a prominent and influential figure in Edinburgh circles. He attended the meetings of the Select Society and the Poker Club, and went to the dinner parties of even nonintellectual citizens. As a guest he could be trying. He rarely spoke, but when he did, it was usually at great length. Alexander Carlyle remembered Adam Smith as “the most absent man in Company that I ever saw, Moving his Lips and talking to himself, and Smiling, in the midst of large Company’s.”

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Muller’s Adam Smith in His Time—And Ours (New York, 1993). Ian Ross’s biography of Smith (see Chapter Three, above), was of course crucial for writing this chapter, as was Dugald Stewart’s Biographical Memoir of Adam Smith, which first appeared in 1793 but which was reprinted from the collected works of Dugald Stewart in 1966. Adam Smith’s two major works, An Inquiry Into the Nature and Causes of the Wealth of Nations and The Theory of Moral Sentiments, are generally available, while even his lectures on jurisprudence and Lectures on Rhetoric and Belles Lettres, both of which are based on notes by former students, can be found in modern editions.

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One of these was John Millar, who served as tutor to Kames’s son, then became the University of Glasgow’s first Professor of Civil Law. As a teacher and scholar, Millar would virtually invent modern political history. Another was Adam Smith, who came to Edinburgh in 1746 looking for an academic job. Because none was available, Kames arranged for him to deliver a series of public lectures on rhetoric, literature, and the subject dear to Kames’s heart, civil jurisprudence. Those lectures, delivered between 1748 and 1751, would become the foundation for the Wealth of Nations. A third was James Boswell, the son of Kames’s colleague on the Court of Session bench, Lord Auchinleck. The headstrong James quarreled frequently with his cold, reproachful father, and looked to the rough but affectionate Kames as his intermediary when things were going badly at home.

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by George R. Tyler
Published 15 Jul 2013

Mary Visot, “Areva, the Candidate of Juniac ‘Incompatible,’” Le Figaro, Dec. 15, 2010. 92 “Bonus Windfall Tax,” Editorial, Financial Times, Nov. 20, 2009. 93 Adam Smith, The Wealth of Nations (New York: Oxford University Press Classics), 376. 94 P.J. O’Rourke, “Adam Smith Gets the Last Laugh,” Financial Times, Feb. 10, 2009. 95 Ibid. 96 Adam Smith, The Wealth of Nations, 129. 97 Adam Smith, The Wealth of Nations, 188. 98 Trevor Manuel, “Let Fairness Triumph over Corporate Profits,” Financial Times, March 16, 2009. 99 Nicholas Phillipson, Adam Smith: An Enlightened Life (Hartford, CT: Yale University Press, 2010). 100 James K. Galbraith, Predator State, 162. 101 “Bonus Points,” Editorial, Financial Times, Dec. 7, 2009. 102 David Brown, “Blood Levels of Trans Fats Plunge after Food-Labeling Decree,” Washington Post, Feb. 9, 2012. 103 Michael E.

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For us today in interpreting Adam Smith, an especially important bubble arose in 1772 in Scotland, when the giant Ayr Bank and others collapsed, impoverishing Scotland for years. P.J. O’Rourke explained the environment in which Smith wrote the Wealth of Nations in a February 2009 column in the Financial Times: “The Mississippi Scheme and the South Sea Bubble had both collapsed in 1720, three years before his (Smith’s) birth. In 1772, while Smith was writing The Wealth of Nations, a bank run occurred in Scotland. Only three of Edinburgh’s 30 private banks survived.”94 As he looked out his study window, Adam Smith could scarcely avoid the financial news of the day, and realized the barrier such abuses posed to his hopes for advancing the condition of his day.95* That accounts for his abiding support for prudent government regulation to channel the business community’s greed into competition.

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Meckling, “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure,” Journal of Financial Economics, vol. 3, no. 4, 1976. 24 John Plender, “Investing: Rules of Engagement,” Financial Times, July 11, 2010. 25 Justin Baer, Francesco Guerrera, and Richard Milne “A Need to Reconnect,” Financial Times, March 13, 2009. 26 Rakesh Khurana and Nitin Nohria, “Management Needs to Become a Profession,” Financial Times, Oct. 20, 2008. 27 Adam Smith, The Wealth of Nations, 368–69. 28 Joe Nocera, “Nice Wasn’t Part of the Deal,” New York Times, Aug. 1, 2009. 29 Adam Smith, The Wealth of Nations. 30 Milton Friedman, “Rethinking the Social Responsibility of Business,” Reason, October 2005. 31 David Magee, Jeff Immelt and the New GE Way (New York: McGraw-Hill Professional, 2009). 32 John P. Hussman, “Misallocating Funds,” Weekly Market Comment, July 12, 2010, hussmanfunds.com, http://www.hussmanfunds.com/wmc/wmc100712.htm. 33 Truman F.

Private Government: How Employers Rule Our Lives (And Why We Don't Talk About It)
by Elizabeth S. Anderson
Published 22 May 2017

Smith, in particular, has been misread as a theorist of benign “invisible hand” self-interest and socially disembedded, selfequilibriating markets. Bromwich rightly invokes Polanyi against such illusions, but wrongly supposes that Smith held them. For corrections, see Gavin Kennedy, “Adam Smith: Some Popular Uses and Abuses,” in Adam Smith: His Life, Thought, and Legacy, edited by Ryan Hanley (Princeton, NJ: Princeton University Press, 2016), 461–77. 2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 1, Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981), I.10.2.61. Nor did Locke support unregulated labor markets. Although he prescribed harsh measures for dealing with those among the poor whom he imagined to be voluntarily unemployed, he also argued that property owners should be required to hire the involuntarily unemployed at a state-prescribed minimum wage.

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But it serves to fix ideas. I hasten to add that some egalitarians of the seventeenth and eighteenth centuries—notably, the Diggers and Rousseau—rejected market society. My focus in this lecture is on those who embraced it. 2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 1, Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981), I.ii.2. 3. Karl Marx, Capital: A Critique of Political Economy, edited by Frederick Engels, translated by Samuel Moore and Edward Aveling (Chicago: Charles H. Kerr, 1912), 195–96. 4. This is not just cynicism on Smith’s part.

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He did not appeal to racist premises to justify his position. On this point, see Jeremy Waldron, God, Locke, and Equality: Christian Foundations of John Locke’s Political Thought (Cambridge and New York: Cambridge University Press, 2002), Kindle loc. 2256–2335, 2402–15. 5. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. 2, Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981), V.1.f.61. 6. Locke contradicted himself on this point. Notoriously, he invested in the slave trade, and probably helped draft The Fundamental Constitutions of Carolina, 1669, http://avalon.law.yale.edu/17th_century/nc05.asp, which upheld slavery.

The Rational Optimist: How Prosperity Evolves
by Matt Ridley
Published 17 May 2010

p. 37 ‘In civilized society,’ wrote Adam Smith’. Smith, A. 1776. The Wealth of Nations. p. 38 ‘Leonard Read’s classic 1958 essay “I, Pencil”’. Read, L.E. 1958. I, Pencil. The Freeman, December 1958. For a fine modern rerun of the same subject see the novel by Roberts, R. 2008. The Price of Everything. Princeton University Press. p. 38 ‘As Friedrich Hayek first clearly saw’. Hayek, F.A. 1945. The use of knowledge in society. American Economic Review 35:519–30. p. 39 ‘a smaller quantity of labour produce a greater quantity of work’. Smith, A. 1776. The Wealth of Nations. p. 39 ‘you would have spent your after-tax income in roughly the following way’.

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Current Biology 17:1908–12. p. 57 ‘as Leda Cosmides and John Tooby put it’. Cosmides, L. and Tooby, J. 1992. Cognitive adaptations for social exchange. In The Adapted Mind (eds J.H. Barkow, L. Cosmides and J. Tooby). Oxford University Press. p. 57 ‘In Adam Smith’s words’. Both Adam Smith quotes are from book 1, part 2, of The Wealth of Nations (1776). p. 57 ‘In the grasslands of Cameroon’. Rowland and Warnier, quoted in Shennan, S. 2002. Genes, Memes and Human History. Thames & Hudson. p. 59 ‘The primatologist Sarah Brosnan tried to teach two different groups of chimpanzees about barter’.

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Arnold, J.E. 2001. The Origins of a Pacific Coast Chiefdom: The Chumash of the Channel Islands. University of Utah Press. p. 93 ‘Das Adam Smith Problem’. Coase, R. H. 1995. Adam Smith’s view of man. In Essays on Economics and Economists. University of Chicago Press. p. 93 ‘How selfish soever man may be supposed’. Smith, A. 1759. The Theory of Moral Sentiments. p. 93 ‘Man has almost constant occasion for the help of his brethren’. Smith, A. 1776. The Wealth of Nations. p. 93 ‘honorary friends’. Seabright, P. 2004. The Company of Strangers. Princeton University Press. p. 94 ‘As the philosopher Robert Solomon put it’.

Value of Everything: An Antidote to Chaos The
by Mariana Mazzucato
Published 25 Apr 2018

Marx, we will see, was more subtle in his understanding of this distinction. Adam Smith: The Birth of the Labour Theory of Value Born in 1723 into a family of customs officials in Kirkcaldy, in the county of Fife, Scotland, Adam Smith became Professor of Moral Philosophy at the University of Glasgow before turning his mind to what we now call economic questions, although at the time such questions were deeply influenced by philosophy and political thought. With Britain well on the path to industrial capitalism, Smith's The Wealth of Nations highlighted the role of the division of labour in manufacturing. His account of pin-manufacturing continues to be cited today as one of the first examples of organizational and technological change at the centre of the economic growth process.

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And to choose a different path among the many that are available. 1 A Brief History of Value There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour. Adam Smith, The Wealth of Nations (1776) Today we take increasing prosperity for granted. We assume that by and large the next generation will be better off than the last. But it was not always so. For most of human history people had no such expectations and, partly because living standards improved at best very slowly, few thinkers devoted much time to asking why some economies grow and others do not.

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This normative and moral view of price, linked to cheating or criminal behaviour, began to fade after the seventeenth century - the time of Petty and King - but lingered on until firmly supplanted by the concept of individual utility, which held that it was not about good or bad but how common goals could be reached through each individual trying to maximize the benefit to him- or herself. In 1776 - the year that Adam Smith published The Wealth of Nations - the Englishman Jeremy Bentham argued that ‘the greatest happiness of the greatest number' should be the ‘measure of right and wrong'.5 In other words, an action should be evaluated according to its consequences in a particular context: killing may be justified if it prevents more killing.

Bourgeois Dignity: Why Economics Can't Explain the Modern World
by Deirdre N. McCloskey
Published 15 Nov 2011

A woman is willing to punish defectors in ways that entail even the sacrifice (from the Latin, “make holy”) of her own profits.19 Humans have a sense of justice (as the primatologist Frans de Waal argues, so also do some other animals, if less elaborately), a sense of appropriate behavior toward other people and especially in other people. They will go to lengths to praise and reward manifestations of the virtues—prudence, temperance, courage, justice, faith, hope, and love—and to blame and punish the corresponding vices. The Blessed Adam Smith called such matters of internalized ethics the “impartial spectator”—though a spectator who then gets up on stage to act, for the moral sentiments and the wealth of nations. A society can craft an official rule against cheating in business. Such a rule would be a “good institution.” It’s even necessary, to discourage the simplest game-theoretic defections and to generate “Schelling points” around which business can gather.

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The three virtues of the classical and Christian seven that are missing from Austen—transcendent hope and faith and love of God—are the same one’s missing from Adam Smith. (Austen appears to have got the gist of Smith only indirectly, if at all. Her father’s considerable library of five hundred books might possibly have contained one of the two books Smith published. Waterman, who has gone into the matter of the circulation of The Wealth of Nations in detail, doubts it.) That is, she is not a Romantic novelist, even though she concerned herself exclusively with romance in its recent sense of “affairs of the heart.”

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Smith was inclined to “offices of secret charity,” a most bourgeois inclination.18 The Duke of Buccleuch, in whose entourage Smith traveled the Continent 1764–1766, admired him for “every private virtue,” the sort of virtues an aristocrat would think well suited to a bourgeois.19 On eighteenth-century suppositions, the public virtues—that is, the political virtues—were to be exercised mainly by aristocrats. Of the seven principal virtues of classical and Christian theory, Adam Smith paid particular attention to three. His three books—two published and one intended—match the three. Prudence is the chief, if nothing like the only, virtue considered in The Wealth of Nations. Temperance is the chief, if again not the only, virtue considered in The Theory of Moral Sentiments. And justice was to be considered in a projected Treatise on Jurisprudence, the shape of which we can imagine from elaborate notes by Smith’s students in courses given from his chair of Moral Philosophy in 1762–1763 and 1766.

The Unknowers: How Strategic Ignorance Rules the World
by Linsey McGoey
Published 14 Sep 2019

If you read on, beyond Books One to Three of the Wealth of Nations, into those parts almost never represented in modern selected editions, it becomes clear that Smith foresaw negative consequences to unfettered economic growth; that for Smith the moral economy still mattered. Female economists, of whom there have been a few over the intervening centuries, often seem to grasp that point, but it has been widely ignored in a predominantly male specialism.32 It is a very good point, but while gender plays some role, it can’t explain all. Writing in 1952, the British economist Lionel Robbins suggested that to call Adam Smith a laissez faire thinker ‘is a sure sign of ignorance or malice.’33 In other words, women have been at the forefront of a more accurate understanding of Smith’s writing.

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, a wonderful and witty book which highlights important points about the way that contemporary economic theories tend to ignore the economic importance of domestic, unpaid labour, especially the labour of women.1 My focus is a little different. I agree that much academic theory ignores the role of unpaid labour in creating economic value. But there’s also another problem surrounding the treatment of Smith’s work today. His book, The Wealth of Nations, published in 1776, is widely viewed today as the most important modern economic text ever written. Smith is seen as the patron saint of the belief that economic self-interest will lead naturally to positive economic growth for all members of a community. Steven Pinker and others call this the ‘positive-sum’ or ‘shared prosperity’ thesis and they attribute it to Smith.

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She notes that the editor of a 1970 Penguin version expects that his readers will agree ‘that the first two books contain the central part of Smith’s work as a theoretical economist, and the real basis of a profoundly influential school of thought.’ Another editor, of the Everyman version in 1991, suggests the first four books ‘contain the whole of what Smith had to say in carrying out his aim, “An inquiry into the Nature and Causes of the Wealth of Nations.”’31 Sutherland makes an important and neglected observation. To discount the centrality of Book 5 might seem like an arbitrary decision, but when multiple versions omit the same book, it amounts to a pattern of wilful omission. The deliberate cutting of sections where Smith writes at length about the necessity of government intervention is an example of what I mean by elite ignorance, because it proves that what people today don’t know about Smith isn’t simply accidental, but rather results from the biases of earlier scholars who are influential in shaping what future generations understand about the past.

The Darwin Economy: Liberty, Competition, and the Common Good
by Robert H. Frank
Published 3 Sep 2011

Jacoby, “Probabilistic Forecast for 21st Century Climate Based on Uncertainties in Emissions (without Policy) and Climate Parameters,” MIT Joint Program on the Science and Policy of Global Change, Report 169, January 2009. 5. Jane Mayer, “Covert Operations: The Billionaire Brothers Who Are Waging a War against Obama,” New Yorker, August 30, 2010, pp. 44–55. 6. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, State College, PA: Penn State University, 2005, p. 364 (originally published in 1776). 7. Ibid., p. 111. 8. For a comprehensive account of how laissez-faire enthusiasts have often misrepresented Adam Smith’s positions, see Amartya Sen’s introduction to the 250thanniversary edition of Smith’s The Theory of Moral Sentiments, New York: Penguin, 2009. 9. Charles Darwin, The Origin of Species, 6th London Edition, The Literature Project, 2000–2010.

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John Rawls, A Theory of Justice, Cambridge, MA: Belknap Press of Harvard University Press, 1971. 2. Harriet Rubin, “Ayn Rand’s Literature of Capitalism,” New York Times, September 15, 2007, http://www.nytimes.com/2007/09/15/business/15atlas.html. 3. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, State College, PA: Penn State University, 2005, book 1, chapter 1 (originally published in 1776), http://www.online-literature.com/adam_smith/wealth_nations/3/. 4. Ibid., book 1, chapter 3. 5. Robert Nozick, Anarchy, State, and Utopia, New York: Basic Books, 1974. 6. www.sirclisto.com/cavalier/spain.htm. INDEX absolute consumption, 24–25, 40 absolute income, 23, 44 ACAP.

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One century hence, if a roster of professional economists is asked to identify the intellectual father of their discipline, a majority will name Charles Darwin. If the same question were posed today, of course, more than 99 percent of my colleagues would name Adam Smith. My views about Darwin’s significance reflect no shortage of admiration for Smith on my part. On the contrary, reading any random passage from the eighteenth-century Scottish moral philosopher’s masterwork, The Wealth of Nations, still causes me to marvel at the depth and breadth of his insights. Charles Darwin was himself no slouch, obviously, yet few people outside academic departments of biology and economics associate his name with ideas in economics.

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One
by Meghnad Desai
Published 15 Feb 2015

But eventually, if money kept flooding in from outside (as was the case with Spain in the previous two centuries), there would be limits to how far economic activity could expand in the short term, and this constraint would result in inflation. As to the question of what constituted wealth, the answer was to come from a fellow Scotsman and friend – Adam Smith. Determining the Wealth of Nations Adam Smith, a lifelong bachelor who lived with his mother and sister all his adult life, was a friend of David Hume. Smith was elected a Professor of Moral Philosophy at Glasgow, and later gave up the post to become a tutor to the Duke of Buccleuch, which allowed him to travel all over Europe meeting the famous philosophers of his day.

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In the eighteenth century, kings still sought to increase their wealth through invasion and plunder – Britain was even then in the middle of its long century of war with France, which lasted, on and off, from 1695 to 1815. In his celebrated book An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776, Adam Smith pointed out that it was the productivity of its workers which was the key to the prosperity of a nation and not the treasures of gold and silver it had accumulated. The productivity of the workers could be enhanced with tools and machines. The capital – the money to buy the tools and machinery as well as to pay the wages – was accumulated out of the profits that the providers of capital made by employing the workers.

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He was well aware of the role of benevolence and sympathy in social life, which he had discussed in The Theory of Moral Sentiments. There were restraints on the pursuit of self-interest by individuals in the laws of the land as well as social conventions. But the dynamic energy unleashed by millions of people pursuing self-interest was the key to the wealth of nations. Adam Smith was a Deist, that is, someone who did not believe in the Revelation or the Virgin Birth but was religious. The fashionable doctrine in those days was of God as a Clockmaker. God did not intervene in the mundane affairs of the people on earth. He set the universe in motion as if it were a highly sprung and delicate clock which then worked away on its own as the pendulum swung back and forth.

The Evolution of Everything: How New Ideas Emerge
by Matt Ridley

Emergent ideas were all around him. He read his grandfather’s Lucretius-emulating poems. ‘My studies consist in Locke and Adam Smith,’ he wrote from Cambridge, citing two of the most bottom–up philosophers. Probably it was Smith’s The Moral Sentiments that he read, since it was more popular in universities than The Wealth of Nations. Indeed, one of the books that Darwin read in the autumn of 1838 after returning from the voyage of the Beagle and when about to crystallise the idea of natural selection was Dugald Stewart’s biography of Adam Smith, from which he got the idea of competition and emergent order. The same month he read, or reread, the political economist Robert Malthus’s essay on population, and was struck by the notion of a struggle for existence in which some thrived and others did not, an idea which helped trigger the insight of natural selection.

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Human action, but not human design The great enrichment was an evolutionary phenomenon. Let’s return to the late eighteenth century, when Britain stands on the brink of this great enrichment, and revisit that great thinker about the general theory of evolution, Adam Smith. In 1776 Smith published his second book, The Wealth of Nations. In it he set out to champion a different evolutionary idea from that which he had set out in his Theory of Moral Sentiments. If God was not the cause of morality, was government the cause of prosperity? In Smith’s day, commerce was a tightly regulated business, with joint-stock companies chartered specifically and exclusively by the state to have monopolies, and mercantilist trade policies designed to promote certain kinds of foreign exports, not to mention professions strictly licensed by the government.

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As so often, Smith got there first, saying in The Wealth of Nations: ‘The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.’ Invisible hands This decentralised emergence of order and complexity is the essence of the evolutionary idea that Adam Smith crystallised in 1776. In his famous metaphor, Smith made the guiding hand invisible: each person ‘intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention’.

What They Do With Your Money: How the Financial System Fails Us, and How to Fix It
by Stephen Davis , Jon Lukomnik and David Pitt-Watson
Published 30 Apr 2016

Pitt speech on introducing his budget, February 17, 1792, quoted in John Kenneth Galbraith, A History of Economics (Hamish Hamilton, 1987), 61. 10. Adam Smith, The Wealth of Nations (Oxford University Press, 2008), bk 1, chap 2. 11. Smith claimed that 240 times the number of pins could be created in this way than by an artisan working alone. 12. See Adam Smith, The Wealth of Nations, bk. 1, chap. 7. 13. Other economists of the same era also sought to turn economics into a science like physics. Stanley Jevons, for example, is described as “wanting to make human behavior as predictable as gravity.” Eric Beinhocker, The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (Random House, 2005), 34. 14.

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7 In the Middle Ages, writings on economic matters could be found in manuals for confessors, who were concerned that prices charged by merchants were “just.” Adam Smith was a professor of moral philosophy who believed his most important book to be one entitled The Theory of Moral Sentiments.8 But he became most famous for a follow-up work in which he applied his mind to the world of commerce: The Wealth of Nations. Even in his own time, it was profoundly influential. Prime Minister William Pitt declared to the House of Commons in 1792 that Smith’s work would “furnish the best solution to every question connected to the history of commerce and with the system of political economy.”9 The Wealth of Nations contains two profoundly important observations, the first of which flew in the face of society’s preference for thinking about money in moral terms.

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But scientists have certain statistical methods by which they can determine how accurate their measurements, and therefore their predictions, are likely to be. One of the key figures in developing those statistical methods was the mathematician who graced the ten-euro note: Carl Friedrich Gauss. Gauss, born the year after Adam Smith published The Wealth of Nations, is recognized as one of the world’s greatest mathematicians. His most direct contributions were in mathematics and physics; he did not turn his attention to economics, which at the time was not considered a mathematical science. As director of the astronomical observatory at Göttingen, Germany, however, he was interested in astronomical measurements and, in particular, the distribution of errors in measurement.17 Simply put, he wanted to know how wrong he could be, how often.

How Markets Fail: The Logic of Economic Calamities
by John Cassidy
Published 10 Nov 2009

remarks at the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming, August 25–27, 2005, available at www.kc.frb.org/publicat/sympos/2005/PDF/GD5_2005.pdf. 23 “The conventional wisdom . . .”: John Kenneth Galbraith, The Affluent Society (Boston: Mariner Books, 1998), 9. 2. ADAM SMITH’S INVISIBLE HAND 27 “It is striking to me . . .”: Alan Greenspan, The Age of Turbulence (New York: Penguin Press, 2007), 260. 27 “One man draws out . . .”: Adam Smith, The Wealth of Nations, Books 1–3 (New York: Penguin Books, 1997), 109–10. 28 In China between 1981 . . . : Poverty Data: A Supplement to World Development Indicators 2008, World Bank, December 2008. 28 “The shepherd, the sorter . . .”: Smith, Wealth of Nations, Books 1–3, 116–17. 29 iPod’s manufacturing chain: See Greg Linden, Kenneth L.

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Rubinfeld, of the University of California, Berkeley: General equilibrium theory, Pindyck and Rubinfeld write, “is the most direct way of illustrating the working of Adam Smith’s famous invisible hand, because it tells us that the economy will automatically allocate resources efficiently without the need for governmental regulatory control.” A defining feature of equilibrium theory, and the source of its appeal to many economists, is its mathematical elegance. For a hundred years or so, following the publication of The Wealth of Nations, economics remained an informal discipline: most of its major figures expressed their arguments in prose. As the nineteenth century progressed, this began to change.

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Its main importance was that, starting out from a perfectly orthodox position—Romer did his Ph.D. at Chicago, where Robert Lucas was one of his teachers—it ended up undermining Adam Smith’s argument that unfettered competition is always the most effective vehicle for promoting economic growth. In an encouraging sign, at least some textbook writers have recognized this point. “That knowledge is both nonrivalrous and nonexcludable creates substantial problems for a market economy,” David Miles and Andrew Scott, the authors of Macroeconomics: Understanding the Wealth of Nations, note. “Because the output of R&D activity is both uncertain and, largely, nonexcludable, firms would prefer to let other firms discover successful new technologies and then copy them.

Why We Work
by Barry Schwartz
Published 31 Aug 2015

You can see this view operating in the “carrot and stick” approach that has dominated efforts to solve the world’s recent financial crisis. To prevent a financial meltdown from happening again, people argued, we needed to replace the “dumb” incentives that led to it with “smarter” ones. We had to get incentives right. Nothing else really mattered. This idea animated the inventor of the free market, Adam Smith. In The Wealth of Nations, published in 1776, he wrote that: It is in the inherent interest of every man to live as much at his ease as he can; and if his emoluments are to be precisely the same whether he does or does not perform some very laborious duty, to perform it in as careless and slovenly a manner that authority will permit.

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Empathy, and care and concern for the well-being of others, are routine parts of most people’s character. Yet they are in danger of being crowded out by exclusive concern for self-interest—a concern that is encouraged by the incentive-based structure of the workplace. Even Adam Smith understood that there was more to human nature than self-interest. The Wealth of Nations followed another book, The Theory of Moral Sentiments, in which he suggested that a certain natural sympathy for one’s fellow human beings provided needed restraints on what people would do if they were left free to “barter, truck, and exchange one thing for another.”

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New York: Riverhead, 2010.* Sen, A. “Rational Fools.” Philosophy and Public Affairs, 6 (1976): 317–44. Skinner, B. F. (1953). Science and Human Behavior. New York: Macmillan.* Smith, A. The Theory of Moral Sentiments (Originally published in 1753). Oxford: Clarendon Press, 1976.* ——. The Wealth of Nations (Originally published in 1776). New York: Modern Library, 1937.* Snyder, M. and E. D. Tanke. (1977). “Social Perception and Interpersonal Behavior: On the Self-fulfilling Nature of Social Stereotypes.” Journal of Personality and Social Psychology, 35 (1977): 655–66. Sowell, T. A Conflict of Visions.

The Logic of Life: The Rational Economics of an Irrational World
by Tim Harford
Published 1 Jan 2008

Delaying motherhood means big income gains: Amalia Miller is the young economist behind this very clever research. Her working paper is available at www.virginia.edu/economics/miller.htm. (His employer was): Biographical details of Adam Smith are from James Buchan, Adam Smith and the Pursuit of Perfect Liberty (London: Profile, 2006). But despite his travels: See David Warsh’s superb Knowledge and the Wealth of Nations (New York: Norton, 2006), chapter 3. “could scarce, perhaps”: Adam Smith, The Wealth of Nations, book 1, chapter 1, paragraph 3. Versions are available online, for instance at www.econlib.org/library/Smith/smWN.html. His adoring wife: Stephanie Coontz, Marriage: A History (New York: Viking, 2005).

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And they are perhaps delayed indefinitely: Betsey Stevenson and Justin Wolfers, “Marriage and Divorce: Changes and their Driving Forces,” NBER Working Paper 12944. Also Tyler Cowen, “Matrimony Has Its Benefits, and Divorce Has a Lot to Do with That,” The New York Times, April 19, 2007. “We know there exists something”: Interview with Justin Wolfers, June 2007. “The man whose whole life”: Adam Smith, The Wealth of Nations, book 5, chapter 1, par. 178, www.econlib.org/library/Smith/smWN.html. 4. WHY YOUR BOSS IS OVERPAID Dilbert: This Dilbert cartoon was reprinted in Edward Lazear, Personnel Economics for Managers (New York: Wiley, 1998). He reckoned that 30,000: Tim Harford, “Odd Numbers,” Financial Times, April 23, 2005.

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Another good popular account is “Economics Focus: Winds of Change,” Economist, November 2, 2006. “Nobody ever saw a dog”: Smith, The Wealth of Nations, book 1, chapter 2. Computer-based simulations: See “Homo Economicus?” Economist, April 7, 2005, and Richard D. Horan, Erwin Bulte, and Jason F. Shogren, “How Trade Saved Humanity from Biological Exclusion: An Economic Theory of Neanderthal Extinction,” Journal of Economic Behavior & Organization 58, no. 1(September 2005): 1–29. Neanderthals, apparently, did not: “Mrs. Adam Smith,” Economist, December 9, 2006. Also Steven L. Kuhn and Mary C. Stiner, “What’s a Mother to Do? The Division of Labor Among Neanderthals and Modern Humans in Eurasia,” Current Anthropology 47, no. 6(December 2006): 953–80, www.journals.uchicago.edu/CA/journal/issues/v47n6/066001/066001.web.pdf.

Basic Economics
by Thomas Sowell
Published 1 Jan 2000

Cadell and W. Davies, Strand, 1805), Volume I, p. 337. {986} Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937), p. 79. {987} Ibid., p. 250. {988} Ibid., p. lvii. {989} Ibid., p. 325. {990} Ibid., p. 900. {991} Ibid., pp. 80–81, 365; Adam Smith, The Theory of Moral Sentiments (Indianapolis: Liberty Classics, 1976), p. 337. {992} Adam Smith, The Wealth of Nations, p. 423. {993} Sir James Steuart, The Works, Volume I, pp. 4, 15, 73, 88. {994} Adam Smith, The Wealth of Nations, p. 435. {995} David Ricardo, The Works and Correspondence of David Ricardo, Volume VII: Letters 1816–1818, edited by Piero Sraffa (New York: Cambridge University Press, 1952), p. 372

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John Maynard Keynes{981} People have been talking about economic issues, and some writing about them, for thousands of years, so it is not possible to put a specific date on when the study of economics began as a separate field. Modern economics is often dated from 1776, when Adam Smith wrote his classic, The Wealth of Nations, but there were substantial books devoted to economics at least a century earlier, and there was a contemporary school of French economists called the Physiocrats, some of whose members Smith met while traveling in France, years before he wrote his own treatise on economics. What was different about The Wealth of Nations was that it became the foundation for a whole school of economists who continued and developed its ideas over the next two generations, including such leading figures as David Ricardo (1772–1823) and John Stuart Mill (1806–1873), and the influence of Adam Smith has to some extent persisted on to the present day.

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Thus Sir James Steuart could write in 1767 of “a whole nation fed and provided for gratuitously” by means of slavery.{985} Although slaves were obviously part of the population, they were not considered to be part of the nation. CLASSICAL ECONOMICS Adam Smith Within a decade after Sir James Steuart’s multi-volume mercantilist treatise, Adam Smith’s The Wealth of Nations was published and dealt a historic blow against mercantilist theories and the whole mercantilist conception of the world. Smith conceived of the nation as all the people living in it. Thus you could not enrich a nation by keeping wages down in order to export.

How Much Is Enough?: Money and the Good Life
by Robert Skidelsky and Edward Skidelsky
Published 18 Jun 2012

“There are few ways in which a man can be more innocently employed than in getting money,” was how Dr. Johnson famously put it. His French contemporary Montesquieu talked of the douceur of commerce.14 Once money-making had been stripped of its ethical opprobrium, it became open to treatment in terms of cause and effect. Hume’s friend, the Scottish philosopher Adam Smith, took the lead. The Wealth of Nations, his masterpiece of 1776, presents humans as driven by a natural desire for self-improvement, which under conditions of free competition leads them “as if by an invisible hand” to promote the public well-being. Newton’s mechanical science of nature was thereby extended to economic relations, with self-interest in the role of gravity.

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The role of the state in management, ownership, regulation, allocation, and distribution was drastically pared back. Governments gave up attempts to steer market forces to desirable social outcomes, limiting themselves to maintaining framework conditions for successful market performance. The wealth of nations would be made to grow faster by releasing acquisitiveness from its communal restraints, in a reprise of the arguments first advanced by Adam Smith and his followers. In this kind of world there is no reason why capitalism should ever end, provided everything goes according to plan. Keynes’s notion of satiety has no place: the progress of the system will create new wants and stimulate positional competition without limit.

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John Maynard Keynes, The General Theory of Employment, Interest, and Money, The Collected Writings of John Maynard Keynes, vol. 7 (Cambridge: Cambridge University Press, 1973), p. 374. 7. IMSciences.net, accessed 09/09/11. 8. H. J. Johnson, “The Political Economy of Opulence,” Canadian Journal of Economics and Political Science, vol. 26, pt. 4 (1960), p. 554. 9. Adam Smith, The Wealth of Nations (Lawrence, Kan.: Digireads.com, 2009; first publ. 1759), p. 40; Alfred Marshall, Principles of Economics (London: Prometheus Books, 1920), p. 1; Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: Macmillan, 1932), p. 16. 10. Keynes, Essays in Persuasion, p. 332.

Capitalism, Alone: The Future of the System That Rules the World
by Branko Milanovic
Published 23 Sep 2019

That number is bound to rise with the increase in population, so the evolution of global inequality will increasingly depend on what is happening in Africa. 38. Adam Smith, The Wealth of Nations, book 4, chap. 7. Appendix A 1. “The colony of a civilised nation which takes possession either of a waste country, or of one so thinly inhabited that the natives easily give place to the new settlers, advances more rapidly to wealth and greatness than any other human society” (Adam Smith, The Wealth of Nations, book 4, chap. 7). 2. “The British Rule in India,” New York Tribune, June 25, 1853, in Marx (2007, 218–219). 3. “The Future Results of British Rule in India,” New York Tribune, August 8, 1853, in Marx (2007, 220). 4.

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In order to answer that question and look at the prospects of political capitalism, it would be useful to consider an interesting approach suggested by Giovanni Arrighi in Adam Smith in Beijing: Lineages of the Twenty-First Century (2007). Smithian and Marxian capitalisms Arrighi starts from a dichotomy that I think he was the first to have defined, in a series of articles, between what he calls a Smithian “natural” path of development of capitalism and a Marxian “unnatural” path. Smith’s natural path, “the natural progress of opulence,” in the terminology of The Wealth of Nations, is that of a market economy of small producers that grows, through division of labor, from agriculture into manufacturing and only later goes into domestic trade and eventually long-distance foreign trade.

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David Wootton writes: “The two works [The Theory of Moral Sentiments and The Wealth of Nations] do not fit quite so neatly together, for one is about how we ought to behave toward our family, friends, and neighbors (who evoke our benevolent feelings), and the other about how we should interact with strangers we meet in the marketplace (to whom we owe no particular duty of care—caveat emptor is an attitude we can legitimately adopt to strangers, but not to family, friends, and neighbors).… [There is] a tension between the amoral world of market forces, and the moral world of human interactions. The Wealth of Nations establishes the extent to which our choices are constrained by market forces, and these constraints limit our opportunities for admirable moral behavior” (Wootton 2018, 174–175; my emphasis). 5.

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor
by William Easterly
Published 4 Mar 2014

The son, also a Catholic, had unrealized pretensions of regaining his father’s throne as James III.) Smith’s leading success story was the American colonies (whose side he took in their dispute with the Crown just as the Wealth of Nations was published). Their secret was “plenty of good land, and liberty to manage their own affairs their own way.” The word liberty appears eighty-five times in the Wealth of Nations. As one biographer, Nicholas Phillipson, put it, Smith’s life’s work was “a call to his contemporaries to take moral, political and intellectual control of their lives.”44 In a remarkable and little-known paragraph criticizing Quesnay, Smith is starting to see that a free political system could also have an Invisible Hand: [Quesnay] seems not to have considered, that in the political body, the natural effort which every man is continually making to better his own condition, is a principle of preservation capable of preventing and correcting, in many respects, the bad effects of a political economy. . . .

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Ian Simpson Ross, The Life of Adam Smith, second edition (Oxford: Oxford University Press, 2010), Kindle edition, locations 1231–39. 5. Ross, Life of Adam Smith, 6131–39. 6. Nicholas Phillipson, Adam Smith: An Enlightened Life (New Haven, CT: Yale University Press, 2010), Kindle edition, location 727. 7. Adam Smith, Wealth of Nations (Beijing, China: Dolphin Books, 2008), Kindle edition, locations 6696–98. There is something evocative and/or ironic about a Chinese company producing an electronic edition of Adam Smith sold on Amazon for $1.00. Emphasis added. 8. Ibid., 212–14. 9. Adam Smith, The Theory of Moral Sentiments (MacMay, 2008), Kindle edition, location 3585; http://www.amazon.com/dp/B001NPDN46/ref=rdr_kindle_ext_tmb. 10.

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Actually, Smith held many negative views about both the rich and businessmen. In his first classic, The Theory of Moral Sentiments, published in 1759, Smith spoke of the rich as a “few lordly masters,” consumed by “vain and insatiable desires,” not to mention their “natural selfishness and rapacity.”9 As for businessmen, Smith in The Wealth of Nations spoke of “the mean rapacity, the monopolizing spirit, of merchants and manufacturers,” which sounds like something he had personally observed in Glasgow. His whole work he described as a “very violent attack” targeting “the wretched spirit of monopoly.” Another famous statement of Smith’s further develops this: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”10 Greedy merchants were, for Smith, far from concerned about promoting general well-being.

The Ages of Globalization
by Jeffrey D. Sachs
Published 2 Jun 2020

Spain and Portugal each held some Asian colonies as well, including the Philippines under Spain and eastern Timor under Portugal. 6.8 World Empires and Selected Nations, 1830 Much of the ensuing drama of nineteenth-century economic development would take place on the mainland of Europe, which pioneered the new age of industrial globalization. Adam Smith’s Summation of the Age of Global Empire Adam Smith, the great inventor of modern economic thought, living in Scotland in the eighteenth century, published his magnum opus, The Wealth of Nations, in 1776. As a great humanist, he observed the consequences of globalization with a globalist perspective rather than British partiality. (In his own work on moral sympathy, Smith spoke about the “impartial spectator” as the vantage point for moral reasoning.)

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Private businesses, drunk with greed, hired private armies, enslaved millions, bribed their way to privileged political status at home and abroad, and generally acted with impunity. But even beyond the private greed, it was an age of conquest and unchecked competition among Europe’s powers. The world beyond the oceans was up for grabs, and little would hold back the rapaciousness that was unleashed as a result. Adam Smith’s masterwork, The Wealth of Nations, provided a template for riches: global trade as the spur for specialization and rising productivity. Smith’s recipe worked beyond his wildest imagination. As we shall see in the next phase of globalization, productivity began to rise rapidly and persistently as new inventions expanded the market and thereby the incentives for even more inventions.

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The second is the social-democratic ethos, meaning an inclusive and participatory approach to political and economic life. The third is subsidiarity, meaning that we solve problems at the proper level of governance. The fourth is a reformed United Nations. The fifth is a world safe for diversity. Sustainable Development In The Wealth of Nations, Adam Smith largely defined the ethos of the Industrial Age: the quest for national wealth. Since the early nineteenth century, sovereign governments have competed for wealth and power through industrialization and technological advancement. A global-scale market economy emerged in which privately owned companies aggressively pursue profits on a global scale.

Stealth of Nations
by Robert Neuwirth
Published 18 Oct 2011

By 2020, the OECD projects, two-thirds of the workers of the world will be employed in System D. There’s no multinational, no Daddy Warbucks or Bill Gates, no government that can rival that level of job creation. Given its size, it makes no sense to talk of development, growth, sustainability, or globalization without reckoning with System D. Adam Smith understood this intuitively back in 1776, when he published The Wealth of Nations. As Smith wrote, “The whole consumption of the inferior ranks of people, or of those below the middling rank, it must be observed, is in every country much greater, not only in quantity, but in value, than that of the middling and of those above the middling rank.”

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Even the simple rhymes of The Grumbling Hive show that Mandeville favored some government intervention in the market: “Vice is beneficial found / when it’s by justice lopp’d and bound.” Adam Smith, too, acknowledged that merchants could be expected to manipulate trade for their own gain. “The interest of the dealers, however, in any particular branch of trade or manufacture, is always in some respects different from, and even opposite to, that of the public,” he wrote in The Wealth of Nations, adding that “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 scrupulous, but with the most suspicious attention.

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So, by this neat trick, Gesell proposed to encourage people to continually spend, and this stimulus in consumption of all sorts (two thumbs up from Bernard Mandeville!) would naturally force production to increase, thus creating jobs and sharing the wealth. Another thirty years on—a hundred and sixty years after Adam Smith published The Wealth of Nations—John Maynard Keynes offered a frank diagnosis of the problems of the free-market system in the last chapter of his 1936 book The General Theory of Employment, Interest and Money: “The outstanding faults of the economic society in which we live,” he wrote, “are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and income.”

What's Wrong With Economics: A Primer for the Perplexed
by Robert Skidelsky
Published 3 Mar 2020

It also makes the problem of scarcity insoluble, as we shall see. Economics was not always as ethically colour-blind as it is now. Historically, there are two main definitions of the subject. The first makes it the study of wealth; the second the study of choice. The first dates from Adam Smith (1723–1790) who called his famous 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations. In discussing the nature of wealth, Smith set out to controvert the ‘erroneous opinion’ that wealth consists of money (gold and silver). Rather, he defined it as the ‘annual produce of the land and labour of society’.1 Wealth arises from the production and exchange of ‘useful’ things like provisions, houses, clothes, and furniture.

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An Essay on the Nature and Significance of Economic Science, 2nd ed., London: Macmillan. Sahlins, Marshall (1972). Stone Age Economics, New York: de Gruyter. Sen, Amartya (1981). Poverty and Famines: An Essay on Entitlement and Deprivation, Oxford: Oxford University Press. Smith, Adam (1904 [1776]). An Inquiry into the Nature and Causes of the Wealth of Nations, London: Methuen. Veblen, Thorstein (1899). The Theory of the Leisure Class, New York: Macmillan. Chapter 3 Acemoglu, Daron, Johnson, Simon and Robinson, James (2001). ‘The Colonial Origins of Comparative Development: An Empirical Investigation’, American Economic Review, Vol. 91 (5): 1369–1401.

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‘Keynes, Globalization and the Bretton Woods Institutions in the Light of Changing Ideas about Markets’, World Economics, Vol. 6 (1): 1–16. Skidelsky, Robert and Craig, Nan (eds.) (2016). Who Runs the Economy?: The Role of Power in Economics, London: Palgrave Macmillan. Smith, Adam (1904 [1776]). An Inquiry into the Nature and Causes of the Wealth of Nations, London: Methuen. Stiglitz, Joseph E. (1993). ‘Post Walrasian and Post Marxian Economics’, Journal of Economic Perspectives, Vol. 7 (1): 109–114. Streeck, Wolfgang (2016). How Will Capitalism End? Essays on a Failing System, London: Verso. Tugendhat, Christopher (1972). The Multinationals, New York: Random House.

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by Kate Raworth
Published 22 Mar 2017

Earth itself, however, is a closed system because almost no matter leaves or arrives on this planet: energy from the sun may flow through it, but materials can only cycle within it.22 Redrawing the economy as an open subsystem of the closed Earth system is the major conceptual shift introduced by ecological economists such as Herman Daly in the 1970s. And it’s a paradigm shift that has become increasingly important, given the economy’s ever-growing scale. When Adam Smith published The Wealth of Nations in 1776, there were fewer than one billion people alive and, in dollar terms, the size of the global economy was 300 times smaller than it is today. When Paul Samuelson published Economics in 1948 there were not yet three billion people on Earth and the global economy was still ten times smaller than it is today.

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– fresh and ready for work each day at the office or factory door. So who cooked, cleaned up, and cleared away to make that possible? When Adam Smith, extolling the power of the market, noted that, ‘it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner’, he forgot to mention the benevolence of his mother, Margaret Douglas, who had raised her boy alone from birth. Smith never married so had no wife to rely upon (nor children of his own to raise). At the age of 43, as he began to write his opus, The Wealth of Nations, he moved back in with his cherished old mum, from whom he could expect his dinner every day.

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If it were to be drawn, however, he would have to look something like this: standing alone, money in hand, calculator in head, and ego in heart. Rational Economic Man: the human character at the heart of mainstream economic theory. Where did this infamous character come from? His most intimate early portrait was created by Adam Smith in two major works, his 1759 Theory of Moral Sentiments and his 1776 book known as The Wealth of Nations. Today Smith is best remembered for having noted the human propensity to ‘truck, barter and exchange’ and the role of self-interest in making markets work.2 But although he believed self-interest was, ‘of all virtues that which is most helpful to the individual’, Smith also believed it was far from the most admirable of our traits, knocked off that top spot by our ‘humanity, justice, generosity and public spirit … the qualities most useful to others’.

How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present
by Thomas J. Dilorenzo
Published 9 Aug 2004

The more Americans come to understand the truth about capitalism, the more reason they will have to be optimistic for the future of their country. ———— NOTES INTRODUCTION: THE UNTOLD STORY 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Random House, 1937), 422. 2. Neela Banerjee and David Firestone, “New Kind of Electricity Market Strains Old Wires Beyond Limits,” New York Times, August 24, 2003, 1. CHAPTER ONE: WHAT IS CAPITALISM? 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Random House, 1937), 422. 2. Ludwig von Mises, Liberalism: In the Classical Tradition (San Francisco: Cobden Press, 1985), 32. 3.

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Of course, nearly every one of Marx’s assumptions (government would wither away under communism, capitalism would make workers poorer, etc.) turned out to be wrong, including this one. Free-market capitalism, based on private property and peaceful exchange, is the source of civilization and human progress. Human beings have a natural propensity to “truck, barter, and exchange,” as Adam Smith said more than two centuries ago, and free-market capitalism is by far the best-known means by which this can be accomplished. In his famous treatise The Wealth of Nations, Smith neatly summed up the essence of how capitalism works: “Give me that which I want, and you shall have this which you want.”1 In other words, commerce is what economists call a “positive-sum game.” The act of buying and selling always benefits both buyer and seller; otherwise they wouldn’t trade with each other.

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But such a claim unfairly lumps together those who succeeded on the strength of their own talents, intelligence, and innovations and those who did in fact gain an unfair advantage over competitors (and consumers). The true capitalists—in the railroad industry and other industries—were the so-called market entrepreneurs. In contrast, the real robber barons—the political entrepreneurs—were not capitalists but corporatists, or, to use a term that Adam Smith employed in The Wealth of Nations, mercantilists. These political entrepreneurs gained an unfair advantage through special privileges created by government intervention (direct subsidies, regulations that harmed their competitors, and much more). The critics are right to condemn these business/government partnerships, but they are wrong to label them as capitalism.

The Fair Trade Scandal: Marketing Poverty to Benefit the Rich
by Ndongo Sylla
Published 21 Jan 2014

Schumpeter (2006 [1954]: 179–80) wrote: But no matter what he actually learned or failed to learn from predecessors, the fact is that the Wealth of Nations does not contain a single analytic idea, principle, or method that was entirely new in 1776 […]. And it was Adam Smith’s good fortune that he was thoroughly in sympathy with the humors of his time. He advocated the things that were in the offing, and he made his analysis serve them. Needless to insist on what this meant both for performance and success: where would the Wealth of Nations be without free trade and laissez-faire? Also, the ‘unfeeling’or ‘slothful’ landlords who reap where they have not sown, the employers whose every meeting issues in conspiracy, the merchants who enjoy themselves and let their clerks and accountants do the work, and the poor laborers who support the rest of society in luxury – these are all important parts of the show.

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On this point, the story begins with the tradition of free trade. Its influence has grown consistently since the Scottish economist and philosopher Adam Smith, considered as the founding father of modern economic science, published in 1776 his work entitled An Inquiry into the Nature and Causes of the Wealth of Nations. Just as the official history of capitalism conveys the false theory that free trade was the strategy followed in the past by countries that are rich today, the official history of political economy as written by the ‘victors’ also teaches us that Adam Smith is the founding father of the free trade tradition. Smith certainly set the standard of economic liberalism.

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This approach was criticised by some authors due to its ‘neo-Smithian’ vision of the capitalist system (Fridell, 2007). In the language of authors in the Marxist lineage, this label symbolises the vision initially developed by Adam Smith, according to which capitalism would have ‘originated’ and been structured by a division of labour based on market exchange (Brenner, 1977). In the Wealth of Nations, Adam Smith demonstrates that the division of labour is a source of wealth creation – it increases labour productivity – and therefore of economic growth. He also underscores that the division of labour is limited by the size of the market.

Wealth and Poverty: A New Edition for the Twenty-First Century
by George Gilder
Published 30 Apr 1981

We should glorify—or at least advocate and defend—capitalism and capitalists for moral reasons, not just material ones. The abundances they create come about precisely because of capitalism’s moral foundations. This profound, basic understanding is what makes George Gilder’s Wealth & Poverty one of the great books of Western civilization, on par with Adam Smith’s The Wealth of Nations and the late Jude Wanniski’s The Way the World Works. The original edition was published in the early 1980s when, like today, people had profound doubts about capitalism. Gilder’s opening words were, “The most important event in the recent history of ideas is the demise of the socialist dream.”

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It is, however, a golden rule of economics, a key to peace and prosperity, a source of the gifts of progress. It is the belief that finally confounded the predatory economics of mercantilism, in which nations used regulation and beggar-thy-neighbor trade campaigns to gather surpluses and bullion. It was this golden rule that inspired the first great book of economics, The Wealth of Nations, by Adam Smith. It was this belief that David Hume proclaimed in 1742, at the end of his essay “Of the Jealousy of Trade”: “I shall therefore venture to acknowledge, that, not only as a man, but as a British subject, I pray for the flourishing commerce of Germany, Spain, Italy, and even France itself.

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The trend seems to have begun in politics. In fact, our current situation recalls the world in which economic science gained its first triumphs. This was the age of mercantilism, a time of similar hypertrophy of politics, when Adam Smith reproached the governments of Europe for believing that the power of demand, in the form of accumulated gold, constituted the source of wealth. In The Wealth of Nations Smith argued that real riches came from the power of production and supply, not bullion collected through a trade surplus. But during the two centuries since Smith won this initial victory for supply-side economics, the demand side has all too often triumphed.

Owning the Earth: The Transforming History of Land Ownership
by Andro Linklater
Published 12 Nov 2013

Hearing the young prince complain of the burden of responsibility he would carry as king, the doctor replied dismissively, “I do not see that it is so troublesome.” Irritated, the prince demanded, “Then what would you do if you were king?” Quesnay’s reply was the classic physiocrate description of government’s role: “Nothing.” Adam Smith owed the theory of laissez-faire economics to the physiocrates, and he owed some at least of his understanding about the behavior of money to Cantillon. But The Wealth of Nations was more than the sum of its parts. It extended the market-driven motivations of capitalist agriculture to industry and trade, and yoked them to the financial systems of mercantile capitalism. And it based its analysis of the wealth-producing capacity of free-market economics on the pragmatic reality that human nature is encouraged by the prospect of profit and discouraged by the experience of injustice.

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In fact the 1873 recession proved to be of critical importance to those parts of the earth occupied by private property economies. By the time its effects had cleared away, it was apparent that the theory of free-enterprise capitalism described by Adam Smith had a flaw. Rural capitalism had offered Smith a model of a free enterprise system based on a myriad of small producers competing on price and delivery in a market where overproduction of one product brought a fall in price and profit, leading either to more efficient production or to a switch to a more profitable item. In The Wealth of Nations, he noted that it was fully working in England, reasonably developed in Scotland, evolving in France, and well-grounded in colonial America.

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Allen, “The Price of Freehold Land and the Interest Rate in the Seventeenth and Eighteenth Centuries,” The Economic History Review, New Series, 41, no. 1 (Feb. 1988): 33–50; Robert C. Allen, “The High Wage Economy of Pre-Industrial Britain,” www.helsinki.fi/iehc2006/papers2/Allen77.pdf. “the natural fertility of the soil”: Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations (New York: Random House, 1937), bk. 3, ch. IV, p. 133, http://www.marxists.org/reference/archive/smith-adam/works/wealth-of-nations/index.htm. For the early development of mercantile capitalism, see Niall Ferguson, The Ascent of Money: A Financial History of the World (London and New York: Penguin, 2008).

Work: A History of How We Spend Our Time
by James Suzman
Published 2 Sep 2020

It had a busy market and a thriving textile industry, and Smith spent his early life watching a near-ceaseless procession of three-masted merchantmen cutting across the black-green waters of the North Sea, coming to deposit cargoes of flax, wheat, continental beer and hemp at the harbour, before disembarking again with holds stuffed with coal and salt, or decks piled with bales of linen. An ageing Adam Smith returned to his childhood home, after several decades studying and teaching in Cambridge, Glasgow and Europe, to write his most celebrated work, An Inquiry into the Nature and Causes of the Wealth of Nations, which he published in 1776. Influenced by the ‘physiocrats’– a French intellectual movement that, among other things, lobbied for idle aristocrats to shoulder a greater proportion of the king’s extravagant tax demands, and who believed that neither governments nor nobles should meddle in the natural order of the markets – Smith was convinced that reason could reveal the fundamental laws of human economic behaviour in the same way that Isaac Newton had used reason to reveal some of the fundamental laws that governed the movement of celestial bodies.

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The solution, Smith argued, lay in their agreeing on a ‘common instrument of commerce’ – what economic historians now often call ‘primitive currency’ – in the form of ‘one commodity or the other’, whether it be cattle, salt, nails, sugar or, as would ultimately become the case, gold, silver and coinage. For much of the nineteenth and early twentieth centuries, it was believed that Benjamin Franklin and Adam Smith had been friends, and that Franklin had offered Smith the benefit of his thoughts on an early draft of An Inquiry into the Nature and Causes of the Wealth of Nations. The appeal of this tale of Enlightenment collaboration stemmed principally from the fact that the publication of Wealth of Nations in 1776 not only coincided with the United States wresting its independence from the British Crown, but also because it could be read as a velvet-gloved critique of the tariffs, taxes and customs duties that inspired North American colonists to cast off the shackles of British imperial rule in the first place.

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Ancient Greek philosophers, for instance, may have been contemptuous of hard manual labour but they still acknowledged its fundamental importance, even if they had slaves to do it for them. The same principle is also discussed in the writings of fourteenth-century scholars like Thomas Aquinas – who insisted that any commodity’s value should ‘increase in relation to the amount of labour which has been expended in the improvement’ of it. When Adam Smith returned to Kirkcaldy to write the Wealth of Nations, this idea still retained a kind of primal currency across Western Europe, where more than half of the population still made a living as small-scale farmers and so saw an obvious correspondence between how hard they worked and how well they ate. Smith was well aware that most people felt there was an organic link between labour and value.

The Future of Capitalism: Facing the New Anxieties
by Paul Collier
Published 4 Dec 2018

This chapter explores how our morals are linked to our emotions, how they evolve, and how things can go wrong.1 WANTS AND ‘OUGHTS’ The glib supporters of capitalism who argue that the end justifies the means invoke Adam Smith’s famous proposition in The Wealth of Nations that the pursuit of self-interest leads to the common good. ‘Greed is good’ became the intellectual underpinning for the zeal of the Reagan–Thatcher revolution. Smith’s proposition is a valuable corrective to the naïve notion that an action is good only if well-motivated. But modern economics, which The Wealth of Nations launched in 1776, is built on a character who is utterly despicable. Economic man is selfish, greedy and lazy. Such people do exist and you will meet some of them.

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The Nobel Laureate Vernon Smith saw that The Wealth of Nations and The Theory of Moral Sentiments are built on a common idea: the mutual benefit from exchange. The arena for exchanging commodities is the market. The arena for exchanging obligations is the networked group, the subject of this chapter. For two centuries, economists thought that Adam Smith had written two incompatible books and ignored The Theory of Moral Sentiments. Only recently has he been properly understood: there are not two Smiths but one, and his neglected ideas are profoundly important.4 People are motivated partly by the ‘wants’ of The Wealth of Nations, and partly by the ‘oughts’ of The Theory of Moral Sentiments.

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Yes, London has a lot of jobs, but they are lousy ones. Having set out what good non-cognitive training looks like, and the alternative track down which many young people are currently lured, we can finally turn to the psychology: what determines whether young people prefer this option? The crude psychology of The Wealth of Nations suggests that people only care about money. The more accurate psychology of The Theory of Moral Sentiments tells us that people also care about their position in society: they give and receive esteem. The evidence on regrets supports our intuition that esteem trumps money. But even on the criterion of money, many young people in America and Britain are being lured down cognitive culs-de-sac.

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis
by Anatole Kaletsky
Published 22 Jun 2010

Chapter Three 1 Robert Heilbroner, The Worldly Philosophers, Chapters 1-2. 2 Max Weber, The Protestant Ethic and the Spirit of Capitalism. 3 Adam Smith, The Wealth of Nations, Books 1-III, 119. 4 Seabright, The Company of Strangers, 14-15. 5 The first edition of Smith’s The Wealth of Nations was published on March 9, 1776 by W. Strahan and T. Cadell in London. Andrew Skinner notes the coincidence of its publication on the eve of the Declaration of Independence in his introduction to Smith’s work. Andrew Skinner, introduction to The Wealth of Nations, Books I-III, by Adam Smith, 6. 6 Keynes and others have traced the first recorded use of the phrase “laissezfaire”—which literally means “let do” or “let make”—to a speech by French minister Rene de Voyer, Marquis d’Argenson, in 1751 in which he declared, “Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé. ” (Let it be, such should be the motto of every public power, ever since the world is civilized.)

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As expounded by Max Weber in his classic The Protestant Ethic and the Spirit of Capitalism, there are two additional requirements: acceptance of profit and capital accumulation as motives with genuine moral legitimacy, as opposed to deplorable, though ineradicable, human vices; and the recognition of voluntary exchange and cooperation, rather than heredity and coercion, as the main organizing principles of economic life.2 These concepts emerged from the Calvinist ideology of the late seventeenth century, according to the standard view of social history pioneered by Weber. But they were crystallized by Adam Smith in The Wealth of Nations, producing some astonishingly counterintuitive revelations. Smith observed that a market economy, although it involves millions of unconnected individuals who work at highly specialized and narrow tasks, is a naturally self-organizing mechanism provided a few simple rules of commerce and mutual trust are generally obeyed and enforced.

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Most great economists—Smith, Ricardo, Mill, Keynes, Schumpeter, and Hayek—had an optimistic outlook about human creativity and the capacities of the market system. They were fundamentally optimistic for both practical and intellectual reasons. The main intellectual goal of economics set out by Adam Smith, and partly achieved by him in The Wealth of Nations, was to explain the miracle that led millions of unrelated individuals, all working freely in pursuit of their own desires and personal interests, to serve the needs of others and promote the prosperity of all. After Smith, other great economists enriched this understanding with unexpected and counterintuitive detail.

Empire of Guns
by Priya Satia
Published 10 Apr 2018

Its mercantilist mainstream saw commercial and colonial resources—metal, specie—as the liquidity needed to acquire a military arsenal and favored policies enabling Britain to acquire more resources than its rivals. Adam Smith’s complaints about the costs of war, about the “ruinous expedient” of perpetual funding and high public debt in peacetime, staked out a contrarian position; The Wealth of Nations (1776) was a work of persuasion. His and other voices in favor of pacific economic development grew louder from the margins. By denormalizing war, liberal political economy raised the stakes of the century’s long final wars from 1793 to 1815, which could be stomached only as an exceptional, apocalyptic stage on the way to permanent peace.

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He struck a deal with Christopher Sholes, inventor of the modern keyboard, in 1868, producing the first Remington typewriter in 1874, a “discursive machine-gun” whose strikes and triggers echo the ammunitions transport in a revolver or machine gun. Electronic writing revolutionized communication; like the gun, it alters us fundamentally. 10 Opposition to the Gun Trade after 1815 Before he explained the wealth of nations, Adam Smith wrote about the moral sentiments necessary for judicious economic behavior, especially the capacity to survey one’s own sentiments “with the eyes of other people.” His Theory of Moral Sentiments appeared in 1759–61, when the doubling of identity was the norm—when exercising one’s conscience involved an almost literal division of the self into the judge and the self being judged.

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Industrial organization was: The iron industry switched to coal-burning methods only late in the century, when wartime tariff policies suddenly rendered uncompetitive the foreign iron that had effectively been meeting rising demand. Evans et al., “Baltic Iron and the British Iron Industry,” 662. Adam Smith considered: A. Smith, The Wealth of Nations, 4–5. Handicraft and mechanized production: M. Berg, “Revisions and Revolutions.” Karl Marx knew: M. Berg, The Age of Manufactures, 194–98, 204, 255. short- or medium-term large rises: Hudson, The Industrial Revolution, 45. “semiskilled men with”: Collier, Arms and the Men, 29.

The Sovereign Individual: How to Survive and Thrive During the Collapse of the Welfare State
by James Dale Davidson and William Rees-Mogg
Published 3 Feb 1997

Conquest implies the destruction of the other party; commerce implies the satisfaction of the other party. As modern technology has 296 made conquest an extraordinarily dangerous policy, commerce has become the only rational approach to the problems of survival. This interdependence is strengthened by another central idea of Adam Smith~not new with him~which is the specialization of function. The Wealth of Nations starts with a celebrated passage in which Adam Smith observes that "the greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity and judgement with which it is any where directed, or applied, seem to have been the effects of the division of labour."

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See Mancur Olson, "Diseconomies of Scale and Development," Cato Journal, vol.7, no.1 (Spring/Summer 1987). 11. Ibid. 12. Basil Davidson, The Black Mans' Burden: Africa and the Curse of the Nation State (New York: Times Books, 1992), p.290. 13. Olson, op. cit. 14. Adam Smith, The Wealth of Nations, p.724. This point was suggested by an argument by Edwin G. West in his Adam Smith and Modern Economics (Aldershot, England: Edward Elgar Publishing, 1990), pp.88-89. 15. Fritz Rorig, The Medieval Town (Berkeley: University of California Press, 1967), p.28. 16. Albert 0. Hirschman, Exit, Voice, and Loyalty (Cambridge: Harvard University Press, 1969), p.81. 17.

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The First Industrial Technology Just as the cannon was opening new economic horizons, the printing press opened new intellectual horizons. It was the first machine of mass production, a signature technology that marked the onset of industrialism. In saying this, we share the view advanced by Adam Smith in The Wealth of Nations that the Industrial Revolution had already happened well before he wrote. It had not reached maturity, to be sure, but the principles of mass production and the factory system were well established. His famous example of the pin manufacturers makes this case. Smith explains how eighteen separate operations are employed to produce pins.

More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next
by Andrew McAfee
Published 30 Sep 2019

This comparison illustrates a fundamental point: instead of being limited by the environment, we learned to shape it to our own ends during the Industrial Era. And did we do this wisely as well? In many ways and many places we did not. I. Also in 1776 the American Declaration of Independence was signed and the Scottish economist Adam Smith published his landmark The Wealth of Nations (a book we’ll come back to later). II. The battles over the Corn Laws led the politician James Wilson, who was in favor of free trade, to found The Economist. It’s still published today and is one of my favorite magazines (even though it calls itself a newspaper). III. It would have made sense for England to concentrate on manufacturing even if it were more productive than mainland Europe at both farming and manufacturing.

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Keeping Smith’s insights in mind lets us see why this system for organizing economic activity works so well at delivering prosperity. It also lets us see where capitalism’s fault lines lie and helps us in evaluating arguments against it. So, with Adam Smith as a guide, let’s look at three valid critiques of capitalism, and three invalid ones. First, the valid criticisms: Capitalism is selfish. Yes, it absolutely is. But as Smith points out, this is a good thing. One of the most quoted passages from his 1776 masterpiece, The Wealth of Nations,I is “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

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As we’ll see later, progress in many important areas has sped up in recent decades as capitalism and tech progress have both spread around the world. Adam Smith realized that capitalism’s greatest virtue was that it improved the lives of not only the elite but also of people born into modest circumstances. He saw much more clearly than Marx or Malthus what the future held as long as capitalism was allowed to operate properly. And throughout his writing, he’s concerned with what we might today call social justice. Smith believed deeply that workers deserved a high and rising standard of living. As he wrote in The Wealth of Nations, “They who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.”

The Price of Time: The Real Story of Interest
by Edward Chancellor
Published 15 Aug 2022

Part One (Of Historical Interest) sets the scene. We trace the origins of interest to the Ancient Near East (Chapter 1) and follow its story through the Middle Ages to the birth of capitalism in Europe (Chapter 2). We describe how interest and capitalism are inseparable. This principle may have been accepted by the date Adam Smith’s The Wealth of Nations was published in 1776, but there has always existed a ‘psychopathic’ fear of excessive interest rates. In seventeenth-century England, the most prominent exponent of lower rates was the wealthy City merchant Sir Josiah Child, who stood to benefit most from a reduction in the cost of borrowing.

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This new concept of interest was ethically wide-ranging: it ‘came to cover virtually the entire range of human actions, from the narrowly self-centered to the sacrificially altruistic, and from the prudently calculated to the passionately compulsive’.49 The seventeenth-century English statesman and philosopher Lord Shaftesbury summed up the new thinking with his comment that ‘Interest governs the World.’50 In his Fable of the Bees (1714), Bernard Mandeville exposed the paradox at the heart of the modern world, namely that private vices brought public benefits. Adam Smith incorporated Mandeville’s wicked insights into his political economy. In The Wealth of Nations, Smith describes the individual as one who ‘By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.’51 A similar thought is expressed in another famous line, in which Smith writes that ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’

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Rents in future years must be worth less than this year’s rent, Petty said, otherwise ‘an acre of land would be equal in value to a thousand acres of the same land; which is absurd, an infinity of units being equal to an infinity of thousands.’fn7 In the following century, Adam Smith described how the price of land depended on the market rate of interest. In The Wealth of Nations (published in 1776) Smith noted that land prices had risen in recent decades as interest rates declined. An act of investment – say the construction of a new manufacturing plant with factory buildings, machinery and all the necessary infrastructure – requires that investors forgo current consumption.

The Myth of Capitalism: Monopolies and the Death of Competition
by Jonathan Tepper
Published 20 Nov 2018

In this book we'll present solutions. We end the book with thoughts on how to reform and fix the economy and political system. We do hope you're outraged after reading this book, but more important, we hope that you come away knowing that consumer and voter anger can be harnessed for good. In 1776 Adam Smith wrote The Wealth of Nations, and the Continental Congress declared independence from Britain. Smith complained bitterly about monopolies. He wrote of the East India Company: “… the monopoly which our manufacturers have obtained … has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature.”

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Few are complete monopolies, so when you read headlines about the monopoly problem in the United States, as Professor Tim Wu has noted, “the press is sounding the wrong alarm. We know how to fight monopolies, but regulators are confused when it comes to duopolies and oligopolies.”18 You won't find the words duopoly or oligopoly in Adam Smith's The Wealth of Nations or in any of the antitrust acts, such as the Sherman Act of 1890 or the Clayton Act of 1914. The word oligopoly was not even created until the 1930s by the Harvard economist Edward Chamberlin. The word oligopoly comes from Greek and means “few sellers.” It has the same origin as the word oligarchs.

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Except in this case, there are no “made men” and only middle-aged white power brokers dividing the country. It doesn't matter where you look, competition looks fierce on paper but in reality it is often carefully orchestrated. There is nothing new under the sun. Even in the eighteenth century, Adam Smith wrote in The Wealth of Nations that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” A little later John Stuart Mill echoed the sentiment, “Where competitors are so few, they always end by agreeing not to compete.”

Austerity: The History of a Dangerous Idea
by Mark Blyth
Published 24 Apr 2013

“Monthly Statement of the Public Debt of the United States: January 31, 2011,” United States Department of the Treasury, http://www.treasurydirect.gov/govt/reports/pd/mspd/2011/opds012011.pdf. 24. Adam Smith, Wealth of Nations (Buffalo, NY: Prometheus Books, 1991), 587. 25. See Murphy, “Genesis,” 155–179, for a good overview of Smith’s economics. 26. Albert Hirschman, The Passions and The Interests: Political Arguments for Capitalism before Its Triumph (Princeton, NJ: Princeton University Press, 1977). 27. Murphy, “Genesis.” Although some commentators see Smith as being critical of banks, there are other parts of the Wealth of Nations in which he is positively enthusiastic about them. 28. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Indianapolis, IN: Hackett, 1996), 64. 29.

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The state was therefore something to be avoided, minimized, bypassed, curtailed, and above all, not trusted. The market, in contrast, emerged in liberal thought as the intellectual and institutional antidote to the confiscatory politics of the king.4 In such a world, if prices and merchants were set free, the wealth of nations (note, not “kingdoms”) would multiply. But from the start this liberal view of “the state versus the market” rested upon a misunderstanding: markets naturally appear when you remove the state from the equation. However, as Karl Polanyi noted at the end of World War II, there is nothing natural about markets.5 Turning people into wage laborers, securing the private ownership of land, even inventing capital and preserving its monetary form are all deeply political projects that involve courts, regulation, enforcement, bureaucracy, and all the rest.6 Indeed, gaining control of the state by the merchant class was a defining feature of early capitalism.7 With the partial exceptions of the United Kingdom and the United States (the former because it was first to make the transition to capitalism and the latter because it was geographically isolated), from Germany in the 1870s to China today, states make markets as much as markets determine the fate of states.8 Yet liberal economic thought remains largely oblivious to these facts.

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The details of what Smith said about the economy are far less well known and quite surprising. Smith brought together much of the scattered work of early economists on the nature of money, economic growth, the role of capital and labor, and a host of other issues, and then had the good sense to put it in one accessible place: The Wealth of Nations.25 As Albert Hirschman observed, this book was no academic project. It was an argument for capitalism before its triumph, and a very successful argument, too.26 For our purposes here, we find in Smith a particular sensibility toward the state and its debt that brings us closer to the modern idea of austerity, but from a surprising angle: the importance of personal frugality and parsimony as the engine of capitalist growth.

Capitalism: Money, Morals and Markets
by John Plender
Published 27 Jul 2015

They then triumphantly rediscover the secret of prosperity: Thus Vice nurs’d Ingenuity, Which joined with Time and Industry, Had carry’d Life’s conveniencies, Its real Pleasures, Comforts, Ease, To such a Height, the very Poor Liv’d better than the Rich before. Adam Smith in Britain and Voltaire in France put the case for material values rather differently. For Voltaire, the great merit of commerce was that the pursuit of self-interest was less dangerous than the pursuit of other goals such as military expansion or religious salvation. He also believed that the self-interested pursuit of profit through commerce had a socialising influence, not least because it helped reduce religious differences. For his part, Adam Smith in The Wealth of Nations argued that consumption was socially benign and that the market economy was the best means for achieving what he called ‘universal opulence’.

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To name just one example, Gordon Gekko’s ‘greed is good’ speech in the film Wall Street clearly descends in a direct line from the author of the fable. The Fable of the Bees was not universally admired by other Enlightenment thinkers. Adam Smith could not bring himself to accept the extremity of Mandeville’s paradox, in which vice was a necessary condition of prosperity. In his justly celebrated redefinition of the boundaries of the argument about business and morality, he emphasised self-interest rather than vice, with his statement in The Wealth of Nations that ‘it is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard for their own interest’. 10 In much the same vein, he added: ‘I have never known much good done by those who affected to trade for the public good.’11 Yet, as the author of The Theory of Moral Sentiments, he also emphasised the need for markets to operate within a moral context and believed that the act of engaging in market exchange entailed a discipline that encouraged good individual behaviour as well as the good of wider society.

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Yet, as I will show, it is arguable that manufacturing employment ought to fall in a mature economy; and one of the safest predictions for the twenty-first century is that in the developed world it will continue to do so without causing a collapse in living standards. To make this case is admittedly quite a challenge, because the prejudice about the superiority of manufacturing over services has deep historical roots. Adam Smith, still hugely influential across the centuries, showed a bias in The Wealth of Nations against services, suggesting that while the labour of a manufacturer added value, the labour of a menial servant did not: There is one sort of labour which adds to the value of the subject upon which it is bestowed: there is another which has no such effect.

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

The South Sea Company collapsed in such a bubble of speculation in 1720 that the British parliament banned the creation of such entities—characterized by dispersed shareholders whose liability for the company’s debt was limited to the value of their shares. In 1776, Adam Smith argued that the “joint-stock company,” as the corporation was then known, had proved an unmitigated disaster. “The directors of such companies,…being the managers of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own,” he wrote in the Wealth of Nations. “Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.”1 During the industrial revolution that began just after Smith’s death, it became apparent that his analysis was off.

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Richard Hofstadter, Social Darwinism in American Thought, rev. ed. (Boston: Beacon Press, 1955), 51–53. 10. William Graham Sumner, What the Social Classes Owe to Each Other (Caldwell, Idaho: The Caxton Printers, 1989), 107. 11. Adam Smith, Wealth of Nations, book 4, chap. 2, par. 4, 2.9 (Indianapolis: Liberty Fund, 1981). It’s not clear Smith himself saw it that way, although many subsequent economists did. The actual quote from the Wealth of Nations is: As every individual…endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can.

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Ross, and Mark Rubinstein, “Option Pricing: A Simplified Approach,” Journal of Financial Economics (Sept. 1979): 229–63. 25. Stephen A. Ross, “Options and Efficiency,” Quarterly Journal of Economics (Feb. 1976): 76. CHAPTER 9: MICHAEL JENSEN GETS CORPORATIONS TO OBEY THE MARKET 1. Adam Smith, The Wealth of Nations (Indianapolis: Liberty Fund, 1981), 741. 2. In the United States the first all-purpose general incorporation statute was Connecticut’s, enacted in 1837, although some states allowed easy incorporation of companies in particular industries before that. In the United Kingdom, Parliament allowed for general incorporation in 1844.

The Locavore's Dilemma
by Pierre Desrochers and Hiroko Shimizu
Published 29 May 2012

Blackwell Publishing; Vaclav Smil. 2010. Prime Movers of Globalization. The History and Impact of Diesel Engines and Gas Turbines. MIT Press; and Robert P. Clark. 2000. Global Life Systems. Population, Food, and Disease in the Process of Globalization. Rowman & Littlefield Publishers, Inc. 5 Adam Smith. 1776. An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. 1, Book I, chapter II: Of the Principle which gives occasion to the Division of Labour. Available at http://www.econlib.org/library/Smith/smWN1.html#B.I, Ch.2, Of the Principle which gives Occasion to the Division of Labour. 6 Gisday Wa and Delgam Uukw. 1989 The Spirit in the Land.

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“Come On Down to the Farmers Market (Bring Your Wallet and Your Food Orthodoxy), (September 17) http://www.consumerfreedom.com/news_detail.cfm/h/3992-come-on-down-to-the-farmers-market-bring-your-wallet-and-your-food-orthodoxy. 7 Alisa Smith and J.B. MacKinnon. 2005. “Living on the 100-mile Diet,” The Tyee (June 28) http://thetyee.ca/Life/2005/06/28/HundredMileDiet and Alisa Smith and J.B. MacKinnon. 2007.The 100-Mile Diet. A Year of Local Eating. Random House Canada. 8 Adam Smith. 1776. An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. 1, Book IV, chapter II: Of Restraints upon the Importation from Foreign Countries of Such Goods as Can Be Produced at Home http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=237&chapter=212328&layout=html&Itemid=27. 9 See, among others, Tom Philpott. 2011.

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Bloomberg.com (November 24) http://www.bloomberg.com/news/2011-11-24/china-s-soybean-imports-in-2011-may-decline-shanghai-jc-says.html In 2010, the USA, Brazil, Argentina and China produced respectively 35, 27, 19 and 6% of the world’s total production (“World Statistics” at soy stats.com http://www.soystats.com/2011/Default-frames.htm ). 56 Quoted in Alan L. Olmstead and Paul W. Rhode. 2008. Creating Abundance. Biological Innovation and American Agricultural Development. Cambridge University Press, p. 381. 57 Adam Smith. 1776. An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. 1, Book I, chapter 8: On the Wages of Labour http://oll.libertyfund.org/?option=com_staticxt&staticfile=show. php%3Fti tle=220&chapter=217399 &layout=html&Itemid=27. Chapter 4 1 See, among others, Dennis E. Jelinski. 2005. “There is no Mother Nature—There is no Balance of Nature: Culture, Ecology and Conservation.”

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank
by John Tamny
Published 30 Apr 2016

Eventually, he plugged in what Harford described as a “toaster-shaped birthday cake,” and “two seconds later, the toaster was toast.” Thwaites concluded, “If you started absolutely from scratch, you could easily spend your life making a toaster.”1 Harford’s opening subject was, in many ways, a tribute to Adam Smith’s brilliant book The Wealth of Nations, and more modernly, to Leonard Read’s I, Pencil. In the former, Smith opens with an essential point: “The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour.”2 Smith goes on to describe something as basic as a pin factory.

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That they’re not falling, but most often rising, is a market signal that fears of an environmental calamity related to oil consumption are vastly overdone. Instead, the nature of my argument about why the fracking boom has been anticredit is monetary. Specifically, it’s about the value of the dollar. For some simple background, we turn to Adam Smith, who made a critical observation in The Wealth of Nations: “The sole use of money is to circulate consumable goods.”7 There’s nothing abnormal or intimidating about Smith’s quote. As readers know by now, if money were actual wealth or itself a commodity, we’d all be rich. We could simply create lots of dollars. But money is not wealth.

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It bought 1/266th of an ounce of gold when Bush was inaugurated in 2001, and by July 2008 it bought 1/940th of an ounce.12 In a sequel to the 1970s, Americans once again started speculating on housing. It offered better returns than the stock market, plus you can live in a house. The rush into housing was a hugely negative economic signal, much as it was in the 1970s. As Adam Smith wrote in The Wealth of Nations: Though a house . . . may yield a revenue to its proprietor, and thereby serve in the function of a capital to him, it cannot yield any to the public, nor serve in the function of a capital to it, and the revenue of the whole of the people can never be in the smallest degree increased by it.13 Housing was all the rage.

The End of the Free Market: Who Wins the War Between States and Corporations?
by Ian Bremmer
Published 12 May 2010

Drucker, “Trading Places,” National Interest, Spring 2005. 14 Antoine van Agtmael, The Emerging Markets Century: How a New Breed of World-Class Companies Is Overtaking the World (New York: Free Press, 2007). 15 From Bill Clinton’s 1996 State of the Union Address, http://clinton4.nara.gov/WH/New/other/sotu.html. 16 Forbes magazine’s Global 2000 list of companies for 2008. CHAPTER TWO : A Brief History of Capitalism 1 Adam Smith, The Wealth of Nations (1776; New York: Modern Library, 1994), book 4, ch. 2, pp. 484-85. 2 Adam Smith, The Theory of Moral Sentiments (1759; Cambridge, UK: Cambridge University Press, 2002), Introduction. 3 During the savings-and-loan crisis of the 1980s (and early 1990s) more than a thousand savings-and-loan associates failed at a cost of at least $125 billion to the U.S. federal government. 4 The South Sea Company, founded in 1711, enjoyed a monopoly over British trade with Spanish South America and the Pacific region.

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Those who believe in pure or laissez-faire capitalism argue that while the buyers and sellers are buying and selling, the state should mind its own business. Beyond enforcing contracts and protecting property rights, governments enable capitalism by staying out of its way. Adam Smith, the oft-quoted father of modern capitalism, wrote in The Wealth of Nations (1776) of the unintended benefits that society derived from individual greed:By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.1 Some students of Smith’s writings might qualify this point with a reference to his earlier work, The Theory of Moral Sentiments (1759), in which he argues thatthere are evidently some principles in [man’s] nature which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it.2 Advocates of pure capitalism insist that the “invisible hand” must be allowed to work its magic—and that any effort by government to guide its actions can only burden markets and distort their natural operation.

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Yet all mixed capitalist systems share faith in the principle that only free markets can generate long-term prosperity and that government should never become the dominant player in an economy. State capitalism represents a direct challenge to that belief. Capitalism and Political Free Markets It’s not mere coincidence that Adam Smith published The Wealth of Nations in the same year that America’s founders signed their Declaration of Independence from Britain. The movement that eighteenth-century philosopher Immanuel Kant called the Enlightenment inspired all sorts of people to demand all sorts of freedoms—both economic and political—from priests, lords, and kings.

A Pelican Introduction Economics: A User's Guide
by Ha-Joon Chang
Published 26 May 2014

But that little metal thing that most of you do not use – that is, unless you have long hair and like to keep it tidy or make your own clothes. The making of the pin is the subject of the very first chapter of what is commonly (albeit mistakenly)1 considered to be the first economics book, namely, An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith (1723–90). Smith starts his book by arguing that the ultimate source of increase in wealth lies in the increase in productivity through greater division of labour, which refers to the division of production processes into smaller, specialized parts. He argued that this increases productivity in three ways.

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During this era, even many of those who worked for capitalists were not wage labourers. There were still slaves around. Like tractors or traction animals, slaves were means of production owned by capitalists, especially the plantation owners in the American South, the Caribbean, Brazil and elsewhere. It was two generations after the publication of The Wealth of Nations (henceforth TWON) that slavery was abolished in Britain (1833). It was nearly a century after TWON and after a bloody civil war that slavery was abolished in the US (1862). Brazil abolished it only in 1888. While a large proportion of people who worked for capitalists were not wage labourers, many wage labourers were people who wouldn’t be allowed to become wage labourers today.

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In their attempts to make profits, producers strive to supply cheaper and better things, ultimately producing their products at the minimum possible costs, thus maximizing national output. This idea is known as the invisible hand and has become arguably the most influential metaphor in economics, although Smith himself used it only once in The Wealth of Nations (TWON) and did not accord it a prominent role in his theory.* Most Classical economists believed in the so-called Say’s Law, which states that supply creates its own demand. The reasoning was that every economic activity generates incomes (wages, profits, etc.) equivalent to the value of its output.

GDP: A Brief but Affectionate History
by Diane Coyle
Published 23 Feb 2014

Once again, financing warfare was the motivation. Then came a substantial intellectual innovation. In The Wealth of Nations (published 1776), Adam Smith introduced the distinction between “productive” and “unproductive” labor. An anonymous author had written in 1746, “What I mean by National Income is, all the whole body of our People get or receive from Land, Trade, Arts, Manufactures, Labour, or any other way whatsoever; and by Annual Expence I mean, the whole that they spend or consume.” Yet in Adam Smith’s definition thirty years later, the “whole body of our People” did not count. Only those involved in the making of physical commodities, agriculture and industry, would count toward national income.

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Importantly, money spent on warfare or the interest on government debt was also being used unproductively. The nation’s wealth was its stock of physical assets less the national debt. National income was what derived from the national wealth. According to Benjamin Mitra-Kahn, “The Wealth of Nations introduced a new idea of the economy, and through the effort of Adam Smith’s students and admirers, it was adopted almost instantly.” In Smith’s own words: There is one sort of labour which adds to the value of the subject upon which it is bestowed: There is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labour.

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Frits Bos, “Uses of National Accounts: History, International Standardization and Applications in the Netherlands,” MPRA Paper no. 9387, 30 June 2008, http://mpra.ub.uni-muenchen.de/9387/. Accessed 1 August 2012. 2. Benjamin H. Mitra-Kahn, “Redefining the Economy: How the ‘Economy’ Was Invented, 1620” (Ph.D. dissertation, City University London, 2011), http://openaccess.city.ac.uk/1276/. Accessed 3 August 2012. 3. Adam Smith, The Wealth of Nations (first published 1776), book II, chap. 3. 4. Geoff Tily, “John Maynard Keynes and the Development of National Accounts in Britain, 1895–1941,” Review of Income and Wealth 55, no. 2 (2009): 331–359. 5. Angus Maddison, The World Economy: Historical Statistics (Paris: Organization for Economic Cooperation and Development, 2003), preface. 6.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
by George A. Akerlof and Robert J. Shiller
Published 1 Jan 2009

Estimates from the Brookings Institution say that preservation of Social Security at current levels would entail expenditure of about 2% of taxable earnings.16 We thought then, and we still think now, that Kerry’s mistake cost him the election. Saving and the Wealth of Nations We have been talking so far about personal decisions to save, why saving varies, and how important it is to people’s welfare in retirement. But there has long been another theme regarding savings. There are vast differences in the wealth of nations. In per capita terms there is more than a 200-fold difference between per capita income from the richest countries to the poorest. Indeed if we include Luxembourg and Burundi it is closer to a 1,000-fold difference.17 Income and wealth depend upon countries’ freedom to trade, the skills of their people, their geography, their current and past history of wars, their political and legal institutions.

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Journal of Finance 52(1):33–55. Sims, Christopher A. 1972. “Money, Income and Causality.” American Economic Review 62:540–52. ———. 2001. “Pitfalls of a Minimax Approach to Model Uncertainty.” American Economic Review 91(2):51–54. Smith, Adam. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations. London: Ward, Lock, Bowden & Co. Smith, Edgar Lawrence. 1925. Common Stocks as Long-Term Investments. New York: Macmillan. Solow, Robert. 1979. “Another Possible Source of Wage Rigidity.” Journal of Macroeconomics 1(1):79–82. Sorkin, Andrew Ross. 2008. “JP Morgan Pays $2 a Share for Bear Stearns.”

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Applied Economics 35(3):337–42. Venti, Steven F., and David A. Wise. 2000. “Choice, Chance, and Wealth Dispersion at Retirement.” National Bureau of Economic Research Working Paper 7521, February. “Want Old Rate Restored.” 1894. Boston Daily, February 10, p. 10. Warsh, David. 2006. Knowledge and the Wealth of Nations: A Story of Economic Discovery. New York: W. W. Norton. Weinstein, Neil, and William M. Klein. 1996. “Unrealistic Optimism: Present and Future.” Journal of Social and Clinical Psychology 15:1–8. Welch, Jack, with John A. Byrne. 2001. Jack: Straight from the Gut. New York: Warner. Wentura, Dirk. 2005.

A Little History of Economics
by Niall Kishtainy
Published 15 Jan 2017

Malthus panicked, and wrote to Ricardo to ask him to get rid of his share. Ricardo held his nerve, though, and held onto his own stake. When news came of the British victory, he became one of the wealthiest men in Britain overnight. Ricardo stumbled upon economics in a library where he discovered Adam Smith’s The Wealth of Nations. It turned out to be the most important book he ever read, and inspired him to apply his formidable mind to the analysis of the economy at a time when the new capitalists were competing for power with the old land-owning aristocrats. The question was how the country’s growing wealth was to be divided between the landowners, the capitalists and the mass of workers.

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He’d moved away from the buzz of the cities where he’d made his name as a philosopher to write what would become arguably the most celebrated book in the history of economics. It led some to call him the father of modern economics. Fuelled by bracing walks and sleepless nights, the hefty book was published in 1776 and called The Wealth of Nations. In it Smith posed one of the fundamental questions of economics. Is self-interest compatible with a good society? To understand what this means, let’s compare the workings of society with those of a football team. A good football team needs good players, obviously. Good players do more than simply dribble and shoot well.

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Smith had a vision of a new economy that was then being born, one based on the division of labour and self-interest. He has been acclaimed as a sage, often by those who believe that markets should rule above all else, that governments should do as little as possible and businesses do what they like. Two hundred years after The Wealth of Nations was published, American President Ronald Reagan championed these principles, taking Smith as his inspiration. Some of his White House officials even took to wearing ties with Smith’s portrait on them. But Smith might not have felt flattered by this. For one thing, he championed the role of markets as an attack on the mercantilist system which then ruled Europe with its many restrictions on buying and selling.

The Trouble With Billionaires
by Linda McQuaig
Published 1 May 2013

‘No fundamental disturbance of the whole system is involved,’ noted Simons in his classic ‌1938 text Personal Income Taxation.6 He elaborated on this theme later, in Economic Policy for a Free Society, emphasizing how progressive taxation achieves redistribution without impinging on freedom: ‘What is important for libertarians is that we preserve the basic processes of free exchange and that egalitarian measures be superimposed on those processes, effecting redistribution afterward and not in the immediate course ‌of production and commercial transactions.’7 It could be added here that taxation – and even heavy taxation of the rich – was supported by no less a conservative heavyweight than Adam Smith. This might come as a surprise since Smith’s legacy has been largely appropriated in recent years by neoliberals. While they’ve managed to tear snippets out of context to present his The Wealth of Nations as a manifesto for unbridled capitalism, in fact Smith was a philosopher who was wary of the social consequences of the emerging industrial capitalist system, and in particular the dangers of inequality. Throughout The Wealth of Nations, Smith consistently championed the rights of workers against the rights of merchants and industrialists.

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In the United States, the slogan ‘no taxation without representation’ became the rallying cry of the Revolutionary War, reflecting the connection the colonial rebels made between taxation and democracy. Similarly, Adam Smith, the eighteenth-century Scottish philosopher and founder of the classical school of economics, rejected suggestions put forward by some in his day that taxes were ‘badges of slavery’. As he wrote in The Wealth of Nations: ‘Every tax…is to the person who pays it a badge, not of slavery, but of liberty. It denotes that he is subject to government, indeed, but that, as he has some property, he cannot himself be ‌the property of a master.’2 • • • Key to the development and promotion of today’s fierce anti-tax ideology was the emergence of a school of thought known as ‘public choice theory’.

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Frankfurt, ‘Reflections on Bullshit’, Harper’s, February 1987. Frankfurt later developed his theory into a bestselling book, On Bullshit, published by Princeton University Press in 2005. 10 Revamping the Ovarian Lottery ‌1 Norbert Haring & Niall Douglas, Economists and the Powerful (London: Wimbledon Publishing Company, 2012), p. 1. ‌2 Adam Smith, The Wealth of Nations (London: Penguin Books, 1999), p. 857. ‌3 Hugh Stretton & Lionel Orchard, Public Goods, Public Enterprise, Public Choice: Theoretical Foundations of the Contemporary Attack on Government (New York: St. Martin’s Press, 1994), p. 20. ‌4 Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1957), p. 163. ‌5 R.

Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own
by Garett Jones
Published 15 Feb 2015

It’s that the memory skills and other traits that higher-IQ individuals tend to have are useful in searching out win-win possibilities, so it would be a great surprise if that didn’t happen in the lab and out in the real world. And if a game of pure conflict turns even slightly into a game of mutual interest, Sobel and Crawford would predict that mutual interest will spur clearer communication. Adam Smith’s Pin Factory: A Team Effort If you’ve never read it before, right now is an excellent time to read the first chapter of Adam Smith’s second book, The Wealth of Nations, published in 1776. Just a few pages long, it discusses how pins are made—the small pushpins that have a flat head, not sewing needles or wooden clothespins. This chapter is where Smith lays out the power of the division of labor, showing that by dividing the job of making pins into about a half-dozen separate tasks—wire-cutting, point-sharpening, head-flattening, and so on—a small group of individuals could make a few pounds of pins each day.

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If you have cooperative, patient, well-informed neighbors, that probably makes you a bit more cooperative, patient, and well-informed. Of course, test scores don’t explain everything about the wealth of nations: I’m only claiming that IQ-type scores explain about half of everything across countries—and much less within a country. If your next-door neighbor earns a lot more or less than you, it’s not mostly because of IQ. And across countries, differences in geography, culture, and the long reach of colonialism are surely shaping the wealth of nations. The hive mind is no single-cause theory of prosperity. It’s just a story that almost no one else is talking about. Chapter 1 JUST A TEST SCORE?

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After all, rich countries and poor countries differ in countless ways, and average test scores are just one of the differences. I could just as easily have shown a graph that shows that rich countries have more cell phones per person, or that people in rich countries eat at restaurants more often or are more likely to have vacation homes. Does Figure I.1 really tell us anything about what drives the wealth of nations? One preliminary check is to see whether a nation’s average test scores still do a good job of predicting a nation’s level prosperity even when you know a lot of other things about the country: this approach is known as multiple regression. It amounts to asking, “Even if I already know that your country has a high savings rate, a lot of mineral wealth, or whatever, does knowing your nation’s average test scores still help me to predict how productive your country is?”

The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism
by Jeremy Rifkin
Published 31 Mar 2014

Epstein and Maarten Prak, Guilds, Innovation, and the European Economy, 1400–1800 (Cambridge: Cambridge University Press, 2008) 31. 23. Ibid., 44. Chapter 3 1. Yujiro Hayami and Yoshihisa Godo, Development Economics: From the Poverty to the Wealth of Nations (New York: Oxford University Press, 2005), 341. 2. Maurice Dobb, Studies in the Development of Capitalism (New York: International Publishers, 1947), 143. 3. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Edinburgh: Thomas Nelson, 1843), 20. 4. Ibid. 5. Ibid., 21. 6. Ibid., 22. 7. Carl Lira, “Biography of James Watt,” May 21, 2013, http://www.egr.msu.edu/~lira/supp/steam /wattbio.html (accessed January 7, 2014). 8.

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Through most of history, markets were occasional meeting places where goods were exchanged. Today, virtually every aspect of our daily lives is connected in some way to commercial exchanges. The market defines us. But here lies the contradiction. Capitalism’s operating logic is designed to fail by succeeding. Let me explain. In his magnum opus, The Wealth of Nations, Adam Smith, the father of modern capitalism, posits that the market operates in much the same way as the laws governing gravity, as discovered by Isaac Newton. Just as in nature, where for every action there is an equal and opposite reaction, so too do supply and demand balance each other in the self-regulating marketplace.

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Of course, my father could never have imagined in the early years that the millions of plastic bags he was selling would end up in landfills and pollute the environment. Nor could he have foreseen that the petrochemicals used to extrude the polyethylene would emit carbon dioxide and play a key role in altering the climate of the planet. Reflecting on my own father’s career, it is clear to me that the invisible hand that Adam Smith alluded to 237 years ago in The Wealth of Nations is really not all that invisible. It’s the entrepreneurial spirit that drove my dad and countless other entrepreneurs to innovate, reduce marginal costs, bring cheaper products and services to the market, and spur economic growth. That entrepreneurial spirit is now taking us to near zero marginal costs and into a new economic era of history where more goods and services will be nearly free and shared on a Collaborative Commons.

Why We Can't Afford the Rich
by Andrew Sayer
Published 6 Nov 2014

Anyway, don’t the differences in the quality of work that people do simply reflect differences in intelligence and effort? And doesn’t the division of labour make for economic efficiency, from which, supposedly, we all benefit? Let’s look at these objections. Isn’t the unequal division of labour a reflection of differences in ability and effort? In 1776, in The Wealth of Nations, Adam Smith famously analysed the benefits of division of labour through his example of the pin factory. Splitting the manufacture into 18 different operations, carried out repetitively and covered by about 10 workers, allowed them to produce over 48,000 pins per day, whereas if each worker had to do all 18 operations on each pin from start to finish before moving on to the next they would scarcely have produced 20 a day.

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The proportion of part-timers in the workforce has also risen in the US in the last 40 years. 13 Tawney, R.H. (2004) [1920] The acquisitive society, Mineola, NY: Harcourt Brace and Howe. 14 Hudson, M. (2008) http://dandelionsalad.wordpress.com/2008/09/08/’modern-debt-peonage”-economic-democracy-is-turning-into-a-financial-oligarchy/. Chapter Four: For rent … for what? 15 Smith, A. (1976) [1776] The wealth of nations, ed. E. Cannan, Chicago, IL: University of Chicago Press, Bk I, ch V, p 56. 16 Paine, T. (1797) Agrarian justice, paragraph 11, http://geolib.pair.com/essays/paine.tom/agjst.html. 17 Churchill, W. (1909) The people’s rights, ch 4, http://www.wealthandwant.com/docs/Churchill_TPL.html. 18 Tawney, R.H. (2004) [1920] The acquisitive society, Mineola, NY: Harcourt Brace and Howe. 19 http://www.richest-people.co.uk/duke-of-westminster/. 20 Mill, J.S. (1965) Principles of political economy, in Collected Works, ed.

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19 For a fuller discussion of these possibilities see Wright, E.O. (2000) Class counts, Cambridge: Cambridge University Press. 20 Orton, M and Rowlingson, K. (2007) Public attitudes to inequality, York: Joseph Rowntree Foundation; Horton, L. and Bamfield, T. (2009) Understanding attitudes to tackling economic inequality, York: Joseph Rowntree Foundation; Miller, D. (1999) Principles of social justice, Cambridge, MA: Harvard University Press. 21 See Robert Jackall’s wonderful study of corporate managers in the US in his 1988 book, Moral mazes, Oxford: Oxford University Press. 22 Gomberg, P. (2007) How to make opportunity equal, Oxford: Blackwell; Sayer, A. (2009) ‘The injustice of unequal work’, Soundings, 43, pp. 102–13. 23 Horton and Bamfield (2009). 24 Gomberg (2007). 25 Gomberg (2007). 26 Smith, A. (1976) [1776], The wealth of nations, ed. E. Cannan, Chicago, IL: University of Chicago Press, vol 2, bk V, ch i, pp 302–3. 27 Murphy, J.B. (1993) The moral economy of labor, New Haven, CT: Yale University Press. 28 Smith (1976) [1776], vol 1, bk I, ch ii, pp 19–20. 29 Feinstein, L. (2003) ‘Inequality in the early cognitive development of British children in the 1970 cohort’, Economica, 70, pp 73–97.

Free to Choose: A Personal Statement
by Milton Friedman and Rose D. Friedman
Published 2 Jan 1980

The story of the United States is the story of an economic miracle and a political miracle that was made possible by the translation into practice of two sets of ideas—both, by a curious coincidence, formulated in documents published in the same year, 1776. One set of ideas was embodied in The Wealth of Nations, the masterpiece that established the Scotsman Adam Smith as the father of modern economics. It analyzed the way in which a market system could combine the freedom of individuals to pursue their own objectives with the extensive cooperation and collaboration needed in the economic field to produce our food, our clothing, our housing. Adam Smith's key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit.

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We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow citizens." —Adam Smith, The Wealth of Nations, vol. I, [>] We cannot indeed depend on benevolence for our dinner—but can we depend wholly on Adam Smith's invisible hand? A long line of economists, philosophers, reformers, and social critics have said no. Self-love will lead sellers to deceive their customers. They will take advantage of their customers' innocence and ignorance to overcharge them and pass off on them shoddy products.

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The action shall name as defendant the Treasurer of the United States, who shall have authority over outlays by any unit or agency of the Government of the United States when required by a court order enforcing the provisions of this article. The order of the court shall not specify the particular outlays to be made or reduced. Changes in outlays necessary to comply with the order of the court shall be made no later than the end of the third full fiscal year following the court order. NOTES INTRODUCTION 1. Adam Smith, The Wealth of Nations (1776). (All page references are to the edition edited by Edwin Cannan, 5th ed. (London: Methuen & Co., Ltd., 1930). 2. On Liberty, People's ed. (London: Longmans, Green & Co., 1865), p. 6. 3. Wealth of Nations, vol. I, p. 325 (Book II, Chap. III). CHAPTER 1 1. See Hedrick Smith, The Russians (New York: Quadrangle Books/New York Times Book Co., 1976), and Robert G.

For Profit: A History of Corporations
by William Magnuson
Published 8 Nov 2022

One famous shareholder of the East India Company, Sir Josiah Child, was notorious for spreading false rumors that war had broken out in India, causing the company’s share price to drop. He would then proceed to buy up entire blocks of shares on the cheap. This kind of market manipulation wreaked havoc on stock markets and the pockets of unsophisticated investors for centuries. What should we make of the rise of this capitalist system? Adam Smith believed that it was all for the best. In The Wealth of Nations, Smith famously argued that an “invisible hand” oversaw the market. The invisible hand ensured that selfish individuals, looking out solely for themselves, ended up promoting the greater good of society as a whole. Precisely how the invisible hand did its work was unclear, but it generally involved some combination of supply and demand: by competing with one another in responding to the demands of consumers, corporations supplied the goods and services that society needed with high quality and at a reasonable price.

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Corporations are public entities with a public purpose, given special rights and privileges precisely because governments believe they will contribute to the greatness of their nations. While they sometimes—perhaps even often—stray from this purpose, their original and abiding justification has always been their ability to promote the good of all. Adam Smith, the father of capitalism, understood this. In the seldom-read passage of The Wealth of Nations in which he articulated his vision of the invisible hand, he was careful to provide an important caveat about capitalism as a cure-all. The invisible hand is not infallible. “By directing [his] industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention,” Smith wrote.

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“The monopoly of tea is, I dare say, but a small part of the plan they have formed to strip us of our property,” Dickinson concluded.36 The East India Company also attracted the attention of two philosophers developing new theories about nations and economies. Adam Smith, the father of modern capitalism, famously wrote in The Wealth of Nations that an “invisible hand” leads individuals pursuing their self-interest in a free market to simultaneously and unintentionally promote the interest of society more broadly. But in a somewhat less well known section of his treatise, Smith cast doubt on the ability of corporations to do the same.

Undoing the Demos: Neoliberalism's Stealth Revolution
by Wendy Brown
Published 6 Feb 2015

Alison Wakefield and Jenny Fleming (London: SAGE Publications Ltd., 2009), pp. 277–79; See also John Clarke, “Living With/in and Without Neo-Liberalism,” Focaal–European Journal of Anthropology 51 (2008), pp. 135–47; and Ronen Shamir, “The Age of Responsibilization: On Market-Embedded Morality,” Economy and Society 37.1 (2008), pp. 1–19. 240 notes 21. Adam Smith, The Wealth of Nations (Chicago: University of Chicago Press, 1976), p. 477 22. Thus the persistent effort to fathom why working and middle-class voters can often be mobilized “against their interests” operates within an anachronistic paradigm of liberalism; such voters are behaving like good neoliberal subjects.

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Ibid., 1.9,15–18 39. Ibid., 1.9.14 notes 241 40. Laval, L’homme économique; Hirschman, The Passions and the Interests. 41. C. B. MacPherson, The Political Theory of Possessive Individualism: Hobbes to Locke (Oxford: Oxford University Press, 1962), p. 3. 42. Smith, The Wealth of Nations. 43. Marx, The German Ideology. 44. In chapter 2 of the Wealth of Nations, Smith writes: “whether this propensity [to truck and barter] be one of those original principles in human nature of which no further account can be given; or whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech, it belongs not to our present subject to inquire.”

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Hunger, thirst, the passion which unites the two sexes, and the dread of pain, prompt us to apply those means for their own sakes, and without any consideration of their tendency to those beneficent ends which the great Director of nature intended to produce by them.” Adam Smith, Theory of Moral Sentiments (Indianapolis: Liberty Classics, 1976), p. 378. Useful considerations of Smith’s account of human nature include Samuel Fleischacker, On Adam Smith’s Wealth of Nations: A Philosoph­ical Companion (Princeton: Princeton Univ. Press, 2004) and Manfred J. Holler, “Adam Smith’s Model of Man and Some of its Consequences,” Homo Oeconomicus 23.3 (2006), pp. 467–88. 242 notes 46. John Locke, Two Treatises of Government, in Political Writings, ed.

The New Enclosure: The Appropriation of Public Land in Neoliberal Britain
by Brett Christophers
Published 6 Nov 2018

But Our Belief in It Has Gone’, Guardian, 1 February 2017. 1 M. Rothbard, Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought, Volume I (Aldershot: Edward Elgar, 1995), p. xii. 2 D. Reisman, ‘Adam Smith on Market and State’, Journal of Institutional and Theoretical Economics 154 (1998), pp. 357–83, at p. 374. 1 A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Edinburgh: Thomas Nelson/Peter Brown, 1831), p. 303. 2 Reisman, ‘Adam Smith on Market and State’, p. 375. 3 On infrastructure, see P. O’Neill, ‘The Financialisation of Infrastructure: The Role of Categorisation and Property Relations’, Cambridge Journal of Regions, Economy and Society 6 (2013), pp. 441–54. 1 See, for example, C.

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But the land itself is not the only such asset. Also irreplaceable, and arguably more significant, is the particular capacity for public self-determination conferred by state ownership and control of the land – even if only ‘potentially’. Economic disorder There is a widely cited passage from Adam Smith’s The Wealth of Nations that reads as follows: As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them.

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Letwin delivered a draft report in June 2018, just as this book was going to press. See O. Letwin, Independent Review of Build Out Rates: Draft Analysis. 3 Cited in R. Sylvester, A. Thomson, F. Elliott and T. Knowles, ‘Greedy House Developers Face Losing Right to Build’, The Times, 31 January 2018. 1 A. Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (Edinburgh: Thomas Nelson/Peter Brown, 1831), p. 21. 2 For example, B. Christophers, ‘On Voodoo Economics: Theorising Relations of Property, Value and Contemporary Capitalism’, Transactions of the Institute of British Geographers 35 (2010), pp. 94–108. Note that ‘rentier capitalism’ does not necessarily signify the prominence of land rents; it denotes the significance of economic rent in general, where rent is understood as value captured by virtue of monopoly ownership of a scarce asset.

Who Rules the World?
by Noam Chomsky

It is small wonder that the “campaign of hatred” against the United States that concerned Eisenhower was based on the recognition that the United States supports dictators and blocks democracy and development, as do its allies. In Adam Smith’s defense, it should be added that he recognized what would happen if Britain followed the rules of sound economics, now called “neoliberalism.” He warned that if British manufacturers, merchants, and investors turned abroad, they might profit but England would suffer. But he felt that they would be guided by a home bias, so that as if by an “invisible hand” England would be spared the ravages of economic rationality. The passage is hard to miss. It is the one occurrence of the famous phrase “invisible hand” in The Wealth of Nations. The other leading founder of classical economics, David Ricardo, drew similar conclusions, hoping that what is called “home bias” would lead men of property to “be satisfied with the low rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations”—feelings that, he added, “I should be sorry to see weakened.”16 Their predictions aside, the instincts of the classical economists were sound.

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Randolph Bourne, “Twilight of Idols,” Seven Arts, October 1917, 688–702.   7. Michael Crozier, Samuel P. Huntington, and Joji Watanuke, The Crisis of Democracy: Report on the Governability of Democracies to the Trilateral Commission (New York: New York University Press, 1975), http://www.trilateral.org/download/doc/crisis_of_democracy.pdf.   8. Adam Smith, The Wealth of Nations (New York: Bantam Classics, 2003), 96.   9. Gordon S. Wood, The Creation of the American Republic, 1776–1787 (New York: W. W. Norton, 1969), 513–14. Lance Banning, in The Sacred Fire of Liberty: James Madison and the Founding of the Federal Republic (Ithaca: Cornell University Press, 1995), strongly affirms Madison’s dedication to popular rule but nevertheless concurs with Wood’s assessment of the Constitutional design (245). 10.

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Fails to Explain Policies to Muslim World, Panel Says,” New York Times, 24 November 2004. 12. Afaf Lutfi Al-Sayyid Marsot, Egypt in the Reign of Muhammad Ali (Cambridge: Cambridge University Press, 1984). For more extensive discussion on post–World War II Egypt, see Noam Chomsky, World Orders Old and New (New York: Columbia University Press, 1994), chapter 2. 13. Adam Smith, The Wealth of Nations (New York: Bantam Classics, 2003), 309. 14. Noam Chomsky, Year 501: The Conquest Continues (Chicago: Haymarket Books, 2014), 150. 15. Chomsky, Hopes and Prospects, 80. 16. David Ricardo, The Works of David Ricardo: With a Notice of the Life and Writings of the Author by J. R.

People, Power, and Profits: Progressive Capitalism for an Age of Discontent
by Joseph E. Stiglitz
Published 22 Apr 2019

Such an economy will shape us—make us more like the individuals and society to which we aspire. And in doing so, it will enable us to create a more humane economy, one capable of delivering for the vast majority of our citizens the “middle-class” life to which they aspire, but which has increasingly become out of reach. The Wealth of Nations Adam Smith’s famous book of 1776, The Wealth of Nations, is a good place to start for understanding how nations prosper. It is usually thought of as the beginning of modern economics. Smith rightly criticized mercantilism, the economic school of thought that dominated Europe during the Renaissance and the early industrial period.

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Even to make money by taking advantage of weaknesses, such as gambling or alcohol, requires market power, because in our amoral society, there is an ample supply of those able and willing to do so, and in the absence of market power, profits even for nefarious activities would be driven down to zero. 10.While traditionally, corruption focuses on instances such as these, in fact there is widespread corruption in the private sector, as when an employee (even a CEO) takes advantage of his position to enrich himself, or when a company behaves dishonestly, to enrich itself at the expense of others. 11.Adam Smith, An Inquiry into the Causes of the Wealth of Nations, 1776. 12.Actually, the passage was in response not just to the potential for monopolization, but the pervasive presence of market power that had emerged at the end of the nineteenth century, including in oil, railroads, meatpacking, and tobacco. 13.There are, of course, fluctuations in the risk premium that the market requires, depending on judgment about risk in the economy. 14.For a close look at the corporate sector, see Simcha Barkai, “Declining Labor and Capital Shares” (working paper, 2017).

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In short, our elites, in both parties, thought that focusing on GDP could be a substitute for focusing on people. In effect, they dissed large parts of the country. This disrespect was perhaps almost as painful as the economic tragedy that was befalling them. Alternative Theories to the Sources of the Wealth of Nations I’ve described the real source of the wealth of nations—resting on foundations of science and knowledge and the social institutions that we’ve created to help us not just live peacefully with each other but cooperate together for our common good. I’ve described too the threat to these foundations represented by Trump and his ilk.

Extreme Money: Masters of the Universe and the Cult of Risk
by Satyajit Das
Published 14 Oct 2011

O’Rourke described economics as “an entire scientific discipline of not knowing what you’re talking about.”2 Economics focuses on how production and financial systems work or should work. Macroeconomics focuses on growth, employment, production, inflation, and monetary and government budgetary (fiscal) policy. Microeconomics tries to analyze the behavior of firms or individuals, and how things like prices are determined and markets work. In his 1776 work The Wealth of Nations, Adam Smith argued for a self-regulating market system in which narrow self-interest could order economic activity: It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.3 Capitalism created wealth and progress, but at high social cost.

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Alain de Botton (2002) The Art of Travel, Penguin Books, London: 40. 10. Ibid: 57. 11. Quoted in Andrew Ross Sorkin “A ‘bonfire’ returns as heartburn” (24 June 2008) New York Times. Chapter 1—Mirror of the Times 1. Michael Jackson “Money” from History—Past, Present And Future Book 1 (2009). 2. Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations: Book 1 Chapter 2 (http://geolib.com/smith.adam/won1-02.html). 3. Glyn Davies (2002) A History of Money: From Ancient Times to the Present Day, University of Wales Press, Cardiff: 13, 14. 4. Ibid: 18, 20. 5. Christian Oliver and Jan Cienski “North Korea offers ginseng to pay Czech debt” (10 August 2010) Financial Times. 6.

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William Jennings Bryan, Speech concluding debate on the Chicago Platform (9 July 1896), Democratic National Convention, Chicago, Illinois (http://en.wikisource.org/wiki/Cross_of_Gold_Speech). 10. Wetherford, The History of Money: 175–7. 11. Quoted in Brook Larmer “The price of gold” (January 2009) National Geographic: 42. 12. Ian Fleming (2009) Goldfinger, Penguin Books, London: 73. 13. John Updike (1982) Rabbit is Rich, Penguin Books, London: 201. 14. Adam Smith (2007) The Wealth of Nations, Cosmino, New York: 241. 15. John Kenneth Galbraith (1975) Money: Whence It Came, Whence It Went, Houghton Mifflin, Boston: 45. 16. Dylan Grice “Popular delusions: a Minskian roadmap to the next gold mania” (18 November 2009), Société Générale Cross Asset Research. 17. Walsh, Keynes and the Market: 167. 18.

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society
by Will Hutton
Published 30 Sep 2010

_r=1. 4 This problem is even more pernicious in developing countries. See Raymond Fisman and Edward Miguel (2008) Economic Gangsters: Corruption, Violence and the Poverty of Nations, Princeton University Press. 5 Adam Smith (1776) An Enquiry into the Nature and Causes of the Wealth of Nations, Vol. I, pp. 363–4. 6 Generally, see Emma Rothschild (2001) Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment, Harvard University Press. The spirit of rationalism underpinned early centralisation and the emergence of unified markets. See Stephan Epstein (2000) Freedom and Growth: The Rise of States and Markets in Europe, 1300–1750, Routledge. 7 J.

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The acquirer must leave for his neighbour ‘as good and as large a possession (after the other had taken out his) as before it was appropriated’.11 A shipwrecked sailor, for example, cannot appropriate the only tools available because that would leave others at an unjustifiable disadvantage. Property ownership therefore had limits, but it was justified not as part of God’s dominion but because of the effort made to win it. We earn our rights – a view that has turned out to be durable. Adam Smith, the author of The Wealth of Nations, saw poor workers as victims of the disproportionate allocation of property, unacknowledged Atlases supporting a superstructure of ‘ease and plenty’ above them. Rather than pitiful creatures who deserved their fate, Smith’s humanity and Enlightenment recognition that human beings were of equal worth made him see virtue in the apparently virtueless poor.

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He was wrong about derivatives alleviating risk, wrong that shareholders would ensure that banks pursued policies that did not destroy wealth, and wrong about the housing boom not being a bubble that would inevitably burst. But the pre-credit crunch, ‘socialist’ Brown was happy to go along with all this. Perhaps we should not be surprised. After all, Edinburgh University was Adam Smith’s alma mater, too, and both Brown and Smith were citizens of Kirkcaldy, and proud of the fact. Greenspan might stress The Wealth of Nations in his belief system; Brown might stress the humanism and commitment to fairness in Smith’s Theory of Moral Sentiments. But both worshipped at the same shrine.8 Brown was flattered that American conservatives thought so highly of the Scottish contribution to the European Enlightenment.

Debt: The First 5,000 Years
by David Graeber
Published 1 Jan 2010

People continued keeping accounts in the old imperial currency, even if they were no longer using coins.28 Similarly, the Pukhtun men who like to swap bicycles for donkeys are hardly unfamiliar with the use of money. Money has existed in that part of the world for thousands of years. They just prefer direct exchange between equals—in this case, because they consider it more manly.29 The most remarkable thing is that even in Adam Smith’s examples of fish and nails and tobacco being used as money, the same sort of thing was happening. In the years following the appearance of The Wealth of Nations, scholars checked into most of those examples and discovered that in just about every case, the people involved were quite familiar with the use of money, and in fact, were using money—as a unit of account.30 Take the example of dried cod, supposedly used as money in Newfoundland.

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In the Middle Ages, for instance, everyone continued to assess the value of tools and livestock in the old Roman currency, even if the coins themselves had ceased to circulate.6 It’s money that had made it possible for us to imagine ourselves in the way economists encourage us to do: as a collection of individuals and nations whose main business is swapping things. It’s also clear that the mere existence of money, in itself, is not enough to allow us see the world this way. If it were, the discipline of economics would have been created in ancient Sumer, or anyway, far earlier than 1776, when Adam Smith’s The Wealth of Nations appeared. The missing element is in fact exactly the thing Smith was attempting to downplay: the role of government policy. In England, in Smith’s day, it became possible to see the market, the world of butchers, ironmongers, and haberdashers, as its own entirely independent sphere of human activity because the British government was actively engaged in fostering it.

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Cambridge: Cambridge University Press. Smith, Adam. 1761. Theory of moral sentiments. Cambridge: Cambridge University Press (2002 edition). _____. 1762. Lectures on Jurisprudence. Glasgow Edition of the Works and Correspondence of Adam Smith Vol. 5. Indianapolis: Liberty Fund (1982 edition). _____. 1776. An Inquiry into the nature and causes of the wealth of nations. Oxford: Clarendon Press (1976 edition). Smith, Edwin, and Andrew Murray Dale. 1968. The Ila Speaking Peoples Of Northern Rhodesia. Two Volumes. London: Kessinger. Smith, Timothy. 1983. “Wampum as Primitive Valuables.” Research in Economic Anthropology 5: 225-246.

Capitalism 3.0: A Guide to Reclaiming the Commons
by Peter Barnes
Published 29 Sep 2006

The Ascent of Corporations When I speak in this book of corporations, I’m speaking of a very special institution: the publicly traded stock corporation. This is an institution with a board of directors, a set of executive officers, and a fluctuating set of shareholders to whom the directors and officers are legally accountable. These corporations have an explicit mission: to maximize return to stock owners. When Adam Smith wrote The Wealth of Nations in 1776, there were barely a handful of corporations in Britain or America. The dominant business form was the partnership, in which small groups of people known to each other ran businesses they co-owned. In the public’s mind—as in Smith’s—the corporate form, in which managers sold stock to strangers, was inherently prone to fraud.

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.”: Bob Dole’s statement on the spectrum giveaway can be found at www.anu.edu.au/mail-archives/link/link9601/0035.html. See also Ralph Kinney Bennett, “The Great Airwaves Giveaway,” Reader’s Digest, June 1996. 119 “If you steal $10 . . .”: Walter Hickel, Crisis in the Commons: The Alaska Solution (Oakland, Calif.: ICS Press, 2002), p. 217. 120 a handful of corporations: Adam Smith, The Wealth of Nations (London: Penguin Books, 1982 [originally published 1776]). 121 corporations were persons”: The Supreme Court decision that established corporate personhood was Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886). 122 Fortune 500 sales: I computed the annual sales of Fortune 500 corporations from data available (for a fee) on Fortune magazine’s website.

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.: South End Press, 2002. Shiva, Vandana. Earth Democracy: Justice, Sustainability, and Peace. Cambridge, Mass.: South End Press, 2005. Shulman, Seth. Owning the Future. Boston: Houghton Mifflin, 1999. Simms, Andrew. Ecological Debt: The Health of the Planet and the Wealth of Nations. London: Pluto Press, 2005. Smith, Adam. The Wealth of Nations. London: Penguin Books, 1982. (Originally published 1776) Smith, Adam. The Theory of Moral Sentiments. Amherst, N.Y.: Prometheus Books, 2000. (Originally published 1759) Steinberg, Theodore. Slide Mountain: The Folly of Owning Nature. Berkeley: University of California Press, 1995.

Year 501
by Noam Chomsky
Published 19 Jan 2016

So it has always been.11 Stigler may well be right, however, that Smith “certainly convinced all subsequent economists.” If so, that is a comment on the dangers of illegitimate idealization that isolates some inquiry from factors that crucially affect its subject matter, a problem familiar in the sciences; in this case, separation of abstract inquiry into the wealth of nations from questions of power: Who decides, and for whom? We return to the point as Adam Smith himself understood it. The wealth of the colonies returned to Britain, creating huge fortunes. By 1700, the East India Company accounted for “above half the trade of the nation,” one contemporary critic commented. Through the following half-century, Keay writes, its shares became the “equivalent of a gilt-edged security, much sought after by trustees, charities and foreign investors.”

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Their “conservative” counterparts are only more extreme in their adulation of the Wise Men who are the rightful rulers—in the service of the rich and powerful, a minor footnote regularly forgotten.18 The rabble must be instructed in the values of subordination and a narrow quest for personal gain within the parameters set by the institutions of the masters; meaningful democracy, with popular association and action, is a threat to be overcome. These too are persistent themes, that only take new forms. Adam Smith’s nuanced interpretation of state interference with international trade extended to the domestic scene as well. The praise in his opening remarks for “the division of labor” is well-known: it is the source of “the greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied,” and the foundation of “the wealth of nations.” The great merit of free trade, he argued, is that it contributes to these tendencies.

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The policies they contrived were reasonable enough in terms of narrow self-interest, however others may have been harmed, including the general population of England.17 Smith’s conclusion that “Under the present system of management, therefore, Great Britain derives nothing but loss from the dominion which she assumes over her colonies” is highly misleading. From the point of view of policy choices, Great Britain was not an entity. “The wealth of nations” is no concern of the “architects of policy,” who, as Smith insists, seek private gain. The fate of the common people is no more their concern than that of the “mere savages” who stand in the way. If an “invisible hand” sometimes provided others with benefits, that is merely incidental. The basic focus on “wealth of nations” and what “Great Britain derives” is faulty from the start, undermined by illegitimate idealization, though at least it is qualified and corrected in Smith’s fuller discussion.

Losing Control: The Emerging Threats to Western Prosperity
by Stephen D. King
Published 14 Jun 2010

Market-led solutions are profoundly amoral and, thus, fail to address many of the key issues of political economy. Market forces may lead to more efficient outcomes, but efficiency says nothing about whether the rewards are fairly distributed. For markets to provide widespread benefits, property rights and the rule of law are most certainly required, but they may not be enough. As Adam Smith wrote in The Wealth of Nations, ‘Wherever there is great property, there is great inequality . . . the affluence of the rich excites the indignation of the poor, who are often driven by want, and prompted by envy, to invade his possessions . . . The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government.’

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To put China’s gold medal haul into context, the Middle Kingdom managed to win only five gold medals in the Seoul Olympics in 1988. 7. For an informed discussion of the client state problem, see Tony Judt’s Post War: A History of Europe since 1945 (William Heinemann, London, 2005). 8. An Inquiry into the Nature and Causes of the Wealth of Nations, first published in 1776. As it turned out, this was a remarkably auspicious year for political and economic developments. 9. See, for example, ‘The market for lemons: quality uncertainty and the market mechanism’, the groundbreaking paper by George A. Akerlof, Quarterly Journal of Economics, 84.3 (1970), pp. 488–500. 10.

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Marks, C. and Morgan, D., ‘Measuring UK inflation’, Economic and Labour Market Review, 2.9 (2008), pp. 18–25 Pingali, P., Westernization of Asian Diets and the Transformation of Food Systems: Implications for Research and Policy, ESA Working Paper No. 04-17, Rome, September 2004 Qu, Hongbin, The Great Migration, HSBC Research, 2005 Rawls, J., A Theory of Justice, Harvard University Press, Cambridge, MA, 1971 Ricardo, D., The Principles of Political Economy and Taxation, Dover, New York, 2004 Samuelson, P., ‘Theoretical notes on trade problems’, Review of Economics and Statistics, 23 (1964), pp. 145–54 ———, ‘Where Ricardo and Mill rebut and confirm arguments of mainstream economists supporting globalisation’, Journal of Economic Perspectives, 18.3 (2004), pp. 135–46 Sandbrook, D., White Heat: A History of Britain in the Swinging Sixties, Little Brown, London, 2006 Santiso, J., Latin America’s Political Economy of the Possible: Beyond Good Revolutionaries and Free-Marketeers, MIT Press, Boston, 2007 Sen, A., Identity and Violence: The Illusion of Destiny, Allen Lane, London, 2006 Shiller, R., Irrational Exuberance, Princeton University Press, Princeton, 2000 Smith, A., The Wealth of Nations, Books I–III and Books IV–V, Penguin, London, 1999 ———, Theory of Moral Sentiments, Prometheus, London, 2000 Stevenson, D., 1914–1918: The History of the First World War, Allen Lane, London, 2004 Stiglitz, J., Globalisation and its Discontents, Penguin, London, 2003 Stock, J. and Watson, M., Has the Business Cycle Changed and Why?

Payoff: The Hidden Logic That Shapes Our Motivations
by Dan Ariely
Published 15 Nov 2016

This view holds that the labor market is a place where individuals exchange work for wages (regardless of how meaningless the labor is) and that people typically don’t really care what happens to their work as long as they are fairly compensated for it. This view of labor as a work-wage exchange springs from Adam Smith’s 1776 magnum opus The Wealth of Nations, in which Smith described the benefits of breaking a large task into components, assigning one person to each specific task, and encouraging them to specialize in performing it. In his famous example of the pin factory, Smith argued that having one person make every part of a pin would result in low productivity.

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CLICK HERE TO SIGN UP or visit us online to sign up at eBookNews.SimonandSchuster.com NOTES 1 As long as you don’t expect a simple answer to this question by the end of the book, we are going to be okay. 2 My father used to say that having very young kids at home is a sure way to get people to stay in the office longer. 3 Roy Baumeister, Kathleen Vohns, Jennifer Aaker, Emily Garbinsky, “Some Key Differences Between a Happy Life and a Meaningful Life,” Journal of Positive Psychology (2013). 4 Dan Ariely, Emir Kamenica, and Drazen Prelec, “Man’s Search for Meaning: The Case of Legos,” Journal of Economic Behavior & Organization (2008). 5 Amy Adkins, “Majority of U.S. Employees Not Engaged Despite Gains in 2014,” Gallup, January 28, 2015, http://www.gallup.com/poll/181289/majority-employees-not-engaged-despite-gains-2014.aspx. 6 Adam Smith, “An Inquiry into the Nature and Causes of the Wealth of Nations,” http://geolib.com/smith.adam/won1-01.html. 7 John Maynard Keynes, The General Theory of Employment, Interest and Money (1936). 8 Michelle Park, “A History of the Cake Mix, the Invention That Redefined ‘Baking,’ ” http://www.bonappetit.com/entertaining-style/pop-culture/article/cake-mix-history. 9 Mike Norton, Daniel Mochon, and Dan Ariely “The IKEA Effect: When Labor Leads to Love,” Journal of Consumer Psychology (2012).

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In 1844, Marx wrote about what he called “the alienation of labor,” which described a situation in which someone works on a small sub-task, in a small part of a larger enterprise. Like the worker in Adam Smith’s pin factory, the laborer has no idea what his project is all about. He doesn’t understand how his work fits in with the enterprise as a whole. It is unclear to him who will use the product he makes, and he generally feels no connection to the organization, the project, the end user, or the outcome. It is clear that Adam Smith and Karl Marx had very different understandings of the nature of productivity. Smith assumed that management could change the structure of the workplace and achieve more efficiency without sacrificing human motivation.

Money: The Unauthorized Biography
by Felix Martin
Published 5 Jun 2013

The new world being forged by this corporate and financial revolution clamoured to be explained and justified—and Mandeville’s outrageous hypothesis appeared to do both at once. When it was taken up by one of the Enlightenment’s morning stars, the Scotsman Adam Smith, it became the basis of a fully fledged theory of monetary society that has survived to this day. In his Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith formulated the first systematic theory linking individual behaviour with the organisation of the economy, and presented the first cogent synthesis of earlier thinkers’ ideas of how the financial revolution had transformed traditional society.

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A version of it can be found in Aristotle’s Politics, the earliest treatment of the subject in the entire Western canon.9 It is the theory developed by John Locke, the father of classical political Liberalism, in his Second Treatise of Government.10 To cap it all, it is the very theory—almost to the letter—advocated by none other than Adam Smith in his chapter “Of the Origin and Use of Money” in the foundation text of modern economics, An Inquiry into the Nature and Causes of the Wealth of Nations: But when the division of labour first began to take place, this power of exchanging must frequently have been very much clogged and embarrassed in its operations … The butcher has more meat in his shop than he himself can consume, and the brewer and the baker would each of them be willing to purchase a part of it.

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Montesquieu, Esprit des lois, Book XXII, 13, quoted ibid., p. 74 (where it is accidentally attributed to Book XXII, 14). 6. Montesquieu, Esprit des lois, Book XXI, 20, quoted ibid., pp. 72–3. 7. Ibid. 8. James Carville, quoted in Wall Street Journal, 25 February 1993, p. A1. 9. It was published in England in 1767, nine years before Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. 10. Steuart, 1966, Vol. 1, p. 278. Quoted in Hirschman, 1977, p. 85. 11. Boyer-Xambeu et al., 1994, p. 30. 12. The extent to which the development of finance in England lagged behind Continental Europe until the late seventeenth century is demonstrated by Thomas Mun’s treatment of standard Latin practices such as payments by transfer between bank accounts as unknown in England in his 1621 Discourse on Foreign Trade.

Deaths of Despair and the Future of Capitalism
by Anne Case and Angus Deaton
Published 17 Mar 2020

Those explanations are long standing. But there is another story that is more recent in origin: the decline in the power of workers relative to corporations, not only in workplaces and markets but also in Congress. It is to this that we now turn. 15 Firms, Consumers, and Workers IN A FAMOUS PASSAGE in The Wealth of Nations, Adam Smith writes that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”1 The use of market power to raise prices remains a concern today, as we have already seen in healthcare.

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Emily Guendelsberger, 2019, On the clock: What low-wage work did to me and how it drives America insane, Little, Brown; James Bloodworth, 2018, Hired: Six months undercover in low-wage Britain, Atlantic Books. 16. Durkheim, Le suicide. 17. Dani Rodrik, 1997, Has globalization gone too far?, Institute for International Economics. 18. Sam Quinones, 2015, Dreamland: The true tale of America’s opiate epidemic, Bloomsbury. 19. Adam Smith, 1776, The wealth of nations, bk. 4. 20. Matthew Smith, Danny Yagan, Owen M. Zidar, and Eric Zwick, 2019, “Capitalists in the 21st century,” Quarterly Journal of Economics, 134(4), 1675–745. 21. Kenneth Scheve and David Stasavage, 2016, Taxing the rich: A history of fiscal fairness in the United States and Europe, Princeton University Press. 22.

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Martin, Micah Hartman, Benjamin Washington, Aaron Catlin, and the National Health Expenditure Accounts Team, 2019, “National health care expenditure in 2017: Growth slows to post-Great Recession rates; share of GDP stabilizes,” Health Affairs, 38(1), 96–106, https://doi.org/10.1377/hlthaff.2018.05085. 2. Adam Smith, 1776, The wealth of nations, bk. 4. See our introduction. 3. Robert E. Hall and Charles I. Jones, 2007, “The value of life and the rise in health spending,” Quarterly Journal of Economics, 122(1), 39–72, https://doi.org/10.1162/qjec.122.1.39. 4. Kenneth J. Arrow, 1963, “Uncertainty and the welfare economics of medical care,” American Economic Review, 53(5), 941–73. 5.

The Entrepreneurial State: Debunking Public vs. Private Sector Myths
by Mariana Mazzucato
Published 1 Jan 2011

Carlota Perez Author of Technological Revolutions and Financial Capital: The Dynamics of Bubble and Golden Ages Technological University of Tallinn, Estonia; London School of Economics, University of Cambridge and University of Sussex, UK February 2013 INTRODUCTION DO SOMETHING DIFFERENT …our disability is discursive: we simply do not know how to talk about things anymore. Tony Judt (2010, 34) A Discursive Battle Never more than today is it necessary to question the role of the State in the economy – a burning issue since Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (Smith, 1776). This is because in most parts of the world we are witnessing a massive withdrawal of the State, one that has been justified in terms of debt reduction and – perhaps more systematically – in terms of rendering the economy more ‘dynamic’, ‘competitive’ and ‘innovative’.

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Equally important, the jobs created by a technology-driven supply chain are much higher paying – but, they must be sustained over entire technology life cycles. (2012, 31) Keynes focused on the need for the State to intervene in order to bring stability and prevent crises, certainly a pressing issue in today’s circumstances.3 But in order to understand the dynamics of such investments, it is fundamental to better understand different perspectives on the theory of economic growth first, and then to establish the role of technology and innovation in driving that economic growth. Technology and Growth While growth and the wealth of nations has been the lead concern of economists since Adam Smith, in the 1950s it was shown by Abramovitz (1956) and Solow (1956) that conventional measures of capital and labour inputs could not account for 90 per cent of economic growth in an advanced industrialized country such as the United States. It was assumed that the unexplained residual must reflect productivity growth, rather than the quantity of factors of production.

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Soviet Union 37, 39; market failure theory applied to 61; as measure of innovation performance 34, 41; myth of business investment requirements 53–5; myth of innovation being about 44, 159–60; as not enough 142; of pharmaceutical companies 25–6, 188; R&D/GDP 52; SEMATECH funding 99; spending differences 42; of struggling OECD countries 41; technological change investments 59; in wind energy projects 144–5; worker tax credit 54 R&D/GDP 52 R&D Magazine 63 redistributional policies 31 Reenen, John van 46 Reinert, Erik 9n3, 38n5, 73 Reinhart, Carmen 17–18 renewable energy credits (RECs) 115n1 Renewable Portfolio Standards 114 ‘repatriation tax holiday’ 175 ‘representative’ agent 60 research 60, 78, 84, 136; see also science rewards, socialization of 156 risk 58–62, 70; see also socialization of risk risk landscape 22–3, 58, 194, 198 risk–reward nexus framework 186 risk–reward relationships: Apple and the US government 167–8; collective vs. private benefit 165–6, 196; corporate success resulting in regional economic misery 176–8; need for functional dynamic in 182–3, 197–8; overview 165–7; State recognition in 12 Robinson, Joan 34 Roche 82 Rock, Arthur 94 Rodrik, Dani 27, 28 Rogoff, Kenneth 17–18 Roland, Alex 98n7 Roosevelt, Franklin D. 6, 74 Royal Radar Establishment (RRE) 101 royalties 188–9 Ruegg, Rosalie 148 Ruttan, Vernon 62–3 Sanofi 69 Schmidt, Horace 92, 92–3; see also Apple Schumpeter, Joseph 10n4, 31, 35, 58 Schumpeterian innovation economics: creative destruction concept in 10, 10n4, 58, 165; extended protection in 189; influence of on BNDES 5; investment role in 31; macro models of 44; ‘systems of innovation’ view of 35–6; theory of 36n4 science 49, 51, 57, 59n1, 69; see also research Seagate 97 Segal, David 170 Semiconductor Manufacturing Technology (SEMATECH) consortium 99 Shapiro, Isaac 170–71, 171n2 share buybacks 25–7, 67, 171, 175 shareholder-value ideology 184, 186 Shiman, Philip 98n7 Shi Zhengrong 141, 152–4 Shockley, William 76 Silicon Valley 20, 63, 78, 95 Silver, Jonathan 129, 154 SIRI 103, 105–6, 109 SITRA, Finnish Innovation Fund 190 small and medium enterprises (SMEs) 10, 45–6, 45n6, 111n13 Small Business Administration (US) 94 small business associations 19 Small Business Innovation Development Act of 1982 79 Small Business Innovation Research (SBIR) (US) 20, 47, 79–81, 80, 188 Small Business Investment Company (SBIC) (US) 94 Smith, Adam 30; see also Adam Smith Institute; Inquiry into the Nature and Causes of the Wealth of Nations, An; ‘Invisible Hand’ socialization of risk and privatization of rewards: as cause of inequity and instability 185; direct or indirect returns of 187–91; framework for change of 185–7; income-contingent loans and equity 189–90; in the innovation economy 3; ‘innovation fund’ creation 189; IPR 189; mapping innovative labour into division of rewards 184–5; in pharmaceutical development 181; in public–private partnerships 27; skewed reality of risk and reward 181–5 social vs. private returns on investment 3–4 solar power: see wind and solar power Solow, Robert M. 33–4 Solyndra 129–32, 151, 154–5, 162; see also clean technology; ‘No More Solyndras Act’ Something Ventured, Something Gained (documentary) 78 Sony 108 Soppe, Birgit 146 South Korea 40, 61, 120–21 Soviet Union 37–9, 39, 76 Spain 120n4, 121, 121, 157 Spectrawatt 130n11, 162 spillovers 194 spinoff business model 76 SPINTRONICS 97, 97n5 Sputnik launch 76 Stanford Research Institute (SRI) 105–6; see also SIRI State: administrative role of 6, 12; attracting talent 12; capitalintensive investment by 27; ‘crowding in’ of 5–6, 8; ‘Developmental State’ 10, 37–8, 37–8n5, 40, 68; ‘directionality’ provided by 32n2; ‘dynamizing in’ 8; economic role of 1, 29; flexibility of 195–6; funding: see individual US agencies and departments; industrial directives of 21; as leading entrepreneurial force 193; market creation by 62, 167; organizational dynamics consideration 197; performance indicators lacking for 194; as private sector partner 5; response to criticism 19; responsibilities of 13; scope of endeavours of 18–19, 195; sectors funded by 63, 83, 196; targeted catch-up policies of 40; views of 9; see also ‘entrepreneurial’ State; ‘picking winners’ State development banks 2–3, 5, 122, 137–40, 189–91; see also Brazilian Development Bank (BNDES); China Development Bank (CDB); KfW (German Development Bank) stock market 49–50 Strategic Computing Initiative (SCI) 98–9 strategic management 197 Stumpe, Bent 101 Sullivan, Martin A. 174 SunPower 151 Suntech of China 152–5, 152n5 supply-side policies 83, 113–15, 159 sustainability 117, 119, 123, 195; see also green industrial revolution Swanson, Richard 151 Sweden 121 ‘systems of innovation’ approach: defined 36; foundation of 35–7; market failure approach vs. 9–10, 61–2; need for 22; regional 39; State role in 74; see also innovation; innovation ecosystems; Schumpeterian innovation economics ‘systems’ perspective 196 tariffs 108, 157, 157n6; see also feed-in tariffs Tassey, Gregory 32 tax avoidance: by Apple 11, 12, 171–5, 188; corporate 173–5, 187; ‘tax gap’ 187, 187n1 tax breaks 45–7 tax credits: energy 114, 138; impact of on R&D 28, 52–4; and R&D 111n13; and R&E 110; wind and solar power 126n8, 145, 149 tax cuts 10, 19, 23, 54, 69 taxes: antidumping tariffs 108; business as dependent on 69; ‘carbon tax’ 114; Citizens for Tax Justice 174n5; citizens unawareness of uses of 166; global avoidance schemes 174, 174n5; incentives to biotech firms 81; innovation systems not supported by 187–8; insensitivity of investment to 30n1; IRS 529 plans 111, 111n15; ‘patent box’ policy 51–2; policies impacting SMEs 45; policy 51; ‘repatriation tax holiday’ 175; State return from 165; US tax code 174; see also private vs. social returns; risk–reward nexus framework Taxol 188 Tea Party movement 17 technology: causing creative destruction 58; commissioning of advances in 54; core enabler technologies of Apple 95; dual-use 97; and growth 33–4; impact of regions on national performance 39; interagency collaborations in 74; origins of Apple products 109; revolutions 125, 126; SIRI 103, 105–6; State leadership of strategy for 40; unique situations in 59; see also computer field; wind and solar power technology commercialized: from capacitive sensing to click-wheels 99–101, 100n9, 103; cellular 102, 104, 109; from click-wheels to multi-touch screens 102–3; digital signal processing (DSP) 109; GPS 105; GPTs 62; LCD 107–8; lithium-ion battery 108; resistive touch-screens 101; silicon ICs impact on 98; thin-film transistors (TFTs) 107–8; ‘zero-emission’ electric vehicles 108 technology policy 75 Technology Reinvestment Program (TRP) 97 TFP of India vs. 46 TFTs (thin-film transistors) 107–8 Thomas, Patrick 148 ‘trade wars’ 122, 131, 157 ‘traitorous eight’, the 76 Tulum, Oner: on biopharmaceutical industry 67, 69, 82; NIH spending data compilation of 25, 69; on orphan drugs 81–2 United Kingdom (UK): approach to green initiatives 124–6; BBC 16; BERD (business expenditure on R&D) in 24; Big Society theme of 15–16; clean technology investment by 120; energy strategies of 116; government energy R&D spending 121, 121; green revolution in 120; Medical Research Council (MRC) 20, 67; outsourcing in 16; public R&D spending in 61; R&D/GDP 52; sector specialties of 42; SME government support 45; SME performance in 46 United States: Air Force 98, 104, 105; American Energy Innovation Council (AEIC) 26; Apple’s risk– reward relationship with 167–8; Army 107; competitiveness decline in 176; energy policy 158; energy strategies of 116, 137; funding and innovation in 52; funding sources for basic research R&D in 61; funding sources for R&D in 60, 60–61, 60n2; green revolution in 120; ‘hidden Developmental State’ in 38, 38n5; innovation threatened in 24; systems of innovation in 37; tax code 174; tax system 172; ‘trade wars’ of 122, 131, 157; types of venture capital successes in 49; undermining of innovation in 53; wind capacity of 143; see also taxes; specific agencies and departments of University of Southern California 77–8 UNIX 104 USSR: see Soviet Union US Windpower (later Kenetech) 147 Valentine, Don 94 Vallas, Steven P. 67–8 value: extraction 26, 42, 162; measures of 34 Venrock 94 Vensys Energiesysteme 149 venture capital: in Europe 53; Europe’s lag attributed to lack of 20; exit opportunities 48, 67, 81, 130, 138; failure of 107; government stimulation of 116; impatience of 129–32, 146n2; limited role of 131, 138; myth of as risk loving 47–50, 142, 161–2; and NASDAQ’s coevolution 50; presenting as lead risk taker 183; public vs. private 19, 47; short-termist approach of 108, 127; timing of investment by 23; Venrock 94; see also private sector venture capital sector investment: clean technology 161; green revolution 127–8, 128n9; in Solyndra 130; subsectors of within clean energy 128 venture capital stages of investment 47, 48; early stage and seed funding awards by 80; risk of loss in 48 Vestas: Denmark producing 143; DoE research influence on 148; early years of 147; patents purchased by 145; policy responses by 125, 137; rugged designs of 146 vision: Apple’s 93, 94, 99–100; ‘green’ 116, 120, 123; lack of 107; in nanotechnology 83–4; State’s 21–4, 58, 62–4 Warburg Pincus 50 Washington Consensus 40 Washington Post 57 Wayne, Ronald 89, 89n1; see also Apple welfare state institutions 31 Westerman, Wayne 102–3 Westinghouse 107 wind and solar power: clean technology in crisis 158–9; collective failure in 163; decline of US firms in 144, 144n1; grid parity in 141; networks of learning in 146n2; R&D myth in 159–60; small being beautiful myth in 160–61; solar bankruptcies 153–6; symbiotic innovation ecosystems in 162–3; venture capital myth in 161–2; from ‘Wind Rush’ to rise of China’s wind power sector 144–50; withdrawal of government support 149; see also specific corporations; clean technology wind and solar power markets: competition, innovation and market size 156–8; disrupting existing markets 161; global market for 143; growth opportunities in 156–7; growth powered by crisis 142–4; and manufacturing of 144, 146–7, 153 wind and solar power policies: California’s tax programme 147; fostering development 144–5; providing incentives 149–51; subsidies 148–9, 152; tax credits 145, 149 wind and solar power technology: aerodynamics of 148; computer use in 147–8; C-Si 129, 130n11, 151–2, 158; Denmark’s Gedser design 145; oil company role in 161n8; origins of solar technologies 150–53; remote power applications 150; research behind 148–9; see also clean technology wind energy R&D projects 144–6 Witty, Andrew 66–7 World Trade Organization (WTO) 40 World War II 74 Wozniak, Steve 89, 89n1, 94; see also Apple Wuxi-Guolian 152 Wuxi Suntech 153 Xerox 107 Xerox PARC 24 Zond Corporation 147–8 Table of Contents Halftitle Page Title Page Copyright Dedication Epigraph Contents List of Tables and Figures List of Acronyms Acknowledgements Foreword by Carlota Perez Introduction: Do Something Different A Discursive Battle Beyond Fixing Failures From ‘Crowding In’ to ‘Dynamizing In’ Images Matter Structure of the Book Chapter 1: From Crisis Ideology to the Division of Innovative Labour And in the Eurozone State Picking Winners vs.

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism
by Ha-Joon Chang
Published 26 Dec 2007

Thus they were compelled to leave the most profitable ‘high-tech’ industries in the hands of Britain – which ensured that Britain would enjoy the benefits of being on the cutting edge of world development.18 The double life of the British economy The world’s first famous free-market economist, Adam Smith, vehemently attacked what he called the ‘mercantile system’ whose chief architect was Walpole. Adam Smith’s masterpiece, The Wealth of Nations, was published in 1776, at the height of the British mercantile system. He argued that the restrictions on competition that the system was producing through protection, subsidies and granting of monopoly rights were bad for the British economy.* Adam Smith understood that Walpole’s policies were becoming obsolete. Without them, many British industries would have been wiped out before they had had the chance to catch up with their superior rivals abroad.

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Pitt is cited as the Earl of Chatham, which he was at the time. 26 The full quotation is: ‘Were the Americans, either by combination or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country towards real wealth and greatness.’ Adam Smith (1776), The Wealth of Nations, the 1937 Random House edition, pp. 347–8. Smith’s view was later echoed by the respected 19th-century French economist Jean-Baptise Say, who is reported to have said that, ‘like Poland’, the US should rely on agriculture and forget about manufacturing. Reported in List (1841), p. 99. 27 Hamilton divided these measures into eleven groups.

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Therefore, adopting free trade was now increasingly in Britain’s interest. However, Smith was somewhat ahead of his time. Another generation would pass before his views became truly influential, and it was not until 84 years after The Wealth of Nations was published that Britain became a genuine free trading nation. By the end of the Napeolenic Wars in 1815, four decades after the publication of The Wealth of Nations, British manufacturers were firmly established as the most efficient in the world, except in a few limited areas where countries like Belgium and Switzerland possessed technological leads. British manufacturers correctly perceived that free trade was now in their interest and started campaigning for it (having said that, they naturally remained quite happy to restrict trade when it suited them, as the cotton manufacturers did when it came to the export of textile machinery that might help foreign competitors).

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity
by Ha-Joon Chang
Published 4 Jul 2007

Thus they were compelled to leave the most profitable ‘high-tech’ industries in the hands of Britain – which ensured that Britain would enjoy the benefits of being on the cutting edge of world development.18 The double life of the British economy The world’s first famous free-market economist, Adam Smith, vehemently attacked what he called the ‘mercantile system’ whose chief architect was Walpole. Adam Smith’s masterpiece, The Wealth of Nations, was published in 1776, at the height of the British mercantile system. He argued that the restrictions on competition that the system was producing through protection, subsidies and granting of monopoly rights were bad for the British economy.iv Adam Smith understood that Walpole’s policies were becoming obsolete. Without them, many British industries would have been wiped out before they had had the chance to catch up with their superior rivals abroad.

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Pitt is cited as the Earl of Chatham, which he was at the time. 26 The full quotation is: ‘Were the Americans, either by combination or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country towards real wealth and greatness.’ Adam Smith (1776), The Wealth of Nations, the 1937 Random House edition, pp. 347–8. Smith’s view was later echoed by the respected 19th-century French economist Jean-Baptise Say, who is reported to have said that, ‘like Poland’, the US should rely on agriculture and forget about manufacturing. Reported in List (1841), p. 99. 27 Hamilton divided these measures into eleven groups.

…

Therefore, adopting free trade was now increasingly in Britain’s interest. However, Smith was somewhat ahead of his time. Another generation would pass before his views became truly influential, and it was not until 84 years after The Wealth of Nations was published that Britain became a genuine free trading nation. By the end of the Napeolenic Wars in 1815, four decades after the publication of The Wealth of Nations, British manufacturers were firmly established as the most efficient in the world, except in a few limited areas where countries like Belgium and Switzerland possessed technological leads. British manufacturers correctly perceived that free trade was now in their interest and started campaigning for it (having said that, they naturally remained quite happy to restrict trade when it suited them, as the cotton manufacturers did when it came to the export of textile machinery that might help foreign competitors).

Luxury Fever: Why Money Fails to Satisfy in an Era of Excess
by Robert H. Frank
Published 15 Jan 1999

These people are willing to forgo many of life’s ordinary pleasures to acquire fine sculpture, and a law that prohibits them from doing so inflicts gratuitous injury. Another difficulty is that sumptuary laws were typically profoundly undemocratic, enacted to insulate those in positions of power and privilege from emulation by their social inferiors. It is this aspect of these laws that seems to have inspired Adam Smith’s contempt for them. Thus, as he put it in The Wealth of Nations, It is the highest impertinence of kings and ministers to pretend to watch over the economy of private people and to restrain their expense, either by sumptuary laws or by prohibiting the importation of foreign luxuries. They are themselves always and without exception, the greatest spendthrifts in the society.

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For instance, if there were too many carriage makers and not enough automobile assembly workers, wage adjustments in these and other labor markets would quickly restore the proper balance—all without government bureaucrats ever having to lift a finger. Eighty-three years after publication of The Wealth of Nations, Charles Darwin launched a series of books that analyzed competition not among human traders but among animals in the wild. Darwin was much influenced by the British economist Thomas Malthus, an intellectual descendant of Smith’s. It is therefore no surprise that Darwin’s view of competition was in many ways similar to Smith’s.

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Diener, E., and R. A. Emmons. “The Independence of Positive and Negative Affect,” Journal of Personality and Social Psychology 50, 1985: 1031-38. Diener, Ed. “A Value Based Index for Measuring National Quality of Life,” Social Indicators Research 36, 1995: 107-27. Diener, Ed, and Carol Diener. “The Wealth of Nations Revisited: Income and the Quality of Life,” Social Indicators Research 36, 1995: 275-86. Diener, Ed; Marissa Diener; and Carol Diener, “Factors Predicting the Subjective Well-Being of Nations,” Journal of Personality and Social Psychology 59, 1995: 851-64. Diener, Ed, and Eunkook Suh. “Measuring Quality of Life: Economic, Social, and Subjective Indicators,” Social Indicators Research, forthcoming.

The Age of Turbulence: Adventures in a New World (Hardback) - Common
by Alan Greenspan
Published 14 Jun 2007

He never sought nor received the press that Fed governors get, but when the governors gave speeches, it was his forecast of the U.S. economy that Fed watchers were getting. We governors learned to see him as the indispensable, behind-the-scenes staffer.* Long before Adam Smith wrote his 1776 masterpiece, An Inquiry into the Nature and Causes of the Wealth of Nations, people were arguing over the shortest, straightest path to prosperity. Truly it is an argument without end. But even so, the data point to three important characteristics influencing global growth: (1) the extent of competition domestically, and, *David is so low-key that it wasn't until after we'd worked together closely for years that I learned t h a t his distant forebear, Richard Stockton, was a signer of t h e Declaration of Independence. 250 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright. 

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These days, almost every professional field is constrained by some regulatory framework, so it's harder than it once was to isolate the reputation effect, but a sector in which one can is e-commerce. Alibris, for example, is a Web site that acts as a broker between sellers and buyers of used books. If you were eager to buy an early edition of Adam Smith's The Wealth of Nations, you might search on Alibris for the names of booksellers around the country who had copies for sale. Customers are given the opportunity to rate the reliability of booksellers from whom they've purchased at least one book, and those ratings no doubt play an important role in the decision as to which of several booksellers to use.

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A U.S. economist looking for Smith's grave in an Edinburgh churchyard in 2000 reported having to clear away beer cans and debris to read the worn inscription on the stone: HERE ARE DEPOSITED THE REMAINS OF ADAM SMITH. A U T H O R OF THE THEORY OF M O R A L SENTIMENTS AND WEALTH OF NATIONS. Yet Scotland, too, has come around to according Smith the kind of honor he deserves. The way to the grave is now marked by a newly installed stone that quotes from The Wealth of Nations, and a college near Kirkcaldy has been renamed after Smith. A ten-foot-tall bronze statue of him is planned for Edinburgh's Royal Mile. Appropriately it is being paid for with 265 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright. 

Blood in the Machine: The Origins of the Rebellion Against Big Tech
by Brian Merchant
Published 25 Sep 2023

So was the factory, and the factory owner, as the chief engines of economic prosperity. “Adam Smith’s discussion in The Wealth of Nations united two key concepts: division of labor as a motor for generating prosperity, and market systems based on self-interest as a fuel for that motor,” the political scientist Mike Munger explained. Two of Smith’s earliest and most influential advocates were the British prime ministers guiding England’s post–Revolutionary War economic policy: the Earl of Shelburne and William Pitt the Younger. During a debate in the Commons on the fiscal health of the nation on February 17, 1792, Pitt offered a paean to Adam Smith: “The writings of an author of our own times… of a celebrated treatise on the Wealth of Nations… will, I believe, furnish the best solution to every question connected with the history of commerce, or with the systems of political economy.”

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Why care too much about the way government institutions or old-line industries worked, when your purpose was to disrupt them in favor of something far better? Why care about history when you were building the future?” The entrepreneurs’ faith in “progress” was rooted in the trendy philosophy of the Scottish economist Adam Smith. “Laissez-faire,” the Luddite historian Brian Bailey wrote, had become “the political dogma of the English bourgeoisie. In fact, it represented freedom for the employers and intolerable repression of the workers.” Smith had published The Wealth of Nations in 1776, and while initial reaction was limited, it became influential in the following decades. The book, a synthesis of recent strands of economic thought, presented the doctrine of laissez-faire, or “let people do” (as they see fit), as a science.

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During a debate in the Commons on the fiscal health of the nation on February 17, 1792, Pitt offered a paean to Adam Smith: “The writings of an author of our own times… of a celebrated treatise on the Wealth of Nations… will, I believe, furnish the best solution to every question connected with the history of commerce, or with the systems of political economy.” Those theories imbued Pitt’s “New Tories” with a sheen of modernity and lent an ideological fuel to the ascendent entrepreneurial class.1 Factory owners began invoking Adam Smith, and workers began despairing of him. (And newspaper columnists would continue to lambast Pitt, years after he was in office, for turning Smith’s ideas into public policy.) When Horsfall and Cartwright did complete their weekly journeys to the busy Huddersfield market, heads would turn as they made their transactions and moved more and more sums of money.

Status Anxiety
by Alain de Botton
Published 1 Jan 2004

In 1900, a giant Coca-Cola sign was erected on one side of Niagara Falls, while an advert for Mennen’s Toilet Powder was suspended over the gorge. 11. When defenders of modern societies have sought to make a case to sceptics, their task has not been difficult: they have had only to point to the enormous wealth that modern societies are able to generate for their members. In his Inquiry into the Nature and Causes of the Wealth of Nations (1776), Adam Smith sarcastically compared the awe-inspiring productivity of proto-industrial societies with the bare subsistence of primitive hunting-and-gathering ones. The latter were, by Smith’s account, steeped in terrible poverty. Harvests rarely yielded enough food, there were chronic shortages of basic necessities and, in times of serious crisis, children, the elderly and the poor were often left “to be devoured by wild beasts.”

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A family bond, a friendship or a sexual attraction may at times render material incentives unnecessary, but only a reckless optimist would rely on emotional currencies for the regular fulfilment of his or her needs. Humans rarely smile without having some robust reason to do so. 3. Adam Smith, The Wealth of Nations (Edinburgh, 1776): “Man has almost constant occasion for the help of his brethren. [However], it is in vain for him to expect this from their benevolence only. He will be more likely to prevail if he can interest their self-love… . It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest.

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In the ancient world, debate raged among philosophers about what was materially necessary for happiness and what unnecessary. Epicurus, for one, argued that simple food and shelter were all that was needed, and that an expensive house and lavish meals could be safely passed up by every rational, philosophically minded person. However, reviewing the argument many centuries later in The Wealth of Nations, Adam Smith wryly pointed out that in modern, materialistic societies, countless things that were no doubt unnecessary from the point of view of physical survival had nonetheless in practical terms come to be seen as “necessaries,” simply because no one could be thought respectable and so lead a psychologically comfortable life without owning them: “By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.

Civilization: The West and the Rest
by Niall Ferguson
Published 28 Feb 2011

In religion as in business, state monopolies are inefficient – even if in some cases the existence of a state religion increases religious participation (where there is a generous subsidy from government and minimal control of clerical appointments).43 More commonly, competition between sects in a free religious market encourages innovations designed to make the experience of worship and Church membership more fulfilling. It is this that has kept religion alive in America.44 (The insight is not entirely novel. Adam Smith made a similar argument in The Wealth of Nations, contrasting countries with established Churches with those allowing competition.)45 Yet there is something about today’s American Evangelicals that would have struck Weber, if not Smith, as suspect. For there is a sense in which many of the most successful sects today flourish precisely because they have developed a kind of consumer Christianity that verges on Wal-Mart worship.46 It is not only easy to drive to and entertaining to watch – not unlike a trip to the multiplex cinema, with soft drinks or Starbucks served on the premises.

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‘The best instituted governments, like the best constituted animal bodies,’ wrote the British political philosopher Henry St John, Viscount Bolingbroke, in 1738, ‘carry in them the seeds of their destruction: and, though they grow and improve for a time, they will soon tend visibly to their dissolution. Every hour they live is an hour the less that they have to live.’3 In The Wealth of Nations Adam Smith conceived of economic growth – ‘opulence’ as he put it – ultimately giving way to the ‘stationary state’. Idealists and materialists agreed on this one thing. For Hegel and Marx alike, it was the dialectic that gave history its unmistakable beat. History was seasonal for Oswald Spengler, the German historian, who wrote in The Decline of the West (1918–22) that the nineteenth century had been ‘the winter of the West, the victory of materialism and scepticism, of socialism, parliamentarianism, and money’.

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The Enlightenment was always most effective when it was being ironical – in Gibbon’s breathtaking chapter on early Christianity (volume I, chapter 15 of his Decline and Fall of the Roman Empire) or in Candide, Voltaire’s devastating mockery of Leibniz’s claim that ‘all is for the best in the best of all possible worlds’.* Yet perhaps the greatest achievement of the era was Smith’s analysis of the interlocking institutions of civil society (The Theory of Moral Sentiments) and the market economy (The Wealth of Nations). Significantly, by comparison with much else that was written in the period, both works were firmly rooted in observation of the Scottish bourgeois world Smith inhabited all his life. But where Smith’s ‘Invisible Hand’ of the market manifestly had to be embedded in a web of customary practice and mutual trust, the more radical Francophone philosophes sought to challenge not just established religious institutions but also established political institutions.

Success and Luck: Good Fortune and the Myth of Meritocracy
by Robert H. Frank
Published 31 Mar 2016

Some critics complain, for example, that the explosive growth of CEO pay proves that executive labor markets are not really competitive—that CEOs appoint cronies to their boards who approve unjustifiably large pay packages. We’re also told that industrial behemoths conspire to drive out their rivals, thereby extorting higher prices from captive customers. To be sure, such abuses occur. But they’re no worse now than they’ve always been. As Adam Smith wrote in The Wealth of Nations, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”8 CEOs have always appointed people they know to their boards, so that’s not enough to explain recent trends.

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The technological changes described by long-tail proponents enable you to make an informed judgment about the extent of my bias. You can review some of The Nepotist’s music videos here: http://thenepotist.com/videos/. 7. Xavier Gabaix and Augustin Landier, “Why Has CEO Pay Increased So Much?” Quarterly Journal of Economics 123.1 (2008): 49–100. 8. Adam Smith, The Wealth of Nations, book 1, chap. 10. 9. The Conference Board, “Departing CEO Age and Tenure,” June 13, 2014, https://www.conference-board.org/retrievefile.cfm?filename=TCB-CW-019.pdf&type=subsite. 10. Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, 2013.

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Harvey Hornstein, Cruelty and Kindness, Englewood Cliffs, NJ: Prentice Hall, 1976. 5. See Robert H. Frank, Passions within Reason: The Strategic Role of the Emotions, New York: W. W. Norton, 1988, chap. 4. 6. Robert H. Frank, Thomas Gilovich, and Dennis Regan, “The Evolution of One-Shot Cooperation,” Ethology and Sociobiology 14 (July 1993): 247–56. 7. Adam Smith, The Wealth of Nations, part 4, section 3, Library of Economics and Liberty, http://www.econlib.org/library/Smith/smWN.html. 8. Adam Satariano, Peter Burrows, and Brad Stone, “Scott Forstall, the Sorcerer’s Apprentice at Apple,” Bloomberg Business, October 12, 2011, http://www.bloomberg.com/bw/magazine/scott-forstall-the-sorcerers-apprentice-at-apple-10122011.html. 9.

When Free Markets Fail: Saving the Market When It Can't Save Itself (Wiley Corporate F&A)
by Scott McCleskey
Published 10 Mar 2011

The very thought of imposing mere transparency—to say nothing of actual restrictions— on this market was greeted ferociously not only from the industry but by other government agencies as well.1 The lineage of the notion that regulation reduces the freedom of the market can be traced back through the history of economic thought at least to the Scottish Enlightenment and the birth of modern capitalism, though the connection is actually a bit tenuous. IN THE BEGINNING, THERE WAS ADAM Capitalism existed long before Adam Smith, just as gravity existed long before Isaac Newton. There were even attempts to describe what we now regard as markets and market behavior before The Wealth of Nations was published in 1776. But The Wealth of Nations gave the world an aha! moment when it described, in a mere thousand pages or so, the way that markets worked at that time. And so, we rightly attribute the birth of the theory of free markets to Adam Smith and The Wealth of Nations. Don’t try to read the book, unless you enjoy spending five hours with Smith’s unhealthy fascination with how nails are made.

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The bad news is that they overdid it and boiled it down to two words: invisible hand. For the ensuing 200-odd years, economic practitioners then reversed the process and expanded those two words into an economic dogma faithful to the original, they think. A lot of nuance was lost in the process. The Wealth of Nations was written at a time when government intervention in the markets didn’t mean pesky regulations here and paperwork there. This was the time of the British East India Company, an absolute governmentimposed monopoly with no legal competitors (unless you count the Dutch East India Company). Smith’s book was written as a repudiation of the prevailing mercantilist system, in which decisions were made by governments rather than by a dispassionate market.

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Of course, there are bad regulations as well, such as the one that said you had to buy all your tea from the government monopoly. The point, however, is that regulations are not inherently antithetical to free markets, and that good ones are as necessary to the operation of markets in the real world as traffic signs are necessary to free travel. Smith’s arguments in The Wealth of Nations center on three issues, only one of which is really related directly to markets: the division of labor, the pursuit of self-interest, and free trade. The markets he discusses, it should be remembered, were not specifically capital markets and certainly not capital markets as we understand them today.

More: The 10,000-Year Rise of the World Economy
by Philip Coggan
Published 6 Feb 2020

The person who can best claim credit for founding the discipline is Adam Smith. His modern reputation is of a narrow believer in the free market, but that is a distortion of his views. In The Theory of Moral Sentiments, he writes: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.” And in The Wealth of Nations, he wrote that “No society can surely be flourishing and happy of which the far greater part of its members are poor and miserable.” Adam Smith’s real target was the use of state policy to favour certain industries in the form of monopolies.

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New gadgets such as the seed drill may have helped escape this Malthusian trap, as it became known, but just as important were new crops, and new systems of field rotation that boosted output. Specialisation – dividing work into tasks, with individual workers focusing on each one – is often the key to productivity improvement. It was one of the main insights of Adam Smith’s famous book The Wealth of Nations. And its advantages had been noticed in ancient times. In the Cyropaedia, written by Xenophon in around 370BCE, it was noted that in Persia “there are places even where one man earns a living just by mending shoes, another just by sewing the uppers together, while there is another who performs none of these operations but assembles the parts.

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In the mid-18th century, around 70% of humans were still living in “agrarian empires” of one kind or another, whether in China, India, Japan, Russia, or under the Habsburg monarchy.1 The term “revolution” implies a sudden change but that is not what the numbers (such as we have) appear to suggest. British economic growth per capita did not rapidly accelerate in the years after 1760 and may even have slowed (the country had already made a significant switch from agriculture by this stage).2 Adam Smith, whose book The Wealth of Nations appeared in 1776, knew about the steam engine but did not seem to think it heralded a new era. Few steam engines were in use before 1800, as noted in the previous chapter. Nor was change confined to Britain. Other parts of Europe (and some parts of the US) were showing signs of industrialisation in the late 18th century, such as the setting up of textile factories, ironworks and the greater use of coal.

Good Profit: How Creating Value for Others Built One of the World's Most Successful Companies
by Charles de Ganahl Koch
Published 14 Sep 2015

Appendix B BUSINESSES KOCH HAS EXITED Activated carbon Air quality consulting Ammonia pipelines Animal feed Broadband trading Business aircraft Canadian pipelines Carbon dioxide Chromatography Coal mining Commercial lending Cooling towers Crude oil gathering Cryogenic systems Dredge manufacturing Drilling rigs European tissue Feedlots Fiberglass-reinforced products Financial instruments, various Gas liquids gathering Gas pipelines Gas processing Grain milling Grain trading Image transmission Meat processing Medical equipment Microelectronic chemicals Particle board Performance roads Pizza dough Platinum trading Polyester, commodity Propane retailing Service stations Slag cement Sulfur plant design Sulfuric acid Tankers Telecommunications Tennis court surfaces Trucking Venture capital Appendix C PRODUCTS KOCH TRADES Agriculture Cattle Cocoa Corn Cotton Hogs Soybeans Sugar Wheat Energy Electrical power Emission credits LNG Natural gas Fertilizer Anhydrous ammonia Enhanced efficiency products Phosphate Potash UAN Urea Financial Corporate bonds Equities Foreign exchange Interest rates Municipal bonds Real estate Forest Products Plywood Pulp and paper Recycled fiber Timber Wastepaper Woodchips Intermediate Feedstocks Ethanol Gas oil Naphtha Metals Aluminum Aluminum alloy Copper Gold Iron ore Lead Nickel Silver Steel Tin Zinc Minerals Cement Coal Exploration and production properties Petroleum coke Shipping Slag Sulfur Natural Gas Liquids Butane Ethane Natural gasoline Propane Oilfield Products Chemicals Guar Proppants Petrochemicals Benzene Cumene Ethylene Metaxylene Methanol Orthoxylene Paraxylene Propylene Pseudocumene Toluene Waste fiber and polymer Petroleum Condensate Crude oil Refined Products Diesel fuel Fuel oil Gasoline Jet fuel Resid Notes INTRODUCTION 1. F. A. Hayek, Law, Legislation and Liberty (Abingdon: Routledge, 1998), p. 136. 2. http://www.freetheworld.com​/2014/EFW2014-POST.pdf. 3. Adam Smith, The Theory of Moral Sentiments (1759), 1.1. 4. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 5th ed. (London: Methuen & Co., 1904), 4.2. Chapter 1: THE GLORIOUS FEELING OF ACCOMPLISHMENT 1. Letter from Fred Koch to his sons, January 22, 1936. 2. Letters from Charles de Ganahl to his son Carl, dated April 26, 1930, and published in The Life and Letters of Charles Francis de Ganahl (Richard R.

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Rittman. 6. http://www.freetheworld.com​/2014/EFW2014-POST.pdf. 7. Based on data available through the year 2012. Authored by James Gwartney, Robert Lawson, and Joshua Hall and published by the Fraser Institute (www.freetheworld.com). 8. Thomas Hobbes, Leviathan (Boston: Adamant Media Corp., 2005), p. 84. 9. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Indianapolis: Liberty Fund Inc., 1981), vol. 1, 2.2. 10. Alexis de Tocqueville, Democracy in America (New York: Harper and Row Publishers, 1969), p. 526. 11. Richard Epstein, “The Limits of Liberty,” Reason, March 2004, vol. 35, no. 10, pp. 40–50. 12. Vernon Smith, “Constructionist and Ecological Rationality in Economics,” Nobel Prize Lecture, Stockholm, Sweden, December 8, 2002. 13.

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Vernon Smith, “Constructionist and Ecological Rationality in Economics,” Nobel Prize Lecture, Stockholm, Sweden, December 8, 2002. 13. Franz Oppenheimer, The State (San Francisco: Fox and Wilkes, 1997), pp. 14–15. 14. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, p. 456. 15. F. A. Hayek, The Fatal Conceit (Chicago: University of Chicago Press, 1989), p. 77. 16. Thomas Sowell, Knowledge and Decisions (New York: Basic Books, 1980), p. 215. 17. Michael Polanyi, “The Republic of Science: Its Political and Economic Theory,” Minerva 1 (1962): 54–74. 18. Ludwig von Mises, Human Action (Chicago: Henry Regnery Co., 1963), p. 32. 19.

Licence to be Bad
by Jonathan Aldred
Published 5 Jun 2019

These economists and their supporters from outside economics (there are many) point to the founding father of economics, Adam Smith, who built his magnum opus The Wealth of Nations (1776) on the rock of humans as essentially selfish creatures. Modern economics has returned to this classical tradition, they conclude, after the aberration which began with Karl Marx and ended with the fall of the Berlin Wall, despite the best efforts of John Maynard Keynes to postpone the inevitable. Unfortunately, this version of history goes wrong from the beginning. Adam Smith’s ideas reflected the eighteenth-century intellectual society he lived in and don’t easily translate to our world.

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We simply do not know.5 Keynes wrote these words in 1937, in response to criticisms of his General Theory, a book that represented unquestionably the biggest development in economics in the twentieth century – effectively inventing modern macroeconomics – and probably the most important contribution to economics since Adam Smith’s The Wealth of Nations over 150 years earlier. Keynes’s emphasis on the importance of economic and political uncertainty was, unsurprisingly, hugely influential. But not influential enough: the Keynesian view of uncertainty is not our contemporary orthodoxy. Instead the Second World War and its immediate aftermath nurtured a renewed optimism about a science of society.

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Schettkat (eds.), The Growth of Service Industries (Cheltenham: Edward Elgar), 24. 20 Florio, M. (2006), The Great Divestiture (Cambridge: MIT Press). 21 Much of this section has been influenced by the superb analysis in Hay, C. (2007), Why We Hate Politics (Cambridge: Polity Press), chapters 3 and 5. 22 Lord Falconer, Secretary of State for Constitutional Affairs, quoted in Hay, 93. 5. FREE-RIDING, OR NOT DOING YOUR BIT 1 Quoted in Strain, C. (2016), The Long Sixties (New York: Wiley), 188. 2 Smith, A. (1776), The Wealth of Nations, book 1, chapter X, part II. 3 Weintraub, Stanley, ‘GBS and the Despots’, Times Literary Supplement, 22 August 2011. 4 For the development of economics, a crucial feature of the new understanding of ‘perfect competition’ was the assumption that the contribution of each producer to the market is effectively zero, not just negligible.

World Economy Since the Wars: A Personal View
by John Kenneth Galbraith
Published 14 May 1994

Voltaire had observed that "It is only because the English have become merchants and traders that London has surpassed Paris in extent and in the number of its citizens; that the English can place 200 warships on the sea and subsidize allies."2 These views were finally crystallized by Adam Smith in the year of American independence. The Wealth of Nations, however, continued to be viewed with discontent and alarm by the men of the older wisdom. In the funeral elegy for Alexander Hamilton in 1804, James Kent complimented his deceased friend on having resisted the "fuzzy philosophy" of Smith. For another generation or more, or in all western countries, there would be solemn warnings that the notion of a liberal society was a reckless idea.

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Enduring success was at odds with all history and could not be expected. This was the legacy of circumstances to ideas. As we shall see, it has enjoyed a remarkable vitality. II In the history of economic thought, Adam Smith (1723–1790), the first great figure in the central economic tradition,3 is counted a hopeful figure. In an important sense, he was. His vision was of an advancing national community, not a stagnant or declining one. His title, An Inquiry into the Nature and Causes of the Wealth of Nations, had an obvious overtone of opulence and well-being. He offered an all but certain formula for economic progress. This was the liberal economic society in which regulation was by competition and the market and not by the state, and in which each man, thrown on his own resources, labored effectively for the enrichment of the society.

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They yield not to the attack of other ideas but, as I may note once more, to the massive onslaught of circumstance with which they cannot contend. 3. Economics and the Tradition of Despair ECONOMICS, not entirely by accident, became a subject of serious study at an important turning point in the history of western man. This was when the wealth of national communities began, for the first time, to show a steady and persistent improvement. This change, which in advanced countries like England and Holland came some time in the eighteenth century, must be counted one of the momentous events in the history of the world. "From the earliest times of which we have record—back, say, to two thousand years before Christ—down to the beginning of the eighteenth century, there was no very great change in the standard of living of the average man living in the civilized centers of the earth.

The Great Transformation: The Political and Economic Origins of Our Time
by Karl Polanyi
Published 27 Mar 2001

The habit of looking at the past ten thousand years as well as at the array of early societies as a mere prelude to the true history of our civilization which started approximately with the publication of the Wealth of Nations in 1776, is, to say the least, out of date. It is this episode which has come to a close in our days, and in trying to gauge the alternatives of the future, we should subdue our natural proneness to follow the proclivities of our fathers. But the same bias which made Adam Smith’s generation view primeval man as bent on barter and truck induced their successors to disavow all interest in early man, as he was now known not to have indulged in those laudable passions.

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The former marked the close of an age which opened with the inventors of the state, Thomas More and Machiavelli, Luther and Calvin; the latter belonged to that nineteenth century in which Ricardo and Hegel discovered from opposite angles the existence of a society that was not subject to the laws of the state, but, on the contrary, subjected the state to its own laws. Adam Smith, it was true, treated material wealth as a separate field of study; to have done so with a great sense of realism made him the founder of a new science, economics. For all that, wealth was to him merely an aspect of the life of the community, to the purposes of which it remained subordinate; it was an appurtenance of the nations struggling for survival in history and could not be dissociated from them. In his view, one set of conditions which governed the wealth of nations derived from the improving, stationary, or declining state of the country as a whole; another set derived from the paramountcy of safety and security as well as the needs of the balance of power; still another was given by the policy of the government as it favored town or countryside, industry or agriculture; hence it was only within a given political framework that he deemed it possible to formulate the question of wealth, by which he for one meant the material welfare of “the great body of the people.”

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The naturalistic element in the foundations of orthodox economics was the outcome of conditions primarily created by Speenhamland. It follows that neither Ricardo nor Malthus understood the working of the capitalist system. Not until a century after the publication of the Wealth of Nations was it clearly realized that under a market system the factors of production shared in the product, and as produce increased, their absolute share was bound to rise.* Although Adam Smith had followed Locke’s false start on the labor origins of value, his sense of realism saved him from being consistent. Hence he had confused views on the elements of price, while justly insisting that no society can flourish, the members of which, in their great majority, are poor and miserable.

Termites of the State: Why Complexity Leads to Inequality
by Vito Tanzi
Published 28 Dec 2017

I shall continue to focus here on the activities of national governments. In addition to the essential, original, and most fundamental role of the state described earlier, namely the allocation of resources, a role that had been recognized and described by economists at least since the time when Adam Smith published The Wealth of Nations, two or, perhaps, more additional economic roles have been assigned to the state in the twentieth century by economists who write about market economies in democratic countries. These roles had not existed in the past, at least not in the modern versions. As already mentioned, these main new roles are: (a) the redistribution of income (and wealth) and (b) the stabilization of economic activity.

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It would require that enterprises and also individuals pay attention to the social consequences of their economic actions, and not just to the impact on their (short run) profits or gains. Unfortunately, for a variety of reasons, some already mentioned by Adam Smith as far back as 1759 in The Theory of Moral Sentiments, and, especially, in 1776 in The Wealth of Nations, and some connected with recent economic and policy developments, this social consciousness is often absent or not evident in the actions of enterprises and individuals. Some recent literature has even argued that altruism may create problems and that greed may be a desirable trait in those who operate in the free market.

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Skarbek, David, 2014, The Social Order of the Underworld: How Prison Gangs Govern the American Penal System (Oxford, UK and New York, NY: Oxford University Press). Skidelsky, Robert, 2000, John Maynard Keynes: Fighting for Britain, 1937–1946 (London: Macmillan). Slemrod, Joel and Jon Bakija, Taxing Ourselves: A Citizen’s Guide to the Debate over Taxes, Third Edition (Cambridge, MA and London, England: MIT Press). Smith, Adam, 1937, The Wealth of Nations (New York: The Modern Library). [1969] 1976. The Theory of Moral Sentiments (Indianapolis, IN: Liberty Classics). Smith, Vernon L., 2008, Rationality in Economics: Constructivist and Ecological Forms (Cambridge, UK and New York: Cambridge University Press). Solimano, Andres, 2016, Global Capitalism in Disarray: Inequality, Debt and Austerity (Oxford: Oxford University Press) Soll, Jacop, 2014, The Reckoning: Financial Accountability and the Making and Breaking of Nations (London: Allen Lane).

A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Carbon Emissions
by Muhammad Yunus
Published 25 Sep 2017

Eventually, we’ll wonder why it took so long for the world to recognize the obvious demand for an economic system that is truly dedicated to meeting human needs. 11 REDESIGNING THE WORLD OF TOMORROW THE CONCEPTUAL FRAMEWORK OF CAPITALISM was originally laid out by the great Scottish economist and philosopher Adam Smith, primarily in his 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations. This framework has been improved and elaborated throughout its long history, but the basic tenets have remained unchanged. Over time, many alternatives to capitalism have been offered and practiced. In the meantime, the world has changed enormously.

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And to bolster it we also have a natural fellow-feeling, which Smith calls sympathy. Between them, these natural senses of conscience and sympathy ensure that human beings can and do live together in orderly and beneficial social organizations. Smith’s other great book, The Wealth of Nations, departed completely from his thesis on moral sentiments. His thesis in The Wealth of Nations is generally summarized as an argument that all will be well if people are allowed to follow “self-interest.” Whatever Smith had in mind in using the word self-interest, the world has interpreted it as equivalent to profit maximization. In effect, self-interest is viewed as the same as selfishness.

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In effect, self-interest is viewed as the same as selfishness. As a result, the world beyond self has largely faded away from the business mind. In The Theory of Moral Sentiments, Smith elaborated on the great importance of justice and other moral virtues. But he never reconciled this with the concept of self-interest on which The Wealth of Nations is anchored. If he had used his two books to propose theoretical foundations for two different types of businesses, perhaps the world could have avoided the serious crisis we are facing today. The present structure of economic theory does not allow the selfless dimension of people to play out in a marketplace dedicated solely to self-interest-driven businesses.

Seventeen Contradictions and the End of Capitalism
by David Harvey
Published 3 Apr 2014

This amazingly influential story has held sway for more than two centuries, ever since Adam Smith articulated it so persuasively and brilliantly in The Wealth of Nations. It constitutes the founding myth of liberal economic theory. The liberal political economists mounted a crusade against state interventions in price-fixing markets and against monopoly power from the late eighteenth century onwards. Keynes did not depart too much from it. Even more surprisingly, it is accepted as gospel in Marx’s Capital, though in Marx’s case the reasoning runs that if Adam Smith’s utopian tale was correct, then things would not turn out to be for the benefit of all: the result would be to deepen the class divide of wealth and power and ensure that capital would become ever more crisis-prone as well as powerful.

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While the narrow technical basis and associated skills of the individual tasks did not change that much, the organisation of production through cooperation and the division of labour brought these different tasks together to reap remarkable gains in efficiency and productivity. The costs of commodities in the marketplace fell rapidly to outcompete the traditional craft and artisanal forms of production. This was the division of labour that was not only extensively analysed but also lauded to the heavens by Adam Smith in The Wealth of Nations, published in 1776. In the celebrated case of the pin factory, Smith emphasised how the organised division of labour within the production process led to immense improvements in technical efficiency and labour productivity. By taking advantage of workers’ differing skills and talents, the overall increase in productivity and profitability within what Marx later called ‘the detail division of labour’ within the firm was assured.

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283 Maddison, Angus 227 Maghreb 174 Malcolm X 291 Maldives 260 Malthus, Thomas 229–30, 232–3, 244, 246, 251 Manchester 149, 159 Manhattan Institute 143 Mansion House, London 201 manufacturing 104, 239 Mao Zedong 291 maquilas 129, 174 Marcuse, Herbert 204, 289 market cornering 53 market economy 198, 205, 276 marketisation 243 Marshall Plan 153 Martin, Randy 194 Marx, Karl 106, 118, 122, 142, 207, 211 and alienation 125, 126, 213 in the British Museum library 4 on capital 220 conception of wealth 214 on the credit system 239 and deskilling 119 on equal rights 64 and falling profits 107 and fetishism 4 on freedom 207, 208, 213 and greed 33 ‘industrial reserve army’ 79–80 and isolation of workers 125 labour theory of value 109 and monetary system reforms 36 monopoly power and competition 135 reality and appearance 4, 5 as a revolutionary humanist 221 and social reproduction 182 and socialist utopian literature 184 and technological innovation 103 and theorists of the political left 54 and the ‘totally developed individual’ 126–7 and world crises xiii; Capital 57, 79–80, 81, 82, 119, 129, 132, 269, 286, 291–2 The Economic and Philosophic Manuscripts of 1844 269, 286 Grundrisse 97, 212–13 Theories of Surplus Value 1 Marxism contradiction between productive forces and social relations 269 ‘death of Marxism’ xii; ecologically sensitive 263 and humanism 284, 286, 287 ‘profit squeeze’ theory of crisis formation 65 traditional Marxist conception of socialism/ communism 91 Marxists 65, 109 MasterCard Priceless 275 Mau Mau movement 291 Melbourne 141 merchants 67 and industrial capital 179 price-gouging customers 54 and producers 74–5 Mercosur 159 Mexican migrants 115, 175, 195–6 Mexico 123, 129, 174 Mexico City riots (1968) x microcredit 194, 198 microfinance 186, 194, 198, 211 Microsoft 131 Middle East 124, 230 Milanovic, Branko 170 military, the capacities and powers 4 dominance 110 and technology 93, 95 ‘military-industrial complex’ 157 mind-brain duality 70 mining 94, 113, 123, 148, 239, 257 MIT (Massachusetts Institute of Technology) 292 Mitchell, David: Cloud Atlas 264 Mitchell, Timothy 122 Modern Times (film) 103 Mondragon 180 monetarism xi monetary wealth and incomes, inequalities in (1920s) x 1071 monetisation 44, 55, 60, 61, 62, 115, 192–3, 198, 235, 243, 250, 253, 261, 262 money abandonment of metallic basis of global moneys 30, 37, 109 circulation of 15, 25, 30–31, 35 coinage 15, 27, 29, 30 commodification of 57 commodity moneys 27–31 creation of 30, 51, 173, 233, 238–9, 240 credit moneys 28, 30, 31, 152 cyber moneys 36, 109–10 electronic moneys 27, 29, 35, 36, 100 and exchange value 28, 35, 38 fiat 8, 27, 30, 40, 109, 233 gap between money and the value it represents 27 global monetary system 46–7 love of money as a possession 34 measures value 25, 28 a moneyless economy 36 oxidisation of 35 paper 15, 27, 29, 30, 31, 37, 40, 45 power of 25, 36, 59, 60, 62, 65–66, 131–6, 245, 266 quasi-money 35 relation between money and value 27, 35 represented as numbers 29–30 and social labour 25, 27, 31, 42, 55, 88, 243 and the state 45–6, 51, 173 storage of value 25, 26, 35 the US dollar 46–7 use value 28 money capital 28, 32, 59, 74, 142, 147, 158, 177, 178 money laundering 54, 109 ‘money of account’ 27–8, 30 monopolisation 53, 145 monopoly, monopolies 77 and competition 131–45, 218, 295 corporate 123 monetary system 45, 46, 48, 51 monopoly power 45, 46, 51, 93, 117, 120, 132, 133–4, 136, 137, 139, 141, 142–3 monopoly pricing 72, 132 natural 118, 132 of state over legitimate use of force and violence 42, 44, 45, 51, 88, 155, 173 see also prices, monopoly monopsony 131 Monsanto 123 Montreal Protocol 254, 259 ‘moral restraints’ 229, 233 mortgages 19, 21, 28, 32, 54, 67, 82, 239 multiculturalism 166 Mumbai 155, 159 Murdoch, Rupert xi Myrdal, Gunnar 150 N NAFTA 159 name branding 31, 139 nano-trading 243 Nation of Islam 291 national debt 45, 226, 227 National Health Service 115 National Labor Relations Board 120 National Security Administration 136 nationalisation 50 nationalism 7, 8, 44, 289 natural resources 58, 59, 123, 240, 241, 244, 246, 251 nature 56 alienation from 263 capital’s conception of 252 capital’s relation to 246–63 commodification of 59 domination of 247, 272 Heidegger on 59, 250 Polanyi on 58 power over 198 process-thing duality 73 and technology 92, 97, 99, 102 Nazis 151 neoclassical economists 109 neocolonialism 143, 201 neoliberal era 128 neoliberal ethic 277 neoliberalisation x, 48 neoliberalism xiii, 68, 72, 128, 134, 136, 176, 191, 234, 281 capitalism 266 consensus 23 counter-revolution 82, 129, 159, 165 political programme 199 politics 57 privatisation 235 remedies xi Nevada, housing in 77 ‘new economy’ (1990s) 144 New York City 141, 150 creativity 245 domestic labour in 196 income inequality 164 rental markets 22 social reproduction 195 Newton, Isaac 70 NGOs (non-governmental organisations) 189, 210, 284, 286, 287 Nike 31 Nkrumah, Kwame 291 ‘non-coincidence of interests’ 25 Nordic countries 165 North America deindustrialisation in 234 food grain exports 148 indigenous population and property rights 39 women in labour force 230 ‘not in my back yard’ politics 20 nuclear weapons 101 Nyere, Julius 291 O Obama, Barack 167 occupational safety and health 72 Occupy movement 280, 292 Ohlin Foundation 143 oil cartel 252 companies 77, 131 ‘Seven Sisters’ 131 embargo (1973) 124 ‘peak oil’ 251–2, 260 resources 123, 240, 257 oligarchy, oligarchs 34, 143, 165, 221, 223, 242, 245, 264, 286, 292 oligopoly 131, 136, 138 Olympic Games 237–8 oppositional movements 14, 162, 266–7 oppression 193, 266, 288, 297 Orwell, George 213 Nineteen Eighty-Four 202 overaccumulation 154 overheating 228 Owen, Robert 18, 184 Oxfam xi, 169–70 P Paine, Tom: Rights of Man 285 Paris 160 riots (1968) x patents 139, 245, 251 paternalism 165, 209 patriarchy 7 Paulson, Hank 47 pauperisation 104 Peabody, George 18 peasantry ix, 7, 107, 117, 174, 190, 193 revolts 202 pensions 134, 165, 230 rights 58, 67–8, 84, 134 people of colour: disposable populations 111 Pereire, Emile 239 pesticides 255, 258 pharmaceuticals 95, 121, 123, 136, 139 Philanthropic Colonialism 211 philanthropy 18, 128, 189, 190, 210–11, 245, 285 Philippines 115, 196 Picasso, Pablo 140–41, 187, 240 Pinochet, Augusto x Pittsburgh 150, 159, 258 planned obsolescence 74 plutocracy xi, xii, 91, 170, 173, 177, 180 Poland 152 Polanyi, Karl 56, 58, 60, 205–7, 210, 261 The Great Transformation 56–7 police 134 brutality 266 capacities and powers 43 powers xiii, 43, 52 repression 264, 280 surveillance and violence 264 violence 266, 280 police-state 203, 220 political economy xiv, 54, 58, 89, 97, 179–80, 182, 201, 206–9 liberal 204, 206, 209 political parties, incapable of mounting opposition to the power of capital xii political representation 183 pollutants 8, 246, 255 pollution 43, 57, 59, 60, 150, 250, 254, 255, 258 Pontecorvo, Gillo 288 Ponzi schemes 21, 53, 54, 243 population ageing 223, 230 disposable 108, 111, 231, 264 growth 107–8, 229, 230–31, 242, 246 Malthus’s principle 229–30 Portugal 161 post-structuralism xiii potlatch system 33 pounds sterling 46 poverty 229 anti-poverty organisations 286–7 and bourgeois reformism 167 and capital 176 chronic 286 eradication of 211 escape from 170 feminisation of 114 grants 107 and industrialisation 123 and population expansion 229 and unemployment 170, 176 US political movement denies assistance to the poor 292–3 and wealth 146, 168, 177, 218, 219, 243 world xi, 170 power accumulation of 33, 35 of capital xii, 36 class 55, 61, 88, 89, 97, 99, 110, 134, 135, 221, 279 computer 105 and currencies 46 economic 142, 143, 144 global 34, 170 the house as a sign of 15–16 of labour see under labour; of merchants 75 military 143 and money 25, 33, 36, 49, 59, 60, 62, 63, 65–6, 245, 266 monopoly see monopoly power; oligarchic 292 political 62, 143, 144, 162, 171, 219, 292 purchasing 105, 107 social 33, 35, 55, 62, 64, 294 state 42–5, 47–52, 72, 142, 155–9, 164, 209, 295 predation, predators 53, 54, 61, 67, 77, 84, 101, 109, 111, 133, 162, 198, 212, 254–5 price fixing 53, 118, 132 price gouging 132 Price, Richard 226, 227, 229 prices discount 133 equilibrium in 118 extortionate 84 food 244, 251 housing 21, 32, 77 land 77, 78, 150 low 132 market 31, 32 and marketplace anarchy 118 monopoly 31, 72, 139, 141 oil 251, 252 property 77, 78, 141, 150 supermarket 6 and value 31, 55–6 private equity firms 101, 162 private equity funds 22, 162 private property and the commons 41, 50, 57 and eradication of usufructuary rights 41 and individual appropriation 38 and monopoly power 134–5, 137 social bond between human rights and private property 39–40 and the state 47, 50, 58, 59, 146, 210 private property rights 38–42, 44, 58, 204, 252 and collective management 50 conferring the right to trade away that which is owned 39 decentralised 44 exclusionary permanent ownership rights 39 and externality effects 44 held in perpetuity 40 intellectual property rights 41 microenterprises endowed with 211 modification or abolition of the regime 14 and nature 250 over commodities and money 38 and state power 40–41, 42–3 underpinning home ownership 49 usufructuary rights 39 privatisation 23, 24, 48, 59, 60, 61, 84, 185, 235, 250, 253, 261, 262, 266 product lines 92, 107, 219, 236 production bourgeois 1 falling value of 107 immaterial 242 increase in volume and variety of 121 organised 2 and realisation 67, 79–85, 106, 107, 108, 173, 177, 179, 180, 221, 243 regional crises 151 workers’ dispossession of own means of 172 productivity 71, 91, 92, 93, 117, 118, 121, 125, 126, 132, 172, 173, 184, 185, 188, 220, 239 products, compared with commodities 25–6 profitability 92, 94, 98, 102, 103, 104, 106, 112, 116, 118, 125, 147, 184, 191–2, 240, 252, 253, 256, 257 profit(s) banking 54 as capital’s aim 92, 96, 232 and capital’s struggle against labour 64, 65 and competition 93 entrepreneurs 24, 104 falling 81, 107, 244 from commodity sales 71 and money capital 28 monopoly 93 rate of 79, 92 reinvestment in expansion 72 root of 63 spending of 15 and wage rates 172 proletarianisation 191 partial 175, 190, 191 ‘property bubble’ 21 property market boom (1920s) 239 growth of 50 property market crashes 1928 x, 21 1973 21 2008 21–2, 54, 241 property rights 39, 41, 93, 135 see also intellectual property rights; private property property values 78, 85, 234 ‘prosumers’ 237 Proudhon, Pierre-Joseph 183 Prozac 248 public goods 38 public utilities 23, 60, 118, 132 Q quantitative easing 30, 233 R R&D ix race 68, 116, 165, 166, 291 racial minorities 168 racialisation 7, 8, 62, 68 racism 8 Rand, Ayn 200 raw materials 16, 17, 148, 149, 154 Reagan, Ronald x, 72 Speech at Westminster 201 Reagan revolution 165–166 realisation, and production 67, 79–85, 106, 107, 108, 173, 177, 179, 180, 221, 243 reality contradiction between reality and appearance 4–6 social 27 Reclus, Elisée 140 regional development 151 regional volatility 154 Reich, Robert 123, 188 religion 7 religious affiliation 68 religious hatreds and discriminations 8 religious minorities 168 remittances 175 rent seeking 132–3, 142 rentiers 76, 77, 78, 89, 150, 179, 180, 241, 244, 251, 260, 261, 276 rents xii, 16–19, 22, 32, 54, 67, 77, 78, 84, 123, 179, 241 monopoly 93, 135, 141, 187, 251 repression 271, 280 autocratic 130 militarised 264 police-state 203 violent 269, 280, 297 wage 158, 274 Republican Party (US) 145, 280 Republicans (US) 167, 206 res nullius doctrine 40 research and development 94, 96, 187 ‘resource curse’ 123 resource scarcity 77 revolution, Fanon’s view of 288 revolutionary movements 202, 276 Ricardo, David 122, 244, 251 right, the ideological and political assault on the left xii; response to universal alienation 281 ‘rights of man’ 40, 59, 213 Rio de Janeiro 84 risk 17, 141, 162, 219, 240 robbery 53, 57, 60, 63, 72 robotisation 103, 119, 188, 295 Rodney, Walter 291 romantic movement 261 Roosevelt, Theodore 131, 135 Four Freedoms 201 Rousseau, Jean-Jacques 213, 214 Ruhr, Germany 150 rural landscapes 160–61 Russia 154 a BRIC country 170, 228 collapse of (1989) 165 financial crisis (1998) 154, 232 indebtedness 152 local famine 124 oligarchs take natural resource wealth 165 S ‘S’ curve 225, 230–31 Saint-Simon, Claude de Rouvroy, comte de 183 sales 28, 31, 187, 236 San Francisco 150 Santiago, Chile: street battles (2006–) 185 Sao Paulo, Brazil 129, 195 savings the house as a form of saving 19, 22, 58 loss of 20, 58 private 36 protecting the value of 20 Savings and Loan Crisis (USA from 1986) 18 savings accounts 5, 6 Scandinavia 18, 85, 165 scarcity 37, 77, 200, 208, 240, 246, 260, 273 Schumpeter, Joseph 98, 276 science, and technology 95 Seattle 196 Second Empire Paris 197 Second World War x, 161, 234 Securities and Exchange Commission 120, 195 security xiii, 16, 121, 122, 165, 205, 206 economic 36, 153 food 253, 294, 296 job 273 national 157 Sen, Amartya 208–11, 281 Development as Freedom 208–9 senior citizens 168 Seoul 84 serfdom 62, 209 sexual hatreds and discriminations 8 Shanghai 153, 160 share-cropping 62 Sheffield 148, 149, 159, 258 Shenzhen, China 77 Silicon Valley 16, 143, 144, 150 silver 27–31, 33, 37, 57, 233, 238 Simon, Julian 246 Singapore 48, 123, 150, 184, 187, 203 slavery 62, 202, 206, 209, 213, 268 slums ix, 16, 175 Smith, Adam 98, 125–6, 157, 185, 201, 204 ‘invisible hand’ 141–2 The Wealth of Nations 118, 132 Smith, Neil 248 social distinction 68, 166 social inequality 34, 110, 111, 130, 171, 177, 180, 220, 223, 266 social justice 200, 266, 268, 276 social labour 53, 73, 295 alienated 64, 66, 88 and common wealth 53 creation of use values through 36 expansion of total output 232 household and communal work 296 immateriality of 37, 233 and money 25, 27, 31, 42, 55, 88, 243 productivity 239 and profit 104 and value 26, 27, 29, 104, 106, 107, 109 weakening regulatory role of 109, 110 social media 99, 136, 236–7, 278–9 social movements 162–3 social reproduction 80, 127, 182–98, 218, 219, 220, 276 social security 36, 165 social services 68 social struggles 156, 159, 165, 168 social value 26, 27, 32, 33, 55, 172, 179, 241, 244, 268, 270 socialism 215 democratic xii; ‘gas and water’ 183 socialism/communism 91, 269 socialist revolution 67 socialist totalitarianism 205 society capitalist 15, 34, 81, 243, 259 civil 92, 122, 156, 185, 189, 252 civilised 161, 167 complex 26 demolition of 56 and freedom 205–6, 210, 212 hope for a better society 218 industrial 205 information 238 market 204 post-colonial 203 pre-capitalist 55 primitive 57 radical transformation of 290 status position in 186 theocratic 62 women in 113 work-based 273 world 204 soil erosion 257 South Africa 84–5, 152, 169 apartheid 169, 202, 203 South Asia labour 108 population growth 230 software programmers and developers 115, 116 South Korea 123, 148, 150, 153 South-East Asia 107–8 crisis (1997–8) 154, 232, 241 sovereign debt crises 37 Soviet Bloc, ex-, labour in 107 Soviet Union 196, 202 see also Russia Spain xi, 51, 161 housing market crash (2007–9) 82–3 spatio-temporal fixes 151–2, 153, 154, 162 spectacle 237–8, 242, 278 speculative bubbles and busts 178 stagnation xii, 136, 161–2, 169 Stalin, Joseph 70 standard of life 23, 175 starvation 56, 124, 246, 249, 260, 265 state, the aim of 156–7 brutality 266, 280 and capital accumulation 48 and civil society 156 curbing the powers of capital as private property 47 evolution of the capitalist state 42 and externality effects 44 guardian of private property and of individual rights 42 and home ownership 49–50 interstate system 156, 157 interventionism 193, 205 legitimate use of violence 42, 44, 45, 51, 88, 155, 173 loss of state sovereignty xii; and money 1, 45–6, 51, 173 ‘nightwatchman’ role 42, 50 powers of 42–5, 47–52, 57–8, 65, 72, 142, 155–9, 209, 295 and private property 47, 50, 58, 59, 146, 210 provision of collective and public goods 42–3 a security and surveillance state xiii; social democratic states 85 war aims 44 state benefits 165 state regulatory agencies 101 state-finance nexus 44–5, 46–7, 142–3, 156, 233 state-private property nexus 88–9 steam engine, invention of the 3 steel industry 120, 121, 148, 188 steel production 73–4 Stiglitz, Joseph 132–4 stock market crash (1929) x Stockholm, protests in (2013) 171, 243 strikes 65, 103, 124 sub-prime mortgage crisis 50 suburbanisation 253 supply and demand 31, 33, 56, 106 supply chain 124 supply-side remedies xi supply-side theories 82, 176 surplus value 28, 40, 63, 73, 79–83, 172, 239 surveillance xiii, 94, 121, 122, 201, 220, 264, 280, 292 Sweden 166, 167 protests in (2013) 129, 293 Sweezy, Paul 136 swindlers, swindling 45, 53, 57, 239 ‘symbolic analysts’ 188 Syntagma Square, Athens 266, 280 T Tahrir Square, Cairo 266 Taipei, Taiwan 153 Taiwan 123, 150, 153 Taksim Square, Istanbul 266, 280 Tanzania 291 tariffs 137 taxation 40, 43, 47, 67, 84, 93–4, 106, 133, 150, 155, 157, 167, 168, 172, 190 Taylor, Frederick 119, 126 Taylorism 103 Tea Party faction 205, 280, 281, 292 technological evolution 95–6, 97, 101–2, 109 technological imperatives 98–101 technological innovation 94–5 technology changes involving different branches of state apparatus 93–4 communicative technologies 278–9 and competition 92–3 constraints inhibiting deployment 101 culture of 227, 271 definition 92, 248 and devaluation of commodities 234 environmental 248 generic technologies 94 hardware 92, 101 humanising 271 information 100, 147, 158, 177 military 93, 95 monetary 109 and nature 92, 97, 99, 102 organisational forms 92, 99, 101 and productivity 71 relation to nature 92 research and development 94 and science 95 software 92, 99, 101 a specialist field of business 94 and unemployment 80, 103 work and labour control 102–11 telephone companies 54, 67, 84, 278 Tennessee 148 Teresa, Mother 284 Thatcher, Margaret (later Baroness) x, 72, 214, 259 Thatcherism 165 theft 53, 60, 61, 63 Thelluson, Peter 226, 227 think tanks 143 ‘Third Italy’ 143 Third World debt crisis 240 Toffler, Alvin 237 tolls 137 Tönnies, Ferdinand 122, 125 tourism ix, 16, 140, 141, 187, 236 medical 139 toxic waste disposal 249–50, 257 trade networks 24 trade unions xii, 116, 148, 168, 176, 184, 274, 280 trade wars 154 transportation 23, 99, 132, 147–8, 150, 296 Treasury Departments 46, 156 TRIPS agreement 242 tropical rainforest 253 ‘trust-busting’ 131 trusts 135 Turin, Italy 150 Turkey 107, 123, 174, 232, 280, 293 Tuscany, Italy 150 Tutu, Archbishop Desmond 284 Twitter 236 U unemployment 37, 104, 258, 273 benefits 176 deliberately created 65, 174 high xii, 10, 176 insurance 175 and labour reserves 175, 231 and labour-saving technologies 173 long-term 108, 129 permanent 111 echnologically induced 80, 103, 173, 274 uneven geographical developments 178, 296 advanced and underserved regional economies 149–50 and anti-capitalist movements 162 asset bubbles 243 and capital’s reinvention of itself 147, 161 macroeconomic processes of 159 masking the true nature of capital 159–60 and technological forms 219 volatility in 244 United Fruit 136 United Kingdom income inequality in 169; see also Britain United Nations (UN) 285 United States aim of Tea Party faction 280 banking 158 Bill of Rights 284 Britain lends to (nineteenth century) 153 capital in (1990s) 154 Constitution 284 consumption level 194 global reserve currency 45–6 growth 232 hostility towards state interventions 167 House of Representatives 206 human rights abuses 202 imperial power 46 indebtedness of students in 194 Indian reservations 249 interstate highway system 239 jobless recoveries after recession 172–3 liberty and freedom rhetoric 200–201, 202 Midwest ‘rust belt’ 151 military expenditures 46 property market crashes x, 21–2, 50, 54, 58, 82–3 racial issues 166 Savings and Loan Crisis (from 1986) 18 social mobility 196 social reproduction 196–7 solidly capitalist 166 steel industry 120 ‘symbolic analysts’ 188 ‘trust-busting’ 131 unemployment 108 wealth distribution 167 welfare system 176 universal suffrage 183 urbanisation 151, 189, 228, 232, 239, 247, 254, 255, 261 Ure, Andrew 119 US Congress 47 US dollar 15, 30, 45–6 US Executive Branch 47 US Federal Reserve xi, 6, 30, 37, 46, 47, 49, 132, 143, 233 monetary policy 170–71 US Housing Act (1949) 18 US Treasury 47, 142, 240 use values collectively managed pool of 36 commodification of 243 commodities 15, 26, 35 common wealth 53 creation through social labour 36 and entrepreneurs 23–4 and exchange values 15, 35, 42, 44, 50, 60, 65, 88 and housing 14–19, 21–2, 23, 67 and human labour 26 infinitely varied 15 of infrastructural provision 78 loss of 58 marketisation of 243 monetisation of 243 of money 28 privatised and commodified 23 provision of 111 and revolt of the mass of the people 60 social demand for 81 usufructuary rights 39, 41, 59 usury 49, 53, 186, 194 utopianism 18, 35, 42, 51, 66, 119, 132, 183, 184, 204, 206–10, 269, 281, 282 V value(s) commodity 24, 25 failure to produce 40 housing 19, 20, 22 net 19 production and realisation of 82 production of 239 property 21 relation between money and value 27, 35 savings 20 storing 25, 26, 35 see also asset values; exchange values; social value; use values value added 79, 83 Veblen, Thorstein: Theory of the Leisure Class 274 Venezuela 123, 201 Vietnam, labour in 108 Vietnam War 290 violence 53, 57, 72, 204–5, 286 against children 193 against social movements 266 against women 193 colonial 289–90, 291 and contemporary capitalism 8 culture of 271 of dispossession 58, 59 in a dystopian world 264 and humanism 286, 289, 291 of the liberation struggle 290 militarised 292 as the only option 290–91 political 280 in pursuit of liberty and freedom 201 racialised 291 state’s legitimate use of 42, 44, 45, 51, 88, 155, 173 of technology 271 and wage labour 207 virtual ecological transfer 256 Volcker, Paul 37 W wages 103 basic social wage 103 falling 80, 82 for housework 115, 192–3 low xii, 114, 116, 186, 188 lower bound to wage levels 175 non-payment of 72 and profits 172 reduction in 81, 103, 104, 135, 168, 172, 176, 178 rising 178 and unskilled labour 114 wage demands 150, 274 wage levels pushed up by labour 65 wage rates 103, 116, 172, 173 wage repression 158–9 weekly 71 see also income Wall Street criticised by a congressional committee 239–40 illegalities practised by 72, 77 and Lebed 195 new information-processing technologies 100 Wall Street Crash (1929) x, 47 Wall-E (film) 271 Walmart xii, 75, 84, 103, 131 war on terror 280 wars 8, 60, 229 currency 154 defined 44 monetisation of state war-making activities 44–5 privatisation of war making 235 resource 154, 260 and state aims 44 state financing of 32, 44, 48 and technology 93 trade 154 world 154 water privatisation 235 wave theory 70 wave-particle duality 70 wealth accumulation of 33, 34, 35, 157, 205 creation of 132–3, 142, 214 disparities of 164–81 distribution of 34, 167 extraction from non-productive activities 32 global 34 the house as a sign of 15–16 levelling up of per capita wealth 171 and poverty 146, 168, 177, 218, 219, 243 redistribution of 9, 234, 235 social 35, 53, 66, 157, 164, 210, 251, 265, 266, 268 taking it from others 132–3 see also common wealth weather futures 60 Weber, Max 122, 125 Weimar Republic 30 welfare state 165, 190, 191, 208 Wells Fargo 61 West Germany 153, 154, 161 Whitehead, Alfred North 97 Wilson, Woodrow 201 Wolf, Martin 304n2 Wollstonecraft, Mary: A Vindication of the Rights of Woman 285 women career versus family obligations 1–2 disposable populations 111 exploitation of 193 housework versus wage labour 114–15 oppression against 193 social struggle 168 trading of 62 violence against 193 in the workforce 108, 114, 115, 127, 174, 230 women’s rights 202, 218 workers’ rights 202 working classes and capital 80 consumer power 81 crushing organisation 81 education 183, 184 gentrified working-class neighbourhoods ix; housing 160 living conditions 292 wage repression and consumption 158–9 working hours 72, 104–5, 182, 272–5, 279 World Bank 16, 24, 100, 186, 245 World Trade Organization 138, 242 WPA programmes (1930s) 151 Wright, Frank Lloyd: Falling Water 16 Wriston, Walter 240 Y YouTube 236 Yugoslavia, former 174 Z Zola, Émile 7

The Age of the Infovore: Succeeding in the Information Economy
by Tyler Cowen
Published 25 May 2010

So you can think of this book as a rebellion against traditional economics or as a micro-foundation for a better economics or as neuroeconomics; alternatively, I view it as a return home to the original foundations of economics. It may come as a surprise that the origin of the study of economics was substantially psychology, perception, and mental ordering. As I’ve already discussed, Adam Smith, the father of modern economics, wrote not just The Wealth of Nations but also a book on human psychology, namely The Theory of Moral Sentiments. Smith’s life’s work was to mix economic reasoning with Stoic moral philosophy (Seneca, Epictetus, and Marcus Aurelius, plus their French Renaissance successor Montaigne) and applied psychology, most of which he generated from his own reasoning.

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Marines, 107 value in culture, 9 and framing effects, 79–81, 84–85 and interiority, 63 of stories, 129, 146 Veley, Charles, 104–5 verbal communication, 20, 35 violence in art, 175 Virtual Human Interaction Lab, 86 Wal-Mart, 4, 59 war, 196–97 Warhol, Andy, 166, 191 Watson, John H. (fictional character), 155, 156, 157–59 “weak central coherence” of autistics, 20 “weak executive function” of autistics, 20 The Wealth of Nations (Smith), 124, 167, 215 web access to content, 47, 49–50, 62–63 and attention spans, 53–55 and autistics, 57, 132, 212, 213, 218 and cognitive performance, 52 currency of, 45–47 and education, 112, 113–14 groups and affiliations on, 87–89 and mental ordering, 4–9, 10–12, 13 and political connections, 87–88 popular websites, 46–47 rewiring effect of, 10 size of content, 48 See also specific sites such as Facebook Webern, Anton, 182 Wikipedia, 11, 47, 98–99 “Williams syndrome,” 179 Windows Live, 47 wine experiments, 79–80 Wittgenstein, Ludwig, 166 workplace, 69 written communication, 213.

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Ostwald, Glenn Gould: The Ecstasy and Tragedy of Genius (New York: W. W. Norton and Co., 1997). On Adam Smith’s view of The Theory of Moral Sentiments, see Ian Simpson Ross, The Life of Adam Smith (Oxford: Clarendon Press, 1995), 177. For various pieces of biographical information on Smith, see adamsmithslostlegacy.com/2008/03/adam-smith-and-tourettes-syndrome.html. On Stewart, see William Robert Scott, Adam Smith as Student and Professor (New York: Augustus M. Kelley, 1965), 77. The John Rae quotation is from John Rae, Life of Adam Smith, chapter 17, online at www.econlib.org/library/YPDBooks/Rae/raeLS17.html#Chapter%2017.

Radical Uncertainty: Decision-Making for an Unknowable Future
by Mervyn King and John Kay
Published 5 Mar 2020

From its very beginnings, useful economic theory has generally been of this kind. Adam Smith began The Wealth of Nations by illustrating the concept of the division of labour through a stylised description of a pin factory. There is no evidence that he was describing a real pin factory. In the early nineteenth century, David Ricardo proposed a model of international trade based on comparative advantage which continues to be among the central insights of economics. Two hundred and fifty years before Donald Trump’s presidency, Adam Smith had refuted the mercantilist view of foreign trade as a zero sum game in which one country gained at the expense of a weaker or foolish partner – trade could benefit both parties. 3 Ricardo developed Smith’s argument to show that a country that was more efficient than another country in producing everything could still benefit from trade with the less efficient country, and vice versa. 4 In the style of his times, he illustrated his thesis with a story based on a numerical example.

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‘Eusociality’ describes behaviour in which animals practise a communal division of reproductive and nurturing labour, with multiple generations living together and working to rear the collective young. Eusociality leads to the division of labour, whose critical importance to economic development Adam Smith recognised in the very first pages of The Wealth of Nations . Eusocial species are highly productive, able to undertake complex tasks, and build elaborate artefacts. Eusociality has emerged down two distinct evolutionary pathways. Manifestations of eusociality are found among humans, and to a much smaller extent in some other mammals, and is the product of communication.

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More than one-third of the economists either refused to answer the question regarding what is fair, or gave very complex, uncodable responses. It seems that the meaning of “fairness” in this context was somewhat alien for this group.’ 8 Reciprocity and exchange The evening led the authors to realise that anthropologists and economists are not really so far apart. Adam Smith began The Wealth of Nations with the observation that ‘the propensity to truck, barter and exchange is common to all men’. 9 The classic anthropological study of reciprocity in human relationships is Marcel Mauss’s 1925 essay The Gift . Mauss asked, ‘What power resides in the object that causes its recipient to pay it back?’

Nuclear War and Environmental Catastrophe
by Noam Chomsky and Laray Polk
Published 29 Apr 2013

If we continue on the path of financialization of the economy and offshoring of production, there’s not going to be very much here for the working population. It’s kind of interesting if you look back at the classical economists, Adam Smith and David Ricardo. They were sort of aware of this—they didn’t put it in precisely these terms—but if you take a look at Adam Smith’s The Wealth of Nations, the famous phrase “invisible hand” appears once. It appears essentially in a critique of what’s going on right now. What he pretty much says is that, in England, if merchants and manufacturers preferred to import from abroad and sell abroad, they might make profit, but it would be bad for England.

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This great mortality, however, will every where be found chiefly among the children of the common people, who cannot afford to tend them with the same care as those of better station.” Smith proposed better wages for workers, enabling families to better provide for their children, consequently providing a healthier, more productive workforce. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; repr., London: Methuen, 1904), Library of Economics and Liberty (EconLib.org), s.v. “Adam Smith, Wealth of Nations,” s.v. “I.8 Of the Wages of Labour.” 7. Extraordinary Lives Laray Polk: In your office, among all the reference materials, you have a rather large black-and-white photograph of Bertrand Russell.

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It’s rarely recognized that Magna Carta not only laid the basis for what became over centuries formal protection for civil and human rights, but also stressed the preservation of the commons from autocratic destruction and privatization—the Charter of the Forests, one of the two components of Magna Carta.101 In contrast, the US is a business-run society, to an extent beyond any other in the developed world. Enormous power lies in the hands of a highly class-conscious business elite, who, in Adam Smith’s words, are the “principal architects” of policy and make sure that their own interests are “most peculiarly attended to” no matter how “grievous” the effects on others, including the people of their own society and their colonies (Smith’s concern) and future generations (which must be our concern).

The Relentless Revolution: A History of Capitalism
by Joyce Appleby
Published 22 Dec 2009

By the mid-eighteenth century Samuel Johnson could casually comment that “there are few ways in which a man can be more innocently employed than in getting money.”3 A decisive cultural shift had clicked into place. At the end of the eighteenth century, the intellectual effort to understand the phenomenon of capitalism found its Aristotle in Adam Smith, whose An Inquiry into the Nature and Causes of the Wealth of Nations appeared in 1776. Smith presented a brilliantly detailed explanation of the causes of the unparalleled wealth in Great Britain. (After the Scottish and English crowns were joined in 1706, England was called Great Britain or the United Kingdom.) Building on the new conception of human beings as responsibly pursuing their own interest, he advocated a system of “natural liberty” because he thought that the “invisible hand” of the market would function better if left free of most regulation.

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The idea of men and women as consuming animals with boundless appetites capable of driving the economy to new levels of prosperity excited the imagination of dozens of writers, but they were entrepreneurs, not moralists. The proposition that the wealth of nations began with stimulating wants rather than with organizing production robbed intrusive social legislation of a supporting rationale. Once advocacy of freeing trade became attached to a new explanation of economic growth, the earlier commercial wisdom of carefully managing trade to ensure high prices came under challenge, a century before Adam Smith’s explanation of why freedom was better than control in matters economic. Popular responses to fashion revealed that some demand was elastic.

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The British cut back on imports of linen from German and Holland and of wine from France. Port became the favorite drink because of the exceptionally good diplomatic relations between Britain and Portugal. Of course other countries retaliated with their own protective legislation. These were the policies that Adam Smith decried in the Wealth of Nations. Calculating the cost of maintaining British colonies, he argued that the country’s best trading partners were its closest neighbors. A lot of economic developments enhanced the possibility for an Industrial Revolution, though none of them can be seen as a cause per se. Conditions make things possible for causes to work, but they cannot cause anything.

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century
by Ryan Avent
Published 20 Sep 2016

POLITICAL EFFECTS OF SCARCITY As the previous section ought to make clear, there is an inevitable political subtext, or even text, to discussions of the economic effects of labour scarcity. Battles over the gains from production are unavoidably political, as is the effort expended by owners of land and capital or by workers to secure the political rights that support scarcity.15 In The Wealth of Nations, Adam Smith mused: We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate … We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of … Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour … The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen.16 If Smith took it for granted that power naturally rests with the master, that might be because he lived during an era of explosive population growth – of labour abundance – in which workers could exercise very little bargaining power within labour markets.

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And the status quo, when it changes, will be pushed in the direction of increased social distance: the use of law and custom to try to push open gaps between societies where technology is closing them, sought because existing social structures are failing to transform new economic possibilities into broad-based income growth. THE WEALTH OF HUMANS In his Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith mused on the way in which market economies translate human impulses into social wealth: [M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them.

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Abbreviations BEA US Bureau of Economic Analysis BLS US Bureau of Labor Statistics EIA US Energy Information Administration IMF International Monetary Fund NBER National Bureau of Economic Research OECD Organization for Economic Co-operation and Development EPIGRAPH   1.  Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776).   2.  Keynes, John Maynard, ‘Economic Possibilities for our Grandchildren’, Essays in Persuasion (London: Macmillan, 1931). INTRODUCTION   1. ‘The Onrushing Wave’, The Economist, 18 January 2014.   2. ‘Is 4.4 jolt an end to Los Angeles’ “earthquake drought”?’

How to Read a Book
by Mortimer J. Adler and Charles van Doren
Published 14 Jun 1972

Only then would they have been ready to study the play carefully and closely because then they would have understood enough of it to learn more. The rule applies with equal force to expository works. Here, indeed, the best proof of the soundness of the rule—give a book a first superficial reading—is what happens when you do not follow it. Take a basic work in economics, for example, such as Adam Smith’s classic The Wealth of Nations. (We choose this book as an example because it is more than a textbook or a work for specialists in the field. It is a book for the general reader.) If you insist on understanding everything on every page before you go on to the next, you will not get very far. In your effort to master the fine points, you will miss the big points that Smith makes so clearly about the factors of wages, rents, profits, and interest that enter into the cost of things, the role of the market in determining prices, the evils of monopoly, the reasons for free trade.

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You will not know the sense in which Euclid’s Elements of Geometry and William James’ Principles of Psychology are books of the same sort if you do not know that psychology and geometry are both sciences—and, incidentally, if you do not know that “elements” and “principles” mean much the same thing in these two titles (though not in general), nor will you further be able to distinguish them as different unless you know there are different kinds of science. Similarly, in the case of Aristotle’s Politics and Adam Smith’s The Wealth of Nations, you can tell how these books are alike and different only if you know what a practical problem is, and what different kinds of practical problems there are. Titles sometimes make the grouping of books easy. Anyone would know that Euclid’s Elements, Descartes’ Geometry, and Hilbert’s Foundations of Geometry are three mathematical books, more or less closely related in subject matter.

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The unity of Aristotle’s Ethics can be stated thus: This is an inquiry into the nature of human happiness and an analysis of the conditions under which happiness may be gained or lost, with an indication of what men must do in their conduct and thinking in order to become happy or to avoid unhappiness, the principal emphasis being placed on the cultivation of the virtues, both moral and intellectual, although other goods are also recognized as necessary for happiness, such as wealth, health, friends, and a just society in which to live. Another practical book is Adam Smith’s The Wealth of Nations. Here the reader is aided by the author’s own statement of “the plan of the work” at the very beginning. But that takes several pages. The unity can be more briefly stated as follows: This is an inquiry into the source of national wealth in any economy that is built on a division of labor, considering the relation of the wages paid labor, the profits returned to capital, and the rent owed the landowner, as the prime factors in the price of commodities.

How to Speak Money: What the Money People Say--And What It Really Means
by John Lanchester
Published 5 Oct 2014

.† All those fundamental needs supplied, all those goods bought and sold, all those provisions transported at the expense of cash and effort and ingenuity, all those transactions made, and all of it constituting a mechanism that functions so effectively that the good citizens of Paris don’t even notice how dependent they are on it—and the whole mechanism created just by allowing people to trade freely with each other. Economists have a shorthand reference to this epiphanic insight into the power of markets: they call it “Who feeds Paris?” For most people with an interest in economics, there’s a revelatory moment resembling Bastiat’s. The bravura opening of Adam Smith’s The Wealth of Nations, the founding text of economics, has a description of a pin-making factory that is very like Bastiat’s moment of awakening in Paris. The eureka moment isn’t always to do with the power of markets, though that’s a pretty good starting point, since the balance of wants and needs manifested in a functioning market is an extraordinary thing: the contents of Aladdin’s cave, all on sale at an ordinary store near you, and brought there by nothing more than market forces.

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The internet offers many superb resources on economics, as well as lively debates that respond to news and data in real time. There is no better place to begin than Twitter: I would start by following Tim Harford, Tyler Cowen, Aditya Chakrabortty, and Paul Kedrosky. Finally, I would urge anyone who’s interested in the subject but hasn’t read The Wealth of Nations to give Adam Smith’s masterwork a go. Smith was a great writer as well as a great thinker, and his book is still fresh and still readable, as well as being a serious candidate for the most influential work of the humanities ever written. Notes 1Grayson Perry and Brian Eno, “How the Internet Has Taught Us We Are All Perverts,” New Statesman, 7 November 2013. 2Daniel, quoted in Michael Lewis, The Big Short: Inside the Doomsday Machine (New York: Norton, 2010), p. 206. 3You can read the original Fortune article at www.awjones.com/images/Fortune_-_The_Jones_Nobody_Keeps_Up_With.pdf. 4See http://www.awjones.com/historyofthefirm.html. 5Frédéric Bastiat, Economic Sophisms, trans.

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Smith, Adam (1723–1790) The founder of modern economics as a field of thought, and author of one of the most important books ever written, The Wealth of Nations (or to give it its full title, An Inquiry into the Nature and Causes of the Wealth of Nations). Everybody should read Smith, because he is such a good writer, still freshly readable to this day, and also because this fundamental text in economics is based on common sense; this in turn gives readers the permission to use their own common sense in thinking about economic questions. It’s also worth reading The Wealth of Nations to see that Smith is much less doctrinally simple-minded than some of the people who claim him for a narrow modern version of neoliberal capitalist economics.

Animal Spirits: The American Pursuit of Vitality From Camp Meeting to Wall Street
by Jackson Lears

“falls short of that complete self-denial”: Smith, Theory, 277. “whatever other passions”: Hume, cited in Rasmussen, Infidel, 90–91. “we feel emotions”: Smith, cited in ibid., 92. “impertinent jealousy”: Adam Smith, The Wealth of Nations (2000), 646. “mean rapacity”: Ibid., 647. “interested sophistry”: Ibid. “Invention is kept alive”: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Modern Library ed., 1994), 840. “By preferring the support”: Smith, Wealth of Nations, 593–94. “The rich … divide with the poor”: Smith, Theory, 164. “the uniform, constant, and uninterrupted effort”: Smith, Wealth of Nations, 373.

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Though he celebrated the emerging nation of shopkeepers, Smith remained keenly aware of the emotional stress of commercial life, which he thought was exacerbated by the “impertinent jealousy,” “mean rapacity,” and “interested sophistry” of merchants. Discerning the degrading effects of the division of labor, Smith even questioned the conventional history of humanity as an ascent from barbarism to civilization. Intelligent barbarians, he observed in The Wealth of Nations, had to perform varied occupations. “Invention is kept alive, and the mind is not suffered to fall into that drowsy stupidity, which, in a civilized society, seems to benumb the understanding of all the inferior ranks of people,” Smith wrote. “The man whose whole life is spent 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 becomes as stupid and ignorant as it is possible for a human creature to become.”

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While Smith celebrated ambition, enterprise, spirit, and keenness rather than mere regularity in the performance of duty, he always elevated tranquility and contentment over vanity and striving; his Presbyterian temperament recoiled from anything that resembled the pursuit of fashion or social status. Though explicitly religious references faded from The Wealth of Nations, in Theory of Moral Sentiments Smith linked the cultivation of tranquility to our awareness of a higher law and our expectation of “a world to come.” Tranquility arose from obedience to God’s law, but obeying God’s law was not mere conformity to rule; the practice of decency to others had psychological as well as theological justifications.

Unfinished Empire: The Global Expansion of Britain
by John Darwin
Published 12 Feb 2013

Most Australians, New Zealanders and English-speaking Canadians and South Africans took the same view. But the empire they imagined was an empire of partners and equals, not of dependents and subjects. For many Victorians, however, it was the third kind of empire that served Britain best and returned the largest moral dividend. Its outline was sketched in Adam Smith’s hymn to free trade, The Wealth of Nations (1776). In the ‘empire of free trade’ (not a term Smith used), rule was, or should be, redundant. Free commercial relations would allow the free passage of ideas. It was easy to think that complementary economies would become complementary cultures as well, and that the world’s richest, most complex and most diversified culture would export its institutions and values alongside its manufactures.

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There was nothing new in the eagerness of the landed and commercial elite to make money quickly, nor in their willingness to try every possible method: the Elizabethan aristocracy had invested in piracy, colonization and exotic new trades, as well as mining and draining for land reclamation. But until the late eighteenth century, it was widely assumed that manufacture and farming in Britain should be protected against competition from abroad. In fact, it took more than seventy years before the programme spelt out in Adam Smith’s The Wealth of Nations (1776) was implemented in full with free trade in corn (1846) and the end of the Navigation Laws (in 1851). Long before that, manufacturers had been free to impose new conditions of work, while the state outlawed ‘combination’ (i.e. trade union organization) or cleared the way for the huge railway projects that, in London at least, removed thousands of people from the path of the line.

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The effect on Europeans had been almost equally bad: their feelings were corrupted and coarsened by the violence and misery they inflicted.5 Indeed, trying to rule colonies that were geographically remote as well as ethnically different was politically risky and certain to fail. These views were influential among thinkers and writers in Britain, including Hume and Edward Gibbon, whose Decline and Fall of the Roman Empire (1776) had famously warned against the danger for an empire of reaching ‘immoderate size’. In The Wealth of Nations (1776), Adam Smith had looked forward to the time when those the Europeans had been able to oppress ‘with impunity’6 would restore the balance of power. Edmund Burke’s famous polemic against the corruption and cruelty of the British presence in India reflected the same disenchanted view of European behaviour overseas and its destructive effects on other cultures and peoples.

The Joy of Tax
by Richard Murphy
Published 30 Sep 2015

Even if ‘Liberté, Égalité, Fraternité’ was not, in fact, the cry of that revolution, in the Age of Enlightenment it was held self-evident that taxation not only had to reflect society, but had the capacity to change society. It may not have been coincidence that Adam Smith published his theory of taxation in his book The Wealth of Nations in 1776, the year the United States of America declared independence from Britain. Another paradigm in taxation had shifted. It was becoming clear that nation states were defined by their ability to tax and that the credibility of those states was, albeit rather hesitantly at first, being determined by their willingness to tax in accordance with the views of those who were governed.

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I first created country-by-country reporting in 2003. 15 http://www.oecd-ilibrary.org/taxation/guidance-on-transfer-pricing-documentation-and-country-by-country-reporting_9789264219236-en 16 http://www.taxresearch.org.uk/Documents/CRDivCBCR2015.pdf 17 http://uncounted.org/2015/06/15/the-politics-of-country-by-country-reporting Chapter 6: The underpinnings of a good tax system 1 Adam Smith, The Wealth of Nations, 1776, Book V, Chapter II, Part II. Extract downloaded from http://www.bibliomania.com/2/1/65/112/frameset.html 4 December 2006 2 It should be noted that these four terms are also the titles of what are called the Quaker Testimonies. I am a Quaker, but as far as I know, also the only one to ever interpret them in the way I do here.

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The fact that Walmsley also argues that people have not consented to tax by voting in elections might surprise many: this idea is very obviously untrue, but the argument is made time and again by those organizations. So, in 2014 Tim Worstall, an Adam Smith Institute fellow, stated that ‘democracy is not all it’s cracked up to be’2 whilst in 2012 Adam Smith Institute director Dr Eamonn Butler wrote about the ‘tyranny of the majority’3 – a term much favoured by these groups. What they mean by it is that the right that democracy on the basis of universal suffrage provides to a government to create progressive taxation is an assault by the majority on the rights of the wealthy minority.

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor
by John Kay
Published 24 May 2004

There was one important difference-a difference that itself provided part of the rationale for settlement. Europe increasingly suffered from too much population for its land; in America, the ratio of land to people was quite different. This had implications for the balance of economic and political power. Adam Smith, the revered founder of modern economics, published The Wealth of Nations in 1776, coincident with the American Revolution. "England," he observed, "is certainly, in the present times, a much richer country than any part of North America. The wages oflabor, however, are much higher in North America than in any part ofEngland." 10 Virginia was different.

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In modern society, we make decisions and choices, and the economic system is the framework within which we make them. It contains rules for assignment, production, and exchange. In the late eighteenth and nineteenth centuries, economists established a durable method of analysis for understanding production for exchange. Adam Smith's principal work, The Wealth of Nations) described the division of labor. David Ricardo, who became a writer and member of the British Parliament after successful speculation in bonds, laid out the principle of comparative advantage fifty years later. The effectiveness of an economic system is determined by its efficiency in exploiting comparative advantage and the division oflabor.

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The Sciences ofthe Artificial. Cambridge, Mass.: MIT Press. Singer, H. 1950. "The Distribution of Gains between Investing and Borrowing Countries." American Economic Review 40: 473-85. Smith, A. 1759. The Theory ofMoral Sentiments. Indianapolis: Liberty Press. 1976. ---. 1976. An Enquiry into the Nature and Causes of the Wealth of Nations. Ed. R. H. Campbell and A. S. Skinner. Oxford: Oxford University Press. Smith, B. D. 1995. The Emergence of Agriculture. New York and Oxford: Scientific American Library. Sokal, A. D., and J. Bricmont. 1998. Fashionable Nonsense: Postmodern Intellectuals) Abuse ofScience. New York: Picador.

Getting Better: Why Global Development Is Succeeding--And How We Can Improve the World Even More
by Charles Kenny
Published 31 Jan 2011

INSTITUTIONS: STICKY TECHNOLOGIES We have seen that “technology” as defined by economists is a very broad concept, covering all sorts of innovation. It covers traditional or invented technologies—Watt’s steam train, Engelbart’s computer mouse—to be sure. But it also covers anything else that can raise the productivity of labor or capital. Think of Adam Smith’s pin factory, highlighted in the Wealth of Nations. The specialized machinery of the factory (technology “embodied” in physical capital) and the skills required to use it (human capital) were both vital, but what allowed for this specialization was the division of labor, according to Smith. “One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top.”

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Chapter 6 further discusses the power of income as a measure and a tool in those terms. The great news for global development is that quality of life is (increasingly) cheap. SIX THE GREAT NEWS The Best Things in Life Are Cheap The idea that ever-growing wealth is central to the good life has long been controversial. In The Wealth of Nations, Adam Smith argued that escaping poverty only required that people are “tolerably well fed, clothed and lodged.” Because of the limited needs of mankind, he felt that the primary purpose of the pursuit of riches in wealthier countries is “regard to the sentiment of mankind . . . to be observed, to be attended to, to be taken notice of.”1 Smith was writing in the late eighteenth century, when GDP per capita in the United Kingdom was somewhere below $1,700.

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“The Educational Impact of Rechov Sumsum/Shara’a Simsim.” International Journal of Behavioural Development 27, pp. 409–422. Collier, P. 2007. The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It. Oxford: Oxford University Press. Comin, D., W. Easterly, and E. Gong. 2006. “Was the Wealth of Nations Determined in 1000 BC?” NBER Working Paper 12657. Conley, D., G. McCord, and J. Sachs. 2007. “Africa’s Lagging Demographic Transition: Evidence from Exogenous Impacts of Malaria Ecology and Agricultural Technology.” NBER Working Paper 12892. Cooper, R. 2005. “A Half-Century of Development.”

Investment: A History
by Norton Reamer and Jesse Downing
Published 19 Feb 2016

With fewer restrictions on interest rates, activities of financial intermediaries grew rapidly.87 However, the influence of the concept of usury was still strong and lasting. Though fewer and fewer people continued to support a total ban on interest rates, there remained long debates, often among economists and economic philosophers in the eighteenth century, about whether interest rates should be set by a free market or be regulated with caps. In The Wealth of Nations, Adam Smith supported a cap on interest rates at around 5 percent. Smith feared that higher rates of 8 to 10 percent would mean that most of the debt would be issued to what he called “prodigals and projectors” (speculators), as few others would be willing to take on debt at such a rate. He believed that without such a cap on interest rates, the prodigals and projectors would outbid more rational economic agents, and as a result defaults and resource misallocation would be pervasive.

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In the end, of course, the fraudulent activities of Enron and Bernie Madoff are echoes of this forerunner some three centuries earlier. Adam Smith, the oft-cited “father of modern economics,” took an entirely adversarial view of the structure of the joint-stock companies The Democratization of Investment 69 and the notion of investment management more broadly. Of course, Smith was highly influenced by the South Sea Bubble collapse, and in The Wealth of Nations he wrote, “Negligence and profusion, must always prevail, more or less, in the management of the affairs of such a [joint-stock] company.”

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“South Sea Bubble Short History,” Baker Library, Harvard Business School, accessed 2014, http://www.library.hbs.edu/hc/ssb/history .html; Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (New York: Free Press, 2004), 6–8. 7. “South Sea Bubble Short History.” 8. Bakan, The Corporation, 6–7. 9. Colin Arthur Cooke, Corporation, Trust and Company: An Essay in Legal History (Cambridge, MA: Harvard University Press, 1951), 83. 10. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937), 334–335. 11. Peter N. Stearns, The Industrial Revolution in World History, 3rd ed. (Boulder, CO: Westview, 2007). 12. Ibid., 34–37. 2. The Democratization of Investment 345 13. Ibid., 17–26 and 79–83. 14. Meir Kohn, “Finance before the Industrial Revolution: An Introduction” (working paper 99-01, Department of Economics, Dartmouth College, Hanover, NH, February 1999), http://www.dartmouth.edu/~mkohn /Papers/99-01.pdf, 5–6. 15.

The Alternative: How to Build a Just Economy
by Nick Romeo
Published 15 Jan 2024

Minsky: The Financial Theory of Investment,” Levy Economics Institute Working Paper No. 543, September 2, 2008, https://ssrn.com/abstract=1262296, http://dx.doi.org/10.2139/ssrn.1262296. 52. Mohsen Javdani and Ha-Joon Chang, “Ideology Is Dead! Long Live Ideology!” (blog), Institute for New Economic Thinking, August 12, 2019, https://www.ineteconomics.org/perspectives/blog/ideology-is-dead-long-live-ideology. 53. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Edinburgh: University Press for T. Nelson and P. Brown, 1827), 323. Chapter 2: The Hidden Costs of Everything 1. Anuradha Varanasi, “Is Organic Food Really Better for the Environment?,” State of the Planet, Columbia Climate School, Columbia University, October 22, 2019, https://news.climate.columbia.edu/2019/10/22/organic-food-better-environment/. 2.

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Indeed, “Retail Sales Associate Salary in Kansas City, KS,” accessed March 10, 2023, https://www.indeed.com/career/retail-sales-associate/salaries/Kansas-City—KS. 21. Ken Shulman, “Putting the Living Wage Calculator into Action,” MIT News, August 21, 2018, https://news.mit.edu/2018/mit-corporations-nonprofits-putting-living-wage-calculator-action-0821. 22. Adam Smith, “Of the Wages of Labour,” chapter 8 in An Inquiry into the Nature and Causes of the Wealth of Nations (Edinburgh: University Press for T. Nelson and P. Brown, 1827), 33. 23. John Stuart Mill, Principles of Political Economy, with Some of Their Applications to Social Philosophy, vol. 2 (London: Longman, Green, Longman, Roberts, and Green, 1865), 554. 24.

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Max Weber, The Protestant Ethic and the Spirit of Capitalism, trans. Talcott Parsons (Mineola, NY: Dover, 2003), 74. 17. Albert O. Hirschman, The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph, 20th anniversary ed. (Princeton, NJ: Princeton University Press, 1997), 41. 18. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Oxford, UK: Clarendon Press, 1880), 28. 19. David Niose, “Why Corporations Are Psychotic” (blog), Psychology Today, March 16, 2011, https://www.psychologytoday.com/us/blog/our-humanity-naturally/201103/why-corporations-are-psychotic. 20. Yvon Chouinard, “Earth Is Now Our Only Shareholder,” Patagonia, accessed December 14, 2022, https://eu.patagonia.com/gr/en/ownership/. 21.

Trust: The Social Virtue and the Creation of Prosperity
by Francis Fukuyama
Published 1 Jan 1995

Taylor, Bismarck: The Man and the Statesman (New York: Vintage Books, 1967), pp. 202-203. 17Braun (1990), p. 54. 18See Klaus Chmielewicz, “Codetermination,” in Handbook of German Business Management, Vol. 2 (199), pp. 412-438. 19Peter Schwerdtner, “Trade Unions in the German Economic and Social Order,” Zeitschrift für die gesamte Staatswissenschaft 135 (1979): 455-473. 20On this general point, see Allen in Lodge and Vogel, eds. (1987), pp. 79-80. 21James Fallows and others have made a great deal of the importance of Friedrich List, asserting that the latter’s National System of Political Economy has been a better guide to both German and Asian economic growth than Adam Smith’s Wealth of Nations. List, however, simply repeats many of the mercantilist dicta about the centrality of national power and the subordination of economic means to strategic ends that was the staple of mercantilists from earlier centuries like Colbert or Turgot. Adam Smith would have found nothing in List’s arguments that he would have considered a decisive critique; indeed, The Wealth of Nations was itself written as a critique of List’s mercantilist predecessors. Fallows, moreover, vastly overstates the importance of List to German economic thought and practice.

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Two of the most prolific and renowned contemporary neoclassical economists, Gary Becker of the University of Chicago and James Buchanan of George Mason University (both of whom won Nobel Prizes for their work), have built careers extending economic methodology to what are usually regarded as noneconomic phenomena like politics, bureaucracy, racism, the family, and fertility.7 The political science departments of many major universities are now filled with followers of socalled rational choice theory, which attempts to explain politics using an essentially economic methodology.8 The problem with neoclassical economics is that it has forgotten certain key foundations on which classical economics was based. Adam Smith, the premier classical economist, believed that people are driven by a selfish desire to “better their condition,” but he would never have subscribed to the notion that economic activity could be reduced to rational utility maximization. Indeed, his other major work besides The Wealth of Nations was The Theory of Moral Sentiments, which portrays economic motivation as highly complex and embedded in broader social habits and mores. The very change in the name of the discipline from “political economy” to “economics” between the eighteenth and late nineteenth centuries reflects the narrowing of the model of human behavior at its core.

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.: Inter-University Study of Human Resources, 1975); and Clark Kerr, The Future of Industrial Societies: Convergence or Diversity? (Cambridge: Cambridge University Press, 1983). 22Adam Smith’s description of the progressive division of labor in the pin factory into tasks of smaller and simpler scope at the beginning of The Wealth of Nations is actually the locus classicus for this line of criticism of modern industrial society. See An Enquiry in the Nature and Causes of the Wealth of Nations (Indianapolis: Liberty Classics, 1981), pp. 14-15. 23On the Judeo-Christian tradition, see the chapter by Jaroslav Pelikan in Jaroslav J. Pelikan et al, Comparative Work Ethics: Christian, Buddhist, Islamic (Washington, D.C: Library of Congress, 1985).

The True and Only Heaven: Progress and Its Critics
by Christopher Lasch
Published 16 Sep 1991

Abundance annulled the first law of social life under scarcity, that individuals or nations prosper only at their neighbors' expense. "Ignorant nations," Bentham said, had "treated each other as rivals, who could only rise upon the ruins of one another." Fortunately the work of Adam Smith had now made it clear, according to Bentham, that "commerce is equally advantageous for all nations— each one profiting in a different manner, according to its natural means." The Wealth of Nations showed that "nations are associates and not rivals in the grand social enterprise." Smith's argument in favor of free trade offered a special application of the general principle, as Bentham put it, that "the interests of men coincide upon more points than they oppose each other."

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A commercial society needed the "gentle virtue of humanity," to be sure; and "justice and humanity" rested, in turn, on a "sacred regard" for life and property, necessarily weakened by the "violence of faction" and the "hardships and hazards of war." Even so, Smith reserved his highest praise, not only in The Theory of Moral Sentiments but in The Wealth of Nations itself, for the soldier's life. He regretted that "the general security and happiness which prevail in ages of civility and politeness, afford little exercise to the contempt of danger, to patience in enduring labor, hunger, and pain." The division of labor made possible an unheard-of expansion of productivity, as he explained at length in The Wealth of Nations, but it also dulled the mind and sapped the martial spirit. His unsparing account of these effects drew on the republican identification of virtue with virility and resourcefulness.

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The ancient world was fully acquainted with the achievements of reason; nor was the eighteenth-century world so besotted with those achievements that it overlooked reason's limits. As for the idea of historical stages, equally familiar to the ancients, it led to a theory of progress only when social theorists ceased to model those stages on the biological life cycle, in which growth and maturity led inevitably to senescence and death. Smith's work, especially The Wealth of Nations, implicitly repudiated this biological conception of history and the self-denying morality with which it had been associated. The stoic critique of appetite lost much of its force in the face of Smith's contention that insatiable appetites led not to corruption -54- and decay but to the indefinite expansion of the productive machinery necessary to satisfy them.

Making It Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy
by Iain Martin
Published 11 Sep 2013

Upwards of 70 per cent of Scots were able to read and write by the mid-eighteenth century. At a time when England had only two such institutions, Oxford and Cambridge, Scotland had four ancient universities in the shape of St Andrews, Aberdeen, Edinburgh and Glasgow. From the latter intellectual hothouse came Adam Smith, the great classical liberal author of The Wealth of Nations (1776). Smith taught at Glasgow, gave popular public lectures in Edinburgh and became the father of modern economics. The ideas of philosophers including David Hume and Adam Ferguson, and scientists such as Joseph Black, helped shape our world. Even the modern insurance industry can be traced to Edinburgh and the establishment in the 1740s of the ‘Fund for a Provision for the Widows and Children of the Ministers of the Church of Scotland’, which created the model, with the use of actuarial tables, whereby a mutual insurance company could ensure that it had sufficient funds to insure against early death.8 It was in this innovative climate that the Royal Bank and the old Bank of Scotland pioneered what became modern British banking.

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Established just three years previously, with the aristocracy of Ayrshire and surrounding counties heavily invested, the Ayr Bank had expanded too fast, made too many loans and became overextended. To fill the gap it started borrowing ever-larger amounts from elsewhere. Then came disaster, with the sudden collapse of the London-Scottish banking house of Neale, James, Fordyce and Downe, with which the Ayr Bank had done business.10 Adam Smith, writing in The Wealth of Nations, several years later, described the Ayr Bank’s reckless approach to running its affairs in the following terms: ‘The project of replenishing their coffers in this manner may be compared to that of a man who had a water-pond from which a stream was continually running out, but who proposed to keep it always full by employing a number of people to go continually with buckets to a well at some miles distance in order to bring water to replenish it.’

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It also didn’t seem like a good way of getting a Labour government elected for the first time since 1979, given that it needed to win in the south and Midlands of England. Brown’s views started to evolve. Adam Smith, the eighteenth-century philosopher and father of modern economics, the inspiration for pro-market economists and free-market Thatcherites, was a fellow son of Kirkcaldy.3 There was a side to Smith that appealed to Brown all along. As well as teaching that markets were essential for economic efficiency, hadn’t Smith also appeared to argue in The Wealth of Nations that the rich should pay higher taxes to support the poor? As Brown’s views shifted away from old-style socialism there were areas he was determined to protect from markets; the National Health Service was the obvioius example.

The Economics Anti-Textbook: A Critical Thinker's Guide to Microeconomics
by Rod Hill and Anthony Myatt
Published 15 Mar 2010

So, competitive markets guarantee that the right quantities are produced and society’s net benefit is maximized. This is the technical argument for laissez-faire, the view that governments should leave the economy alone. But textbooks seek to persuade. So, most textbooks selectively paraphrase the argument developed by Adam Smith in The Wealth of Nations, published in 1776. In an analogy that has become iconic, Smith compares competitive market forces to an invisible hand that guides self-interest into socially useful activities. In a famous passage he says: ‘It is not through the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest.’

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Such moral questions are ultimately resolved by political decisions. All economists can do is give advice on how to achieve society’s goals as efficiently as possible. The science of economics is value free. 14 2.1 The inherent tension with macroeconomics As we mentioned the first seminal book in economics, Adam Smith’s The Wealth of Nations, it behoves us to mention another, John Maynard Keynes’s The General Theory of Employment, Interest and Money. Published in 1936 during the Great Depression, it attempted to explain how unemployment could persist, and what ameliorating actions governments could take. In the process of ­doing this, Keynes became the founding father of macroeconomics.

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Simon, H. (1991) ‘Organisations and markets’, Journal of Economic Perspectives, 5(2): 25–44. Singer, N. and D. Wilson (2009) ‘Medical editors push for ghostwriting crackdown’, New York Times, 17 September. Singer, P. and J. Mason (2006) The Ethics of What We Eat: Why our food choices matter, Emmaus, PA: Rodale. Smith, A. (1979 [1776]) The Nature and Causes of the Wealth of Nations, Indianapolis: Liberty Press. Solnick, S. J. and D. Hemenway (1998) ‘Is 287 Bibliography K. Rothschild (ed.), Power in Economics: Selected readings, London: Penguin, pp. 7–17. Ruffin, R. and P. Gregory (2001) Principles of Microeconomics, 7th edn, Toronto: Addison Wesley. Russell, T. and R.

This Could Be Our Future: A Manifesto for a More Generous World
by Yancey Strickler
Published 29 Oct 2019

It’s like seeing the world through the eyes of a sociopathic oligarch. Everything has a price. A RATIONAL ORIGIN It all started innocently enough. In 1776, the Scottish economist and philosopher Adam Smith argued that society best functions when people are trusted to act according to their self-interest. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” he famously wrote in The Wealth of Nations. You didn’t have to force or beg a butcher to be a butcher. Because this was what enabled people to survive and meet the needs of their family, it’s what they would do on their own.

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Everything was connected but not everything worked the same way. Each part of the body had its own path to health. It wasn’t one treatment fits all. Now we know there are types and stages of cancer, good and bad cholesterols, good and bad fats, and more nuance every day. (Specificity is the same force that Adam Smith declares crucial to unlocking economic growth in The Wealth of Nations.) Because of the forces of technology, measurement, and specificity, our understanding of health became deeper. Medicine became real. We live longer and better lives as a result. The same thing can happen again. Financial maximization is to value what bloodletting was to medicine: the most advanced answer of its time, but not the final answer.

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The idea that the rich would willfully share power was unthinkable. You had to petition the House of Lords to start a company. Children were expected to work long hours of hard labor. Then new ideas developed and spread for how the world could work. The French Revolution, the Declaration of Independence, Adam Smith, Karl Marx, the Beatles, hip-hop, and Star Trek: The Next Generation in the blink of an eye. It was a very different world and it wasn’t that long ago. Where should the 2050 generations lead us? I believe that expanding our definition of value is the goal to work toward. There is unlimited potential to increase the amount of fairness, mastery, purpose, community, knowledge, family, faith, tradition, and sustainability in our world if we accept a broader idea of value.

The Reckoning: Financial Accountability and the Rise and Fall of Nations
by Jacob Soll
Published 28 Apr 2014

He began putting surpluses of sometimes more than £1 million per annum into the sinking fund, which went to service the debt and lower the debt principal. This brought confidence to the markets and led to a general feeling that the debt was under control. By the time he left office in 1742, Walpole had lowered the debt by £13 million.27 In The Wealth of Nations (1776)—the defining work of morality and free-market economics—Adam Smith expressed doubt that a sinking fund was a solution to debt. Instead, he considered it a temptation to ignore debt and, indeed, to contract new debts. Smith was thinking of Walpole. Although Walpole was a man of finance who governed during the Enlightenment, he was a politician first, and as political pressure regarding the debt lightened, the sinking fund looked less and less like a debt-servicing instrument and more like a political slush fund.

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Yamey, “Scientific Bookkeeping and the Rise of Capitalism,” Economic History Review 1, no. 2–3 (1949): 102; Lodewijk J. Wagenaar, “Les mécanismes de la prospérité,” in Amsterdam XVIIe siècle. Marchands et philosophes: les bénéfices de la tolerance, ed. Henri Méchoulan (Paris: Editions Autrement, 1993), 59–81; Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Amherst, NY: Prometheus Books, 1991), 4: chap. 3, part 1; Jan de Vries and Ad van der Woude, The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500–1815 (Cambridge: Cambridge University Press, 1997), 129–131. 7. Caspar Barlaeus, Marie de Medicis entrant dans l’Amsterdam; ou Histoire de la reception faicte à la Reyne Mère du Roy très-Chrestien, par les Bourgmaistres et Bourgeoisie de la Ville d’Amsterdam (Amsterdam: Jean & Corneille Blaeu, 1638), 57; Simon Schama, The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age, 2nd ed.

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The Foundations of Modern Political Thought. 2 vols. Cambridge: Cambridge University Press, 1978. Smallwood, Stephanie E. Saltwater Slavery: A Middle Passage from Africa to American Diaspora. Cambridge, MA: Harvard University Press, 2008. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Amherst, NY: Prometheus Books, 1991. Smith, Woodruff D. “The Function of Commercial Centers in the Modernization of European Capitalism: Amsterdam as an Information Exchange in the Seventeenth Century.” Journal of Economic History 44, no. 4 (1984): 985–1005. Smyth, Adam. Autobiography in Early Modern Britain.

Profiting Without Producing: How Finance Exploits Us All
by Costas Lapavitsas
Published 14 Aug 2013

Marx offered a distinctive answer to this question, the significance of which can be fully appreciated only in the context of other monetary theories.15 It is notable, for instance, that classical political economy offers little guidance on this issue. Classical economists were certainly concerned with the peculiarity of money, but approached the issue instrumentally, so to speak. The standard view was put forth by Adam Smith in The Wealth of Nations while analysing ‘primitive’ exchange.16 In short, if money was absent, direct commodity exchange would prevail; however, direct exchange would be prone to constant breakdowns since the commodities held by traders would frequently be incompatible in terms of quantities, quality, time of exchange, and so on.

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Advanced capitalism is indeed based on money that comprises promises to pay, but only a leap of logic would equate gold with a promise to pay – that is, with a debt.28 Fourth, and more generally, credit-based theories of money offer a slender foundation for explaining the collapse of financial relations and the corresponding rise of monetary relations that is characteristic of capitalist crises. It is instructive to note, incidentally, that some aspects of the chartalist view go back to classical political economy. Sir James Steuart proposed a well-developed version of abstract value measurement shortly before Adam Smith wrote The Wealth of Nations. In his Inquiry into the Principles of Political Economy, Steuart suggested that ‘money of account’ is an abstract numeraire that establishes ideal prices, which are then approximated in practice by ‘material money’.29 Marx, despite the high regard in which he held Steuart’s monetary analysis, rejected this view and offered fresh insight into money originating in commodity exchange.30 The gist of Marx’s objection to Steuart’s theory of the abstract numeraire was that it obfuscates the relationship between ideal prices (established abstractly by money on paper, or in the mind) and actual prices (established in practice by money through regular commodity exchanges).

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Arthur, for whom Hegel-type dialectics entirely replace monetary theory and economics (‘Money and Exchange’, Capital and Class 30:3, 2006); for a telling response see Thomas Sekine, ‘Arthur on Money and Exchange’, Capital and Class 33:3, 2009. 15 Discussion in this section draws heavily on Costas Lapavitsas, Social Foundations of Markets, Money and Credit, London: Routledge, 2003, ch. 3. 16 Adam Smith, The Wealth of Nations, ed. Edwin Cannan E, London: Methuen, 1904, vol. 1, ch. 5. 17 This point is often missed by anthropologists, sociologists and other social scientists who discuss the origin of money and criticize ‘economic theory’ for relating money to direct exchange. Thus, David Graeber makes a typically withering attack on Smith for assuming a ‘primitive’ society and an imaginary state of barter out of which money presumably emerges (Debt: The First 5000 Years, New York: Melville House, 2011, ch. 2).

The Future of the Professions: How Technology Will Transform the Work of Human Experts
by Richard Susskind and Daniel Susskind
Published 24 Aug 2015

Antonio Regalado, ‘What It Will Take for Computers to Be Conscious’, MIT Technology Review, 2 Oct. 2014 <http://www.technologyreview.com> (accessed 30 March 2015). 17 Jerome Groopman, How Doctors Think (2008), 17. 18 Simon Baron-Cohen, The Essential Difference: Male and Female Brains and the Truth About Autism (2004). 19 Joseph Weizenbaum, Computer Power and Human Reason: From Judgment to Calculation (1984). 20 The Panel on Fair Access to the Professions, Unleashing Aspiration: The Final Report of the Panel on Fair Access to the Professions (2009). <http://webarchive.nationalarchives.gov.uk/+/http:/www.cabinetoffice.gov.uk/media/227102/fair-access.pdf> (accessed 23 March 2015). 21 Adam Smith, An Inquiry into the Nature and Cause of the Wealth of Nations (1998). 22 Smith, The Wealth of Nations, 12–15. 23 Smith, The Wealth of Nations, 429. 24 Smith, The Wealth of Nations, 430. 25 ‘He is at home when he is not working and when he is working he is not at home’: ‘Economic and Philosophical Manuscripts’, in Karl Marx: Selected Writings, ed. Lawrence Simon (1994), 62. 26 Marx, ‘Economic and Philosophical Manuscripts’, passim. 27 Max Weber, The Protestant Ethic and the Spirit of Capitalism (2011), 99. 28 Isaac Asimov, Robot Visions (1990), 341. 29 ‘Le mieux est l’ennemi du bien’ (‘the best is the enemy of the good’), in Voltaire, ‘La Bégueule’ (1772) <http://fr.wikisource.org/wiki/La_Bégueule> (accessed 23 March 2015). 7 After the Professions When we started working on this book in 2010, our principal focus was on what the future might hold for the professions.

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Langdon Winner, who writes: ‘the basic conceit is always the same: new technology will bring universal wealth, enhanced freedom, revitalized politics, satisfying community, and personal fulfillment.’ Langdon Winner, ‘Technology Today: Utopia or Dystopia?’, in Technology and the Rest of Culture, ed. Arien Mack (2001), 59. 16 See e.g. Adam Smith, An Inquiry into the Nature and the Causes of the Wealth of Nations (1998) and Karl Marx, Capital: Critique of Political Economy, vol. 1 (1992). 17 David Autor, ‘The “Task Approach” to Labor Markets: An Overview’, Institute for the Study of Labour Discussion Paper Series, No. 7178, Jan. 2013 <http://ftp.iza.org/dp7178.pdf> (accessed 25 March 2015). 18 Richard Susskind, Transforming the Law (2000), 47.

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Workers in industrial Britain in the eighteenth and nineteenth centuries were systematically exploited and oppressed, and had little legal protection. To draw a direct comparison between their plight and the prospects for our professions would be to overstate the case. Yet we can still learn, albeit indirectly, from the insights of Smith and Marx. In 1776, Adam Smith published The Wealth of Nations.21 He was trying to understand what made some countries rich and others poor. His answer, in short, was that different countries had undergone different degrees of ‘division of labour’. This explained why some countries enjoyed a ‘universal opulence’ and others did not. The rationale underlying this division of labour was that by dividing up any given piece of work into its constituent tasks, and then reallocating particular tasks as specialties for specific people, productivity would be much greater than when one person is spread thinly across a range of tasks.

Milton Friedman: A Biography
by Lanny Ebenstein
Published 23 Jan 2007

Their teacher had said that Friedman was an admirer of Adam Smith. Friedman wrote back that he was delighted to hear that you are studying his great book, The Wealth of Nations. It has much to tell us today. In many ways we have come full circle since that book was written. At the time Adam Smith wrote there were many government regulations and restrictions. His book was a blow for freedom. It succeeded. However, it took some seventy years before it did. Since then we have been drifting back, and today we again have a situation in which we have extensive controls and restrictions on human freedom. We need a new Adam Smith to strike a new blow for freedom.29 A great source of Friedman’s success is his sense of humor.

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Friedman-Ebenstein correspondence (November 22, 2004). 42. Memoirs, 190. CHAPTER 20 1. Milton Friedman, Why Government Is the Problem (Stanford: Hoover Institution, 1993), 6. 2. Memoirs, 563. 3. Ibid., 471. 4. Ibid., 473. 5. John Stuart Mill, On Liberty (1859), Introduction. 6. FTC, xv. 7. Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, vol. 1 (Indianapolis: Liberty Classics, 1976), 456, 426. 8. Memoirs, 480. 9. FTC, i. 10. Ibid. 11. Ibid. 12. Memoirs, 605. 13. Ibid., 503. 14. Ibid., 504. CHAPTER 21 1. Memoirs, 209–210. 2. Martin Anderson, Revolution (New York: Harcourt Brace Jovanovich, 1988), 164. 3.

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After a lag, sometimes of decades, an intellectual tide “taken at its flood” will spread at first gradually, then more rapidly, to the public at large and through the public’s pressure on government will affect the course of economic, social, and political policy.10 The concept of lags runs through Friedman’s work. Milton and Rose think that the past two and a quarter centuries have been typified by three different intellectual tides in society and government: “The Rise of Laissez-Faire (the Adam Smith Tide),” “The Rise of the Welfare State (the Fabian Tide),” and “The Resurgence of Free Markets (the Hayek Tide).”11 They consider the Adam Smith tide, which advocates free trade and limited government, to have washed ashore in the realm of ideas from about 1776—with the publication of Smith’s Wealth of Nations and start of the American War of Independence—to 1883 and to have reached its primary public policy influence from about 1820 to 1900 in Britain and slightly later in the United States.

The Greed Merchants: How the Investment Banks Exploited the System
by Philip Augar
Published 20 Apr 2005

Ibid. (20 August 2004). 52. Kay, John, Financial Times (16 June 2004). 53. Financial News (19 April 2004). 54. Pecora, Ferdinand, Wall Street Under Oath (Cresset Press, 1939), p. 119. Chapter 6 1. Smith, Adam, The Wealth of Nations (Modern Library edition, 2000), page 148; Smith, Roy, Adam Smith and the Origins of American Enterprise (Truman Tulley Books, 2002); Glahe, Fred (ed.), Adam Smith and the Wealth of Nations: Bicentennial Essays (University of Chicago Press, 1976). 2. Hintz, Brad, Large Investment Bank Margins and ROE Trends, Securities Industry Association Research Reports, vol. 3, no. 2 (March 2002), p. 10. 3.

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The earnings of big technology companies would have been cut by a third if they had been forced to deduct options costs and S&P 500 company earnings would have been 5–6 per cent lower: research by CSFB and Citigroup Global Markets, Financial Times (22 June 2004). 11. The Economist (28 June 2003); Financial Times (17 January 2004). 12. Title of NBC programme, 1984. 13. Financial Times (11 October 2004). 14. Plender, John, op. cit., pp. 124–36. 15. Financial News (12 July 2004). 16. Author interview, 2003. 17. Smith, Adam, The Wealth of Nations (Modern Library edition, 2000), p. 485. 18. David Smith, Free Lunch (Profile Books, 2003), p. 49. 19. The Economist (16 November 2002). Chapter 11 1. Wall Street (American Entertainment/20th Century Fox, 1987). 2. Galbraith, J. K., The Great Crash 1929 (Penguin edition, 1992), p. 153. 3.

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Enron is an extreme case, but its journey from being an energy supplier into an energy trader symbolizes the change in corporate values. It remains to be seen whether the markets culture can produce long term companies. Whatever Happened to the Invisible Hand? Adam Smith, the eighteenth-century father of modern economic theory, was not perturbed by the likelihood of collusion in free markets. He believed that the businessman is ‘led by an invisible hand to promote an end which was no part of his intention… By pursuing his own interest he frequently promotes that of society.’17 Adam Smith’s belief that conspiracy and contrivance would result in the public good is neatly summed up by another British economist called Smith, the journalist David Smith: ‘The point was that the market did not let them get away with it, or at least not for long.

Money and Government: The Past and Future of Economics
by Robert Skidelsky
Published 13 Nov 2018

Sloman, P. (2015), The Liberal Party and the Economy, 1929–1964. Oxford: Oxford University Press. Smith, A. (1755), Adam Smith on the need for ‘peace, easy taxes, and a tolerable administration of justice’. Online Library of Liberty. Available at: http://oll.libertyfund.org/quote/436 [Accessed 25 August 2017]. 455 Bi bl io g r a p h y Smith, A. (1976 (1776)), The Glasgow Edition of the Works and Correspondences of Adam Smith (Vol. II) An Inquiry into the Nature and Causes of the Wealth of Nations (Vols. I & II). Oxford: Clarendon Press. Soros, G. (2009a), General theory of reflexivity. Financial Times, 26 October.

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Smith ignored mercantilist concern with money and employment. 82 t h e or i e s of t h e f e r t i l e a n d b a r r e n s t a t e Money was simply a lubricant. The economists who followed Smith believed that in conditions of natural liberty all savings would be invested, resources fully used. Taxation does not appear in the index of The Wealth of Nations, but there is a large section on the national debt, the growth of which in the 1700s Smith regarded as the main impediment to increased prosperity. ‘Like an improvident spendthrift, whose pressing occasions will not allow him to wait for the regular payment of his revenue, the state is in the constant practice of borrowing of its own factors and agents, and paying interest for the use of its own money.’22 Issuing debt was a way of extracting money from the citizen by stealth.

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Under Ricardian equivalence, consumers know this and respond to bond-financed government spending by reducing 398 No t e s 32 33 34 35 36 37 38 39 40 41 42 consumption, so that they can save for this higher tax future. It thus does not matter how the government funds spending; consumption (and investment) will fall either way. See Barro (1974). Ricardo (2005 (1817)), p. 248. But Smith is not entirely consistent: in the Wealth of Nations, he writes about the erection of banking companies in Scottish towns and villages, and holds ‘that the trade and industry of Scotland . . . have increased very considerably . . . and that banks have contributed a good deal to this increase, cannot be doubted’ (Smith (1976 (1776)), p. 297).

The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor
by David S. Landes
Published 14 Sep 1999

One moves from the task-oriented time consciousness of the peasant (one job after another, as time and light permit) and the time-filling busyness of the domestic servant (always something to do) to an effort to maximize product per unit of time (time is money). The invention of the mechanical clock anticipates in its effects the economic analysis of Adam Smith: increase in the wealth of nations derives directly from improvement of the productive powers of labor. The mechanical clock remained a European (Western) monopoly for some three hundred years; in its higher forms, right into the twentieth century. Other civilizations admired and coveted clocks, or more accurately, their rulers and elites did; but none could make them to European standard.

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Hist. Rev., 43: 371-94. Borgstrom, Georg. 1972. The Hungry Planet: The Modern World at the Edge of Famine. 2d rev. ed., New York: Macmillan. Boskin, Michael J., and Lawrence J. Lau. 1992. “Capital, Technology, and Economic Growth,” in Rosenberg, Landau, and Mowery, eds., Technology and the Wealth of Nations, pp. 17-55. Bottineau, Yves. 1977. Le Portugal et sa vocation maritime: Histoire et civilisation d’une nation. Paris: Boccard. Boucher, Philip P. 1992 Cannibal Encounters: Europeans and Island Caribs, 1492-1763. Baltimore: Johns Hopkins Univ. Press. Boulnois, Luce. 1963/1986. La route de la soie.

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Balkan Economic History, 1550-1950: From Imperial Borderlands to Developing Nations. Bloomington: Indiana University Press. Landau, Ralph, and Nathan Rosenberg. 1992. “Successful Commercialization in the Chemical Process Industries,” in Rosenberg, Landau, and Mowery, eds. Technology and the Wealth of Nations, pp. 73-119. Landau, Ralph, Timothy Taylor, and Gavin Wright, eds. 1996. The Mosaic of Economic Growth. Stanford: Stanford Univ. Press. Landes, David S. 1952. “Bankers and Pashas: International Finance in Egypt in the 1860’s,” in Miller, ed. Men in Business, pp. 23-70. —————. 1956.

The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention
by William Rosen
Published 31 May 2010

Eighty years after Locke’s death, conservatives like Edmund Burke, and progressives like Jeremy Bentham and John Stuart Mill, were still uncomfortable with Locke’s idea of natural laws; Bentham called them “nonsense on stilts.”29 The final victory, however, was Locke’s; in 1776, Adam Smith was virtually channeling Locke’s Second Treatise, writing in The Wealth of Nations, “The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable.” Smith’s French counterpart, Anne-Robert-Jacques Turgot, echoed him: “God … made the right of work30 the property of every individual in the world, and this property is the first, the most sacred, and the most imprescriptible of all kinds of property.”

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February 17 saw the first volume of Edward Gibbon’s History of the Decline and Fall of the Roman Empire roll off the presses (“In the second century of the Christian Era, the empire of Rome comprehended the fairest part of the earth …”). And on March 9, a former University of Glasgow colleague of Joseph Black published An Inquiry into the Nature and Causes of the Wealth of Nations. Standing in London’s Science Museum, in front of Rocket and surrounded by models of Thomas Newcomen’s beam engine, Joseph Bramah’s challenge lock, and James Watt’s separate condenser, it takes very little imagination to see connections with iron foundries, coal mines, and even cotton fields. The road back to Adam Smith requires more thought, but is just as important, and as enlightening. Smith’s book, like Darwin’s Origin of Species, was revolutionary in its impact, immediately and permanently, though both are far more frequently cited than read.

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Anthony Smith, eds., English Historical Documents XI, 1783–1832 (New York: Oxford University Press, 1959). 76 This made them not only self-interested Horn, “Machine-breaking in England and France During the Age of Revolution.” 77 “I do not mean to say, that parties of Luddites” Aspinall and Smith, eds., English Historical Documents XI, 1783–1832. 78 “You must raise your right hand” Ibid. 79 In 1813, there were 2,400 power looms Usher, “The Textile Industry 1750–1830,” in Kranzberg and Pursell, eds., Technology in Western Civilization. 80 “a steam-loom weaver” Hills, Power from Steam, quoting Baines’s 1835 History of the Cotton Manufacture in Great Britain. 81 During the century and a half Clark, Farewell to Alms. CHAPTER ELEVEN: WEALTH OF NATIONS 1 nothing about the forging of iron David Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery (New York: W. W. Norton, 2006). 2 David Ricardo predicted Clark, Farewell to Alms. 3 The second component, growth in capital Warsh, Knowledge and the Wealth of Nations. 4 Solow first assumed Ibid. 5 “the mass of persons with intermediate skills” Hobsbawm and Wrigley, Industry and Empire: from 1750 to the Present Day. 6 preindustrial Britain exhibited a fair bit F.

Ethics in Investment Banking
by John N. Reynolds and Edmund Newell
Published 8 Nov 2011

New York Times, 20 November 2005 http://www.nytimes.com/2005/11/20/ business/yourmoney/20jail.html?pagewanted=all, accessed 8 March 2011. 8. Geraint Anderson http://www.moneyweb.com/mw/view/mw/en/page308878? oid=309416&sn=2009+Detail&pid=287226, accessed 8 March 2011. Chapter 2 1. 2. 3. 4. 5. Adam Smith (1776) The Wealth of Nations (London: W. Strahan and T. Cadell). Adam Smith (1759) The Theory of Moral Sentiments. http://www.sec.gov/news/press/2010/2010-59.htm, accessed 8 March 2011. Goldman Sachs (2011) Business Standards Report, section v, para A. http://online.wsj.com/article/SB122576100620095567.html, accessed 8 March 2011. 6.

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Within other markets, it could be argued that minimum intervention and maximum openness is desirable to ensure the most efficient allocation of resources (as has been argued in relation to free trade). A market that operates in an inefficient or dysfunctional way, either because of the way it is structured or because of the negative influence by key players, is a concern. This was understood by no less a figure than Adam Smith, who is regarded by many as the founding father of free-market economics through his great work The Wealth of Nations.1 Smith makes clear, however, the dangers of potential market abuse as people pursue selfish ends. It is noteworthy, therefore, that Smith’s other great (and earlier) work, The Theory of Moral Sentiments,2 is about moral philosophy. Different markets raise different issues, including ethical ones.

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Singer, P. (ed.) (1991) A Companion to Ethics (Oxford: Blackwell). Bibliography 169 Sinn, H.-W. (2010) Casino Capitalism: How the Financial Crisis Came about and What Needs to be Done Now (Oxford: Oxford University Press). Smith, A. (1759) The Theory of Moral Sentiments. Smith, A. (1776) The Wealth of Nations (London: W. Strahan and T. Cadell). Sorkin, A.R. (2009) Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis – and Themselves (New York: Viking). Stackhouse, M.L. (2001) “Business, Economics and Christian Ethics”, in R. Gill (ed.)

Giving the Devil His Due: Reflections of a Scientific Humanist
by Michael Shermer
Published 8 Apr 2020

It was, in fact, the physiocrats who gave us the term laissez faire.27 The physiocrats asserted that people operating in a society were subject to knowable laws of both human and economic nature not unlike those discovered by Galileo and Newton, and this movement grew into the school of classical economics championed by David Hume, Adam Smith, and others that forms the basis of all economic science and policy today. Consider Smith’s monumental 1776 work. Most people think the title is The Wealth of Nations. Its full title is far more revealing as to its intent: An Inquiry into the Nature and Causes of the Wealth of Nations. Smith employed the terms “nature” and “causes” in the scientific sense of identifying and understanding the cause-and-effect relationships in the natural system of an economy, with the underlying premise that natural laws govern economies, that humans are rationally calculating economic actors whose behaviors can be understood, and that markets are self-regulated by an “invisible hand.”

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A decade later, upon his return home from the five-year voyage around the world on HMS Beagle, Darwin revisited these works, reconsidering their implications in light of the new theory he was developing.10 Although Darwin does not reference Smith directly, Darwin scholars are largely in agreement that he modeled his theory of natural selection after Smith’s theory of the invisible hand.11 Compare, by example, these two descriptions from Smith and Darwin: Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Adam Smith, The Wealth of Nations, 1776 It may be said that natural selection is daily and hourly scrutinising, throughout the world, every variation, even the slightest; rejecting that which is bad, preserving and adding up all that is good; silently and insensibly working, whenever and wherever opportunity offers, at the improvement of each organic being in relation to its organic and inorganic conditions of life.

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When Stein interviewed me and asked my opinion on the impact of Darwinism on culture, he seemed astonishingly ignorant of the many other ways that Darwinism has been used and abused by political and economic ideologues of all stripes. Because Stein is a well-known economic conservative (and because I had just finished writing my book The Mind of the Market, a chapter of which compares Adam Smith’s “invisible hand” with Charles Darwin’s “natural selection”), I pointed out how the captains of industry in the late nineteenth and early twentieth centuries justified their beliefs in laissez-faire capitalism through the social Darwinism of “survival of the fittest corporations.” And, more recently, I noted that Enron’s CEO, Jeffrey Skilling, said his favorite book in Harvard Business School was Richard Dawkins’ The Selfish Gene (first published in 1976), a form of Darwinism that Skilling badly misinterpreted (“read by title only” in Dawkins’ apt phrase to describe those who misread the book).

The Corporation: The Pathological Pursuit of Profit and Power
by Joel Bakan
Published 1 Jan 2003

Unlike the prevailing partnership form, in which relatively small groups of men, bonded together by personal loyalties and mutual trust, pooled their resources to set up businesses they ran as well as owned, the corporation separated ownership from management- one group of people, directors and managers, ran the firm, while another group, shareholders, owned it. That unique design was believed by many to be a recipe for corruption and scandal. Adam Smith warned in The Wealth of Nations that because managers could not be trusted to steward "other people's money," "negligence and profusion" would inevitably result when businesses organized as corporations. Indeed, by the time he wrote those words in 1776, the corporation had been banned in England for more than fifty years.

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Ford still stands for the legal principle that managers and directors have a legal duty to put shareholders' interests above all others and no legal authority to serve any other interests-what has come to be known as "the best interests of the corporation" principle. That principle provided a legal fix to a flaw in the corporate form that Page 37 NE CORPORATION 37 had famously worried Adam Smith 140 years before Dodge v. Ford was decided. Smith, in his 1776 classic, The Wealth of Nations, said he was troubled by the fact that corporations' owners, their shareholders , did not run their own businesses but delegated that task to professional managers. The latter could not be trusted to apply the same "anxious vigilance" to manage "other people's money" as they would their own, he wrote, and "negligence and profusion therefore must prevail, more or less, in the management of such a company."

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Elite Deviance, 7th ed. Boston: Allyn & Bacon, 2001. Simpson, Sally S. Corporate Crime, Law, and Social Control. Cambridge, England: Cambridge University Press, 2002. Singer, P. W. Corporate Warriors: The Rise of the Privatized Military Industry. Ithaca, N.Y.: Cornell University Press, 2003. Smith, Adam. The Wealth of Nations. New York: Modern Library, 1994. Smith, D. Gordon. "The Shareholder Primacy Norm." The Journal of Corporation Law 23 (1998), 277. Smith, Toby M. The Myth of Green Marketing: Tending Our Goats at the Edge of Apocalypse. Toronto: University of Toronto Press, 1998. Smith, Thomas A. "The Efficient Norm for Corporate Law: A Neo-traditional Interpretation of Fiduciary Duty."

The Globalization Paradox: Democracy and the Future of the World Economy
by Dani Rodrik
Published 23 Dec 2010

(London: Sampson Low, Marston & Co., 1910), pp. 22–23. 12 Quoted in Newman, Empire of the Bay, p. 165. 13 The actual quote is: “This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another”—Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations (1776), Bk. I, chap. 2. 14 See David R. Cameron, “The Expansion of the Public Economy: A Comparative Analysis,” American Political Science Review, vol. 72, no. 4 (December 1978), pp. 1243–61. 15 Vito Tanzi and Ludger Schuknecht, Public Spending in the 20th Century: A Global Perspective (Cambridge: Cambridge University Press, 2000), chap. 1. 16 Dani Rodrik, “Why Do More Open Economies Have Bigger Governments?”

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Taussig, “Abraham Lincoln on the Tariff: A Myth,” Quarterly Journal of Economics, vol. 28, no. 4 (August 1914), pp. 814–20. 6 World Values Survey online database (http://www.worldvaluessurvey.org/). 7 This can be seen in the cross-tabs that World Values Survey makes available online—ibid. 8 Anna Maria Mayda and Dani Rodrik, “Why Are Some Individuals (and Countries) More Protectionist Than Others?” European Economic Review, 49 (August 2005), pp. 1393–1430. 9 So Adam Smith was not correct when he famously wrote, in defense of free trade, that “What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom”—Smith, The Wealth of Nations, Bk. IV, chap. 2. 10 Regulatory decisions on new technologies can have large economic impacts on particular groups, just like trade policies. In October 2009, for example, when the Food and Drug Administration issued a negative judgment on a drug meant to treat osteoporosis in postmenopause women, the stock of the company that makes the drug fell by more than 2 percent.

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Today, we are likely to take our cue more from Adam Smith, whose Wealth of Nations (published in 1776) was a frontal attack on mercantilist thought and practice. Economic liberals, with Smith as their founding father, have a different narrative. They believe that economies flourish when markets are left free of state control. Competition, rather than monopoly, maximizes economic advantage. Protective barriers on trade—import tariffs and prohibitions—reduce competition and thus are a way of shooting oneself in the foot. State-business collaboration is just another name for corruption. Adam Smith did not deny that there was a role for government, but his vision was of a state restricted to national defense, protection of property rights, and administration of justice.

The Great Convergence: Information Technology and the New Globalization
by Richard Baldwin
Published 14 Nov 2016

The Enlightenment (1600s and 1700s) furthered the rise of Europe by adding the thinking of Descartes, Locke, Voltaire, Hobbes, Hume, Kant, Newton, Smith, Rousseau, and others. Europe was also marked by keynote developments in banking, finance, and markets. The economic thought foundations were laid during this period for trade and what would later be called globalization. A key text was Adam Smith’s 1776 tome The Wealth of Nations, which built on thinking by French writers of the physiocratic school. European Age of Discovery: Putting the Global in Globalization The global economic and manufacturing center of gravity was still in Asia at the beginning of the 1400s. The demise of the Silk Road greatly raised the economic rewards in Europe to finding a way to the riches of the East around the Middle Eastern blockage.

…

It was a century-long sequence of incremental technical, organizational, social, and institutional changes that completely transformed the human condition. Economic historian Nick Crafts would argue that any precise year is misleading given its accretive nature, but 1776 provides as good a landmark as any, since this is when he finds a structural break in British industrial growth. Conveniently, it is also the publication date of Adam Smith’s The Wealth of Nations. The Industrial Revolution was directly linked with improved transportation. Inland water and road transportation networks densified in the last decades of the eighteenth century. Water transportation advanced with new types and layouts of sails, new shipbuilding techniques, and big advances in navigational technology.

…

The Specialization versus Coordination Tradeoff Deciding how to organize production is impossibly complex in the real world—that is, in the world of Mein Herr’s one-mile-to-the-mile-map world. The choices that real firms make fill days and years of middle-manager time, but allowing for all that detail would obscure the main tradeoffs. Abstraction is in order. Fortunately, Adam Smith laid out a useful approach to the matter. The key tradeoff is between specialization and coordination. In his 1776 book The Wealth of Nations, Smith discusses the gains from specialization in the context of an eighteenth-century pin factory. As Smith writes: “One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on, is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper.”

How to Be a Liberal: The Story of Liberalism and the Fight for Its Life
by Ian Dunt
Published 15 Oct 2020

Constant’s Principles of Politics Applicable to All Governments has been translated by Dennis O’Keeffe and reads very well on its own. It is also available online at the Online Library of Liberty, which you can access here: https://oll.libertyfund.org/titles/constant-principles-of-politics-applicable-to-all-governments Adam Smith’s The Wealth of Nations and The Theory of Moral Sentiments are worth reading on their own terms. Jerry Muller’s Adam Smith in His Time and Ours is a very good introduction to his life and work. It’s also well worth reading the sections on Smith in A History of Economic Thought: The LSE Lectures, by Lionel Robbins. Robbins was Hayek’s patron and ally at LSE, but then later moved towards Keynesianism.

…

He did so in a way that was vastly more sophisticated than previous thinkers, because he had access to significant improvements in the field of economics. The chief figure in that improvement was a Scotsman called Adam Smith. Using his contributions, Constant was able to develop new lines of argument for how freedom existed in the material world. Smith was born in Kirkcaldy in 1723. He lived a fairly uneventful life, teaching in universities in Edinburgh and Glasgow. But his contribution to intellectual thought would make him a pioneer in the history of ideas. His 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, was the foundation of modern economics. It has since been misrepresented into a far cruder and more pessimistic assessment of the human personality than Smith himself intended.

…

‘What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom,’ Smith said. This notion took a firm hold on those who came after him. It became something close to a sacred economic commandment, to be followed at all times, by people across the political spectrum. The Wealth of Nations was an explanation and defence of capitalism – a system of production organised for profit. And it fitted liberalism like a glove. It seemed to tick all the boxes. It began with the individual. It based its function on the assumption that no-one had the right to tell the individual what to do – no king, no lord, no planning committee had the right to interfere.

Obliquity: Why Our Goals Are Best Achieved Indirectly
by John Kay
Published 30 Apr 2010

Chapter 1: Obliquity—Why Our Objectives Are Often Best Pursued Indirectly 1 John Stuart Mill, Autobiography (1873; reprint, London: Penguin, 1989), p. 117. 2 Jim Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (London: Random House Business Books, 2000), p. 8. 3 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; abridged with commentary, Indianapolis and Cambridge: Hackett, 1993), p. 130. 4 Emily Dickinson, Emily Dickinson, ed. L. Dickey (New York: Dell, 1960), p. 107. 5 John Keats, “On First Looking into Chapman’s Homer,” in Poems by John Keats (London: Methuen, n.d.). 6 Richard Weston, Modernism (London: Phaidon Press, 1996). 7 Charles Jencks, The Language of Post-Modern Architecture (London, Academy Editions, 1984), p. 9. 8 Le Corbusier, Toward a New Architecture (London, Architectural Press, 1982), p. 10. 9 Marseille’s Unité d’Habitation, also known as La Cité Radieuse, was built in 1947–52 and combined Le Corbusier’s vision of communal living with the needs of postwar France for social housing. 10 Michael Hammer and James Champy, Reengineering the Corporation: A Manifesto for Business Revolution (London: Nicholas Brearley, 1995), p. 31. 11 Vladimir Ilyich Lenin, Essential Works of Lenin: “What Is to Be Done?”

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London: Weidenfeld & Nicolson, 1970. Simon, H. A., and A. Newell. “Heuristic Problem Solving: The Next Advance in Operations Research.” Operations Research 6, no. 1 (Jan.–Feb. 1958). Singh, Simon. Fermat’s Last Theorem. London: Fourth Estate, 1997. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. 1776. Abridged, with commentary, Indianapolis and Cambridge: Hackett Publishing, 1993. Smith, Ed. What Sport Tells Us About Life. London: Penguin, 2008. Sobel, Robert. The Rise and Fall of the Conglomerate Kings. New York: Stein and Day, 1984. Solomon, Robert C. Ethics and Excellence. New York: Oxford University Press, 1994.

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—Jim Collins and Jerry I. Porras, Built to Last2 He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. —Adam Smith, The Wealth of Nations3 Tell all the truth, but tell it slant. Success in circuit lies. —Emily Dickinson4 The American continent separates the Atlantic Ocean in the east from the Pacific in the west. The route of the Panama Canal follows the shortest crossing of America. When you arrive at Balboa port on the Pacific coast you are some thirty miles to the east of Colón, where you left the Atlantic.

Red Flags: Why Xi's China Is in Jeopardy
by George Magnus
Published 10 Sep 2018

Tim Marshall, Prisoners of Geography: Ten Maps That Tell You Everything You Need to Know about Global Politics, Elliott & Thompson, 2015, pp. 35–6. 7. Angus Maddison, China’s Economic Performance in the Long Run, 2nd edition, OECD, 2007, p. 27. 8. Ryan Patrick Hanley, ‘The Wisdom of the State: Adam Smith on China and the Tartary’, American Political Science Review, vol. 108, no. 2, May 2014. 9. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, cited in Andre Gunder Frank, ReORIENT: Global Economy in the Asian Age, University of California Press, 1998, p. 279. 10. Eric Midthun Brooks, ‘The Enlightenment European Perception of China’, BA thesis, Haverford College, 2009, pp. 25–6, <https://scholarship.tricolib.brynmawr.edu/bitstream/handle/10066/3597/2009BrooksE.pdf?

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The ‘century of humiliation’ In the late eighteenth century, the Scottish economist, philosopher and author Adam Smith, considered in the West at least as the founding father of economics, wrote prolifically about China. He deemed it to be ‘one of the most fertile, best cultivated, most industrious, and most populous countries in the world’, and noted that it was the only non-European modern society to have reached levels of civilisation and opulence that rivalled those of Europe.8 In his famous book An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776, he said that ‘Even those three countries, China, Egypt, and Indostan, the wealthiest, according to all accounts, that ever there were in the world, are chiefly renowned for their superiority in agriculture and manufactures . . .

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–China Strategic and Economic Dialogue (i) Hua Guofeng (i) Huangpu district (Shanghai) (i) Huawei (i), (ii), (iii), (iv) hukou (i), (ii), (iii), (iv) Human Freedom Index (i) Human Resources and Social Security, Ministry of (i) Hunan (i) Hungary (i), (ii), (iii), (iv) ICORs (incremental capital-output ratios) (i), (ii), (iii) n4 IMF Article IV report (i) on broadening and deepening of financial system (i) China urged to devalue (i) China’s integration and (i) concern over smaller banks (i) concern over WMPs (i) credit gaps (i) credit intensity (i) GP research (i) ICOR (i) n4 laissez-faire ideas (i) pensions, healthcare and GDP research (i), (ii), (iii) Renminbi reserves (i) risky corporate loans (i) Special Drawing Rights (i), (ii), (iii), (iv), (v) WAPs (i) immigrants see migrants income inequality (i) India Adam Smith on (i) ASEAN (i) BRI misgivings (i) BRICS (i), (ii) comparative debt in (i) demographic dividend (i) economic freedom level (i) frictions with (i) Nobel Prize (i) pushing back against China (i) regional allies of (i) SCO member (i) Indian Ocean access to ports (i) African rail projects and (i) Chinese warships enter (i) rimland (i) shorelines (i) Indo-Pacific region (i), (ii) Indonesia Asian crisis (i) BRI investment (i) debt and GDP (i) GDP (i) rail transport projects (i) RCEP (i) retirement age (i) trade with China (i) Industrial and Commercial Bank of China (i), (ii) Industrial Revolution (i), (ii) industrialisation (i), (ii) Industry and Information Technology, Minister of (i) infrastructure (i), (ii), (iii), (iv) Initial Public Offerings (IPOs) (i) Inner Mongolia (i), (ii) innovation (i), (ii) Inquiry into the Nature and Causes of the Wealth of Nations (Adam Smith) (i) Institute for International Finance (i) institutions (i), (ii) insurance companies (i), (ii), (iii) intellectual property (i) interbank funding (i), (ii), (iii), (iv), (v) investment (i), (ii), (iii) Iran (i) Ireland (i), (ii), (iii) Iron Curtain (i) ‘iron rice bowl’ (i) Israel (i), (ii) Italy (i), (ii), (iii) Jakarta (i), (ii) Japan acts of aggression by (i) aftermath of war (i) ASEAN (i) between the wars (i) bond market (i) Boxer Rebellion and (i) Chiang Kai-shek fights (i) China and (i) China’s insecurity (i) credit gap comparison (i) dispute over Diaoyu islands (i), (ii) export-led growth (i), (ii) financial crisis (i) friction with (i) full-scale war with China (i), (ii) growth (i) high-speed rail (i) India and (i) Liaodong peninsula (i) Manchuria taken (i), (ii), (iii) Mao fights (i) middle- to high-income (i) migrants to (i) Okinawa (i) old-age dependency ratio (i) pensions, healthcare and GDP research (i) pushing back against China (i) RCEP (i) Renminbi block, attitude to (i) research and development (i) rimland (i) robots (i) seas and islands disputes (i) Shinzō Abe (i) TPP (i) trade and investment from (i) yen (i) Jardine Matheson Holdings (i) Jiang Zemin 1990s (i) Deng’s reforms amplified (i), (ii), (iii) influence and allies (i) Xiao Jianhua and (i) Johnson, Lyndon (i) Julius Caesar (i) Kamchatka (i) Kashgar (i) Kashmir (i) Kazakhstan (i), (ii) Ke Jie (i) Kenya (i) Keynes, John Maynard (i) Kharas, Homi (i) Kissinger, Henry (i), (ii), (iii), (iv) Korea (i), (ii), (iii) see also North Korea; South Korea Korean War (i), (ii) Kornai, János (i), (ii), (iii) n16 Kowloon (i), (ii) Krugman, Paul (i) Kunming (i) Kuomintang (KMT) (i), (ii) Kyrgyzstan (i) Kyushu (i) labour productivity (i) land reform (i) Laos (i), (ii), (iii) Latin America (i), (ii), (iii) Lattice Semiconductor Corporation (i) leadership (i) Leading Small Groups (LSGs) (i), (ii), (iii), (iv) Lee Kuan Yew (i) Lee Sodol (i) Legendary Entertainment (i) Lehman Brothers (i) lending (i) Leninism governance tending to (i) late 1940s (i) party purity (i) Xi’s crusade on (i), (ii) Lenovo (i), (ii) Lewis, Arthur (i) Lewis turning point (i) LGFVs (local government financing vehicles) (i) Li Keqiang (i), (ii) Liaodong peninsula (i), (ii) LinkedIn (i) Liu He (i), (ii), (iii) Liu Xiaobo (i) local government (i), (ii), (iii) London (i), (ii), (iii) Luttwak, Edward (i), (ii), (iii) Macartney, Lord George (i), (ii), (iii) Macau (i), (ii) Made in China 2025 (MIC25) ambitious plans (i) importance of (i) mercantilism (i) priority sectors (i) robotics (i) Maddison, Angus (i), (ii), (iii) n3 (C1) Maghreb (i) major banks see individual entries Malacca, Straits of (i) Malay peninsula (i) Malaysia ASEAN member (i) Asian crisis (i) high growth maintenance (i) Nine-Dash Line (i) rail projects (i), (ii) Renminbi reserves (i) TPP member (i) trade with (i) Maldives (i) Malthus, Thomas (i), (ii) Manchuria Communists retake (i) Japanese companies in (i) Japanese puppet state (i), (ii), (iii) key supplier (i) North China Plain and (i) Pacific coast access (i) Russian interests (i) targeted (i) Manhattan (i), (ii) see also New York Mao Zedong arts and sciences (i) China stands up under (i) China under (i) Communist Party’s grip on power (i) consumer sector under (i) Deng rehabilitated (i) Deng, Xi and (i) east wind and west wind (i) Great Leap Forward (i) industrial economy under (i) nature of China under (i) People’s Republic proclaimed (i) positives and negatives (i) property rights (i) women and the workforce (i) Xi and (i) Maoism (i) Mar-a-Lago (i) Mark Antony (i) Market Supervision Administration (i) Marshall Plan (i), (ii) Marxism (i), (ii), (iii), (iv) Mauritius (i) May Fourth Movement (i) McCulley, Paul (i) n18 Mediterranean (i) Menon, Shivshankar (i) mergers (i) MES (market economy status (ii)) Mexico completion of education rates (i) debt comparison (i) GDP comparison (i) NAFTA (i) pensions comparison (i) TPP member (i) US border (i) viagra policy (i) Middle East (i), (ii), (iii) middle-income trap (i), definition (i) evidence and argument for (i) governance (i) hostility to (i) hukou system (i) lack of social welfare for (i) low level of (i) migrant factory workers (i) patents and innovation significance (i) significance of technology tech strengths and weaknesses (i) total factor productivity focus (i) vested and conflicted interests (i) ultimate test (i) World Bank statistics (i) migrants (i), (ii), (iii), (iv), (v) Ming dynasty (i) Minsky, Hyman (i) mixed ownership (i), (ii) Modi, Narendra (i) Mombasa (i) monetary systems (i) Mongolia (i), (ii) Monogram (i) Moody’s (i) Morocco (i) mortality rates (i) see also population statistics mortgages (i) motor cars (i), (ii) Moutai (i) Mundell, Robert (i) Muslims (i) Mutual Fund Connect (i) Myanmar ASEAN (i) Chinese projects (i) disputes (i) low value manufacturing moves to (i) Qing Empire in (i) ‘string of pearls’ (i) ‘Myth of Asia’s Miracle, The’ (Paul Krugman) (i) NAFTA (North American Free Trade Agreement) (i) Nairobi (i) Namibia (i) Nanking (i) Treaty of (i), (ii) National Bureau of Statistics fertility rates (i) GDP figures (i) ICOR estimate (i), (ii), (iii) n4 SOE workers (i) National Cyberspace Work Conference (i) National Development and Reform Commission (i), (ii), (iii) National Financial Work Conferences (i) National Health and Family Planning Commission (i) National Medium and Long-Term Plan for the Development of Science and Technology (i) National Natural Science Foundation (i) National People’s Congress 2007 (i) 2016 (i) 2018 (i), (ii), (iii), (iv) National People’s Party of China (i) National Science Foundation (US) (i) National Security Commission (i) National Security Strategy (US) (i), (ii) National Supervision Commission (i), (ii), (iii), (iv) Needham, Joseph (i) Nepal (i), (ii) Netherlands (i) New Development Bank (i), (ii) New Eurasian Land Bridge (i) New Territories (i), (ii) New York (i) see also Manhattan New Zealand (i), (ii), (iii) Next Generation AI Development Plan (i) Nigeria (i) Nine-Dash Line (i) Ningpo (i) Nixon, Richard (i) Nobel Prizes (i), (ii) Nogales, Arizona (i) Nogales, Sonora (i) Nokia (i) non-communicable disease (i) non-performing loans (i), (ii), (iii), (iv), (v), (vi) North China Plain (i) North Korea (i) see also Korea Northern Rock (i) Norway (i) Nye, Joseph (i) Obama, Barack Hu Jintao and (i) Pacific shift recognised (i) Renminbi (i) US and China (i), (ii) OECD (Organisation for Economic Co-operation and Development) China’s ranking (i) GDP rates for pension and healthcare (i) GP doctors in (i) tertiary education rates (i) US trade deficit with China (i) Office of the US Trade Representative (i) Official Investment Assistance (Japan) (i) Okinawa (i) old-age dependency ratios (i), (ii), (iii) Olson, Mancur (i) Oman (i) one-child policy (i), (ii) Opium Wars financial cost of (i) First Opium War (i), (ii), (iii) Qing dynasty defeated (i) Oriental Pearl TV Tower, Shanghai (i) Pacific (i), (ii), (iii) Padma Bridge (i) Pakistan Economic Corridor (i) long-standing ally (i) Renminbi reserves (i) SCO member (i) ‘string of pearls’ (i) Paris (i) Party Congresses see numerical list at head of index patents (i) Peking (i), (ii), (iii) see also Beijing pensions (i) People’s Bank of China see also banks cuts interest rates again (i) floating exchange rates (i) lender of last resort (i), (ii) long term governor of (i) new rules issued (i) new State Council committee coordinates (i) places severe restrictions on banks (i) publishing Renminbi values (i) Renminbi/dollar rate altered (i) repo agreements (i) sells dollar assets (i) stepping in (i) Zhou Xiaochuan essay (i) People’s Daily front-page interview (i), (ii) on The Hague tribunal (i) riposte to Soros (i) stock market encouragement (i) People’s Liberation Army (i), (ii) Persia (i) Persian Gulf (i), (ii) Peru (i) Pettis, Michael (i) n12 Pew Research (i) Peyrefitte, Alain (i) Philippines (i), (ii), (iii), (iv) Piraeus (i) PISA (Programme for International Student Assessment) (i) Poland (i), (ii), (iii) ‘Polar Silk Road’ (i) Politburo (i), (ii), (iii), (iv) pollution (i) Polo, Marco (i) Pomeranz, Kenneth (i) population statistics (i) see also ageing trap; WAP (working-age population) consequences of ageing (i) demographic dividends (i), (ii) hukou system and other effects (i) low fertility (i), (ii), (iii) migrants (i), (ii) old-age dependency ratios (i), (ii), (iii) one-child policy (i), (ii) places with the most ageing populations (i) rural population (i) savings trends (i) technology and (i) under Mao (i) women (i) Port Arthur (i) Port City Colombo (i), (ii) Portugal (i), (ii), (iii), (iv) pricing (i), (ii) private ownership (i), (ii) productivity (i), (ii) Propaganda, Department of (i) property (i) property rights (i) Puerto Rico (i) Punta Gorda, Florida (i) Putin, Vladimir (i) Qianlong, Emperor (i) Qing dynasty (i), (ii), (iii) Qingdao (i) Qualcomm (i) Qualified Domestic Institutional Investors (i), (ii) Qualified Foreign Institutional Investors (i), (ii) Qiushi, magazine (i) rail network (i), (ii) RCEP (Regional Comprehensive Economic Partnership) (i), (ii), (iii) real estate (i), (ii) reform authoritative source warns of need for (i), (ii) different meaning from West (i) of economy via rebalancing (i), (ii) as embraced by Deng Xiaoping (i) fiscal, foreign trade and finance (i), (ii) Hukou (i) of ownership (i) state-owned enterprises (i) third plenum announcements (i) in Xi Jinping’s China (i) ‘Reform and Opening Up’ (Deng Xiaoping) (i), (ii), (iii) regulations and regulatory authorities (financial) (i), (ii) Reinhart, Carmen (i) Renminbi (i) 2015 mini-devaluation and capital outflows (i), (ii) appreciates (i) banking system’s assets in (i) bloc for (i) capital flight risk (i) devaluation (i), (ii), (iii), (iv) dim sum bonds (i) efforts to internationalise (i) end of peg (i) foreign investors and (i) fully convertible currency, a (i) growing importance of (i) IMF’s Special Drawing Rights (i) Qualified Institutional Investors (i) in relation to reserves (i) Renminbi trap (i), (ii), (iii), (iv) share of world reserves (i) significance of (i), (ii) Special Drawing Rights and (i), (ii) US dollar and (i), (ii), (iii), (iv), (v) repo markets (i), (ii) research and development (R&D) (i), (ii) Resources Department (i) retirement age (i) Rhodium Group (i) rimland (i) Robinson, James (i) robots (i) Rogoff, Kenneth (i) Roman Empire (i) Rotterdam (i) Rozelle, Scott (i) Rudd, Kevin (i) Rudong County (i) Rumsfeld, Donald (i) Rural Cooperative Medical Scheme (i) rural workers (i) Russia see also Soviet Union 19th century acquisitions (i), (ii) ageing population (i) BRI and (i) BRICS (i), (ii), (iii) C929s (i) China’s view of (i) early attempts at trade (i) fertility rates (i) Human Freedom Index (i) middle income trap and (i) Pacific sea ports (i) Polar Silk Road (i) Renminbi reserves (i) SCO member (i) Ryukyu Islands (i) Samsung (i) San Francisco (i) SASAC (i), (ii) Saudi Arabia (i) savings (i), (ii), (iii) Scarborough Shoal (i) Schmidt, Eric (i) Schumpeter, Joseph (i) SCIOs (i) Second Opium War (i) Second World War China and Japan (i), (ii) economic development since (i) Marshall Plan (i), (ii) US and Japan (i) Senkaku islands see Diaoyu islands separatism (i), (ii) Serbia (i) service sector (i), (ii) Seventh Fleet (US) (i) SEZs (special economic zones) (i), (ii), (iii), (iv) shadow banks (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix) n18 see also banks Shandong (i), (ii) Shanghai 1st Party Congress (i) arsenal (i) British influence in (i) central bank established (i) Deng’s Southern Tour (i) firms halt trading (i) income per head (i) interbank currency market (i) PISA scores (i) pollution (i) property price rises (i) stock market (i), (ii), (iii) Western skills used (i) Shanghai Composite Index (i), (ii) Shanghai Cooperation Organisation (SCO) (i), (ii), (iii) Shanghai Free Trade Zone (i), (ii), (iii) Shanghai–Hong Kong Bond Connect Scheme (i) Shanghai–Hong Kong Stock Connect Scheme (i), (ii) Shanghai World Financial Centre (i) Shenzhen first foreign company in (i) n3 (Intro.)

Rage Inside the Machine: The Prejudice of Algorithms, and How to Stop the Internet Making Bigots of Us All
by Robert Elliott Smith
Published 26 Jun 2019

Democracy’s emphasis on individual rights fit neatly with the ‘priesthood of the individual’ doctrine at the core of Protestantism, the official religion of the country since the sixteenth century, and which by the eighteenth century was a distinguishing aspect of English thought, in contrast to more collectivist, Catholic Europe. This emphasis on individualism also found an echo in the emerging academic discipline of economics. In 1776, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations, in which he wrote: It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

…

On 2 March 1812, The Morning Chronicle published Byron’s ‘An Ode to the Framers Bill’: Men are more easily made than machinery Stockings fetch better prices than lives Gibbets on Sherwood will heighten the scenery, Showing how Commerce, how Liberty thrives Mechanization evolved to handle tasks outside of textiles, and spread quickly throughout industries and the world, nearly uniformly displacing jobs and degrading workers’ rights along the way. Three decades after Vaucanson’s marrying automata tech to industry, Adam Smith wrote The Wealth of Nations, the book which not only created the notion of the ‘invisible hand’, but foresaw the economic effects that mechanization would accelerate: specialization, and its inevitable consequence, the division of labour. Imagine the making of a fine, eighteenth-century leather purse. A single person, working alone to make such a purse would have to know how to raise grain, feed livestock, slaughter them, skin them, tan those skins, and make tools to sew and work the leather (not to mention the finishing work).

…

Despite the indisputable proof of women’s ability to contribute intellectually on a par with men, Edwards, Wollstonecraft, Lovelace and thousands of other outstanding female thinkers have struggled to shift the entrenched separate spheres social model over the centuries, even when a change was called for by prominent men. One such influential advocate was John Stuart Mill, who in 1848 (inspired partially by Babbage) published Principles of Political Economy, which replaced Adam Smith’s influential The Wealth of Nations to become the most important political economics text of the late nineteenth century and which was used in economics teaching well into the twentieth century. Mill was a philosophical titan and is considered one of the most influential thinkers in the history of liberalism. He contributed widely to social theory, political theory and economics, and was an accepted authority on social and individual rights.

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century
by Rodrigo Aguilera
Published 10 Mar 2020

Finally, for those readers who still remain concerned about the potential disruption involved in moving towards an economy where employees rather than capitalists or the state control the means of production, it is worth recalling the extent to which many of the features that we now consider essential to a modern, capitalist economy were once heavily criticized. By capitalists. For example, Adam Smith was no fan of the joint-stock company, foreseeing the conflicts of interest between absentee ownership and management that would obsess a generation of business theorists two centuries after The Wealth of Nations was published. As with much of his work, statements like this have been conveniently forgotten by economic liberals, and especially libertarians, who would prefer to paint him as an absolutist defender of free markets and free enterprise.: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.

…

Having the wrong economic model to embrace it will be one of the biggest missed opportunities for progress and prosperity that we could conceive. Saving Democracy “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.” — Adam Smith, The Wealth of Nations Perhaps it is my bias as an economist speaking here, but it is my belief that solving many of the economic problems facing humanity would simultaneously help solve the political ones. Polities not captured by laissez-faire fundamentalism could offer their citizens true pluralistic options at the ballot box rather than recycling the same plutocrats from different parties.

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Source is the OECD Tax Database, https://www.oecd.org/tax/tax-policy/tax-database/ 22 Page, B.I., Seawright, J. and Lacombe, M.J., “What Billionaires Want: The Secret Influence of America’s 100 Richest”, Guardian, 30 Oct. 2018, https://www.theguardian.com/us-news/2018/oct/30/billionaire-stealth-politics-america-100-richest-what-they-want 23 Rawls, J., Justice as Fairness: A Restatement (Harvard University Press, 2001), pp. 137-8 24 Ibid., pg. 138 25 Ibid., pg. 139 26 Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Book V, Ch. I, Part III 27 Quoted in Djellic, M-L., “When Limited Liability was (Still) an Issue: Mobilization and Politics of Signification in 19th-Century England”, Organizational Studies, 34(5-6), 2013, https://doi.org/10.1177%2F0170840613479223 28 “Conservative General Election Manifesto 1979”, Margaret Thatcher Foundation, https://www.margaretthatcher.org/document/110858 29 One study for the US is Muro, M., Maxim, R., and Whiton, J.

The Glass Cage: Automation and Us
by Nicholas Carr
Published 28 Sep 2014

Thanks to the ingenuity of our inventors and entrepreneurs, hardly a decade has passed without the arrival of new, more elaborate, and more capable machinery. Yet our ambivalence toward these fabulous creations, creations of our own hands and minds, has remained a constant. It’s almost as if in looking at a machine we see, if only dimly, something about ourselves that we don’t quite trust. In his 1776 masterwork The Wealth of Nations, the foundational text of free enterprise, Adam Smith praised the great variety of “very pretty machines” that manufacturers were installing to “facilitate and abridge labour.” By enabling “one man to do the work of many,” he predicted, mechanization would provide a great boost to industrial productivity.7 Factory owners would earn more profits, which they would then invest in expanding their operations—building more plants, buying more machines, hiring more employees.

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Inside the new factories, ever more efficient and capable machines were installed, boosting productivity but also narrowing the responsibility and autonomy of those who operated the equipment. Skilled craftwork became unskilled factory labor. Adam Smith had recognized how the specialization of factory jobs would lead to the deskilling of workers. “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 wrote in The Wealth of Nations. “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.”27 Smith viewed the degradation of skills as an unfortunate but unavoidable by-product of efficient factory production.

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.: Cambridge University Press, 1956), 1. 2.Ibid., 91. 3.Ibid., 1–6. The emphasis is Macmillan’s. 4.Ibid., 92. 5.George B. Dyson, Darwin among the Machines: The Evolution of Global Intelligence (Reading, Mass.: Addison-Wesley, 1997), x. 6.Bertrand Russell, “Machines and the Emotions,” in Sceptical Essays (London: Routledge, 2004), 64. 7.Adam Smith, The Wealth of Nations (New York: Modern Library, 2000), 7–10. 8.Ibid., 408. 9.Malcolm I. Thomis, The Luddites: Machine-Breaking in Regency England (Newton Abbot, U.K.: David & Charles, 1970), 50. See also E. J. Hobsbawm, “The Machine Breakers,” Past and Present 1, no. 1 (1952): 57–70. 10.Karl Marx, Capital: A Critique of Political Economy, vol. 1 (Chicago: Charles H.

Machinery of Freedom: A Guide to Radical Capitalism
by David Friedman
Published 2 Jan 1978

This is a classic example of the use of economics and statistics to measure the effect of government regulation. Peltz-man's conclusion was that the particular legislation he was looking at reduced the rate of introduction of new drugs by about half, while having no detectable effect on their average quality. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; reprint ed., New York: Modern Library, 1937). Usually referred to simply as The Wealth of Nations, this is arguably the most influential libertarian book ever written. Law and Economics Gary S. Becker and George J. Stigler, 'Law Enforcement, Malfeasance, and Compensation of Enforcers', Journal of Legal Studies, 3 (January 1974), 1-18.

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Force and restraint may, no doubt, be in some degree requisite in order to oblige children, or very young boys, to attend to those parts of education which it is thought necessary for them to acquire during that early period of life; but after twelve or thirteen years of age, provided the master does his duty, force or restraint can scarce ever be necessary to carry on any part of education. Excerpts from An Inquiry into the Nature and Causes of the Wealth of Nations, Book V, part 3, article 2. Written by Adam Smith and published in 1776. THE IMPOSSIBILITY OF A UNIVERSITY The modern corporate university, public or private, contains an implicit contradiction: it cannot take positions, but it must take positions. The second makes the demand for a 'responsible university' appealing, intellectually as well as emotionally.

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Table of Contents THE MACHINERY OF FREEDOM PREFACE TO THE SECOND EDITION PREFACE TO THE FIRST EDITION ACKNOWLEDGEMENTS INTRODUCTION IN DEFENSE OF PROPERTY IN DEFENSE OF PROPERTY A NECESSARY DIGRESSION LOVE IS NOT ENOUGH INTERLUDE ROBIN HOOD SELLS OUT THE RICH GET RICHER AND THE POOR GET RICHER MONOPOLY I: HOW TO LOSE YOUR SHIRT MONOPOLY II: STATE MONOPOLY FOR FUN AND PROFIT EXPLOITATION AND INTEREST I DON'T NEED NOTHING LIBERTARIAN GRAB BAG OR HOW TO SELL THE STATE IN SMALL PIECES SELL THE SCHOOLS A RADICAL CRITIQUE OF AMERICAN UNIVERSITIES THE IMPOSSIBILITY OF A UNIVERSITY ADAM SMITH U. OPEN THE GATES SELL THE STREETS 99 AND 44/100THS PERCENT BUILT A FIRST STEP COUNTERATTACK MIGHT HAVE BEEN IS WILLIAM F. BUCKLEY A CONTAGIOUS DISEASE? IT'S MY LIFE THE RIGHTS OF YOUTH CREEPING CAPITALISM IF YOU WANT IT, BUY IT SCARCE MEANS FINITE POLLUTION BUCKSHOT FOR A SOCIALIST FRIEND ANARCHY IS NOT CHAOS WHAT IS ANARCHY?

Work in the Future The Automation Revolution-Palgrave MacMillan (2019)
by Robert Skidelsky Nan Craig
Published 15 Mar 2020

Sayers, S. (2005). Why Work? Marxism and Human Nature. Science and Society, 69(4), 606–616. Skidelsky, R., & Skidelsky, E. (2012). How Much is Enough? Money and the Good Life. London: Penguin. Smith, A. (1976). In R. H. Campbell & A. S. Skinner (Eds.), An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Clarendon Press. Spencer, D. A. (2009). The Political Economy of Work. London: Routledge. Spencer, D. A. (2018). Fear and Hope in an Age of Mass Automation: Debating the Future of Work, New Technology. Work and Employment, 33(1), 1–12. Srnicek, N., & Williams, A. (2015). Inventing the Future.

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Paris: OECD Publishing. Rosen, S. (1986). The Theory of Equalizing Differences. In O. Ashenfelter & R. Layard (Eds.), Handbook of Labor Economics. Amsterdam: North-Holland. Sennett, R. (2008). The Craftsman. New Haven, CT: Yale University Press. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. London: Strahan. Supiot, A., et al. (2001). Beyond Employment. Changes in Work and the Future of Labour Law in Europe. Oxford: Oxford University Press. Taylor, C. (1989). The Sources of the Self. Cambridge, MA: Harvard University Press. Verdugo, G. (2014). The Great Compression of the French Wage Structure, 1969–2008.

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The medieval economy comprised farms and ‘manufactories’ in small towns which were little larger than villages. The professions had their origin in the urban guilds of skilled workers. Yet everyone was skilled in the sense that 12 R. Skidelsky their work involved knowledge of all stages of production, not just tiny bits of it, as in Adam Smith’s pin factory. The nature of the work forced them to be ‘multi-tasked’. Associated with multi-tasking was multiple sources of income, with the ‘putting out’ system providing extra income for farmers in the fallow season. The social and political structure was hierarchical: everyone had their place and their just reward in the scheme of things.

The Third Pillar: How Markets and the State Leave the Community Behind
by Raghuram Rajan
Published 26 Feb 2019

FREEING THE MARKETS In his book An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776, Adam Smith argued that by producing for the market and maximizing his own profits, the manufacturer maximized the size of the public pie, and thus the wealth of the nation. Smith thus made the case for allowing the invisible hand of the competitive market, working through self-interest, to drive economic prosperity. The real damage was not caused by avarice or even the self-indulgence of the rich, it emanated from restraints on competition and the resulting distorted prices and quantities. Seen in this light, Adam Smith was pro-market, not pro-business.

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McGee, “The Economic Thought of David Hume,” Hume Studies 15, no. 1 (1989), 184–204. http://www.humesociety.org/hs/issues/v15n1/mcgee/mcgee-v15n1.pdf 23. The quotations are from Dietz, Economic History of England, 270. 24. This paragraph draws on E. L. Jones, The European Miracle, 3rd ed. (1981; repr., Cambridge, UK: Cambridge University Press, 2003), 98–102. 25. Jones, The European Miracle, 98. 26. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976). 27. Jones, European Miracle, 114; Eric Evans, The Forging of the Modern State: Early Industrial Britain 1783–1870 (London: Longman, 2001), 32, conjectures that even in the late eighteenth century when government was more capable than earlier, fully one-fifth of all imports were smuggled. 28.

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Linklater, Owning the Earth, 117. 46. See Moore, Social Origins. CHAPTER 3: FREEING THE MARKET . . . THEN DEFENDING IT 1. Quoted in Edward Cheyney, An Introduction to the Industrial and Social History of England (New York: Macmillan, 1916), chapter 8. 2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976), 90. Page numbers are from the Kindle edition of this text. 3. Smith, Wealth of Nations, 176. 4. See, for example, Smith, Wealth of Nations, 493. 5. Smith, Wealth of Nations, 314. 6. Smith, Wealth of Nations, 482. 7.

Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals
by Tyler Cowen
Published 15 Oct 2018

First: The Principle of Growth: We should maximize the rate of sustainable economic growth, defined in terms of a concept such as Wealth Plus. The Principle of Growth would return economics to its roots in Adam Smith. Smith held a straightforward, common sense approach to political economy. He understood that the benefits of cumulative growth were significant, especially with the passage of time. It is no accident that his economics treatise was entitled An Inquiry Into the Nature and Causes of the Wealth of Nations. By the way, I see only one episode in human history in which the Principle of Growth was clearly and unambiguously applied, and that is in the East Asian economic miracles, which includes Japan, South Korea, Taiwan, Hong Kong, Singapore, and China (with a caveat for sustainability in the case of China).

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Land Economics 73, no. 4 (November): 467–491. Chipman, John S., and James C. Moore. 1978. “The New Welfare Economics 1939–1974.” International Economic Review 19, no. 3 (October): 547–584. Clark, Kenneth. 1969. Civilization. New York: Harper & Row. Comin, Diego, William Easterly, and Erick Gong. 2010. “Was the Wealth of Nations Determined in 1000 B.C.?” American Economic Journal: Macroeconomics 2, no. 3: 65–97. Cowen, Tyler. 1992. “Consequentialism Implies a Zero Intergenerational Rate of Discount.” In Philosophy, Politics, and Society: Volume 6, Justice Between Age Groups and Generations, edited by Peter Laslett and James Fishkin, 162–168.

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Since free lunches aren’t always easy to find, we should think about where free lunches might be hiding and why some of those free lunches might be less than evident. In particular, we might uncover hidden gains if we more closely consider the dimension of time. Maybe some of our choices release a steady stream of benefits, but we don’t see them as clearly as we ought to. As Adam Smith noted in the eighteenth century, we tend to visualize future events very poorly and with a deficit of proper imagination. In economics, there is at least one (hypothetical) example of a free lunch. Economist Frank Knight wrote of the Crusonia plant, a mythical, automatically growing crop which generates more output each period.

Falter: Has the Human Game Begun to Play Itself Out?
by Bill McKibben
Published 15 Apr 2019

These kids spend far less time hanging out with friends than any generation in history, and the data show they’re uniquely unhappy as a result.9 There’s actually a kind of natural balance between public and private that wise people have always recognized. Adam Smith can be said to have launched the movement that ended up with the Kochs: his landmark work, The Wealth of Nations, provided the first explanation of how pursuing one’s own interest could end up increasing the general prosperity. But that wasn’t Smith’s only book. In The Theory of Moral Sentiments, he points out that “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.”

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As the French journalist Hervé Kempf observed, growth “creates a surplus of apparent wealth that allows the system to be lubricated without modifying its structure.”13 But as this book has pointed out, that growth now comes with enormous levels of risk. Indeed, it risks ending the game of being human. Even with all that lubrication, the gears have begun to grind. And so, it makes sense to remember that those who helped define our current worldview have themselves imagined other possibilities. Adam Smith, who with The Wealth of Nations fired the gun that set off the race we’re still running, nonetheless predicted that the time would come when “a country which had acquired that full complement of riches which the nature of its soil and climate, and its situation with regard to other countries, allowed it to acquire; which could, therefore, advance no farther, and which was not going backward.”14 This stationary state was the inevitable destiny of societies, he believed, even if no one had gotten there yet.

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George Monbiot, “Our Natural World Is Disappearing Before Our Eyes. We Have to Save It,” tppahanshilhorst.com, July 6, 2018. CHAPTER 5 1. Donald Worster, Shrinking the Earth: The Rise and Decline of Natural Abundance (New York: Oxford University Press, 2016), p. 15. 2. Ibid., p. 40. 3. Adam Smith, The Wealth of Nations, Book 4, Chapter 7, Part 3. (Indianapolis, 2009), p. 2. 4. Gayathri Vaidyanathan, “Killer Heat Grows Hotter around the World,” Scientific American, August 6, 2015. 5. Alan Blinder, “As the Northwest Boils, an Aversion to Air-Conditioners Wilts,” New York Times, August 3, 2017. 6.

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else
by Chrystia Freeland
Published 11 Oct 2012

New technologies have helped, too—instant and mobile communication makes it possible to live on the move and around the world. So have the political revolutions that have opened up so many of the world’s borders over the past twenty years. The most important shift, however, was the one foreseen by Adam Smith in The Wealth of Nations. Writing in 1776 at the very beginning of the industrial revolution, he predicted that as fortunes shifted from acres to shares they would become more mobile: “The proprietor of land is necessarily a citizen of the particular country in which his estate lies. The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country.”

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Murphy, was in the vanguard of a small group of business school academics who had spent the previous decade trying to solve one of the big problems of twentieth-century market economies: How do you have capitalism without capitalists? Or, to put it another way, who manages the managers? This is not a new problem. In The Wealth of Nations, Adam Smith compared the executives of a joint-stock company to “the stewards of a rich man” and warned that “being the managers rather of other people’s money than their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. . . .

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“The largest metals group in the world is Indian” Stephen Jennings, “Opportunities of a Lifetime: Lessons for New Zealand from New, High-Growth Economics,” Sir Ronald Trotter Lecture, April 7, 2009. “They know how to provide mobile phones” Chrystia Freeland, “Globalization 2.0: Emerging-Market Cross-Pollination,” The Globe and Mail, October 1, 2010. “The proprietor of land is necessarily a citizen” Adam Smith, The Wealth of Nations, Book V, Chapter II, Section 91. “We don’t have castles and noble titles” Benjamin Wallace, “Those Fabulous Confabs,” New York, February 26, 2012. and where, in lieu of noble titles, an elaborate hierarchy of conference badges Nick Paumgarten, “Magic Mountain: What Happens at Davos?”

Capital Ideas: The Improbable Origins of Modern Wall Street
by Peter L. Bernstein
Published 19 Jun 2005

The nonpredictability of future prices from past and present prices is the sign, not of failure of economic law, but the triumph of economic law after competition has done its best.”14 He recognized the jumble that stock prices presented as an unexplored variation on a theme that runs throughout economic-theory—the difference between price and value. From Adam Smith onward (not the fellow on TV who puts the name in quotation marks, but the eighteenth-century author of The Wealth of Nations), all the great economists have wrestled with this problem in one form or another; it plays a central role in Karl Marx’s model of capitalism. Economists agree that “value” refers to something that lies behind, or beneath, the prices observed in the marketplace; prices gyrate around “true value.”

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Contents Acknowledgments Introduction: The Revolution in the Wealth of Nations Part I: Setting the Scene Chapter 1: Are Stock Prices Predictable? Part II: The Whole and the Parts Chapter 2: Fourteen Pages to Fame Chapter 3: The Interior Decorator Fallacy Chapter 4: The Most Important Single Influence Part III: The Demon of Chance Chapter 5: Illusions, Molecules, and Trends Chapter 6: Anticipating Prices Properly Chapter 7: The Search for High P.Q. Part IV: What Are Stocks Worth? Chapter 8: The Best at the Price Chapter 9: The Bombshell Assertions Chapter 10: Risky Business Chapter 11: The Universal Financial Device Part V: From Gown to Town Chapter 12: The Constellation Chapter 13: The Accountant for Risk Chapter 14: The Ultimate Invention Part VI: The Future Chapter 15: The View from the Top of the Tower Notes Bibliography and Other Sources Name Index Subject Index Copyright © 2005 by Peter 1.

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She has been a close collaborator in every phase of the project, from the interviews to the planning and writing of each chapter. Every part of the book has been improved by her participation. Even with all this help and support, I am certain that flaws remain. They comprise the only part of the book that is my responsibility alone. Introduction: The Revolution in the Wealth of Nations . . . the machine-gun clatter of fingers on a keyboard. Americans have always welcomed change. Revolution is our birthright. We take it as a sign of our youth that we prefer the new to the old. We are fascinated by innovation and lionize the innovators. We are partial to tinkerers and make folk-heroes out of people like Thomas Edison, Henry Ford, and Benjamin Franklin.

A Splendid Exchange: How Trade Shaped the World
by William J. Bernstein
Published 5 May 2009

The dinar, like most of the standard gold coins of the premodern period, weighed about one-eighth of an ounce, worth about eighty dollars at current value. Thus, an annual income of one hundred dinars corresponds to about $8,000 per year in today's currency. 12. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976), I: 17. 13. Paul Mellars, "The Impossible Coincidence. A Single-Species Model for the Origins of Modem Human Behavior in Europe," Evolutionary Anthropology, 14:1 (February, 2005): 12-27. 14. Thomas L. Friedman, The World Is Flat (New York: Farrar, Straus and Giroux, 2005). 15.

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Plassey was just one facet of the Seven Years' War, which yielded a particularly rich bounty for England: not only the Bengal, but also Canada and much of the Lesser Antilles. 8. Quoted in J. R. Ward, "The Industrial Revolution and British Imperialism, 1750-1850," Economic History Review 47, no. 1 (February 1994): 47. 9. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976), I: 82. 10. Ibid., II:33; Barber, 97. 11. Anthony Webster, "The Political Economy of Trade Liberalization: The East India Company Charter Act of 1813," The Economic History Review 43, no. 3 (August 1990): 404-419. 12.

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Simmons, Colin, "'De-Industrialization,' Industrialization, and the Indian Economy, c. 1850-1947," Modern Asian Studies 19, no. 3 (April 1985): 593-622 Simpson, Donald, "The Treasure in the Vergulde Draek: A Sample of V. O. C. Bullion Exports in the 17th Century," The Great Circle 2, no. 1 (April 1980): 13-17. Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1976). Srinivasan, T. N., "Developing Countries in the World Trading System: From GATT, 1947, to the Third Ministerial Meeting of WTO, 1999," World Economy 22, no. 8 (1999): 1047-1064. Stamper, Norm, "A Good Cop Wasted," excerpted in Seattle Weekly (June 1, 2005).

Phishing for Phools: The Economics of Manipulation and Deception
by George A. Akerlof , Robert J. Shiller and Stanley B Resor Professor Of Economics Robert J Shiller
Published 21 Sep 2015

So, in the absence of some curbs on markets, we reach an economic equilibrium where the monkeys on the shoulder are substantially calling the shots. The Alleged Optimality of a Free-Market Equilibrium There is a perhaps surprising result that, indisputably, lies at the very heart of economics. Back in 1776, the father of the field, Adam Smith, in The Wealth of Nations, wrote that, with free markets, as if “by an invisible hand … [each person] pursuing his own interest” also promotes the general good.16 It took a bit more than a century for Smith’s statement to be precisely understood. According to the modern version, commonly taught even in introductory economics, a competitive free-market equilibrium is “Pareto optimal.”17 That means that once such an economy is in equilibrium, it is impossible to improve the economic welfare of everyone.

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Levitt, “Keith Chen’s Monkey Research,” New York Times, June 5, 2005. 15. Venkat Lakshminarayanan, M. Keith Chen, and Laurie R. Santos, “Endowment Effect in Capuchin Monkeys,” Philosophical Transactions of the Royal Society B: Biological Sciences 363, no. 1511 (December 2008): 3837–44. 16. Adam Smith, The Wealth of Nations (New York: P. F. Collier, 1909; originally published 1776), p. 19. Emphasis added. 17. For a version of Pareto’s original writings, see Vilfredo Pareto, Manual of Political Economy: A Critical and Variorum Edition, ed. Aldo Montesano et al. (Oxford: Oxford University Press, 2014). This edition derives from Manuale di Economia, published in Italy in 1906, and also a later edition in French. 18.

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Singh, Gurkirpal. “Recent Considerations in Nonsteroidal Anti-Inflammatory Drug Gastropathy.” American Journal of Medicine 105, no. 1, supp. 2 (July 27, 1998): 31S–38S. Skeel, David A., Jr. “Shaming in Corporate Law.” University of Pennsylvania Law Review 149, no. 6 (June 2001): 1811–68. Smith, Adam. The Wealth of Nations. New York: P. F. Collier, 1909. Originally published 1776. Smith, Gary. Standard Deviations: Flawed Assumptions, Tortured Data, and Other Ways to Lie with Statistics. New York: Duckworth Overlook, 2014. Snell, George D. “Clarence D. Little, 1888–1971: A Biographical Memoir by George D. Snell.”

A Culture of Growth: The Origins of the Modern Economy
by Joel Mokyr
Published 8 Jan 2016

The selection criteria for any kind of cultural belief are contingent, and it is easy to envisage a cultural environment in which the question “but is it true?” can be routinely answered satisfactorily by “sometimes,” or “maybe,” or “if God wills it.” 7 Schumpeter maintained, somewhat unfairly, that “the Wealth of Nations contained no really novel ideas and … cannot rank with Newton’s Principia and Darwin’s Origin as an intellectual achievement.” See Schumpeter, 1954 p. 185. 8 In 1492 the Abbott of Sponheim, Johannes Trithemius, wrote In Praise of Scribes in which he made a series of powerful arguments against the use of the printing press and favoring hand-copying.

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By the eighteenth century, conservative writers such as the Jesuits associated Newtonian physics with various heretical philosophies such as deism, Spinozism, or Epicurean materialism (Shank, 2008, p. 381). 32 There is no documentary evidence for Laplace ever to have uttered those widely cited words, but Hahn (1986, p. 256) notes that the statement was a faithful reflection of his position. 33 This line comes right after the famous statement (not reproduced in the Wealth of Nations) that “little else is required to carry a nation to the highest state of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice” (Stewart [1793] 1829, p. 64). Dugald Stewart added that the sentences appear in a small 1755 manuscript by Smith that was in his possession, but not to be published. 34 The description of the one of the “fathers” of Salomon’s House, despite the definition of the end of their foundation as “the knowledge of causes and secret motions of things and the enlarging of the bounds of Human Empire to the effecting of all things possible” includes his entry in streets lined with people in which he “held up his bare hand as he went blessing the people in silence.”

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The Republic of Letters: A Cultural History of the French Enlightenment. Ithaca, NY: Cornell University Press. Goody, Jack. 2009. Renaissances: The One or the Many? Cambridge: Cambridge University Press. ———. 2010. The Eurasian Miracle. Cambridge: Polity Press. Gorodnichenko, Yuriy and Gerard Roland. 2011. “Culture, Institutions, and the Wealth of Nations.” NBER Working Papers 16368, unpublished ms. Gough J. B. 2008. “Réaumur, René-Antoine Ferchault de.” In Charles C. Gillispie, ed., Complete Dictionary of Scientific Biography. Gale Virtual Reference Library. Detroit: Charles Scribner’s Sons. Vol. 11, pp. 327–35. Grafe, Regina. 2012. Distant Tyranny: Markets, Power, and Backwardness in Spain, 1650–1800.

The Impulse Society: America in the Age of Instant Gratification
by Paul Roberts
Published 1 Sep 2014

But the basic argument—that it is possible and thus necessary to take steps to produce more sustainable, equitable, humane economic outcomes—is neither flawed nor particularly “liberal.” From the very beginnings of the Industrial Revolution, it was understood that “commercial society,” as Adam Smith called capitalism, would need constant poking and prodding and nudging to ensure that its massive efficiencies benefited as wide a public as possible. As Smith wrote in The Wealth of Nations,1 “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” Today, conservatives routinely invoke Smith and his invisible hand to argue for unfettered markets.

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The Culture of the New Capitalism. New Haven, CT: Yale University Press, 2006. Shiller, Robert. Irrational Exuberance. Second Edition. Princeton, NJ: Princeton University Press, 2005. Slade, Giles. Made to Break: Technology and Obsolescence in America. Cambridge, MA: Harvard University Press, 2009. Smith, Adam. The Wealth of Nations. New York: Penguin Classics, 1982. Smith, Merrit Roe, and Leo Marx, eds. Does Technology Drive History? The Dilemma of Technological Determinism. Cambridge, MA: MIT Press, 1994. Sunstein, Cass R. Republic.com 2.0: Revenge of the Blogs. Princeton, NJ: Princeton University Press, 2007. ———.

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In their capacity as buyers and consumers they are hard-hearted and callous, without consideration for other people.”22 Vendors who failed to accept these truths, and who continued to rely on social obligations and other nonmarket inefficiencies, were not only dooming themselves; they were also holding back the overall efficiency of the marketplace. As Adam Smith, patron saint of efficient markets, proposed two centuries earlier, the best outcome was achieved when individuals pursued self-interest. The shift from customer to consumer, conservative economists now argued, was merely a manifestation of Smith’s great insight. It might be devastating to older, inefficient vendors and a few small towns. But in the long term, it would bring the social benefits of a more efficient economy. Yet in viewing the social side of commerce through such a purely economic, Darwinian lens, we lose a lot of important detail. Adam Smith himself insisted that markets will not yield their famous optimality without a strong moral dimension: absent trust and empathy between buyer and seller, markets quickly lose their efficiencies and fail—as numerous scandals and scams and bubbles and busts have demonstrated.

Misbehaving: The Making of Behavioral Economics
by Richard H. Thaler
Published 10 May 2015

No Problem Economists have not always been so dense about self-control problems. For roughly two centuries, the economists who wrote on this topic knew their Humans. In fact, an early pioneer of what we would now call a behavioral treatment of self-control was none other than the high priest of free market economics: Adam Smith. When most people think about Adam Smith, they think of his most famous work, The Wealth of Nations. This remarkable book—the first edition was published in 1776—created the foundation for modern economic thinking. Oddly, the most well-known phrase in the book, the vaunted “invisible hand,” mentioned earlier, appears only once, treated with a mere flick by Smith.

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Come to think of it, even if your spouse is an economist, this is probably not a great idea. You know, and I know, that we do not live in a world of Econs. We live in a world of Humans. And since most economists are also human, they also know that they do not live in a world of Econs. Adam Smith, the father of modern economic thinking, explicitly acknowledged this fact. Before writing his magnum opus, The Wealth of Nations, he wrote another book devoted to the topic of human “passions,” a word that does not appear in any economics textbook. Econs do not have passions; they are cold-blooded optimizers. Think of Mr. Spock in Star Trek. Nevertheless, this model of economic behavior based on a population consisting only of Econs has flourished, raising economics to that pinnacle of influence on which it now rests.

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“Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic.” Econometrica 66, no. 3: 569–96. Smith, Adam. (1759) 1981. The Theory of Moral Sentiments. Reprint edited by D. D. Raphael and A. L. Macfie. Indianapolis: LibertyClassics. ———. (1776) 1981. An Inquiry into the Nature and Causes of the Wealth of Nations. Reprint edited by R. H. Campbell and A. S. Skinner. Indianapolis: LibertyClassics. Smith, Vernon L. 1976. “Experimental Economics: Induced Value Theory.” American Economic Review 66, no. 2: 274–9. ———, Gerry L. Suchanek, and Arlington W. Williams. 1988. “Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets.”

Socialism Sucks: Two Economists Drink Their Way Through the Unfree World
by Robert Lawson and Benjamin Powell
Published 29 Jul 2019

Today, Venezuela ranks dead last in the economic freedom index, with a score of about 3.4 As economists, Bob and I know that economic freedom almost inevitably leads to good economic outcomes, because free people have both the incentive and the ability to improve their own lives, and, in the process, the lives of others. Adam Smith put it best in his book The Wealth of Nations when he wrote of an “invisible hand” that guided individual economic self-interest to a greater good. As Smith put it: “Every individual . . . neither intends to promote the public interest, nor knows how much he is promoting it . . . he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”5 This “invisible hand” requires two things: freedom and the rule of law.

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David Sirota, “Hugo Chavez’s economic miracle,” Salon, March 6, 2013, http://www.salon.com/2013/03/06/hugo_chavezs_economic_miracle/. 4. North Korea and Cuba aren’t rated. The latest economic freedom ratings are available online here: https://www.fraserinstitute.org/economic-freedom. 5. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937 [1776]), 423. 6. Sabrina Martin, “Venezuelan Regime Threatens to Expropriate Bakeries, Jeopardizing Bread,” PanAm Post, March 13, 2017, https://panampost.com/sabrina-martin/2017/03/13/venezuela-regime-threatens-expropriate-bakeries-jeopardizing-bread/. 7.

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Tons of books have been written on Marx, and we don’t want to bore you here by going through his entire life and work, but it’s worth at least briefly reviewing his ideas on value, alienation, and history, the three big pillars of Marxism. Even though we’re free-market economists, Marx’s labor theory of value doesn’t offend us. He was wrong, but it wasn’t until after Marx died that economists figured it out. Most economists, including the great classical liberal, Adam Smith, were mistaken in their labor, or cost-of-production, theory of value. It wasn’t until the so-called “Marginal Revolution” in the 1880s when three economists, working independently, all concluded that the value of a good is based on what people subjectively think a particular (or “marginal”) unit of that good is worth, which is exactly right.

The Global Auction: The Broken Promises of Education, Jobs, and Incomes
by Phillip Brown , Hugh Lauder and David Ashton
Published 3 Nov 2010

The hold of this faith over current thinking is difficult to exaggerate despite the fallout from the economic crisis.2 This book explains why it would be more fitting in a fairy tale than in an account of reality. But first we need to see how the neoliberal opportunity bargain of individual freedom and national prosperity was supposed to unfold. From Muscle Power to Brianpower In the eighteenth-century world of Adam Smith, the wealth of nations was based on trade and plunder rather than increasing productivity. The founder of modern economics recognized that wealth could be created by improving the efficiency of the workforce, even if the price was to condemn most workers to jobs that in Smith’s words made them “as stupid and ignorant as it is possible for a human creature to become.”

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(eds.), Education, Globalization and Social Change (Oxford: Oxford University Press, 2006). Chapter Two 1. Robert Reich, The Work of Nations (New York: Vintage, 1991), 247. 2. W. Norton Grubb and Marvin Lazerson, The Education Gospel: The Economic Power of Schooling (Cambridge, Mass.: Harvard University Press, 2004). 3. See Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations,Edwin Cannan (ed.) (Chicago: University of Chicago Press, 1976 [1776]), 8. By the dawn of the twentieth century, the fate of the workforce was looking more promising, at least according to another famous economist, Alfred Marshall. In a essay on “The Future of the Working-Classes” presented to the Reform Club in Cambridge, England, in 1873, he spoke of new technologies accelerating the demand for a skilled workforce ending the distinction between blue- and white-collar workers.

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This was because the increase in productive capacity depended on subdividing the activities of workers, each performing the same repetitive task such as in the manufacture of pins where someone draws out the wire, another straightens it, another cuts it, and so on.3 The dangers involved in creating a workforce of human automatons were not lost on Smith. He believed that although this was a price worth paying to increase national wealth, state-funded education should be developed to compensate for the mind-numbing work that a detailed division of labor imposed on the workforce. Since Adam Smith, labor was treated as a homogeneous category. What counted was the number of workers or the size of the workforce, akin to the area of land for agricultural production or the number of machines in a factory. Well into the twentieth century, people were treated as expensive machines, and the personal costs of rising prosperity continued to be high.

Kicking Awaythe Ladder
by Ha-Joon Chang
Published 4 Sep 2000

Once the most complex in Europe, the British tariff could now be printed "on half a page of Whitaker's Almanack" It is important to note here that Britain's technological lead that enabled this shift to a free trade regime had been achieved 'behind high and long-lasting tariff barriers'.47 It is also important to note that the overall liberalization of the British economy that occurred during the mid-nineteenth century, of which trade liberalization was just a part, was a highly controlled affair overseen by the state, and not achieved through a laissez-faire approach.48 It should also be pointed out that Britain 'adopted Free Trade painfully slowly: eighty-four years from The Wealth of Nations to Gladstone's 1860 budget; thirty-one from Waterloo to the ritual victory of 1846'.49 Moreover, the free-trade regime did not last long. By the 1880s, some hard-pressed British manufacturers were asking for protection. By the early twentieth century, reintroduction of protectionism was one of the hottest issues in British politics, as the country was rapidly losing its manufacturing advantage to the USA and Germany: testimony to this was the influence of the Tariff Reform League, formed in 1903 under the leadership of the charismatic politician Joseph Chamberlain.50 The era of free trade ended when Britain finally acknowledged that it had lost its manufacturing eminence and re-introduced tariffs on a large scale in 1932.51 2.2.2.

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Singh, A, 1994, "Openness' and the 'Market-friendly' Approach to Development: Learning the Right Lessons from Development Experience', World Development, vol. 22, no. 12. 1997, 'Financial Liberalisation, the Stockmarket and Economic Development', Economic Journal, vol. 107, no. 442. Singh, A and Dhumale, R, 1999, 'Competition Policy, Development, and Developing Countries', T.R.A.D.E. Working Paper, no. 7, Geneva, South Centre. Smith, A, 1937 [1776], An Inquiry into the Nature and Causes of the Wealth of Nations, edited with an introduction, notes, marginal summary and an enlarged index by Edwin Cannan, with an introduction by Max Lerner, originally published in 1776, New York, Random House. Smith, T , 1955, Political Change and Industrial Development in Japan: Government Enterprise, 1868-1880, Stanford, Stanford University Press.

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Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth, [my italics] As for the USA, List points out that the country had previously been misjudged by the great economic theorists Adam Smith and Jean Baptiste Say as being 'like Poland', namely, destined to rely on agriculture.10 Indeed, Adam Smith in his Wealth of Nations sternly warned the Americans against any attempt at infant industry promotion: Were the Americans, either by combination or by any other sort of violence, to stop the importation of European manufactures, and, by thus giving a monopoly to such of their own countrymen as could manufacture the like goods, divert any considerable part of their capital into this employment, they would retard instead of accelerating the further increase in the value of their annual produce, and would obstruct instead of promoting the progress of their country towards real wealth and greatness.11 Two generations later, when List was writing his book, many Europeans still shared Smith's view.

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations
by David Pilling
Published 30 Jan 2018

One author lists some of the activities that are not part of the economy as “giving birth to babies, raising children, cultivating a garden, cooking food for her siblings, milking the family cow, making clothes for her relatives or taking care of Adam Smith so he can write The Wealth of Nations.”13 Even the woman whose housework freed up time for the economist Adam Smith to write his most famous work contributed nothing to the economy, as we define it. Smith is known for his concept of the “invisible hand,” which describes the market forces and pricing signals that are supposed to make economies work smoothly without a central plan.

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Subtly different from Petty, in the physiocrats’ interpretation the “productive class” consisted of mainly agricultural laborers, while the so-called sterile class included “artisans, professionals, merchants and, lo and behold, the King himself.”5 Viewed from this perspective, the invention of the economy—as something distinct from the monarch—was a profoundly democratic act. Adam Smith, in his An Inquiry into the Nature and Causes of the Wealth of Nations, first published in 1776, also divided labor into productive and unproductive categories. A man, he wrote, “grows rich by employing a multitude of manufacturers: He grows poor by maintaining a multitude of menial servants.” It wasn’t a very flattering view of the leisured classes.

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What unites these early attempts to catalog national wealth is an effort to draw what economists today call the production boundary—between activities that should be counted and those that should not. In short, they were trying to answer a question that is still relevant today: precisely what is an economy? In the great economic ledger should the king appear on the plus side, the embodiment in flesh and blood of the national patrimony? Or, as the physiocrats and Adam Smith implied, should he be on the negative side of the ledger, an unproductive spender of the nation’s resources? The same question of what should be included and what should be excluded has rumbled on ever since. Should we include government spending? How about providers of services, whose contributions to society—healthy minds (psychoanalysts), humor (clowns), education (teachers)—may be harder to count than horseshoes or bushels of wheat?

Impact: Reshaping Capitalism to Drive Real Change
by Ronald Cohen
Published 1 Jul 2020

As Rousseau was launching his political ideas on the world, Adam Smith introduced the theory of the ‘invisible hand of markets’ in The Wealth of Nations. In his view, ‘the invisible hand’– a metaphor for individuals acting in their own self-interest within a free market economy – created an equilibrium between the supply and demand for goods, which was in everyone’s best interest. His thinking has dominated the economic narrative ever since. In actual fact, Adam Smith was prouder of the ideas in The Theory of Moral Sentiments, published 17 years before The Wealth of Nations in 1759. In this earlier work, he sought to provide the moral and ethical foundation for human behavior, postulating that, ‘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.’

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And much is at stake – billions of people’s lives depend on the success of the Impact Revolution. There has never been a more tangible opportunity to make a transformative difference, and each of us has a significant role to play in making it happen. The economist Adam Smith famously introduced the ‘invisible hand of markets’ in The Wealth of Nations at the end of the eighteenth century, to describe how everyone’s striving for profit results in everyone’s best interests. His first book, The Theory of Moral Sentiments, was about the ability of humans to act out of empathy and altruism. Had he known that we would be measuring impact in the twenty-first century, he might well have combined his two books into one, and written about impact as the invisible heart of markets that guides their invisible hand.

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It is this that constitutes the ‘invisible heart of markets’. As I wrote in this book’s introduction, had Smith thought that we could measure what we now call impact, he might have merged the two works and described a single economic system, in which the invisible heart of markets guides their invisible hand. The new ideas brought by The Wealth of Nations helped shift our economic system from mercantilism (which held that countries should use trade and the accumulation of gold to make themselves more powerful), to laissez-faire (the idea that state intervention in economic activity is ill-advised), which prevailed until the 1930s. After the Great Depression, this gave way to John Maynard Keynes’s new thinking about a ‘managed economy’, where the state assumes responsibility for altering public expenditure, interest rates and taxation to maintain full employment.

The end of history and the last man
by Francis Fukuyama
Published 28 Feb 2006

Marx’s vision of an industrial world where workers were mere appendages to their machines has not, by and large, been fulfilled. 15 The proliferation of new, increasingly specialized tasks in turn suggest new applications for technology in the production process. Adam Smith points out in the Wealth of Nations how concentration on a single, simple task frequently suggests new possibilities for machine production that would have escaped the attention of a craftsman dissipating his attention on a variety of tasks; hence the division of labor frequently leads to the creation of new technology, as well as the reverse. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 1 (Oxford: Oxford University Press, 1976), pp. 19-20. 16 Charles Lindblom points out how, as of the late 1970s, half of the American population worked in private-sector bureaucracies, while another thirteen million Americans worked for federal, state, or local government.

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And yet, while the most successful modern economies may be capitalist, not all capitalist economies are successful—or, at any rate, as successful as others. Just as there are sharp distinctions between the ability of formally democratic countries to sustain democracy, so there are equally sharp differences between the ability of formally capitalist economies to grow. It was the view of Adam Smith that the chief source of the differences in the wealth of nations was the wisdom or foolishness of government policies, and that human economic behavior, once free from the constraints of bad policy, was more or less universal. Many of the differences in performance between capitalist economies can in fact be traced to differences in government policy.

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Interest Groups in Soviet Politics. Princeton University Press, Princeton, NJ. Skocpol, Theda. 1977. “Wallerstein’s World Capitalist System: A Theoretical and Historical Critique.” American Journal of Sociology 82 (March): 1075-1090. Smith, Adam. 1976. An Inquiry into the Nature and Causes of the Wealth of Nations, 2 vols., Oxford University Press, Oxford. Smith, Adam. 1982. The Theory of Moral Sentiments. Liberty Classics, Indianapolis. Smith, Steven B. 1983. “Hegel’s Views on War, the State, and International Relations.” American Political Science Review 77, no. 3 (September): 624-632. Smith, Steven B. 1989a.

What's Mine Is Yours: How Collaborative Consumption Is Changing the Way We Live
by Rachel Botsman and Roo Rogers
Published 2 Jan 2010

This lack of the most basic resources and the consequent poverty also confronted Adam Smith more than three hundred years ago. Smith, the great Scottish economist, sought a way out of the agrarian squalor of the eighteenth century. He believed a more productive society would lead to a wealthier society. In The Wealth of Nations, Smith argued that humans are motivated by self-interest and “self-love,” and that the exploitation of this trait leads to greater wealth for all and a more effective distribution of labor.1 Looking back, one can understand why Adam Smith wanted to figure how to get the economy to produce more.

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Jonathan Haidt, The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom (Basic Books, 2006), 101. 46. Jon Mooallem, “The Self-Storage Self,” New York Times (September 2, 2009), http://www.nytimes.com/2009/09/06/magazine/06self-storage-t.html?pagewanted=1. 47. Lawson, All Consuming, 11. 1. Adam Smith, The Wealth of Nations (W. Strahan and T. Cadell, London, 1776). 2. “18th Century London—Its Daily Life and Hazards Canadian Content,” http://forums.canadiancontent.net/history/48176-18th-century-london-its-daily.html. 3. David Korten, When Corporations Rule the World (Berrett-Koehler Publishers, 1995), http://deoxy.org/korten_betrayal.htm. 4.

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In When Corporations Rule the World, David C. Korten writes, “Smith did not advocate a market system based on unrestrained greed. He was talking about small farmers and artisans trying to get the best price for their products to provide for themselves and their families. That is self-interest—but it is not greed.”3 Adam Smith and later Milton Friedman both believed that an individual pursuing his own self-interest promotes the good of society as a whole. In Chapter Two, we saw how in just a few generations, this concept was transformed from a relatively healthy narrative of technological ingenuity to a frenetic quest for personal identity through brands, products, and services, before finally becoming an extreme system of insatiable consumerism.

Americana: A 400-Year History of American Capitalism
by Bhu Srinivasan
Published 25 Sep 2017

• • • THE FATHER, WILL CARNEGIE, died soon after. He wouldn’t live long enough to see his son go beyond the telegraph office. But young Andrew Carnegie was in full possession of the entrepreneurial genius that had eluded Samuel Morse—he was exactly the type of “philosopher” vital to the wealth of nations of whom his fellow Scotsman, Adam Smith, had once written. Nine GOLD Their indictment was clear. “The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together,” wrote Marx and Engels in 1848.

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Chapter 4: Cotton for the steam: James Watt, Specification of James Watt: Steam Engines (London: G. E. Eyre, 1855), 2–7. valued for millennia: Sven Beckert, Empire of Cotton: A Global History (New York: Alfred A. Knopf, 2014), 5. new ways replaced old: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 1 (1776; repr., Indianapolis, IN: Liberty Fund, 1981), 18–20. home to South Carolina: “Notes of Catharine Greene,” quoted in Edward T. James et al., Notable American Women, 1607–1950: A Biographical Dictionary, vol. 3 (Boston: Harvard University Press, 1971), 85–86.

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In 1982, when we had finally saved enough for a refrigerator, it was delivered by oxcart—an indignity that I felt even as a child, especially because I had waited and hoped for some time to see a delivery truck. But we didn’t need to endure this imbalance for long, this lack of purchasing power stemming from being on the wrong side of the wealth of nations. With the proper application of ambition, my mother could convert her education into a global currency, regardless of how illiquid it was in India. Ambition in this case meant the willingness to leave behind one’s homeland, culture, family, and large parts of self-identity. This has always been the immigrant’s price of admission.

Americana
by Bhu Srinivasan

• • • THE FATHER, WILL CARNEGIE, died soon after. He wouldn’t live long enough to see his son go beyond the telegraph office. But young Andrew Carnegie was in full possession of the entrepreneurial genius that had eluded Samuel Morse—he was exactly the type of “philosopher” vital to the wealth of nations of whom his fellow Scotsman, Adam Smith, had once written. Nine GOLD Their indictment was clear. “The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together,” wrote Marx and Engels in 1848.

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Chapter 4: Cotton for the steam: James Watt, Specification of James Watt: Steam Engines (London: G. E. Eyre, 1855), 2–7. valued for millennia: Sven Beckert, Empire of Cotton: A Global History (New York: Alfred A. Knopf, 2014), 5. new ways replaced old: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 1 (1776; repr., Indianapolis, IN: Liberty Fund, 1981), 18–20. home to South Carolina: “Notes of Catharine Greene,” quoted in Edward T. James et al., Notable American Women, 1607–1950: A Biographical Dictionary, vol. 3 (Boston: Harvard University Press, 1971), 85–86.

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In 1982, when we had finally saved enough for a refrigerator, it was delivered by oxcart—an indignity that I felt even as a child, especially because I had waited and hoped for some time to see a delivery truck. But we didn’t need to endure this imbalance for long, this lack of purchasing power stemming from being on the wrong side of the wealth of nations. With the proper application of ambition, my mother could convert her education into a global currency, regardless of how illiquid it was in India. Ambition in this case meant the willingness to leave behind one’s homeland, culture, family, and large parts of self-identity. This has always been the immigrant’s price of admission.

Small Change: Why Business Won't Save the World
by Michael Edwards
Published 4 Jan 2010

After all, markets were designed to facilitate the exchange of goods and services under a limited definition of efficiency that had little to do with moral or social goals. Yet the broader effects of capitalism have animated debates in all societies at least since Adam Smith, who was so agitated by this question that he wrote two different books in search of a single answer. One of them changed the world, and the other, sadly, has all but been forgotten. The Wealth of Nations describes how economic forces will produce the greatest common good under conditions of perfect liberty and competition, maximizing the efficient allocation of productive resources and bringing the economy into equilibrium — “the ideal balance between buyers and sellers, and firms and workers, such that rates of return to a resource in various uses will be equal.”1 The “invisible hand” makes only one 63 64 small change appearance in the 1,264 pages of my edition (it’s on page 572), perhaps because Smith didn’t believe that social welfare would be maximized through the uncoordinated (i.e., “invisible”) actions of self-interested individuals.

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James, The Selfish Capitalist (London: Vermilion, 2007). 51. D. Callahan, “The Moral Market,” Democracy Journal (Summer 2009): 49–59. 52. R. Wilkinson and K. Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better (London: Allen Lane, 2009). chapter 4 1. From Alan Krueger’s introduction to the Bantam edition of The Wealth of Nations (New York, 2003). 2. ReasonOnline, “Rethinking the Social Responsibility of Business: A Reason Debate Featuring Milton Friedman, John Mackey and T. J. Rodgers,” http://www.reason.com/news/show/32239.html. 116 small change 3. J. Speth, The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability (New Haven: Yale University Press, 2008). 4.

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Following our own self-interest to secure the basic necessities is only the first step toward the higher goal of achieving a virtuous life, attained by actualizing our capacity for what Smith called “benevolence.” Yet he was unable to integrate these two books into one coherent philosophy, sparking a conversation between efficiency and welfare that continues still today. Will philanthrocapitalism finally resolve Adam Smith’s dilemma? In conventional market thinking, “the social responsibility of business is to increase its profits,” as Milton Friedman famously declared almost forty years ago in the pages of the New York Times. That is because the invisible hand is supposed “to be beneficial for the people it orders,” maximizing social welfare as a by-product of self-interested but unconscious interactions, with some light regulation to ensure that business operates inside a framework of agreed-upon social rules.2 One of the virtues the high cost of mission drift 65 of markets is that, at least in theory, they can ensure that each resource is used where returns are highest and is combined with other resources in the most efficient way, even though producers and consumers do not coordinate their decisions.

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World
by Jeremy Rifkin
Published 27 Sep 2011

Ray Canterbery notes that taking on the likes of Adam Smith becomes increasingly daunting because he rides on the coattails of the great Sir Isaac Newton. He writes, “From time to time, a cluster of economists consider conventional economics ripe for revolution, but any economic revolutionaries will have to go to the barricades against the genius of Isaac Newton as well as against Adam Smith and his long line of followers.”6 Now however, for the first time, the many cracks in the theoretical foundations of the discipline are threatening to tumble the edifice of classical economic theory. THE WEALTH OF NATIONS The fault line that runs through all of classical economic theory is the fundamental misunderstanding of the nature of wealth.

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The trout, in turn, must consume 90,000 frogs, which must consume 27 million grasshoppers, which live off of 1,000 tons of grass.”10 Now, let’s look at the thermodynamic consequences of converting nature’s resources into food for human consumption in a complex, industrial civilization and what it portends for how we perceive the wealth of nations. Consider the energy that goes into a beefsteak: 1.It takes nine pounds of feed grain to make one pound of steak.11 This means that only 11 percent of the feed goes to produce the beef itself, with the rest either burned off as energy in the conversion process, used to maintain normal body functions, or extracted or absorbed into parts of the body that are not eaten—like hair or bones.

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We might look back fifty years from now and say the same thing about the Third Industrial Revolution technologies and the new economic theory that is likely to accompany them. PART III THE COLLABORATIVE AGE CHAPTER SEVEN RETIRING ADAM SMITH The dawn of the market era and the onset of the First Industrial Revolution in the late eighteenth century brought with it a new academic field called economics. In their attempts to understand the new forces let loose by coal-powered steam technology and factory production, the founding fathers of the new discipline—Adam Smith, Jean-Baptiste Say, and the like—looked to the new field of physics for a set of guiding principles and metaphors to fashion their own theories of the workings of the marketplace.

Masters of Mankind
by Noam Chomsky
Published 1 Sep 2014

Throughout the world, indigenous societies are struggling to protect what they sometimes call “the rights of nature,” while the civilized and sophisticated scoff at this silliness. All exactly the opposite of what rationality would predict—unless it is the skewed form of reason that passes through the distorting filter of RECD. * Inaugural Lecture delivered at University College Dublin Philosophy Society, April 2, 2013. Notes Epigraph 1. Adam Smith, The Wealth of Nations (Oxford: Clarendon Press, 1976), Book III, chapter 4, p. 418. Foreword by Marcus Raskin 1. Noam Chomsky, “The Responsibility of Intellectuals,” in The Essential Chomsky, ed. Anthony Arnove (New York: The New Press, 2008), p. 40. 2. Noam Chomsky, On Power and Ideology: The Managua Lectures (Boston: South End Press, 1987), p. 140.

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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. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons.” —Adam Smith, The Wealth of Nations1 Foreword by Marcus Raskin Noam Chomsky’s political activities and his understanding of the nature of language capacity may be described metaphorically as an unbroken band labeled universality. But his universality is no mystification aimed at masking truths and marginalizing truthful inquiries, nor is it the belief that all of public life must be the same everywhere.

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It does not matter whether these leaders are elected or appointed, or hold their office through blood or advantage of wealth or even as the result of some level of educational attainment useful to a ruling elite. He is aware that oligarchs do not rule as trustees for others, but for themselves. They have in mind the destruction of democracy if it ever proves to be more than a rhetorical fig leaf, when it means the redistribution of economic and political power along the ideological lines of Adam Smith and Tom Paine, or when it means the renunciation of imperialism. There is a direct line between the antidemocratic elites and the establishment of secret organizations such as the CIA, which know and do things that a democracy would not begin to understand or countenance—until the democracy is deadened through propaganda.

Profit Over People: Neoliberalism and Global Order
by Noam Chomsky
Published 6 Sep 2011

Whether accurate or not, this description serves to remind us that the governing institutions are not independent agents but reflect the distribution of power in the larger society. That has been a truism at least since Adam Smith, who pointed out that the “principal architects” of policy in England were “merchants and manufacturers” who used state power to serve their own interests, however “grievous” the effect on others, including the people of England. Smith’s concern was “the wealth of nations,” but he understood that the “national interest” is largely a delusion: within the “nation” there are sharply conflicting interests, and to understand policy and its effects we have to ask where power lies and how it is exercised, what later came to be called class analysis.

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My comments on the Madisonian roots of the prevailing concepts of democracy were unfair in an important respect. Like Adam Smith and other founders of classical liberalism, Madison was precapitalist, and anticapitalist in spirit. He expected that the rulers would be “enlightened Statesmen” and “benevolent philosophers,” “whose wisdom may best discern the true interests of their country.” They would “refine” and “enlarge” the “public views,” guarding the true interests of the country against the “mischiefs” of democratic majorities, but with enlightenment and benevolence. Madison soon learned differently, as the “opulent minority” proceeded to use their newfound power as much as Adam Smith had predicted a few years earlier.

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The issues are of great human significance and not very well understood. To deal with them sensibly, we have to begin by separating doctrine from reality. We often discover a considerable gap. The term “neoliberalism” suggests a system of principles that is both new and based on classical liberal ideas: Adam Smith is revered as the patron saint. The doctrinal system is also known as the “Washington consensus,” which suggests something about global order. A closer look shows that the suggestion about global order is fairly accurate, but not the rest. The doctrines are not new, and the basic assumptions are far from those that have animated the liberal tradition since the Enlightenment.

Fool Me Twice: Fighting the Assault on Science in America
by Shawn Lawrence Otto
Published 10 Oct 2011

The dilemma suggests that politicians are paralyzed by a fundamental conflict between the environment and the economy that arises from the deeply held, mistaken belief that freedom and regulation are incompatible. Hardin’s paper was remarkable because it offered such a sound rebuttal to the ideas of the Scottish economist Adam Smith, whose collaborator and mentor was David Hume. In 1776 Smith argued in The Wealth of Nations that in a shared economy, an individual, who “intends only his own gain,” was in effect “led by an invisible hand” to promote the greater public interest, since willing buyers and willing sellers will always arrive at a natural price for things, and the highest value and efficiency will be obtained.

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CHAPTER 11. FREEDOM AND THE COMMONS 1. US Department of Defense. Quadrennial Defense Review Report, February 2010. www.defense.gov/qdr/images/QDR_as_of_12Feb10_1000.pdf. 2. Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. J. Manis. Electronic Classics Series. Hazleton, PA: Pennsylvania State University, n.d. www2.hn.psu.edu/faculty/jmanis/adam-smith/Wealth-Nations.pdf. 3. Hardin, G. The Tragedy of the Commons. Science 1968;162(3859):1243–1248. www.sciencemag.org/content/162/3859/1243.full. 4. Rand, A. The Virtue of Selfishness. New York: Signet, 1964. 5. Hume, D.

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Conservation Group Petitions the United States Government to List the Polar Bear as a Threatened Species Under the Endangered Species Act. Center for Biological Diversity, February 16, 2005. www.biologicaldiversity.org/news/press_releases/polarbear2-16-05.html. [news release] Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. J. Manis. Electronic Classics Series. Hazleton, PA: Pennsylvania State University, n.d. www2.hn.psu.edu/faculty/jmanis/adam-smith/Wealth-Nations.pdf. Smith, P., et al. Children Who Have Received No Vaccines: Who Are They and Where Do They Live? Pediatrics 2004;114(1):187–195. http://pediatrics.aappublications.org/cgi/content/full/114/1/187. Snow, C.

No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy
by Linsey McGoey
Published 14 Apr 2015

In fact, it’s a widely held belief, impressed on generations of scholars from at least the eighteenth century onwards, when a convenient reading of Adam Smith helped to propagate the idea that patents are fundamentally economic devices: an integral feature of laissez-faire economies. But patents are not market devices. They are the opposite. They are a government-sanctioned monopoly permitting exclusive sales of a product for a limited period of time, protected by courts of law. In The Wealth of Nations, Smith suggested that, in instances where individuals take huge financial risks to come up with a new invention, it was not unreasonable for a government to grant a ‘monopoly of the trade for a certain number of years’.

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, Proceedings of the American Philosophical Society, vol. 149, no. 2 (2005), 126; see also Paul Schervish, ‘The Spiritual Horizons of Philanthropy: New Directions for Money and Motives,’ New Directions for Philanthropic Fundraising, vol. 29 (2000), 17–32. 26Edwards is one of the rare few who have pointed out the relevance of Smith to Bishop and Green’s notion. See Edwards, Small Change. 27Adam Smith, The Wealth of Nations, Books 1–3 (Harmondsworth: Penguin, 1982 [1776]), 292. 28Felix Salmon, ‘Philanthropy Can’t be Outsourced to the Profit Motive’, Reuters, 16 June 2011, at blogs.reuters.com. 29Slavoj Žižek, ‘The Liberal Communists of Porto Davos’, In These Times, 11 April 2006. 30Ray Madoff, ‘5 Myths About Payout Rules for Donor-Advised Funds,’ The Chronicle of Philanthropy, 13 January 2014. 31David Moore and Douglas Rutzen, ‘Legal Framework for Global Philanthropy: Barriers and Opportunities’, The International Journal of Not-for-Profit Law, vol. 13, no. 1–2 (2011), icnl.org. 32Emmanuel Saez, ‘Striking it Richer: The Evolution of Top Incomes in the United States’ (2012), at eml.berkeley.edu.

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Criticizing the purported novelty of the notion of philanthrocapitalism, Salmon points out that the ‘realization that business has the capacity to create as well as destroy social value is known as “economics”, and goes back at least as far as Adam Smith. There’s nothing new about it, and nor is there anything new about economists using this insight to assuage the guilt of the rich’.28 The philosopher Slavoj Žižek has also noted the strange déjà vu that pervades the rhetoric of philanthrocapitalism enthusiasts, suggesting that their maxims are like a ‘postmodernized version of Adam Smith’s invisible hand: the market and social responsibility are not opposites, but can be reunited for mutual benefit … their goal is not to earn money, but to change the world (and as a by-product, make even more money)’.29 Both Salmon and Žižek make witty and persuasive points.

Who's Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life
by Richard Florida
Published 28 Jun 2009

The classical economists Adam Smith and David Ricardo both argued that nation-states are the geographic engines behind economic growth. As Ricardo famously theorized, discretely defined countries have incentive to specialize in different kinds of industries, which would allow them to gain and maintain “comparative advantage” over others.1 The first person to see this was the great urbanist Jane Jacobs, who is best known for her scathing critique of urban planning, The Death and Life of Great American Cities, and two other very important books, The Economy of Cities and Cities and the Wealth of Nations.2 In The Economy of Cities (1969) Jacobs refutes the long-standing theory that cities emerged only after agriculture had become sufficiently productive to create a surplus beyond what was needed to survive.

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These organized geographic production systems and markets, where human beings and talents cluster, Lucas argues, offer social and economic advantages that other places simply can’t. Their benefits in terms of innovation and productivity far outweigh the higher costs of living and doing business there. Jane Said The study of economic growth is an arcane field that until recently has paid little attention to the importance of location. In 1776 Adam Smith published The Wealth of Nations, which argued that specialization, efficiency, and division of labor are the cornerstones of modern economic growth.2 Later, David Ricardo’s theory of comparative advantage argued that not just firms but countries gain advantage by specializing in certain kinds of economic activity.3 The far-seeing urbanist Jane Jacobs agrees that specialization has its uses, but she focuses on an even more fundamental source of economic growth—what she terms expansion.

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For more on this methodology, see Florida, Gulden, and Mellander, “Rise of the Mega-region.” 8 “The Texas Triangle as Megalopolis,” Federal Reserve Bank of Dallas, Houston Branch, April 2004, www.dallasfed.org/research/houston/2004/hb0403.html. 9 On Montreal, see Kevin Stolarick and Richard Florida, “Creativity, Connections, and Innovation: A Study of Linkages in the Montréal Region,” Environment and Planning A, 38, 10, 2006, pp. 1799-1817. 10 Dominic Wilson and Roopa Purushothaman, “Dreaming with BRICs: The Path to 2050,” Global Economics Paper no. 99, Goldman Sachs, October 1, 2003. Chapter 4 1 Robert Lucas, “On the Mechanics of Economic Development,” Journal of Monetary Economics 22, 1988, pp. 3-42. 2 Adam Smith, The Wealth of Nations, Bantam, 2003 (1st ed., 1776). 3 David Ricardo, Principles of Political Economy and Taxation, Cosimo Classics, 2006 (1st ed., 1817). 4 Joseph Schumpeter, Theory of Economic Development, Harvard University Press, 1934 (1st ed., 1911); Schumpeter, Capitalism, Socialism, and Democracy, Harper, 1975 (1st ed., 1942).

Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom
by Grace Blakeley
Published 11 Mar 2024

The authority that supported this relationship was God: God had given us ownership over our own bodies, and we could therefore mix this ownership with the earth to augment our property. Leaving potentially useful resources unused was an affront to God so anyone who thinks to make use of these resources gains the right to count them among his property. Locke, The Second Treatise on Government. 31. Adam Smith, The Wealth of Nations (London: Heritage Illustrated Publishing, 2014). 32. “Adam Smith: Father of Capitalism,” BBC Forum, BBC World Service, November 21, 2017, https://www.bbc.co.uk/programmes/w3csvsfb. 33. Foucault, The Birth of Biopolitics. 34. Ha-Joon Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective (London: Anthem Press, 2021). 35.

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States existed to make people’s lives better by helping them produce and trade things—not just to stop them from killing one another. They could achieve these aims through, for example, the enforcement of contracts, the establishment of a stable currency, and the provision of basic infrastructure. Adam Smith, one of the founders of the discipline that came to be known as political economy, drew on many areas of Locke’s thought to write his well-known work The Wealth of Nations, which remains a foundational text in mainstream economics.31 If Locke was the father of liberalism, then Smith was the “father of capitalism.”32 The role of government, in Smith’s view, was to protect free markets and private property—at home and abroad.

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These are always conducted with the utmost silence and secrecy till the moment of execution.” In contrast, when workers combine, “the masters […] never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen.” Smith, The Wealth of Nations. 58. Tepper and Hearn, The Myth of Capitalism. 59. Meagher, Competition Is Killing Us. 60. Ibid. 61. Baars, The Corporation, Law and Capitalism. 62. Brown, In the Ruins of Neoliberalism. 63. Ibid. 64. Brown, Undoing the Demos. 65. Karl Marx, Manifesto of the Communist Party, Marxist Internet Archive, accessed July 10, 2023, https://www.marxists.org/archive/marx/works/1848/communist-manifesto/. 66.

Prosperity Without Growth: Foundations for the Economy of Tomorrow
by Tim Jackson
Published 8 Dec 2016

After all, the basic human metabolism doesn’t change so much across the species. Crucially, however, the material requirements associated with social and psychological capabilities can vary widely between different societies. Sen’s argument harks back to Adam Smith’s insight on the importance of shame in social life. ‘A linen shirt, for example, is, strictly speaking, not a necessary of life’, wrote Smith in The Wealth of Nations. ‘But in the present times, through the greater part of Europe, a creditable day labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.’10 Sen broadens this argument to a wider range of goods, and a deeper sense of flourishing.

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It should not be railed against or reined in because it’s the source of our wealth and our wellbeing, argues the Fable of the Bees. The poem was particularly influential on the Scottish moral philosopher Adam Smith, the man widely regarded as the father of economics. ‘It is not from the benevolence of the butcher, the brewer and the baker that we expect our dinner, but from their regard to their own self-interest’, Smith famously wrote in An Inquiry into the Nature and Causes of the Wealth of Nations. Everyone is continually exerting himself in his own self-interest, said Smith. ‘It is his own advantage, indeed and not that of the society, which he has in view’, but ‘he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention’.31 The metaphor of the invisible hand turned out to be an extraordinarily powerful one and it has been central to modern economics.

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The Happiness Hypothesis: Putting Ancient Wisdom and Philosophy to the Test of Modern Science. London: Arrow Books. Hall, Charles, Cutler Cleveland and Robert Kaufmann 1992. Energy and Resource Quality: The Ecology of the Economic Process. Niwot: University of Colorado Press. Hall, Charles and Kent Klitgaard 2012. Energy and the Wealth of Nations: Understanding the Biophysical Economy. New York and London: Springer. Hall, Peter and David Soskice 2001. Varieties of Capitalism: The Institutional Foundations of Competitive Advantage. Oxford: Oxford University Press. Hall, Robert and David Papell 2005. Macroeconomics: Economic Growth, Fluctuations and Policy.

The New Class War: Saving Democracy From the Metropolitan Elite
by Michael Lind
Published 20 Feb 2020

Nick Hopkins and Simon Bowers, “Apple Secretly Moved Parts of Empire to Jersey After Row Over Tax Affairs,” Guardian, November 6, 2017. 23. Adam Smith, An Inquiry into the Nature and Causes of the Wealth Of Nations, Book VI, Chapter II, “Of the Sources of the General or Public Revenue of the Society,” Part II, “Of Taxes,” Article II, “Taxes Upon Profit, or Upon the Revenue Arising from Stock,” Project Gutenberg ebook of An Inquiry into the Nature and Causes of the Wealth of Nations, ebook #3300, accessed October 3, 2019, https://www.gutenberg.org/files/3300/3300-h/3300-h.htm#chap11. 24. Smith, An Inquiry, Book I, Chapter IX, “On the Profits of Stock.” 25.

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Exploiting the gap between the two nations’ tax laws, Apple Operations International has not filed an income tax return in either country, or any other country, for the past five years. From 2009 to 2012, it reported income totaling $30 billion.21 When Ireland changed its tax laws in 2015, Apple responded by secretly shifting some of its subsidiaries to another international tax haven, the Isle of Jersey.22 Adam Smith would not have been surprised. In The Wealth of Nations he wrote: “The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country. He would be apt to abandon the country in which he was exposed to a vexatious inquisition, in order to be assessed to a burdensome tax, and would remove his stock to some other country where he could carry on his business, or enjoy his fortune more at his ease.”23 Nor would Smith have been surprised by the centrality of labor arbitrage in the modern global economy: 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.

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* * * — IN THE NINETEENTH and early twentieth centuries, five major schools of thought debated the future of industrial society: liberalism, producerism, socialism, corporatism, and pluralism. Economic liberalism has come in several varieties, including the eclectic and flexible “classical liberalism” of Adam Smith, David Ricardo, and J. S. Mill and a more rigidly antistatist ideology, associated with Friedrich Hayek and Ludwig von Mises and Milton Friedman and already called “neoliberalism” by the 1920s. In all its forms, economic liberalism identifies human freedom with commercial transactions in markets, with the state limited to the role of enforcing contracts and perhaps providing minimal social insurance safety nets.

Economics Rules: The Rights and Wrongs of the Dismal Science
by Dani Rodrik
Published 12 Oct 2015

Jorge Luis Borges, “On Exactitude in Science,” in Collected Fictions, trans. Andrew Hurley (New York: Penguin, 1999). 23. Uskali Mäki, “Models and the Locus of Their Truth” Synthese 180 (2011): 47–63. CHAPTER 2: The Science of Economic Modeling 1. John Maynard Keynes, Essays in Persuasion (New York: W. W. Norton, 1963), 358–73. 2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 5th ed. (1789; repr., London: Methuen, 1904), I.ii.2. 3. The pencil example was based on an essay by Leonard E. Read called “I, Pencil: My Family Tree as Told to Leonard E. Read” (Irvington-on-Hudson, NY: Foundation for Economic Education, 1958), http://www.econlib.org/library/Essays/rdPncl1.html. 4.

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In his inimitable fashion, Roberto pushed me to think hard about the strengths and weaknesses of economics and to articulate what I found useful in the economic method. The discipline had become sterile and stale, Roberto argued, because economics had given up on grand social theorizing in the style of Adam Smith and Karl Marx. I pointed out, in turn, that the strength of economics lay precisely in small-scale theorizing, the kind of contextual thinking that clarifies cause and effect and sheds light—even if partial—on social reality. A modest science practiced with humility, I argued, is more likely to be useful than a search for universal theories about how capitalist systems function or what determines wealth and poverty around the world.

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It is not at all evident, on its face, that millions of consumers, workers, firms, savers, investors, banks, and speculators, each of them pursuing strictly their own personal advantage, would collectively arrive at anything other than economic chaos. Yet the model says the outcome is actually efficient. The First Fundamental Theorem of Welfare Economics is colloquially known among economists as the Invisible Hand Theorem. It was Adam Smith, perhaps the father of economics, who first stated it in broad terms. Though he did not use the term “invisible hand” in quite this context, Smith argued that decentralized decision making by individual consumers and producers in a market would nonetheless provide collective benefit. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,” he famously wrote, “but from their regard to their own interest.”2 Smith’s point that price incentives turn markets into a stupendously effective coordination machine running on autopilot was brought home powerfully by Milton Friedman in his popular TV series Free to Choose in 1980, on the eve of a wave of market reforms under the Reagan and Thatcher governments.

Tyler Cowen - Stubborn Attachments A Vision for a Society of Free, Prosperous, and Responsible Individuals
by Meg Patrick

First: The Principle of Growth: “We should make political choices so as to maximize the rate of sustainable economic growth, as defined by Wealth Plus.” The Principle of Growth would return economics back to its roots in Adam Smith. Smith held a straightforward, common-sense approach to political economy. He understood that the benefits of cumulative growth were significant, especially with the passage of time. It is no surprise that his economics treatise was entitled An Inquiry into the Nature and Causes of the Wealth of Nations. 38 By the way, I see only one episode in human history where the Principle of Growth was clearly and unambiguously applied, and that is in the East Asian economic miracles, including Japan, South Korea, Taiwan, Hong Kong, Singapore, and China (with a caveat here for sustainability), across the appropriate periods of time in each case.

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Land Economics, November 1997, 73, 4, 467-491. 115 Chipman, John S. and Moore, James C. 1978. “The New Welfare Economics 1939-1974.” International Economic Review, October, 19, 3, 547-584. Clark, Kenneth. 1969. Civilization. New York: Harper & Row. Comin, Diego, William Easterly, and Erick Gong, 2010. “Was the Wealth of Nations Determined in 1000 B.C.?”, American Economic Journal: Macroeconomics, 2, 3, 65-97. Cowen, Tyler. 1992. "Consequentialism Implies a Zero Intergenerational Rate of Discount," in Justice Across the Generations: Philosophy, Politics, and Society, sixth series, edited by Peter Laslett and James Fishkin, Yale University Press, 1992, 162-168.

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Since free lunches aren’t always easy to find, we should think about where free lunches might be hiding or why some of those free lunches are less than evident. In particular we might uncover hidden gains if we more closely consider the dimension of time. Maybe some of our choices could release a steady gush of benefits, but we don’t always see those benefits as clearly as we ought to. As Adam Smith noted long ago in the eighteenth century, we visualize many future events very poorly and with a deficit of proper imagination. In economics, there is at least one (hypothetical) example of a free lunch over time. Economist Frank Knight wrote of the Crusonia plant, a mythical, automatically growing crop which creates more output each period.

Other People's Money: Masters of the Universe or Servants of the People?
by John Kay
Published 2 Sep 2015

eISBN 978 1 78283 154 9 The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own … Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. Adam Smith, The Wealth of Nations, 1776 When I speak of high finance as a harmful factor in recent years, I am speaking about a minority which includes the type of individual who speculates with other people’s money – and you in Chicago know the kind I refer to. Franklin D. Roosevelt, US presidential campaign address, Chicago, 14 October 1936 Contents Prologue: The parable of the ox Introduction: Far too much of a good thing PART I: FINANCIALISATION 1 History The road to Pottersville The rise of the trader New markets, new businesses From crisis to crisis The robber barons We are the 1 per cent 2 Risk Cows, coffee and credit default swaps Chasing the dream Adverse selection and moral hazard 3 Intermediation The role of the middleman Liquidity Diversification Leverage 4 Profits Smarter people Competition The Edge Regulatory arbitrage I’ll be gone, you’ll be gone How profitable is the finance sector?

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For all their superficial sophistication, the masters of the universe had no real understanding of what was going on before them. 4 Profits Smarter people 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. Adam Smith, The Wealth of Nations, 1776 The year is 1995, and I am sitting at a massive octagonal table on the top floor of the large modern building that dominates the town of Halifax, West Yorkshire. The location is the boardroom of the Halifax Building Society. The Halifax Building Society had travelled far in size, though not in distance.

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Simon, H., 2009, Hidden Champions of the 21st Century, London and New York, Springer Verlag. Sinclair, U., 1906, The Jungle, London, Werner Laurie. Sinclair, U., 1994, I, Candidate for Governor: And How I Got Licked, orig. pub. 1935, London, University of California Press. Smith, A., 1776, An Inquiry into the Nature and Causes of the Wealth of Nations, 5th edn, 1904, ed. Edwin Cannan, London, Methuen. Smith, G., 2012, ‘Why I Am Leaving Goldman Sachs’, The New York Times, 14 March. Soble, R.L., and Dallos, R.E., 1975, The Impossible Dream: The Equity Funding Story, the Fraud of the Century, New York, G.P. Putnam’s Sons. Sorkin, A.R., 2009, Too Big to Fail: Inside the Battle to Save Wall Street, London, Allen Lane.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

To think that companies should work for shareholders, he argued, “one must imagine that a man of vigorous, lusty and reassuringly heterosexual inclination eschews the lovely and available women by whom he is intimately surrounded in order to maximize the opportunities of other men whose existence he knows of only by hearsay.”39 Galbraith broadly got it right – even if he was ahead of his time, writing before others had coined the principal–agent theory. His flair for colorful expressions caught the imagination of people, but there were others before him who had touched upon the same type of conflict inside joint-stock companies. Adam Smith, for instance, tendered the same view in his classic tome The Wealth of Nations, where he made the point that, “being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.”40 The OECD has also offered pointed skepticism about what happens in firms with highly diffused and intermediated ownership.

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30.Blundell-Wignall, Hu, and Yermo, “Sovereign Wealth and Pension Fund Issues,” 4. 31.NBIM, “The Fund’s Market Value,” 2015. 32.OECD, “Ageing and Employment Policies.” 33.Cournède, “The Political Economy of Delaying Fiscal Consolidation.” 34.Cournède, “The Political Economy of Delaying Fiscal Consolidation,” 10. 35.Magnus, The Age of Aging provides a thorough analysis of retirement savings and their relation to the broader economy. 36.United Nations, World Population Prospects: The 2012 Revision. 37.Cournède, “The Political Economy of Delaying Fiscal Consolidation.” 38.Iwamoto, “Abandoned Homes Haunt Japanese Neighbourhoods.” 39.Galbraith, The New Industrial State. 40.Smith, The Wealth of Nations. 41.Isaksson and Çelik. “Who Cares?” 42. 42.Goldstein, “The State of Engagement between US Corporations and Shareholders.” 43.Van der Elst, “Revisiting Shareholder Activism at AGMs”; Van der Elst and Aslan, “The Economic Consequences of Large Shareholder Activism.” 44.Berle and Means, The Modern Corporation and Private Property. 45.Drucker, The Unseen Revolution, 1. 46.Markowitz, “Portfolio Selection.” 47.Bhide, “The Hidden Costs of Stock Market Liquidity,” 31. 48.Pfleiderer, “Is Modern Portfolio Theory Dead?”

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Sinn, Hans-Werner, “The Pathological Export Boom and the Bazaar Effect: How to Solve the German Puzzle.” World Economy, 29.9 (2006): 1157–75. Smith, Aaron, and Janna Anderson, “AI, Robotics, and the Future of Jobs.” Pew Research Center, Aug. 6, 2014. At http://www.pewinternet.org/2014/08/06/future-of-jobs/. Smith, Adam, The Theory of Moral Sentiments. Penguin, 2010. Smith, Adam, The Wealth of Nations, vol. 3. Prometheus Books, 1991. Smithers, Andrew, The Road to Recovery: How and Why Economic Policy Must Change. Wiley, 2013. Song, Jae, David J. Price, Faith Guvenen, Nicholas Bloom, and Till von Wachter, “Firming up Inequality.” NBER Working Paper No. 21199. National Bureau of Economic Research, May 2015.

The Right to Earn a Living: Economic Freedom and the Law
by Timothy Sandefur
Published 16 Aug 2010

Allen,” Emory Law Journal 45 (1996): 1275–76. 4. Darcy v. Allen, 77 Eng. Rep. 1260 (1603). 5. The Case of the Tailors of Ipswich, 77 Eng. Rep. 1218 (K.B. 1615). 6. Ibid. at 1218. 7. Catherine Drinker Bowen, The Lion and the Throne: The Life of Edward Coke (Boston: Little, Brown, 1957), p. 304. 8. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Indianapolis: Liberty Classics, 1976), vol. 2, pp. 647–48. 9. See Barbara Malament, “The ‘Economic Liberalism’ of Sir Edward Coke,” in Law, Liberty, and Parliament: Selected Essays on the Writings of Sir Edward Coke, ed. Allen D. Boyer (Indianapolis: Liberty Fund, 2004), p. 186. 299 Notes for Pages 20–26 10.

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The patrimony of the poor man lies in the strength and dexterity of his own hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper.’” (Quoting Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Indianapolis: Liberty Fund, 1976), vol. 1, p. 138). This is a moral, not an economic, argument. 3. Robert Green McCloskey, American Conservatism in the Age of Enterprise (New York: Harper & Row, 1964), p. 75. 4. Akhil Reed Amar, The Bill of Rights: Creation and Reconstruction (New Haven, CT: Yale University Press, 1998), pp. 148–49. 5.

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West, Vindicating the Founders: Race, Sex, Class, and Justice in the Origins of America (Lanham, MD: Rowman & Littlefield, 1997), pp. 38–39. 34. Virginia Declaration of Rights (1776), para. 1 (emphasis added). 35. James Madison, Speech in the Virginia Constitutional Convention (1829), in Rakove, Madison: Writings, p. 824. 36. West, Vindicating the Founders, p. 39. 37. Smith, The Wealth of Nations, vol. 1, p. 138. 38. Ibid., vol. 2, p. 660. 39. Ibid., vol. 2, pp. 647–48 40. Ibid., vol. 2, p. 654. 41. Ibid., vol. 1, p. 140. 42. William Blackstone, Commentaries on the Laws of England (London: A. Strahan, 1809), vol. 1, p. 470. 300 Notes for Pages 26–31 43. Encyclopedia Britannica (Edinburgh: Bell & MacFarquar, 1771), vol. 2, p. 281.

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace
by Matthew C. Klein
Published 18 May 2020

See also Thomas Hauner, Branko Milanovic, and Suresh Naidu, “Inequality, Foreign Investment, and Imperialism,” Stone Center Working Paper 2017, for a modern quantitative analysis of Hobson’s thesis. 8. Kenneth Austin, “Communist China’s Capitalism: The Highest Stage of Capitalist Imperialism,” World Economics, January–March 2011, 79–94. ONE From Adam Smith to Tim Cook 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 2 vols., ed. Edwin Cannan (London: Methuen, 1904), vol. 1, bk. 1, chap. 1, available at https://oll.libertyfund.org/. 2. R. H. Coase, “The Nature of the Firm,” Economica 4, no. 16 (November 1937): 386–405. 3. Smith, Wealth of Nations, vol. 1, bk. 4, chap. 2. 4.

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Companies spread complex manufacturing supply chains across multiple countries to maximize efficiency and minimize taxes. Trade today looks nothing like it did before. Unfortunately, in spite of all these changes, the popular understanding of trade continues to be based on obsolete eighteenth-century models. Pins, Cloth, and Wine Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations opens with an account of a pin factory. Smith estimated that it took “eighteen distinct operations” to make a single pin. Just making the head required “two or three distinct operations.” One worker would be hard-pressed to make more than a few dozen pins in a day if he were forced to perform all the steps himself.

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The only safety of nations lies in removing the unearned increments of income from the possessing classes, and adding them to the wage-income of the working classes or to the public income, in order that they may be spent in raising the standard of consumption. John A. Hobson, Imperialism: A Study (1902) Contents Acknowledgments Introduction ONE From Adam Smith to Tim Cook: The Transformation of Global Trade TWO The Growth of Global Finance THREE Saving, Investment, and Imbalances FOUR From Tiananmen to the Belt and Road: Understanding China’s Surplus FIVE The Fall of the Wall and the Schwarze Null: Understanding Germany’s Surplus SIX The American Exception: The Exorbitant Burden and the Persistent Deficit Conclusion.

With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough
by Peter Barnes
Published 31 Jul 2014

Janet Lowe, Warren Buffett Speaks: Wit and Wisdom from the World’s Greatest Investor (New York: John Wiley & Sons, 1997), 164. 4. Herbert Simon, “Public Administration in Today’s World of Organizations and Markets,” public lecture (2000), http://research.mbs.ac.uk/hsi/Aboutus/HerbertSimonsLastPublicLecture.aspx. 5. Adam Smith, The Wealth of Nations, chapter 9, “Of the Rent of Land,” conclusion (London, 1776), 212, http://www2.hn.psu.edu/faculty/jmanis/adam-smith/wealth-nations.pdf. 6. See my reconsideration of Henry George’s Progress and Poverty in the New Republic, December 11, 1971, http://cooperativeindi-vidualism.org/barnes-peter_reconsideration-of-progress-and-poverty-by-henry-george-1971.html. 7.

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In our larger society, similar warnings could be issued about the gaps between rich and poor and between humans and nature. These gaps must be not only minded but also narrowed. The persistent question is how to do this, and I contend that rent is a useful and indeed necessary tool. But before we get to that, we must first become familiar with rent. The term was first used by classical economists, including Adam Smith, to describe money paid to landowners. It was one of three income streams in the early years of capitalism, the others being wages paid to labor and interest paid to capital. In Smith’s view, landlords benefited from land’s unique ability to enrich its owners “independent of any plan or project of their own.”5 This ability arises from the fact that the supply of good land is limited, while the demand for it steadily rises.

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. … To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can only serve to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens.”7 Figure 4.1: ADAM SMITH’S “ABSURD TAX” It’s important to recognize that the tax Smith spoke of isn’t the kind we pay to government; it’s the kind we pay, much less visibly, to businesses. That’s because prices in capitalism are driven by four factors: supply, demand, market power, and political power. The first two determine what might be called fair market value; the last two determine what is now called rent.

Capitalism Without Capital: The Rise of the Intangible Economy
by Jonathan Haskel and Stian Westlake
Published 7 Nov 2017

The story of how economists and statisticians came to measure intangible investment is a late episode in a much bigger story: the invention of GDP and systems of national accounts.1 This story is engagingly told in Diane Coyle’s GDP: A Brief but Affectionate History and Ehsan Masood’s The Great Invention: The Story of GDP. One of the biggest conceptual challenges involved in the creation of GDP was deciding what to count. This was an old problem. Adam Smith, in The Wealth of Nations, puzzled over whether England was producing more than it did at the fall of the Roman Empire. With no data to support this he simply asserted it was so, since there was more productive labor and less unproductive labor, the latter being occupations such as “servants . . . the sovereign . . . players, buffoons, musicians and opera-singers.”2 By the time of the Great Depression, when economists were being pressed into service to understand what was going wrong with the economy, this problem had become urgent.

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All of these are examples of the synergies between intangibles—synergies that are often large in size and hard to predict.1 The Four S’s of Intangible Investment It should come as no surprise that things that one can’t touch, like ideas, commercial relationships, and know-how, are fundamentally different from physical things like machines and buildings. This fact has not been lost on economists. Over the last century researchers in different subfields of economics have looked into various unusual properties of intangible assets. David Warsh’s fascinating book Knowledge and the Wealth of Nations tells the story of how the economist Paul Romer developed an improved theory of economic growth that included knowledge, in particular R&D, rather than treating it as an unpredictable exogenous variable. The work of Romer, Chad Jones, Philippe Aghion, and other pioneers of endogenous growth theory, as it’s called, pointed out that knowledge is an unusual type of good because putting an idea into practice doesn’t use it up.

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A more formal exploration of this relationship finds intangible investment negatively correlated with employment strictness and product market restrictions, controlling for other factors (Corrado et al. 2016). Chapter 3: How to Measure Intangible Investment 1. A very helpful guide to measuring investment and GDP, packed with data, is from Eurostat: http://ec.europa.eu/eurostat/statistics-explained/index.php/National_accounts_and_GDP. 2. Smith, The Wealth of Nations, book 2, chapter 3. 3. Hence, we have Alan Greenspan’s remarks in 2000 on the challenges faced by the US Bureau of Economic Analysis in defining and calculating GDP: “It’s become evident that there has been an increasing technological change within our system, which has muddied the distinction between what we call capital investment and current expense.

Cheap: The High Cost of Discount Culture
by Ellen Ruppel Shell
Published 2 Jul 2009

.: Marshall Cavendish, 2004), 318. 214 “kind of environment that Sam Walton built this company for”: Stephanie Rosenbloom, “For Wal-Mart, a Christmas That Was Made to Order,” New York Times, November 5, 2008. 214 Dollar stores, too, were booming: Jason Asaeda, “Tough Times Favor Family Dollar Stores,” BusinessWeek, October 28, 2008. 215 for its 1.3 million employees: Kris Maher, “Wal-Mart Seeks New Flexibility in Worker Shifts,” Wall Street Journal, January 3, 2007. 215 entitled “Obama’s Biggest Challenge”: Bob Herbert, “Obama’s Biggest Challenge,” New York Times, January 9, 2009. 216 “whether carrots were grown without chemical fertilizers”: Andrew Martin, “Budgets Squeezed, Some Families Bypass Organics,” New York Times, November 1, 2008. 216 is trucked in from huge California farms: In Omnivore’s Dilemma, author Michael Pollan writes that Cascadian Farms founder Gene Kahn, now a vice president of General Mills, acknowledges his farm is essentially a “PR farm.” See Michael Pollan, The Omivore’s Dilemma: A Natural History of Four Meals (New York: Penguin, 2006), 145. 218 “need be employed in dissuading them from it”: Adam Smith, The Wealth of Nations, Books IV-V; Andrew S. Skinner, ed. (New York: Penguin Books, 1999), 32. 218 “tolerably well fed, clothed and lodged”: Adam Smith, The Wealth of Nations, Books I-III; Andrew S. Skinner, contributor, (New York: Penguin Books, 1970), 181. 220 B-grade versions of national brands: Charles Fishman offers a great example of this in The Wal-Mart Effect. In 2002, Wal-Mart sold an estimated $3 billion worth of its house brand “Faded Glory” jeans—more jeans than any other retailer.

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Chief among these illusions was that we humans always act in our own best interest. This fantasy, although losing currency in recent years, had prevailed in one form or another in American political and economic thought for over a century. It was not always that way. Like psychology, economics was once a branch of “moral science,” concerned with the mind but also the heart. Adam Smith, the crusty Scottish philosopher generally credited as the founder of modern economics, began his Moral Sentiments: “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. . . .

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CHAPTER TEN THE PERFECT PRICE The frugal man has the advantage over the man of pleasure in facilities for self-improvement, for doing his duty to his country, and for securing general happiness. | PLATO, SOCRATIC DISCOURSES If you hang around economists long enough, you hear a good deal about their intellectual heroes: John Stuart Mill, Adam Smith, John Maynard Keynes. Among the more controversial of these heroes is Joseph A. Schumpeter, the Harvard economist who in 1943 published the iconic Capitalism, Socialism, and Democracy. The seventh chapter of that work, entitled “The Process of Creative Destruction,” is for many academics a sacred text.

Team of Teams: New Rules of Engagement for a Complex World
by General Stanley McChrystal , Tantum Collins , David Silverman and Chris Fussell
Published 11 May 2015

The habit of constraining information derives in part from modern security concerns, but also from the inured preference for clearly defined, mechanistic processes—whether factory floors or corporate org charts—in which people need to know only their own piece of the puzzle to do their job. One of the oldest and most famous examples of specialization—and the compartmentalized ignorance that such specialization encourages—can be found in Adam Smith’s 1776 description of a pin factory in his classic work, The Wealth of Nations: One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; . . . the important business of making a pin is, in this manner, divided into about eighteen distinct operations . . .

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May, Senior Advisor), The 9/11 Commission Report, 271. “inordinate number of individuals” . . . 9/11 Commission Report, 272. did not read the memo . . . 9/11 Commission Report, 272. “were not put together” . . . 9/11 Commission Report, 277. CHAPTER 7: SEEING THE SYSTEM “One man draws out the wire” . . . Adam Smith, The Wealth of Nations, Books 1-3 (New York: Penguin, 1986), 109–10. “240,000 miles away” . . . “Address at Rice University on the Nation’s Space Effort,” John F. Kennedy Presidential Library & Museum, July 21, 2014, http://www.jfklibrary.org/Asset-Viewer/MkATdOcdU06X5uNHbmqm1Q.aspx. 600 million . . .

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Management historian Alfred Chandler observed that the role of the merchant, which once embraced “exporter, wholesaler, importer, retailer, shipowner, banker and insurer,” split—like Adam Smith’s pin production—into multiple specialized businesses in the late 1800s. Years later, in what Chandler referred to as “the Managerial Revolution,” the specialized businesses were reunited when they merged into large, vertically integrated corporations with dozens of departments and hundreds of offices. Many functions were consolidated under centrally managed entities, instead of the sea of small actors responding independently to the forces of the market (Chandler dubbed this force “the visible hand” in contrast to Adam Smith’s description of market forces as “the invisible hand”).

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas
by Janek Wasserman
Published 23 Sep 2019

This definition placed Menger within the new trends in economic thought that stressed utility and the satisfaction of the subjective needs of individual actors.16 Menger then limned the production process, starting from consumption goods and running back to the raw materials that constitute those items. For Menger, long, capitalist production processes were a thing of beauty, since they increased the number of goods and the overall prosperity of human civilization. Like Adam Smith before him, who started The Wealth of Nations with a meditation on the division of labor and its role in the prosperity of nations, Menger also marveled over production, though from the vantage of individual producers and their subjective choices. His subjectivist interpretation therefore set apart Principles from classical economic theory.

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Cambridge, MA: Harvard University Press, 2018. ———. “Neoliberalism’s Populist Bastards.” Public Seminar, February 15, 2018. http://www.publicseminar.org/2018/02/neoliberalisms-populist-bastards/. ———. “The Road to the Alt Right.” Working paper, German Studies Association, 2017. Smith, Adam. The Wealth of Nations. Edited by Edwin Canaan. 5th ed. London: Methuen, 1904. Smithies, Arthur. “Professor Hayek on the Pure Theory of Capital.” AER 31, no. 4 (1942): 767–79. Somary, Felix. The Raven of Zurich: The Memoirs of Felix Somary. New York: St. Martin’s, 1986. Sombart, Werner. Der moderne Kapitalismus.

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Understanding these interactions may permit us to change our world for the better. 1 THE PREHISTORY AND EARLY YEARS OF THE AUSTRIAN SCHOOL In the orthodox telling of the Austrian School story, in the beginning was Carl Menger: “In 1871 Carl Menger founded the Austrian School in Vienna with his pathbreaking Principles of Economics.”1 His Principles offered a significant reformulation of core economic concepts like value, price, and production, contributing to an incipient transformation in economics called the marginal revolution. Alongside French, English, and American scholars, the Viennese thinker overturned a century of received wisdom from “classical” political economists such as Adam Smith and David Ricardo. In Vienna, Menger spawned a movement with his words. Historians of economic thought have noted, however, that an Austrian School of economics did not spring fully formed from Menger’s mind or from the pages of Principles. In fact, Principles was poorly distributed, found a limited readership, received middling reviews, and played a minor role in the vibrant economic discussions of the 1870s.

Imperial Ambitions: Conversations on the Post-9/11 World
by Noam Chomsky and David Barsamian
Published 4 Oct 2005

Social Security was created in response to pressure from popular, organized social movements—the labor movement and others—that were based on the idea of solidarity and mutual aid. If you go back to Adam Smith, whom we’re supposed to revere but not read, he assumed that sympathy was the core human value, and society should therefore be constructed so that this natural human dedication to sympathy and mutual support will be satisfied. In fact, his main argument for markets was that they would, under conditions of perfect liberty, lead to perfect equality. In fact, Smith’s famous phrase “the invisible hand,” which everyone totally misuses, appears only once in The Wealth of Nations, in the context of an argument against what we now call neoliberalism.5 He says that if English manufacturers and investors imported from abroad and invested overseas, rather than here, it would be harmful to England.

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INTELLECTUAL SELF-DEFENSE 1. BBC World News, 3 December 2004. 2. Thomas E. Ricks, Washington Post, 9 May 2004. 3. PIPA/Knowledge Networks Poll, Press Release, 3 December 2003; and additional PIPA polls. 4. Edmund L. Andrews, New York Times, 3 December 2004. 5. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) (University of Chicago Press, 1996), book 4, chap. 2. 6. David Ricardo, The Principles of Political Economy and Taxation (Dover, 2004), pp. 83–84. 7. Lord Hutton, “Report of the Inquiry into the Circumstances Surrounding the Death of Dr. David Kelly C.M.G.,” 28 January 2004. 8.

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In fact, Smith’s famous phrase “the invisible hand,” which everyone totally misuses, appears only once in The Wealth of Nations, in the context of an argument against what we now call neoliberalism.5 He says that if English manufacturers and investors imported from abroad and invested overseas, rather than here, it would be harmful to England. In other words, if they followed what are now called the principles of Adam Smith, it would be harmful to England. He said, however, there was no reason to worry about that because “upon equal or nearly equal profits, every wholesale merchant naturally prefers the home-trade to the foreign trade of consumption.” That is, British capitalists will individually prefer to use domestically produced goods and to invest at home. So, therefore, as if “led by an invisible hand to promote an end which was no part of his intention,” the threat of what’s now called neoliberalism will be avoided.

Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity
by Daron Acemoglu and Simon Johnson
Published 15 May 2023

Weavers typically did not work on Mondays, and sometimes even Tuesdays, and when necessary made it up by working Friday and Saturday nights. Most workers did not need to keep careful track of time or did not even have access to clocks. Factory work changed all that. The modern imagery of early factories owes much to Adam Smith’s vivid description of a pin factory in his classic book, The Wealth of Nations. Smith emphasized how the division of labor in factories improved efficiency by allowing each worker to focus on a very specific task in the process of pin making. But early factory organization had as much to do with worker discipline as the division of labor for technical efficiency.

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If the market process was already incentivizing businesses to offer safe and high-quality products, additional regulations would only divert effort and reduce profitability, forcing businesses to increase prices or reduce labor demand. These ideas about the idealized market process have been part of economic theory ever since Adam Smith’s The Wealth of Nations introduced the notion of the invisible hand—a metaphor for the notion that the market provides good outcomes for everyone, if there is enough competition. There has always been debate on this point, with the other side taken by people like John Maynard Keynes, who points out that markets do not function in an idealized way.

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Things are even worse when these corporations can block entry by new competitors or when they are able to acquire competing businesses, as the robber barons of late nineteenth-century America understood all too well. Adam Smith, the original proponent of the market-mechanism magic, was damning in his account of how even small groups of businessmen getting together could damage the common good. In a famous passage in The Wealth of Nations, he wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

An Empire of Wealth: Rise of American Economy Power 1607-2000
by John Steele Gordon
Published 12 Oct 2009

Sir Dudley North (1641–91), for instance, demonstrated that the idea that one nation could grow rich only at the expense of another was a fallacy and that the more trade, both exports and imports, the better. Adam Smith would draw heavily on North and others in writing The Wealth of Nations. But mercantilism coincided with powerful economic self-interests among merchants and manufacturers who wanted protection from foreign competition, and it held intellectual sway until Adam Smith blew it away with one of the most powerfully argued and influential books in Western history. In 1651 England began passing a series of Navigation Acts to regulate the trade of its American colonies.

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And yet the Constitution endures, and the country continues to flourish under it. By no means the least of the lucky breaks that the United States has had in its history was the time at which it came into existence and established its fundamental laws. In one of history’s great coincidences, Adam Smith published The Wealth of Nations in 1776. It destroyed the intellectual underpinnings of the mercantilism on which the economic policies of Western nations had been based for two hundred years. It showed in example after example, each more powerfully argued than the next, that unfettered trade, both within and without the country, and a government that did not take sides as individuals competed in the marketplace resulted in greater prosperity for all and thus greater power for the country as a whole.

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A protective tariff always has a surface plausibility that makes it attractive to politicians: a protective tariff saves jobs and protects profits in the short term, which is what always most concerns politicians—who are usually up for reelection in the near future. Even Alexander Hamilton recommended one in his “Report on Manufactures.” But the arguments against it, laid out at length in The Wealth of Nations, are economically persuasive. Most important, a tariff is not paid by foreign producers; it is paid by domestic consumers, to whom the cost is passed along. And consumers not only pay higher prices for foreign goods, they also pay higher prices for domestic goods as well, for local producers will invariably take advantage of any opportunity to raise their own prices.

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt
by Kwasi Kwarteng
Published 12 May 2014

Bodin was in no doubt that the Spanish were to blame for this increase in prices, since when ‘the Spaniard made himself lord of the New World, axes and knives were sold there for more than pearls and precious stones’. As a consequence, ‘everything is more expensive in Spain and Italy than in France, and more so in Spain than in Italy’.44 Bodin’s insight into the monetary significance of the Spanish discovery of the New World was shared by other great economists. In Book I of The Wealth of Nations, Adam Smith asserted that the ‘discovery of the mines of America diminished the value of gold and silver in Europe’. Smith made the further point that, after the discovery of Potosí, ‘the silver mines of Europe were, the greater part of them, abandoned’, since the value of silver ‘was so much reduced that their produce [of the European silver mines] could no longer pay the expence of working them . . . with a profit’.

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Fitzgerald, Money Growth and Inflation: How Long is the Long-Run?, Federal Reserve Bank of Cleveland, Cleveland, OH, 1999, p. 1. 44Jean Bodin, Response to the Paradoxes of Malestroit, trans. and ed. Henry Tudor and R. W. Dyson, Bristol, 1997 (1st edn 1568), pp. 59–60. 45Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, London, 2007 (1st edn 1776), p. 124. 46John Maynard Keynes, ‘Economic Possibilities for our Grandchildren’, in Essays in Persuasion, London, 1972 (1st edn 1931), p. 323. 47John Maynard Keynes, A Treatise on Money, 2 vols, London, 1930, vol. 2, pp. 155, 163. 48Ibid., pp. 153, 161. 49John Maynard Keynes, ‘Social Consequences of Changes in the Value of Money’ (1923), in Essays in Persuasion, pp. 67–8.

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Skidelsky, Robert, John Maynard Keynes: Hopes Betrayed, 1883–1920, London, 1983. Slivinski, Stephen, Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government, Nashville, 2006. Sloan, Alfred, My Life with General Motors, London, 1986 (1st edn 1963). Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, London, 2007 (1st edn 1776). Smith, Vera C., The Rationale of Central Banking, London, 1936. Sobel, Robert, The Last Bull Market: Wall Street in the 1960s, New York, 1980. Sobel, Robert, The Worldly Economists, New York, 1980. Sorkin, Andrew Ross, Too Big to Fail: Inside the Battle to Save Wall Street, London, 2009.

Hard Times: The Divisive Toll of the Economic Slump
by Tom Clark and Anthony Heath
Published 23 Jun 2014

Examining the ‘plague’ of poverty in America, Heritage Foundation, Washington, DC, 2007, at: www.heritage.org/research/reports/2007/08/how-poor-are-americas-poor-examining-the-plague-of-poverty-in-america 5. Maud Pember-Reeves, Round About a Pound a Week, C. Bell and Son, London, 1914, at: http://archive.org/stream/roundaboutpoundw­00reevrich#page/12/mode/2up 6. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Electronic Classics Series Publications, Hazleton, PA, 2005 [1776], at: www2.hn.psu.edu/faculty/jmanis/adam-smith/wealth-nations.pdf 7. See, for example, Amartya Sen, Inequality Reexamined, Oxford University Press, Oxford, 1995. 8. The connection between, for example, low social class and cardiovascular disease is now familiar.

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The dividing line between essential and non-essential expenditure is, however, not as sharp as the likes of the Heritage Foundation would have us believe. For an explanation of why, we turn not to Keynes or Marx, but to an authority whose name is often claimed by the free-market Right: Adam Smith, writing in The Wealth of Nations. By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life.

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‘Deleveraging and growth: Japan's long and winding road’, lecture at the London School of Economics, 10 January 2012, available at: www.lse.ac.uk/asiaResearchCentre/_files/Shi­rakawaLectureTranscript.pdf Skidelsky, Robert. John Maynard Keynes, vol. 2: The Economist as Savior, 1920–37, Penguin Viking, New York, 1995. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, Electronic Classics Series Publications, Hazleton, PA, 2005 [1776], available at: www2.hn.psu.edu/faculty/jmanis/adam-smith/wealth-nations.pdf Smith, Jean Edward. FDR, Random House paperback edition, New York, 2008 [2007]. Steinbeck, John. The Grapes of Wrath, Pan Books, London, 1975 [1939]. Stiglitz, Joseph. The Price of Inequality, Penguin/Allen Lane, London, 2012.

An Edible History of Humanity
by Tom Standage
Published 30 Jun 2009

Taking a long-term historical perspective also provides a new way to illuminate modern debates about food, such as the controversy surrounding genetically modified organisms, the relationship between food and poverty, the rise of the “local” food movement, the use of crops to make biofuels, the effectiveness of food as a means of mobilizing political support for various causes, and the best way to reduce the environmental impact of modern agriculture. In his book The Wealth of Nations, first published in 1776, Adam Smith famously likened the unseen influence of market forces, acting on participants who are all looking out for their own best interests, to an invisible hand. Food’s influence on history can similarly be likened to an invisible fork that has, at several crucial points in history, prodded humanity and altered its destiny, even though people were generally unaware of its influence at the time.

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One factor that counted in the potato’s favor was the high status of white bread, made from wheat, compared with brown bread, made from rye, oats, and barley. English workers who had become wealthy enough to switch from brown to white bread during the eighteenth century were very reluctant to switch back again. When times were hard, they would sooner eat potatoes. In his book The Wealth of Nations, published in 1776, the Scottish philosopher and economist Adam Smith observed that “the food produced by a field of potatoes is not inferior in quantity to that produced by a field of rice, and much superior to what is produced by a field of wheat.” Even allowing for the fact that potatoes contained a large amount of water, he noted, “an acre of potatoes will still produce six thousand weight of solid nourishment, three times the quantity produced by the acre of wheat.”

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Enriching the Earth: Fritz Haber, Carl Bosch, and the Transformation of World Food Production. Cambridge, Massachusetts: MIT Press, 2004. ———. “Nitrogen and Food Production: Proteins for Human Diets.” Ambio 31, no. 2 (March 2002): 126–31. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Hartford: Oliver D. Cooke, 1804. Spaull, C. “The Hekanakhte Papers and Other Early Middle Kingdom Documents, by T. G. H. James.” (Review) Journal of Egyptian Archaeology 49 (1963): 184–86. Steinberg, Theodore. “An Ecological Perspective on the Origins of Industrialization.” Environmental Review 10, no. 4 (Winter 1986): 261–76.

Rethinking Islamism: The Ideology of the New Terror
by Meghnad Desai
Published 25 Apr 2008

.฀ The฀best฀system฀of฀governance฀was฀one฀which฀gave฀protection฀to฀ property฀in฀a฀rule-based฀framework฀and฀allowed฀maximum฀freedom฀ to฀people฀to฀pursue฀their฀self-interest.฀Adam฀Smith฀called฀this฀the฀ system฀of฀natural฀liberty,฀and฀argued฀that฀it฀was฀the฀best฀principle฀ and฀that฀all฀nations฀should฀seek฀to฀establish฀it. Smith฀ was฀ a฀ philosopher฀ rather฀ than฀ an฀ ideologue,฀ but฀ even฀ without฀ his฀ preaching฀ he฀ had฀ enormous฀ influence฀ soon฀ after฀ the฀ publication฀of฀his฀An฀Inquiry฀into฀the฀Nature฀and฀Causes฀of฀the฀Wealth฀ of฀ Nations.฀His฀doctrine฀of฀natural฀liberty฀(often฀wrongly฀labelled฀ laissez-faire)฀is฀programmatic฀only฀in฀recommending฀the฀removal฀of฀ obstacles฀to฀free฀commerce.

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.฀ They฀ seek฀ a฀ total฀ explanation฀ of฀ the฀ world’s฀ past,฀   ฀  present฀and฀future,฀but฀one฀based฀in฀history,฀political฀economy฀and฀ sociology.฀Two฀centuries฀later,฀Karl฀Popper,฀a฀leading฀philosopher฀ of฀the฀twentieth฀century,฀was฀to฀castigate฀such฀totalising฀explanation฀as฀historicism.฀ Adam฀Smith฀was฀impressed฀by฀Newton’s฀success฀in฀explaining฀ the฀workings฀of฀the฀universe฀from฀a฀small฀number฀of฀first฀principles฀ –฀ gravity฀ for฀ one.฀ He฀ attempted฀ a฀ theory฀ of฀ history฀ based฀ on฀ a฀ notion฀of฀stages฀of฀development฀–฀a฀sequence฀of฀modes฀of฀subsistence.฀ The฀ stages฀ began฀ with฀ hunting฀ and฀ gathering,฀ followed฀ by฀ pastoralism,฀ agriculture฀ and฀ then฀ finally฀ commerce.฀ A฀ central฀ principle฀ was฀ that฀ people฀ had฀ a฀ propensity฀ to฀ ‘truck฀ and฀ barter’,฀ and฀as฀they฀pursued฀their฀own฀interests฀social฀changes฀came฀about฀ through฀ the฀ autonomous฀ action฀ of฀ myriad฀ individuals.฀ Laws฀ of฀ property฀evolved฀over฀time,฀and฀systems฀of฀governance฀emerged.฀ The฀best฀system฀of฀governance฀was฀one฀which฀gave฀protection฀to฀ property฀in฀a฀rule-based฀framework฀and฀allowed฀maximum฀freedom฀ to฀people฀to฀pursue฀their฀self-interest.

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.฀ The฀ ideas฀ in฀ the฀ abandoned฀ manuscript฀ surfaced฀ in฀ various฀ abridged฀forms,฀most฀famously฀in฀the฀Preface฀to฀A฀Contribution฀to฀ the฀ Critique฀ of฀ Political฀ Economy,฀ which฀ Marx฀ wrote฀ in฀ .฀ The฀ Preface฀contains฀a฀terse฀summary฀of฀the฀materialist฀theory฀of฀history,฀the฀foundation฀upon฀which฀Marx’s฀theory฀of฀the฀dynamics฀of฀ history฀was฀built.฀It฀offers฀a฀theory฀of฀the฀stages฀of฀history฀similar฀ to฀but฀more฀complex฀than฀the฀one฀Adam฀Smith฀had฀proposed.฀But฀ ฀ ฀  by฀the฀time฀the฀Preface฀was฀published฀in฀,฀Marx฀had฀already฀ become฀better฀known.฀This฀was฀because฀of฀another฀much฀shorter฀ book฀–฀indeed฀a฀pamphlet฀–฀that฀he฀and฀Engels฀had฀written.฀It฀was฀ not฀just฀a฀theory฀of฀history;฀it฀made฀history. Marx฀and฀Engels฀followed฀up฀their฀abandoned฀tome฀on฀ideology฀ by฀ publishing฀ a฀ short฀ sharp฀ essay฀ for฀ the฀ Communist฀ League฀ in฀ ฀ –฀ The฀ Communist฀ Manifesto.฀ It฀ was฀ this฀ more฀ than฀ any฀ other฀ work฀ of฀ theirs฀ that฀ launched฀ Communism฀ as฀ an฀ ideology.฀ They฀ gave฀Communism฀a฀shape฀and฀a฀theory.

Economists and the Powerful
by Norbert Haring , Norbert H. Ring and Niall Douglas
Published 30 Sep 2012

Ricardo would later use this treaty as his famous example to illustrate the mutual benefits of comparative advantage (Ricardo 1817); however Portugal to this day still lives with an unusually global-trade-dependant economy as a legacy of that treaty (Almodovar and Cardoso 1998). The birth of marginalism While the classical economists touted the virtues of free international trade and took issues of power out of international economics, they still left some room to discuss power in the national context, notably on the labor market. When Adam Smith wrote his famous Inquiry into the Wealth of Nations in 1776, large parts of the British population hardly had enough income to feed their children adequately and provide decent housing. For Smith, it was clear that wages were determined by the relative bargaining powers of industrialists and workers: What are the common wages of labour, depends everywhere upon the contract usually made between those two parties… The workmen desire to get as much, the masters to give as little as possible… It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms.

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“Soros Fund Fined $2.2 Million by Hungarian Regulator.” Bloomberg, March 27. Smeeding, Timothy M. 2005. “Public Policy, Economic Inequality, and Poverty: The United States in Comparative Perspective.” Social Science Quarterly 86: 955–83. Smith, Adam. 1776/2007. An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. Sálvio M. Soares. MetaLibri, 2007, v.1.0p. http://metalibri.wikidot.com/ title:an-inquiry-into-the-nature-and-causes-of-the-wealth-of (accessed March 28, 2012). Sonik, Sara and David Hemenway. 1998. “Is More Always Better? A Survey on Positional Concerns.” Journal of Economic Behavior and Organization 37: 373–83.

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He who pays the piper calls the tune The Member of Parliament, who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and 42 ECONOMISTS AND THE POWERFUL influence with an order of men, whose numbers and wealth render them of great importance. —Adam Smith, 1784 What Adam Smith said in the above quote from the second edition of his Wealth of Nations regarding parliamentarians and their incentives to please powerful economic interests holds true for economists as well, and still does to this day. The modern mainstream conception of economics is attractive to all those who do well under the status quo and who would do even better with less grassroots and collective action.

To the Ends of the Earth: Scotland's Global Diaspora, 1750-2010
by T M Devine
Published 25 Aug 2011

Scottish educators and ministers were commonplace throughout, and in particular at some of the great institutions of higher learning in America – the College of New Jersey (later Princeton), William and Mary and the College of Philadelphia (later the University of Pennsylvania).81 Thus it was that Scottish civil institutions began to make a deep mark on the expansion of empire only a few generations after the union with England. 2 Did Slavery Help to Make Scotland Great? In his magnum opus, The Wealth of Nations, Adam Smith famously declared that: ‘Under the present system of management, therefore, Great Britain derives nothing but loss from the dominion which she assumes over her colonies.’ Yet, even Smith’s authority could not lay to rest the question of whether empire in the later eighteenth century was a drain on the metropolis or a priceless resource of great material advantage to the mother country as it moved towards economic transformation.

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Karras, Sojourners in the Sun: Scottish Migrants in Jamaica and the Chesapeake 1740–1800 (Ithaca, N. Y., 1992), pp. 43–5; Hamilton, Scotland, the Caribbean and the Atlantic World, pp. 23–4. 29. National Archives, Customs 14 and 17/12. Copies in National Archives of Scotland (NAS), RH 2/4/22 and 40 30. Adam Smith, The Wealth of Nations (1776; London, 1937), p. 366. 31. J. R. Ward, ‘The British West Indies in the Age of Abolition’, in Marshall, ed., Oxford History, p. 427. 32. Ibid. 33. Quoted in R. B. Sheridan, ‘The Formation of Caribbean Plantation Society, 1689–1748’, in Marshall, ed., Oxford History, p. 402. 34.

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Simpson, Kenneth, ed., Love and Liberty (Edinburgh, 1997). Slaven, A., The Development of the West of Scotland 1750–1960 (London, 1975). Slaven, Anthony and Sydney Checkland, eds., Dictionary of Scottish Business Biography 1860–1960, Vol. 2 (Aberdeen, 1990). Smith, Adam, The Theory of Moral Sentiments (1759; London, 1804 edn). Smith, Adam, The Wealth of Nations (1776; London, 1937 edn). Smith, Bill, Robert Fleming 1845–1933 (Haddington, 2000). Smout, T. C., ‘Tours in the Scottish Highlands from the eighteenth to the twentieth centuries’, Northern Scotland, 5 (1983). Smout, T. C., A Century of the Scottish People, 1830–1950 (London, 1986). Smout, T.

Rethinking the Economics of Land and Housing
by Josh Ryan-Collins , Toby Lloyd and Laurie Macfarlane
Published 28 Feb 2017

This rent will change over time as land is developed around any particular plot, out of the control of any individual landlord. But equally, economic rent is not related to the investment the landowner has put into the land. In other words, rent is determined by collective rather than individual investment and activity. As Adam Smith noted in The Wealth of Nations (1776, p. 162): The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give.

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London: Centre for Global Studies. Slack, Enid, and Richard M. Bird. 2014. ‘The Political Economy of Property Tax Reform’. OECD Working Papers on Fiscal Federalism no. 18, 9 April. Sloman, J., and A. Wride. 2009. Economics. 7th ed. Harlow: Prentice Hall. Smith, Adam. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations. W. Strahan and T. Cadell. Snowdon, Christopher. 2010. The Spirit Level Delusion: Fact-Checking the Left’s New Theory of Everything. Ripon: Little Dice. Solow, Robert M. 1956. ‘A Contribution to the Theory of Economic Growth’. The Quarterly Journal of Economics 70 (1): 65–94. Stephens, Mark. 1993.

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Since in most advanced economies all land is owned, it is not clear the Lockean justification for private property in land still has legitimacy. The classical political economists that followed Locke and fellow Enlightenment thinkers rejected the ‘natural law’ argument (we discuss this more in Chapter 3). Adam Smith, usually recognised as the founder of liberal economic thought and free markets, accepted the concept of natural rights but limited them to the notions of ‘liberty and life’. In contrast, he held property to be an acquired right that was dependent on the state and its form (West, 2003, pp. 20–42).

Inequality and the 1%
by Danny Dorling
Published 6 Oct 2014

When they came into the world, and for the first six or eight years of their existence, they were perhaps, very much alike. Adam Smith, The Wealth of Nations (1776)48 Despite the greed of those at the top of the heap, many still find fault first with the unfortunates struggling at the bottom. Young people who cannot find employment typically appear among these innocent targets. Foremost among those casting aspersions on the young is David Cameron. The Conservative prime minister said in 2013: ‘Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits.’49 In fact, people almost never opt for poverty. As Adam Smith noted more than two centuries ago, although some may be more prone to selfish habit we are all very much alike at the start – it is the circumstances we find ourselves in that turn us into bullies, or the bullied.

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Dixon, ‘Judges Lose Their Sky TV at Taxpayer Funded Lodgings’, Telegraph, 14 October 2013. 47. A. Foster, ‘Jeremy Paxman Takes 20 Per Cent Pay Cut to Stay at Newsnight – But Still Gets £3M over Four Years’, Evening Standard, 8 February 2011. 48. A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book I, Chapter II: ‘Of the Principle which Gives Occasion to the Division of Labour’, Section 1.2.4 (London: Methuen, 5th edn, 1904 [1776]), at econlib.org. 49. BBC, ‘David Cameron Suggests Cutting Benefits for Under-25s’, BBC News, 2 October 2013, at bbc.co.uk. 50. C. Hope, ‘Exclusive: Cabinet Is Worth £70 Million’, Telegraph, 27 May 2012. 51.

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Elbaek and N. Lawson, ‘The Bridge: How the Politics of the Future Will Link the Vertical to the Horizontal’, London, Compass, at compassonline.org.uk. 48. H. Dalton, ‘The Measurement of the Inequality of Incomes’, Economics Journal 30: 119 (September 1920), at jstor.org. 49. World Bank, ‘Where is the Wealth of Nations? Measuring Capital for the 21st Century’, Washington, DC, World Bank, 2006, at web.worldbank.org. 50. J. B. Stewart, ‘Calculated Deal in a Rate-Rigging Inquiry’, New York Times, 13 July 2012. 51. E. Logutenkova, ‘UBS, Barclays Dodge $4.3 Billion EU Fines for Rate Rigging’, Bloomberg News, 4 December 2013, at bloomberg.com. 52.

Dirty Secrets How Tax Havens Destroy the Economy
by Richard Murphy
Published 14 Sep 2017

Murphy, ‘Country-by-Country Reporting: Accounting for Globalisation Locally’, Tax Justice Network, 2012, pdf at taxresearch.org.uk. 30.This is an OECD estimate. See OECD, ‘About BEPS and the Inclusive Framework’, at oecd.org. 2The Problems of Secrecy 1.Federal Trade Commission, ‘Guide to Antitrust Laws’, at ftc.gov. 2.A. Smith, An Enquiry into the Nature and Causes of the Wealth Of Nations, pdf at ibiblio.org, p. 574. 3.G. Zucman, The Hidden Wealth of Nations: The Scourge of Tax Havens (Chicago: University of Chicago Press, 2015). 4.Philip Booth, ‘Oxfam’s 355 Economists Are Completely Wrong: Tax Havens Do Serve a Useful Purpose’, City AM, 10 May 2016. 5.Dan Mitchell, ‘Debating Tax Havens’, International Liberty, 13 July 2013, at danieljmitchell.wordpress.com. 6.M.

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This is especially true in the current era: when the owners of most limited companies provide them with very little capital, which is the only sum that protects creditors from a potential insolvency, it is only the availability of data on who owns and really manages a company and the publication of its accounts that can offer any protection from abuse to creditors and stakeholders such as employees, customers, tax authorities and society at large. I am not alone in taking this view. Adam Smith was massively concerned about the abuse of limited liability: The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.

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Its ability to permit the accumulation of private capital from a variety of sources proved to be a catalyst in the evolution of society, its economies, and the release of human potential for the common good. But he was also right that all this was accompanied by risks that still remain today. In fact, the secrecy that so many tax havens provide on the ownership, identity of management, and trading of companies delivers the precise scenario in which Adam Smith’s worst fears about the abuses that limited liability could give rise to might be realised. Only transparency and accountability can counterbalance these risks and ensure that limited-liability companies can operate without significant cost to society. The Cost of Tax Havens What are these costs?

After Tamerlane: The Global History of Empire Since 1405
by John Darwin
Published 5 Feb 2008

The fourth assumption concerns our understanding of empire. Empire is often seen as the original sin of European peoples, who corrupted an innocent world. Of course its real origins are much older, and lie in a process almost universal in human societies. It was a human characteristic, remarked Adam Smith in The Wealth of Nations (1776), to want to ‘truck, barter and exchange’.23 Smith was thinking of material goods: it was the habit of exchange that allowed the division of labour, the real foundation of economic life. But he might well have extended his philosophical insight to the parallel world of information and ideas.

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High costs of production and the loss of export markets, as trade rivals raised tariffs, damaged manufacturing and drove capital towards public lending at home and abroad – a strategy shipwrecked by the political and diplomatic crises at the end of the century. Altogether the Dutch experiment in pre-industrial modernity was aborted by three forces endemic in early modern Europe: the ‘mercantilist’ tendency towards closed markets and commercial autarky – the trade-suppressing policies castigated by Adam Smith in The Wealth of Nations – the high costs of pre-industrial manufacturing, coupled with the environmental limits on agricultural growth; and the drastic consequences of intra-European conflict for the fiscal systems of European states. Dutch experience suggested that the limits of preindustrial modernity would soon be felt for Britain and France also, and that it would require a technological, political and geostrategic revolution before the European style of economy could successfully colonize the rest of Eurasia – and the world. 4 The Eurasian Revolution 4.

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The most prosperous regions could be seen in France, mainland Britain, the Low Countries, the Rhineland, northern Italy and parts of Catalonia, and among the commercial towns of southern and eastern Germany and the Austrian Empire. These were the places where an advanced commercial economy of the kind that Adam Smith described in The Wealth of Nations had taken firm root. Economic growth was driven by increased specialization and the division of labour, allowing productivity to rise and the market to grow in a virtuous circle. Incremental improvements in manufacturing technique and the use of the land pushed in the same direction.

The Enlightened Capitalists
by James O'Toole
Published 29 Dec 2018

That caveat registered, the protagonists of most stories about great business leaders have been self-interested individuals whose metrics of success were profits and wealth creation. Moreover, the goal of profit has long been accepted by most citizens in capitalist societies as both appropriate and sufficient. The Realists’ Case Against Business Enlightenment IN 1776 ADAM SMITH laid the foundation for the case against business idealism in The Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-interest.”17 Baldly stated, Smith thus reminds us that the motivation bakers have in baking bread is making money, not feeding us.

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Owen was born in Wales in 1771, the sixth of seven children in a lower-middle-class family that, unusually for the era, had the wherewithal to send Robert and his siblings to the village school. Owen’s first four years of childhood were passed at home with his loving family (at roughly the time Adam Smith was furiously penning The Wealth of Nations in Edinburgh). Beginning at age five, Owen attended the school taught by a certain Mr. Thickness, whose improbable Dickensian name was an accurate description of his mental capabilities. Despite schoolmaster Thickness’s shortcomings, Owen proved himself to be something of a prodigy, learning to read, write, and do arithmetic sums by the time he was seven.

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“Rockefeller, Jr., to Get Out of Standard Oil,” New York World, May 22, 1905. 10.Vincent Curcio, Henry Ford (New York: Oxford University Press, 2013), 114. 11.Curcio, 168–69. 12.David Nasaw, Andrew Carnegie (New York: Penguin, 2006). 13.Nasaw, 167. 14.Nasaw, 358. 15.Nasaw, 647. 16.Nasaw, 750. 17.Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776), 1:17. 18.Stanley Fish, “Are the Studios in the Morality Business?” Los Angeles Times, February 28, 2016. 19.Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962). 20.Smith, Wealth of Nations, 4:35. 21.Quoted in Businessweek, February 26, 2001, 101. 22.Edward E.

Postcapitalism: A Guide to Our Future
by Paul Mason
Published 29 Jul 2015

WORK IS THE SOURCE OF VALUE Amid the empty shops in the run-down high street of Kirkcaldy, Scotland, there is a branch of Gregg’s. Gregg’s sells high-fat food at low prices and is one of the few places busy at lunchtime. A glance at Scotland’s poverty map gives the context: the town is dotted with areas of extreme deprivation and ill health.1 On the wall outside Gregg’s is a plaque marking the house where Adam Smith wrote The Wealth of Nations. Nobody takes much notice. But this is where, in 1776, the economic principles of capitalism were first laid out. I’m not sure Smith would like the look of his home town today, blighted by de-industrialization, low pay and chronic sickness. But he would have understood the cause. The source of all wealth, said Smith, is work.

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If you witness workers sweating thirteen hours a day in a machine workshop, as Smith did, you will understand that it is the workers, not the machines, that produce the added value.3 Standard textbooks will tell you Smith thought the labour-theory was valid only for primitive societies, and that when it came to capitalism, ‘value’ was the combined product of wages, capital and land. This is incorrect.4 Smith’s labour theory of value was inconsistent, but on a detailed reading of The Wealth of Nations the argument is clear: labour is the source of value but the market can only reflect this roughly, through what Smith calls ‘higgling and bargaining’. So the law operates beneath the surface in a full capitalist economy. Profits and rents are deductions from the value produced by labour.5 David Ricardo, the most influential economist of the early nineteenth century, created a more developed model.

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Romer, ‘Endogenous Technological Change’, Journal of Political Economy, vol. 98, no. 5, pt 2 (1990), pp. S71–S102 12. Ibid. p. S72 13. Ibid., pp. S71–S102 14. http://www.billboard.com/biz/articles/news/digital-and-mobile/1567869/business-matters-average-itunes-account-generates-just 15. D. Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery (New York, 2007) 16. http://en.wikipedia.org/wiki/Apple_A7#cite_note-AnandTech-iPhone5s-A7-2 17. http://commons.wikimedia.org/wiki/File:Bill_Gates_Letter_to_Hobbyists.jpg 18. R. Stallman, The GNU Manifesto, March 1985, http://www.gnu.org/gnu/manifesto.html 19. http://gs.statcounter.com 20. http://www.businessinsider.com/android-market-share-2012-11 21.

Samuelson Friedman: The Battle Over the Free Market
by Nicholas Wapshott
Published 2 Aug 2021

And the consumer who is king is the electorate.”80 Samuelson believed that at the core of the argument between him and Friedman were competing views of the role the individual should play in society. Friedman contended that, just as Adam Smith81 had suggested in The Wealth of Nations, self-interest was the constant factor that ensured that society worked well for the maximum number. “As Adam Smith wrote over 200 years ago,” Friedman wrote, “in the economic market, people who intend to serve only their own private interests are led by an invisible hand to serve public interests where there was no part of their intention to promote.”82 But for Samuelson, Smith was a creature of his place and age—eighteenth-century Scotland during the Enlightenment.

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Somebody else made that happen.” 76.Samuelson, Economics from the Heart, August 13, 1973, p. 34. 77.Samuelson, The Samuelson Sampler, September 1968, p. 7. 78.Robert Strange McNamara (June 9, 1916–July 6, 2009), former president of Ford Motor Company who became U.S. secretary of defense during the Vietnam War. President of the World Bank 1968–1981. 79.Samuelson, Economics from the Heart, July 23, 1979, p. 71. 80.Samuelson, The Samuelson Sampler, September 1968, p. 7. 81.Adam Smith (June 16, 1723–July 17, 1790), Scottish economist, philosopher, and author whose An Inquiry into the Nature and Causes of the Wealth of Nations (1776) is considered the first economics text. 82.Friedman’s television series Free to Choose, 1980. https://thedailyhatch.org/2013/08/26/milton-friedmans-free-to-choose-how-to-stay-free-transcript-and-video-60-minutes/. 83.Samuelson, “Modern Economic Realities and Individualism,” in Innocence and Power: Individualism in Twentieth-Century America, ed.

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I think I am a different Keynesian than I was ten years ago.”64 But when asked to rank Keynes as an economist, Samuelson did not blink. “I still think he was the greatest economist of the twentieth century and one of the three greatest of all time.”65 Asked to name numbers two and three, he replied, “Adam Smith and Leon Walras.”66 It was perhaps the sublime confidence in his own intellect that allowed Samuelson to change his mind as often as he liked, an admirable trait that separated him from those, like Friedman and Hayek, who, having decided a line to pursue, kept digging down. Samuelson once wrote to Friedman, “Now I must eat my words.

Six Degrees: The Science of a Connected Age
by Duncan J. Watts
Published 1 Feb 2003

How is it, in other words, that the performance of firms—meaning their ability to allocate resources, innovate, adapt, and solve problems, both routine and radical—is related to their organizational architecture? MARKETS AND HIERARCHIES INDUSTRIAL ORGANIZATION IS ACTUALLY QUITE AN OLD SUBJECT, growing out of the economic and social upheaval of the Industrial Revolution. Indeed, it is the topic of industrial organization on which Adam Smith opens his monumental treatise, The Wealth of Nations. In particular, Smith discusses the division of labor, the principle that he originally inferred from his observations of workers in manufacturing plants, who consistently performed better when their collective task was broken down into specialized subtasks. The example he uses to illustrate the principle is, of all things, the production of pins.

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Some other recent treatises on the same subject are Kindleberger, C. P. Manias, Panics, and Crashes: A History of Financial Crises, 4th ed. (Wiley, New York, 2000). Shiller, R. J. Irrational Exuberance (Princeton University Press, Princeton, NJ, 2000). Fear, Greed, and Rationality Adam Smith’s discussion of rationally optimizing agents, including his reference to the invisible hand, is in Smith, A. The Wealth of Nations, Vol. 1, Book 4 (University of Chicago Press, Chicago, 1976), chapter 2, p. 477. The paradox of the efficient market hypothesis is described in Chancellor, E. Devil Take the Hindmost: A History of Financial Speculation (Farrar, Straus and Giroux, New York, 1999).

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Schools, governments, and professional armies can’t exist, nor can manufacturing, construction, transportation, or service industries. But as central as the division of labor was to Smith’s view of industrial organization, he never actually specified the mechanism by which the specialized subtasks should be aggregated into a complex whole. In The Wealth of Nations, Smith skirts the issue, claiming only that the extent to which specialization is possible depends on the “extent of the market.” By this statement he meant that the larger the pool of potential consumers, the more resources a firm can afford to invest in building production facilities, designing and creating specialized machinery, and employing workers, thereby benefiting from economies of scale.

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar
Published 16 May 2016

As the crisis of 2008 and its continuing aftermath have surely shown, we are at the end of what financialization can do for growth. We need a new model, one that enriches the many rather than the few, in a more sustainable way. We need markets that are structured fairly, with the kind of equal access that Adam Smith described in The Wealth of Nations. We need a political economy that isn’t captured by moneyed interests. And we need a financial sector that understands that it should be a helpmeet to business, not an end in and of itself. Even if we don’t understand the particulars of Wall Street, we all know on some gut level that the current system isn’t working.

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Dunstan Prial, “Fund Managers Pressured to Be ‘Better Corporate Citizens,’ ” Associated Press, March 9, 2000; Willard T. Carleton, James M. Nelson, and Michael Weisbach, “The Influence of Institutions on Corporate Governance Through Private Negotiations: Evidence from TIAA-CREF,” Journal of Finance 53, no. 4 (1998): 1335–62. 52. Adam Smith, An Inquiry into the Nature and Causes of The Wealth of Nations, vol. 2, edited by Edwin Cannan (London: Methuen & Co., 1904), 159. CHAPTER 9: THE ARTFUL DODGERS 1. Vanessa Houlder and Vicent Boland, “Corporate Tax: The $240bn Black Hole,” Financial Times, November 25, 2015. 2. Carla Mozée, “What an AstraZeneca Deal Could Do for Pfizer’s ‘War Chest,’ Taxes,” MarketWatch, April 28, 2014. 3.

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Still, this was a sensitive topic—since asset managers are hired to manage the retirement money of the very firms whose corporate governance they might be trying to direct—and Bogle’s suggestion got a rather mixed reaction. “I remember one of the guys from some big firm said, ‘We all know what you’re trying to do, Jack. Why don’t you just leave it to the markets? Leave it to Adam Smith’s Invisible Hand!’ And I said, ‘Don’t you realize that we are Adam Smith’s Invisible Hand?’ ”48 It’s a profound statement. Finance is in control, yes. But that means that it has the potential to be a force for economic and social good, rather than exploitation. Yet in this case, harnessing that force would require that the asset management industry turn its back on a business model that has been yielding unbelievably easy money for decades.

God Is Back: How the Global Revival of Faith Is Changing the World
by John Micklethwait and Adrian Wooldridge
Published 31 Mar 2009

The biggest problem for the prophets of secularization is that the surge of religion is being driven by the same two things that have driven the success of market capitalism: competition and choice. THE GOSPEL OF PLURALISM To understand the competitive mechanism behind religion’s revival, you need to consult only two sacred texts. The first is The Wealth of Nations, in which Adam Smith argues that the free market works with God as well as Mammon. Nonestablished clergy, who rely on the collection plate, show greater “zeal” in proselytizing “the inferior ranks of people” than established clerical salarymen, who are more interested in sucking up to their patrons.

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The decision to get government out of the religion business did as much as almost anything else to establish America’s role as the most religious country in the advanced world. Why is disestablishment a recipe for religious vigor? As we have already pointed out, Adam Smith gave the best answer to this question more than two centuries ago in The Wealth of Nations: a free market in religion forces clergymen to compete for market share. But English fiction is also an acerbic commentary on the way that an established clergy can sometimes behave: think of the obsequious Reverend Mr. Collins pursuing his patron Lady Catherine de Bourgh in Pride and Prejudice or the infighting over livings in Trollope.

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This spirit of competition also helps to explain some of Islam’s success. That may sound odd. Saudi Arabia enforces religious orthodoxy with police and prisons, punishing apostasy with death. In many Islamic countries mosques get a degree of financial help and direction from the state that would have scandalized Adam Smith. Islam is not as evangelical as Christianity. Its followers are less intent on spreading the good news than on stiffening the resolve of traditional Muslims. Yet there is more competition within Islam than at first appears. Like Pentecostalism, Islam is a religion without much hierarchy: most mosques claim to be following the teachings of one preacher or another, but their real authority comes from the Koran.

The End of Growth: Adapting to Our New Economic Reality
by Richard Heinberg
Published 1 Jun 2011

Richard Heinberg, The Party’s Over (Gabriola Island BC: New Society Publishers, 2003), pp. 14–33; William Catton, Overshoot: The Ecological Basis of Revolutionary Change (University of Illinois, 1980). 47. For an unrealistically optimistic view of what division of labor has achieved, see John Kay, “Why You Can Have an Economy of People Who Don’t Sweat,” Financial Times, Oct. 20, 2010. 48. Adam Smith, The Wealth of Nations (New York: Oxford University Press, World’s Classics Edition, 2008). 49. Economists frame the advantages of increased trade in terms of a concept called “comparative advantage.” Technically, comparative advantage means that each country will specialize in what it is good at, even if another country does everything better, and the result is that all countries benefit from trade.

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Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day....48 Later in The Wealth of Nations, Smith criticizes the division of labor, saying it leads to a “mental mutilation” in workers as they become ignorant and insular — so it’s hard to know whether he thought the trend toward specialization was good or just inevitable. It’s important to note, however, that it was under way before the fossil fuel revolution, and was already contributing to economic growth.

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While the first economists were ancient Greek and Indian philosophers, among them Aristotle (382– 322 bce) — who discussed the “art” of wealth acquisition and questioned whether property should best be owned privately or by government acting on behalf of the people — little of real substance was added to the discussion during the next two thousand years. It’s in the 18th century that economic thinking really gets going. “Classical” economic philosophers such as Adam Smith (1723–1790), Thomas Robert Malthus (1766–1834), and David Ricardo (1772–1823) introduced basic concepts such as supply and demand, division of labor, and the balance of international trade. As happens in so many disciplines, early practitioners were presented with plenty of uncharted territory and proceeded to formulate general maps of their subject that future experts would labor to refine in ever more trivial ways.

The Technology Trap: Capital, Labor, and Power in the Age of Automation
by Carl Benedikt Frey
Published 17 Jun 2019

Computer-controlled machines have eliminated precisely the jobs created for a host of machine operators during the Second Industrial Revolution. The workers that were once pulled into decent-paying jobs in mass-production industries are now being pushed out. What Computers Do In the Wealth of Nations, Adam Smith observed the division of labor in Britain’s pin factories. By dividing activities into narrow tasks, he found that the first factories were able to increase efficiency enormously. While his observation concerned the division of labor between human workers, the age of automation came with a new division of labor: tasks can now be divided between humans and computers.

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On cotton yarn manufacturing, see R. C. Allen, 2009a, The British Industrial Revolution in Global Perspective (Cambridge: Cambridge University Press), chapter 8, Kindle. 8. Mantoux, 1961, The Industrial Revolution in the Eighteenth Century, 234. 9. It was in the same year that Adam Smith published The Wealth of Nations that the industrial undertakings that would eventually make Britain a truly wealthy nation took off. 10. Quoted in Mantoux, 1961, The Industrial Revolution in the Eighteenth Century, 213. 11. Ibid., 14. 12. On the labor savings of Arkwright’s inventions, see Allen, 2009a, The British Industrial Revolution, chapter 8. 13.

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Based on data from the 1086 Domesday Book and the numbers published by Gregory King in 1688, Graeme Snooks has estimated that the British economy grew at an annual rate of 0.29 percent in per capita terms (1994, “New Perspectives on the Industrial Revolution,” in Was the Industrial Revolution Necessary?, ed. G. D. Snooks [London: Routledge], 1–26). 35. D. Defoe, [1724] 1971, A Tour through the Whole Island of Great Britain (London: Penguin), 432. 36. A. Smith, [1776] 1976, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press), 365–66. 37. As noted above, a larger share of this wealth was appropriated by a fraction of the population. But although everyone didn’t gain equally from growth, most workers lived well above subsistence levels. Based on King’s 1688 social table of Britain, Allen estimates that the poorest group—consisting of cottagers, paupers, and vagrants—earned just about enough to buy a bare-bones subsistence basket.

Capitalism in America: A History
by Adrian Wooldridge and Alan Greenspan
Published 15 Oct 2018

The United States was born in the age of the Enlightenment, when old verities were being rethought and established institutions remodeled. The country’s bloody struggle for independence (1775–83) began a year before the publication of the greatest work of free-market economics ever written, Adam Smith’s The Wealth of Nations (1776). For most of recorded history, people had acquiesced in, and in some ways embraced, a society that was static and predictable. From the birth of Jesus to about 1820, economic growth amounted to no more than 0.11 percent a year or 11 percent a century, according to Angus Maddison.2 A young fifteenth-century vassal could look forward to tilling the same plot of his landlord’s soil until disease, famine, natural disaster, or violence dispatched him.

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Moving things upstream, against the current, particularly a mighty current like the Mississippi’s, was often impossible. Americans were also fortunate in having the great Atlantic Ocean to provide them with both a ready supply of fish and a thoroughfare to the European continent. The New England fishing industry was so successful that no less a figure than Adam Smith described it in The Wealth of Nations as “one of the most important, perhaps, in the world.”10 Communities sustained themselves on lobster, oysters, herring, sturgeon, haddock, crabs, and scrod; indeed, the codfish was to Massachusetts what tobacco was to Virginia. The “cradle of American liberty,” Faneuil Hall, was the gift of Peter Faneuil, a Boston merchant who had made a fortune selling New England codfish around the world.

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The codes even decreed whether customers could choose their own chicken from a coop or butcher shop or whether they had to be allotted it randomly. The result was to entrench the power of established companies: insiders flourished thanks to guaranteed markets at elevated prices, part of which funded high wage rates, but outsiders could not prosper however hard they worked or cleverly they innovated. In The Wealth of Nations, Adam Smith had warned that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The major tire makers (Goodyear, Goodrich, and Firestone) got together and wrote the NRA tire code.

Modernising Money: Why Our Monetary System Is Broken and How It Can Be Fixed
by Andrew Jackson (economist) and Ben Dyson (economist)
Published 15 Nov 2012

We then discuss the development of banking in the United Kingdom and its evolution up to the present day. 1.1 The origins of money A textbook history The standard theory of the origins of money, commonly found in economics textbooks, was perhaps first put forward by Aristotle (in “Politics”) and restated by Adam Smith in his book “The Wealth of Nations” (1776). According to Smith’s story, money emerged naturally with the division of labour, as individuals found themselves without many of the necessities they required but at the same time an excess of their own produce. Without a means of exchange individuals had to resort to barter in order to trade, which was problematic as both sides of the deal had to have something the other person wanted (the “double coincidence of wants”).

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“As a consequence, as the bank raises the rate of interest, there is an adverse selection effect; the mix of loan applicants changes adversely, so much so that the expected return from those receiving loans may actually decrease as the interest rate charged increased.” The problem of adverse selection has long been known – Adam Smith noted in the Wealth of Nations that when interest rates are high the only people wishing to borrow would be “prodigals and projectors”: “Sober people, who will give for the use of money no more than a part of what they are likely to make by the use of it, would not venture into the competition. A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it, and thrown into those which were most likely to waste and destroy it.

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(Lester, 1938, cited in Zarlenga, 2002) In conclusion, historians agree that Pennsylvania’s system of issuing currency was ‘to the manifest benefit of the province’ (Ferguson, 1953). Indeed, Ferguson notes that “Pennsylvania’s currency was esteemed by all classes and regarded as having contributed to the growth and prosperity of the colony” (p. 159), and that “Favourable testimony can be found in nearly all commentators, modern or contemporary”. (p. 163) Adam Smith, writing in the Wealth of Nations, commented that the success of the system was dependent on three circumstances: “First, upon the demand for some other instrument of commerce, besides gold and silver money, or upon the demand for such a quantity of consumable stock as could not be had without sending abroad the greater part of their gold and silver money, in order to purchase it; secondly, upon the good credit of the government which made use of this expedient; and, thirdly, upon the moderation with which it was used, the whole value of the paper bills of credit never exceeding that of the gold and silver money which would have been necessary for carrying on their circulation, had there been no paper bills of credit.”

The Seventh Sense: Power, Fortune, and Survival in the Age of Networks
by Joshua Cooper Ramo
Published 16 May 2016

Releasing power into the busy arms of businessmen, politicians, scientists, and artists meant that ideas, politics, and innovations competed. They got better. They evolved. And the sum of all these interacting pieces produced sustained economic growth for the first time in history. In a “commercial society,” Adam Smith explained in The Wealth of Nations, “every man thus lives by exchanging, or becomes in some measure a merchant.” Smith didn’t mean that everyone was really a merchant; rather, in a world of markets, each of us—our labor, our ideas, our capital—is a commodity. We are liberated, but only to compete. For votes, for jobs, for resources.

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Nisbet, Cambridge Texts in the History of Political Thought (Cambridge: Cambridge University Press, 1991), 54. “Human knowledge”: Francis Bacon, The New Organon, ed. Lisa Jardine and Michael Silverthorne, Cambridge Texts in the History of Philosophy (Cambridge: Cambridge University Press, 2000), 33. In a “commercial society”: Adam Smith, The Wealth of Nations, ed. Kathryn Sutherland, Oxford World’s Classics (Oxford: Oxford University Press, 2008), 31. “the scaffolds humans erect”: Douglass C. North, Understanding the Process of Economic Change (Princeton, NJ: Princeton University Press, 2010), 48. Museums… Scientific congresses: Joel Mokyr, “The Intellectual Origins of Modern Economic Growth,” Journal of Economic History 65, no. 2 (June 2005): 290.

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Unlike traditional conflicts: Derek Gregory, “The Everywhere War,” The Geographical Journal 177, no. 3 (September 2011): 238–50. He labeled it: Donald G. Janelle, “Spatial Reorganization: A Model and Concept,” Annals of the Association of American Geographers 59, no. 2 (1969): 348–64. Adam Smith’s famous remark: Adam Smith, The Theory of Moral Sentiments, ed. Knud Haakonssen (Cambridge: Cambridge University Press, 2002), 198. “Time is a ride”: Stewart Brand, The Clock of the Long Now, 67. The German philosopher: Monika Codourey, “Mobile Identities and the Socio-Spatial Relations of Air Travel,” Surveillance & Society 5, no. 2 (2008): 188–202.

The New Economics: A Bigger Picture
by David Boyle and Andrew Simms
Published 14 Jun 2009

Earl (1997) ‘Neighbourhoods and violent crime’, Science, 15 August. 23 Edgar Cahn (2000) No More Throwaway People: The Co-production Imperative, Essential Books, Washington DC. The phrase ‘core economy’ was originated by Neva Goodwin in Neva Goodwin, Julie Nelson, Frank Ackerman and Thomas Weisskopf (2003) Microeconomics in Context, Houghton Mifflin, New York. 24 Adam Smith (1976) An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. R. H. Campbell and A. S. Skinner. 2 vols, Glasgow Edition of the Works and Correspondence of Adam Smith 2. Oxford University Press, Oxford. 25 New York Times (1921) 4 December. 7 Resources: Why are Cuban Mechanics the Best in the World? Every Cuban is a mechanic. Cuban proverb, quoted in the film Yank Tanks Money is round and it rolls away.

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63 9 Tax Justice Network (2005) The Price of Offshore, London. 10 Edgar Cahn (2000) No More Throwaway People: The Co-production Imperative, Essential Books, Washington DC. 11 Robert Skidelsky (1992) John Maynard Keynes Vol 2: The Economist as Saviour, Picador, London. 12 David Boyle (2003) Beyond Yes and No: A Multi-currency Alternative to EMU, New Economics Foundation, London. 13 James Robertson (2002) ‘The euro will prompt further monetary reform’, European Business Review, Vol 14, No 1. 14 Jane Jacobs (1986) Cities and the Wealth of Nations, Random House, New York. 15 Bernard Lietaer (2000) The Future of Money, Random Century, London. 16 Richard Douthwaite (1999) The Ecology of Money, Schumacher Briefings Number 4, Green Books, Totnes. 17 Tom Greco (1985) New Money for Healthy Communities, Greco, Tucson. 18 See, for example, David Boyle (ed) (2002) The Money Changers: Currency Reform from Aristotle to e-cash, Earthscan, London. 19 New York Times (1921) 4 December. 20 Stamp Out Poverty (2005) Submission to the Intergovernmental Working Group, London. 21 Joseph Stiglitz (2002) Globalisation and its Discontents, Norton, New York. 5 Markets: Why has London Traffic Always Travelled at 12mph?

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Other books to read David Boyle (1999) Funny Money, HarperCollins, London David Boyle, Sherry Clark and Sarah Burns (2006) Hidden Work, Joseph Rowntree Foundation, London Colin Hines (2000) Localization: A Global Manifesto, Earthscan, London Alison Ravetz (2008) ‘Is the government trying to abolish illness?’, New Statesman, 5 May James Robertson and Joseph Huber (2000) Creating New Money, New Economics Foundation, London Shann Turnbull (1975) New Money Sources and Profit Motives for Democratising the Wealth of Nations, Company Directors Association, Sydney Notes 1 2 3 4 5 6 7 8 9 Tim Jackson, Nic Marks, Jon Ralls and S. Strymne (1997) An Index of Sustainable Economic Welfare for the UK 1950–1996, Centre for Environmental Strategy, University of Surrey, Guildford. Robert Lacey and Dabby Danziger (1999) The Year 1000: What Life was Like at the Turn of the Last Millennium, Little, Brown, London.

Start It Up: Why Running Your Own Business Is Easier Than You Think
by Luke Johnson
Published 31 Aug 2011

The delights of the portfolio career I once attended a dinner party where the host went round the table one by one, describing what each of us did for a living. It was a sobering moment. Here were our lives, summed up in a few words. Is this really how we will be remembered? Is this all we have done? Ever since Adam Smith published The Wealth of Nations in 1776, modern societies have focused on the division of labour. It is one of the platforms on which industrial capitalism is constructed. We have become ever more specialist in our work – no one wants to be known as a jack of all trades, master of none. Today it is all niches.

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It should be non-profit and unfussy, with an emphasis on the partners interacting to their mutual advantage, and perhaps an ancillary role of charitable giving. Ideally it covers all sectors and ages, with veterans giving tips to up-and-comers. There should be start-ups, family firms and established companies. Building a business is never easy, and the best support always comes from those who have been there before. Just beware Adam Smith’s famous dictum: ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’ These days that’s a criminal offence. Cliques and clubs – the ties that bind It seems every profession has a small circle of characters that basically command things.

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After all, in mature economies most markets are dominated by a handful of operators – if you assemble the owners, founders and heads of those companies, it would often be fewer than twenty people. There is mutual respect and occasional cooperation between these bosses – but is there plotting against the consumer? Adam Smith thought so, but I disagree. It’s more likely that the members of such groups spend their time conspiring against each other. At the sharp end, business leaders compete ferociously for power, fame, money, market share, staff, property and awards. And, as Smith said, once more: ‘Rivalship and emulation render excellency and frequently occasion the very greatest exertions.’

Liberalism at Large: The World According to the Economist
by Alex Zevin
Published 12 Nov 2019

Mark Bevir and Frank Trentmann, Cambridge 2004, pp. 46–50, 65–69; Ruggiero, European Liberalism, pp. 172, 204; Dean Russell, ‘Frederic Bastiat and the Free Trade Movement in France and England, 1840–1850’ (PhD diss., Université de Genève 1959), pp. 25–26, 62–64, 91–93; David Todd, L’identité Économique de la France: Libre-Échange et Protectionnisme, 1814–1851, Paris 2008, pp. 331–51, 416. 31.Smith invoked the term in The Wealth of Nations in 1776 to describe certain professions, or generous wages; he also referred to a ‘liberal plan of equality, liberty and justice’, that is, ‘allowing every man to pursue his own interest in his own way’, and also, in a digression on the Corn Laws, to a ‘liberal system’, by which he meant ‘freedom of the corn trade’. Adam Smith, The Wealth of Nations, ed. Edwin Cannan, New York 2003, pp. 509, 681–82. 32.José Luis Abellán, Historia Crítica del Pensamiento Español, Madrid 1984, Vol IV, pp. 58, 78–82; Jörn Leonhard, ‘From European Liberalism to the Language of Liberalisms: The Semantics of Liberalism in European Comparison’, in Redescriptions, 2004, pp. 17–31; Leonhard, Liberalismus, pp. 329–32, 347, 410–12, 416, 494. 33.In a letter from 1831, Mill opposed the ‘speculative Toryism’ of Wordsworth, Southey or Coleridge, ‘a reverence for government in the abstract … duly sensible that it is good for man to be ruled; to submit his body and mind to the guidance of a higher intelligence and virtue’, to lower case liberalism, ‘which is for making every man his own guide and sovereign master, and letting him think for himself and do exactly as he judges best for himself, giving other men leave to persuade him if they can by evidence, but forbidding him to give way to authority; and still less allowing them to constrain him more than the existence & tolerable security of every man’s person and property renders indispensably necessary’: Mill to John Sterling, 20 October 1831, in Collected Works, ed.

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But that they were anything other than absolutely true and ultimately humane was out of the question. Political economy was a science and so certain was the newspaper that its laws had been discovered, and by whom, that it argued repeatedly for changing its very name. The application of the adjective political to the science of ‘The Wealth of Nations’ is of French origin; and never was an epithet more misapplied; for the distinguishing feature of Smith’s science is the proof it continually supplies that all policy – unless laissez-faire, or standing idle and religiously refraining from interfering, can be called a policy – is erroneous, injurious to the production of wealth, and repudiated by the science.

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If a principle be true there can be no exception to its application, and least of all can it be abandoned or neglected in an extreme case.’75 The paper was aware that Adam Smith had sanctioned public works in like situations. But it doubted if he would still approve, and defended him from a hostile pamphlet, The True Cure for Ireland, which called it ‘perfect folly to be dancing a Will-o’-the-wisp dance, after the abstract principles of political economy, as laid down by Adam Smith, for it ought to be remembered he wrote for a country advanced in social position and high civilization.’ On the contrary, retorted the Economist, ‘Smith wrote for all time, and of all time’.76 Wilson not only ensured that his paper constantly firmed up civil servants and politicians over Ireland: he soon enlisted them to craft the Economist itself.

The Great Surge: The Ascent of the Developing World
by Steven Radelet
Published 10 Nov 2015

Most of today’s global trade occurs through sea-based shipping, as it has for several hundred years. Cities and countries with greater access to the sea have lower shipping costs, so businesses and individuals are much better positioned to take advantage of all of the opportunities afforded by trade, including access to new technologies. Adam Smith recognized the importance of global access through sea-based trade in The Wealth of Nations: As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it, so it is upon the sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to sub-divide and improve itself, and it is frequently not till a long time after that those improvements extend themselves to the inland part of the country.9 True to Smith’s insights, as development spread from Europe over the last two centuries, coastal cities—or cities with direct access to the sea through rivers—became the major centers of commercial activity around the world: London, Rotterdam, New York, Los Angeles, New Orleans, Tokyo, Seoul, Sydney, Shanghai, Istanbul, Rio de Janeiro, Buenos Aires, and many others.

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George Ayittey, Africa Betrayed (New York: St. Martin’s Press, 1993); Acemoglu and Robinson, Why Nations Fail. 6. Francis Fukuyama, The End of History and the Last Man (New York: Free Press, 1992), p. xiii. SEVEN: HELLO GLOBALIZATION, WELCOME NEW TECHNOLOGIES 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776), chap. 7. 2. Frank Viviano, “China’s Great Armada,” National Geographic, July 2005, p. 37. 3. Ibid., p. 52. 4. The figures are drawn from the World Bank’s World Development Indicators, and are the sum in each year of the number of patent applications for residents and nonresidents. 5.

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Masters (Washington, DC: International Bank for Reconstruction and Development/World Bank, 2009). 7. Samuel Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: University of Oklahoma Press, 1991), p. 258. 8. Ethan Kapstein and Nathan Converse, The Fate of Young Democracies (Cambridge: Cambridge University Press, 2008), p. xv. 9. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776), bk. 1, chap. 3, and bk. 3, chap. 4. NINE: FOREIGN AID: BLESSING OR CURSE? 1. Richard Carter and Kamini N. Mendis, “Evolutionary and Historical Aspects of the Burden of Malaria,” Clinical Microbiology Reviews 15, no. 4 (October 2002): 564–94, table 3. 2.

The New Division of Labor: How Computers Are Creating the Next Job Market
by Frank Levy and Richard J. Murnane
Published 11 Apr 2004

The narrow job definitions provided workers no opportunity to learn how their task related to those of their co-workers. The importance of organizational design for stimulating or repressing the development of expertise is not a new idea. We remember Adam Smith for explaining how the division of labor—dividing work into narrow tasks—increases short-run efficiency. In his 1776 treatise, The Wealth of Nations, Smith also made clear how that same structure stifles learning. The man whose whole life is spent in performing a few simple operations, of which the effects 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.

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By keeping the four questions in front of us, we will be better able to appreciate the challenge we face as we work to progress as a nation. This page intentionally left blank NOTES CHAPTER 1. New Divisions of Labor 1. Quoted from http://www.pa.msu.edu/people/mulhall/mist/Triple.html. 2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1994; orig. 1776). Smith used the term to describe the increased efficiency that came when a particular job—making a straight pin, in his example—was divided into a series of narrow tasks—making the heads of pins, making the stems, sharpening the points—with each task assigned to a specialized worker. 3.

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Like many computer scientists of that time, the committee expected computers would soon replicate all the modes by which humans process information. The expectation was only partly fulfilled, and so the committee’s warning was only partly right. Computers have not created mass unemployment, but they have created a major upheaval in the nature of human work. More than two centuries ago, Adam Smith used the words “division of labor” to describe an earlier upheaval—the way in which the first factory systems had reorganized work and dramatically boosted productivity.2 In today’s economy, Smith’s words have taken on new meanings. There is a new division of labor between people and computers. And there is a growing division within human labor itself—a divide between those who can and those who cannot do valued work in an economy filled with computers.

Futureproof: 9 Rules for Humans in the Age of Automation
by Kevin Roose
Published 9 Mar 2021

Uber drivers lost out on millions of dollars Arik Jenkins, “Why Uber Doesn’t Want a Built-In Tipping Option,” Fortune, April 18, 2017. the technology critic Tim Wu calls Tim Wu, “The Tyranny of Convenience,” New York Times, February 16, 2018. Rule 3 Demote Your Devices Adam Smith warned Adam Smith, The Wealth of Nations (1776). The psychologist Sherry Turkle Sherry Turkle, Reclaiming Conversation: The Power of Talk in a Digital Age (New York: Penguin, 2015). One such study, conducted at the University of British Columbia Ryan J. Dwyer, Kostadin Kushlev, and Elizabeth W. Dunn, “Smartphone Use Undermines Enjoyment of Face-to-Face Social Interactions,” Journal of Experimental Social Psychology (September 2018).

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These AIs represent the kind of futuristic superintelligence we saw in sci-fi movies as kids, and they stare out at us from our screens every day—observing us, adapting to our preferences, figuring out what sequence of stimuli will get us to watch one more video, share one most post, click on one more ad. Humans have worried about the degrading psychological effects of machines for centuries. (Adam Smith warned in The Wealth of Nations that automated factory equipment was making us “as stupid and ignorant as it is possible for a human creature to become.”) And in recent years, sounding the alarm about the negative consequences of smartphone use has become a thriving cottage industry. We now have “screen detox” resorts for adults, screen-time consultants for kids, and “digital sabbath” groups that encourage members to unplug completely for one day a week.

10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less
by Garett Jones
Published 4 Feb 2020

You want a lot of members who are better than you: • Fellow gym members who can inspire you • Fellow classmates who are smarter than you and can therefore teach you new things • Fellow heads of government in the Council of Europe who are more market oriented than you When our peers shape us, it’s smart to search out peers who are better than us. And in the EU, there aren’t that many nations that can serve as models to the United Kingdom. Great Britain, after all, largely invented the concept of market-oriented liberalism, building on the insights of Adam Smith’s late eighteenth-century work, The Wealth of Nations, and turning market-oriented liberalism into a practical policy that reached its peak in the late nineteenth century under the political leadership of Prime Minister William Gladstone. And while the United Kingdom has ebbed and flowed in its support for economic liberalism in the twentieth and twenty-first centuries, it still is far more market oriented than most other EU members.

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Through the process, I learned about the workings of the human brain, the value of intelligence tests, the merits and joys of listening to psychologists. 10% Less Democracy has nothing to do with any of that, at least not directly. But one relevant lesson I did learn from that experience was that voter skill matters for the wealth of nations—that the clichés are true and that informed voters are an extremely important ingredient in the recipe for good government. Indeed, informed voters are so important that many thinkers—including economist Dambisa Moyo of Barclays and other corporate boards and philosopher Jason Brennan of Georgetown—have been searching for ways to give the most-informed voters greater weight in modern democracies.

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Denmark, 169–70, 175; economic growth in, 170; Economist’s Democracy Index score for, 171; electoral terms in, 175; Feedback Unit, 173; Government Parliamentary Committees, 173; income per person in, 169, 170; independent central bank in, 175; independent judiciary in, 175; Institute of Policy Studies, 173; Lee Kuan Yew, 172–73, 175; libel suits in, 170; life expectancy, 169, 170; middle class in, 173, 175; monetary policy, 175; People’s Action Party (PAP), 170, 174, 175; Singapore Zoo, 174; vs. United States, 171 Smith, Adam: on economic freedom, 73; The Wealth of Nations, 157 social media, 2, 13, 132, 141, 144–47, 170, 179 Socrates, 181, 182 Solow, Robert: on inflation and unemployment, 43 South Korea, 22 sovereign debt. See government debt/sovereign debt Spain: central bank in, 46; EU membership, 158; inflation in, 46; relations with EU, 155 Standard & Poor’s, 121 statistics: multivariate regression, 12 Stella, Andrea: on independent central banks and inflation, 58–59 Stockemer, Daniel, 107 Summers, Larry: on control of central banks, 42–43; on economic independence of central banks, 45–46, 50; on income growth and central bank independence, 48, 49; on inflation and central bank independence, 45–47; influence of, 49–50; on political independence of central banks, 45–46, 47; on unemployment and central bank independence, 48 sweet spots, 19–20, 21–22 Switzerland: independent central bank in, 45–46; inflation in, 45–46 Tabarrok, Alex: on elected judges and voters, 66–68 Tobin, James: on inflation and unemployment, 43 Taiwan, 22 Tammany Hall, 105, 137–38, 141, 143 tariffs, 32, 100, 105 Tawadros, George: on inflation and central banks, 47–48 taxation: Blinder on, 61, 92–94, 143; and democracy, 62; of imports, 32, 100, 105; and inflation, 23; of interest earnings, 23; tax rates, 19–20, 117, 118, 133 term lengths of politicians: increases in, 11, 22, 37–40; short terms and short-term thinking, 31–35.

SEDATED: How Modern Capitalism Created Our Mental Health Crisis
by James. Davies
Published 15 Nov 2021

“Well, James,’ answered Lawson slowly, ‘I think that by talking about the heart and soul, Margaret Thatcher felt very strongly that there were certain important virtues – self-reliance, independence and self-responsibility – that economic reform could nurture and develop.’ He then elaborated by referring to the founding text of modern capitalism: Adam Smith’s The Wealth of Nations. ‘You see, there is a widespread view out there that for Adam Smith, the wealth of nations consisted of actual gold. But actual gold had absolutely nothing to do with it. The true wealth of any nation exists in people working to better their own and their children’s lives. For Smith, the true gold was not found in vaults, but rather in who people were and what they did.’

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We would learn to develop our relationships and creativity, finally casting off the ‘pseudo-moral principles which have hag-ridden us for two hundred years’; we would learn that ‘the love of money’ or the ‘money motive’ was not only a ‘disgusting morbidity’ but acted against our best human qualities – just as the materialist way of living diminished our humanity. By envisaging a state of relative freedom from excessive work, Keynes was describing an economic future he believed society must one day embrace. Like Adam Smith and Karl Marx before him, he saw economics as a servant of the good life, as a mechanism for solving inequality, for cutting levels of demeaning work and for facilitating the highest human values and characteristics. The future society he envisaged, to use Erich Fromm’s words, would ultimately elevate living and loving over attaining and acquiring – would put ‘being more’ over ‘having more’.2 While Keynes’s vision never advocated the end of market capitalism, as did Fromm’s, both men shared the view that cutting the amount of meaningless work would progress our behavioural, intellectual and interpersonal potentialities, assuming we learnt to use our new-found freedom properly.

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This third force was known as ‘humanistic psychology’, and it prided itself on being in alignment with a long and venerable tradition in Western thought.4 It held that once our basic human needs had been satisfied, self-betterment for the good of oneself and others became the highest occupation of life. Whether self-betterment came in the form of developing our ‘virtue’ (as in Aristotle’s ethics), or our unique artistic and intellectual powers (as Francesco Petrarch and Pico della Mirandola claimed),5 or our critical and scientific reason (as Benedictus de Spinoza, Adam Smith and John Locke stated),6 or our individuality and creative possibilities (as John Stuart Mill and Wilhelm von Humboldt insisted),7 the humanistic psychologists valued the development of our highest human qualities as the epitome of health-seeking activity, as of course did John Maynard Keynes.8 But these psychologists also offered something new.

Thinking in Systems: A Primer
by Meadows. Donella and Diana Wright
Published 3 Dec 2008

Forrester, Urban Dynamics (Cambridge, MA: The MIT Press, 1969), 117. 7. Václav Havel, from a speech to the Institute of France, quoted in the International Herald Tribune, November 13, 1992, p. 7. 8. Dennis L. Meadows, Dynamics of Commodity Production Cycles, (Cambridge MA: Wright-Allen Press, Inc., 1970). 9. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Edwin Cannan, ed., (Chicago: University of Chicago Press, 1976), 477-8. 10. Herman Daly, ed., Toward a Steady-State Economy (San Francisco: W. H. Freeman and Co., 1973), 17; Herbert Simon, “Theories of Bounded Rationality,” in R. Radner and C. B. McGuire, eds., Decision and Organization (Amsterdam: North-Holland Pub.

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By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. —Adam Smith,9 18th century political economist It would be so nice if the “invisible hand” of the market really did lead individuals to make decisions that add up to the good of the whole. Then not only would material selfishness be a social virtue, but mathematical of the economy would be much easier to make. There would be no need to think about the good of other people or about the operations of complex feedback systems. No wonder Adam Smith’s model has had such strong appeal for two hundred years! Unfortunately, the world presents us with multiple examples of people acting rationally in their short-term best interests and producing aggregate results that no one likes.

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Which is to say, we don’t even make decisions that optimize our own individual good, much less the good of the system as a whole. When the theory of bounded rationality challenged two hundred years of economics based on the teachings of political economist Adam Smith, you can imagine the controversy that resulted—one that is far from over. Economic theory as derived from Adam Smith assumes first that homo economicus acts with perfect optimality on complete information, and second that when many of the species homo economicus do that, their actions add up to the best possible outcome for everybody. Neither of these assumptions stands up long against the evidence.

How Did We Get Into This Mess?: Politics, Equality, Nature
by George Monbiot
Published 14 Apr 2016

A Telling Silence 1‘Liberal Democrat Manifesto 2010’, politicsresources.net. 2David Teather, 22 June 2010, ‘Capital Gains Tax Rises to 28% for Higher Earners’, theguardian.com. 3House of Commons, 8 January 2013, Welfare Benefits Up-Rating Bill, Hansard, publications.parliament.uk. 4HM Revenues and Customs, 14 April 2013, Rates and Allowances: Corporation Tax, gov.uk; Dan Milmo, 5 December 2012, ‘Corporation Rate Cut to Nearly Half of US Level as Osborne Ignores Tax Row’, theguardian.com. 5Ibid. 6Gordon Brown, 1 November 1999, Speech to the CBI Conference. 7Tony Dolphin, 10 June 2010, Financial Sector Taxes, Institute for Public Policy Research, ippr.org. 8Greg Philo, 15 August 2010, ‘Deficit Crisis: Let’s Really Be in It Together’, theguardian.com. 9Chris Spillane and Neil Callanan, 28 October 2012, ‘Sultan’s Tax Discount on London House Shows Law Favours Rich’, independent.co.uk. 10Ibid. 11Hélène Mulholland, 7 October 2012, ‘David Cameron Rules out Mansion Tax and Plans Further Welfare Cuts’, theguardian.com. 12Speech delivered by Winston Churchill in King’s Theater, Edinburgh, on 17 July 1909, see Current Affairs, ‘Winston Churchill Said It All Better Than We Can’, landvaluetax.org. 13‘Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground’, from Adam Smith, 1776, An Inquiry into the Nature and Causes of the Wealth of Nations, Book V, Chapter 2. 14Winston Churchill, as above. 15Land Value Taxation Campaign, ‘Land Rent for Public Revenue’, landvaluetax.org. 16David Cameron, 6 March 2011, ‘Speech to Conservative Spring Conference | Cardiff’, newstatesman.com. 51. The Values of Everything 1Tom Crompton, September 2010, ‘Common Cause: The Case for Working with Our Cultural Values’, WWF, Oxfam, Friends of the Earth, CPRE, Climate Outreach Information Network, wwf.org.uk. 2J.

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Every Saturday, in a wine bar called the Cork and Bottle, Margaret Thatcher’s researchers and leader writers and columnists from The Times and Telegraph met staff from the Adam Smith Institute and the Institute of Economic Affairs. Over lunch, they ‘planned strategy for the week ahead’.8 These meetings would ‘co-ordinate our activities to make us more effective collectively’. The journalists would then turn the institute’s proposals into leader columns while the researchers buttonholed shadow ministers. Soon, Pirie says, the Daily Mail began running a supportive article on the leader page every time the Adam Smith Institute published something.9 The paper’s editor, David English, oversaw these articles himself, and helped the institute to refine its arguments.10 As Pirie’s history progresses, all references to funding cease.

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As the corporate lobbyist Jeff Judson enthuses, they are ‘virtually immune to retribution … the identity of donors to think tanks is protected from involuntary disclosure’.3 A consultant who worked for the billionaire Koch brothers claims that they see the funding of think tanks ‘as a way to get things done without getting dirty themselves’.4 This much I knew, but over the past few days I’ve learnt a lot more. In Think Tank: The Story of the Adam Smith Institute, the institute’s founder, Madsen Pirie, provides an unintentional but invaluable guide to how power in this country really works.5 Soon after it was founded in 1977, the institute approached ‘all the top companies’. About twenty of them responded by sending cheques.6 Its most enthusiastic supporter was the coup-plotter Sir James Goldsmith, one of the most unscrupulous asset strippers of that time.

Globish: How the English Language Became the World's Language
by Robert McCrum
Published 24 May 2010

Eventually, there was revulsion at heaven’s bounty and the governor-general, Warren Hastings, was impeached on charges of misgovernment and corruption. Meanwhile, the American Revolution had relocated the English-speaking world’s centre of gravity. Britain, having lost one empire in the West, found a second one in the East. With remarkable foresight, the Scots economist Adam Smith identified this process as early as 1776 in The Wealth of Nations. There were, wrote Smith, two milestones on Britain’s road to global empire: the settlement of North America and the opening of trade routes to India and the East: The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind.

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It was this idea that generations of independent-minded Scots and Englishmen would take to the four corners of the world. In this way, the world’s English became the vessel for a progressive culture and political economy. William Pitt the younger, the prime minister during the last years of the century, used to quote from Adam Smith in his Commons speeches (while privately admitting that The Wealth of Nations was beyond him), popularising Smith’s ideas and placing them at the heart of his government’s foreign policy. Yet again, it was war with France that shaped the final decades of Britain’s century-long struggle for global dominance. At first, the French Revolution renewed ancestral Gallic ambitions and, in opposition, stimulated a bruising nationalist temper in Britain.

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Schoenbaum, Shakespeare Lives (Oxford, 1993), pp. 104-10. 165 ‘Let me search for the clue’: David McCullough, John Adams (New York, 2001), pp. 48-9. 166 ‘There is nothing preserved of this great genius: ibid., p. 359. 166 Abraham Lincoln used to derive special pleasure from reading Shakespeare: Doris Kearns Goodwin, Team of Rivals (London, 2009), p. 546. 166 The discovery of America: Adam Smith, The Wealth of Nations (1776). 167 The surge in Britain’s fortunes was palpable: Piers Brendon, The Decline and Fall of the British Empire, 1781-1997 (London, 2007), p. 28. 168 Closer to home, in Egypt: Maya Jasonoff, Edge of Empire: Conquest and Collecting in the East, 1750-1850 (London 2005), p. 243. 168 ‘oak planted in a flower pot’: Brendon, Decline and Fall, p. 28. 169 The British media was playing its part too: Tombs and Tombs, That Sweet Enemy, pp. 188-9. 169 ‘The greatest revolution’: quoted ibid., p. 189. 170 So the French Revolution was denied: this account of the duke of Dorset’s abortive game relies on ‘Carry on Cricket: The Duke of Dorset’s 1789 Tour’, History Today, 39 (August 1989).

Free Money for All: A Basic Income Guarantee Solution for the Twenty-First Century
by Mark Walker
Published 29 Nov 2015

Nozick, Anarchy, State and Utopia (New York: Basic Books, 1974). 3. I borrow the camping analogy from Gerald Cohen (Cohen, Why Not Socialism? (Princeton, NJ: Princeton University Press, 2009)). 4. Karl Marx and Friedrich Engels, The Communist Manifesto (Peking: Foreign Language Press, 1975). 222 NOTES 5. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (A. and C. Black, 1863). 6. Ibid. 7. Anne Robert Jacques Turgot and Peter Diderik Groenewegen, The Economics of ARJ Turgot (The Hague, Netherlands: Martinus Nijhoff, 1977). 8. Nozick also stipulates that legitimate justice in transfer must be free of fraud and deception. 9.

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Rebecca Weber, “The Travel Agent Is Dying, but It’s Not yet Dead—CNN.com,” CNN, accessed May 18, 2015, http://www. cnn.com/2013/10/03/travel/travel-agent-survival/index.html. 22. Björn Nykvist and M\a ans Nilsson, “Rapidly Falling Costs of Battery Packs for Electric Vehicles,” Nature Climate Change, 2015, http://www.nature.com/nclimate/journal/vaop/ncurrent/full/ nclimate2564.html. 23. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (A. and C. Black, 1863). 24. There are about 7 acres of land per person in the United States, so there is more than enough land for everyone. 25. K. Eric Drexler, Nanosystems: Molecular Machinery, Manufacturing, and Computation (New York: John Wiley, 1992). 26. Ray Kurzweil, The Singularity Is Near (New York: Penguin Books, 2005). 27.

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How to Simplify the Tax Code and Provide Every American With a Basic Income Guarantee. USBIG Discussion Paper, 2006. http://usbig.net/papers/144-Sheahen-RefundableTaxCredit.pdf. REFERENCES 243 Sheahen, Allan. Basic Income Guarantee: Your Right to Economic Security. New York: Palgrave Macmillan, 2012. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations . Edinburgh, Scottland: A. and C. Black, 1863. Smith, Eric Alden, Monique Borgerhoff Mulder, Samuel Bowles, Michael Gurven, Tom Hertz, and Mary K. Shenk. “Production Systems, Inheritance, and Inequality in Premodern Societies.” Current Anthropology 51, 1 (2010): 85–94. Sofge, Erik. “3 New Farm Bots Programmed to Pick, Plant and Drive.”

Reinventing the Bazaar: A Natural History of Markets
by John McMillan
Published 1 Jan 2002

Journal of Economic Perspectives 5, 25–44. Skidelsky, Robert. 1996. The Road from Serfdom, London, Penguin. Slemrod, Joel, ed. 2000. Does Atlas Shrug? The Economic Consequences of Taxing the Rich. Cambridge, Harvard University Press. Smith, Adam. 1976. An Inquiry into the Nature and Causes of the Wealth of Nations. Chicago, University of Chicago Press. First published in 1776. Smith, Eugene. 1975. Minamata, New York, Holt, Rinehart, Winston. Smith, Vernon L. 1982. “Microeconomic Systems as an Experimental Science.” American Economic Review 72, 923–955. Sobel, Dava. 1996. Longitude. New York, Penguin.

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Certain respected merchants, called “queen mothers,” play the part of judges, arbitrating when disputes arise. Gains from trade are generated. The vendors make others—as well as themselves—better off by making food available to the urban poor, and by providing income to farmers with which to buy necessities like clothing. Thus they exemplify Adam Smith’s analysis of the merchant: “By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.” The Makola marketplace has continued to operate despite periodic, sometimes violent attempts by the Ghanaian government to shut it down. These attempts reached a height of brutality in 1979 after the military government accused marketplace traders of violating its price controls.

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Deaths from influenza and pneumonia have been greatly reduced, as have deaths from heart disease, strokes, and ulcers. Millions live longer, more productively, and more comfortably. Market incentives are what prompted the invention of these miracle drugs. Were it not for the profit motive, many of them would not exist. Adam Smith said self-interest can lead to beneficent outcomes: there is no more striking instance of this than the aggressive pursuit of profit giving rise to life-preserving medicines. No economic system that has ever been implemented, other than the market, has succeeded in consistently spawning major pharmaceutical innovations.

The Clash of the Cultures
by John C. Bogle
Published 30 Jun 2012

To protect against such conflicts of interest, English common law had developed, centuries earlier, the concept of fiduciary duty—the duty of the agents entrusted with the care of the property of others to protect the interests of their principals, the owners of these assets. But while this concept may seem simple and obvious, its actual implementation was too often honored more in the breach than in the observance. Indeed, in 1776, Adam Smith eloquently described—in his The Wealth of Nations—the challenges that existed even in that far simpler era: . . . the managers of other people’s money (rarely) watch over it with the same anxious vigilance with which . . . they watch over their own. . . . Like the stewards of a rich man, they very easily give themselves a dispensation.

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See also Index funds assets exchange traded funds versus future of growth in number of as portfolio core profile of trading volumes “Trafficking” in management contracts Transactions: cost of taxes on Trends Turner, Adair Turner, Lynn Turnover: actively managed equity funds exchange traded funds index funds mutual funds Stewardship Quotient and stock market Twardowski, Jan M. 12b-1 fees Value, corporate Vanguard: Admiral shares balanced index fund bond funds, defined-maturity cash flow emerging markets stock fund exchange traded funds “Extended Market” portfolio growth and value index funds history index fund family milestones international funds LifeStrategy Portfolios proxy votes REIT index fund small capitalization stock fund Stewardship Quotient structure and strategy tax-managed index funds Vanguard 500 Index Fund Vanguard Institutional Index Fund Vanguard PRIMECAP Fund Vanguard Total Bond Market Index Fund Vanguard Total Stock Market Index funds Vanguard U.S. Growth Fund Vanguard Wellington Fund. See Wellington Fund Vanguard Windsor Fund Volatility Volcker Rule “Wall Street Casino, The” (Bogle) Wall Street Journal, The Wealth of Nations, The (Smith) Wellington Fund: about advisory fees Annual Report (1967) Annual Report (1978) Annual Report (2000) Annual Report (2010) assets under management Beta dividend income projections dividend policy dividends equity ratio expenses Fall (1967–1978) founding income strategy, implications of investment committee lessons from memo on restructuring memo on speculation naming of other balanced funds versus other pioneer funds compared to performance portfolio approach to higher income Renaissance (1978-2012) restructuring memo returns Rise (1929-1966) shareholder objectives survey speculation memo Wellington Management Company.

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I wince when the Federal Reserve states its intention to raise asset prices—including “higher stock prices”—apparently irrespective of the level of underlying intrinsic stock values. Substantive limits on short selling are another nonstarter for me. The overriding principle should be: Let the markets clear, at whatever prices that willing and informed buyers agree to pay to willing and informed (but often better-informed) sellers. Individual investors need to wake up. Adam Smith–like, they need to look after their own best interests. Of course, that would mean that individual investors must demand much better, clearer, and more pointed disclosures. We need a campaign to educate investors about the hard realities of investing. Investors need to understand not only the magic of compounding long-term returns, but the tyranny of compounding costs; costs that ultimately overwhelm that magic.

Utopia or Bust: A Guide to the Present Crisis
by Benjamin Kunkel
Published 11 Mar 2014

Coinage did not become widespread until several thousand years later. Graeber insists on the historical priority of debt to exchange in order to dispel the anthropological premise of modern economics: “the myth of barter.” Adam Smith supposed, as primers on economics complacently repeat, that economic life emerged from a propensity of the species to truck and barter. The Wealth of Nations imagines “a tribe of hunters or shepherds” among whom producers of arrowheads, tanned hides, or “little huts or moveable houses” simply swap one thing directly for another. Eventually, however, economies become too complex to function like this, and so they introduce some universal commodity—salt, cowries, or one or another precious metal—by means of which all other commodities can be exchanged.

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But among Americans, wage growth had ceased and household incomes could no longer be supplemented by the mass entry of women into the workforce, something already accomplished. The issuance and securitization of debt alone could substitute for present income. In the end, so much fictitious capital could not be redeemed. Whatever the destination of future Chinese savings gluts, they are unlikely to sponsor American consumption in the same way. In his final book, Adam Smith in Beijing (2007), the late Giovanni Arrighi expanded on Harvey’s concepts of the spatial fix and the switching crisis to survey half a millennium of capitalist development and to peer into a new, perhaps Chinese century. In Arrighi’s scheme of capitalist history, there have been four “systemic cycles of accumulation,” each lasting roughly a century and each organized on a larger scale than the one before, with a new polity at the center: a Genoese-Iberian cycle; a Dutch cycle; a British cycle; and an American one.

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If the loaning of money at interest, stigmatized as usury during the Middle Ages, has seemed a more tolerable practice during much of the history of capitalism, its acceptance has been purchased through growth: increased income for rentiers didn’t necessarily imply a corresponding decrease for everyone else, only a share in the common expansion. The more nearly property relations approach a zero-sum game, the less we will be able to distinguish between what Adam Smith called productive and consumptive loans, the former contributing to the borrower’s prosperity and the latter merely draining it. Positive real interest rates per se will come to seem consumptive or parasitic, a straightforward transfer of wealth from debtor to creditor. It’s not inconceivable that financial rents could grow even as the economy stalls, with the subjects of capitalism submitting to an age of declining standards of living, as occurred in much of Europe during the eighteenth century.

American Made: Why Making Things Will Return Us to Greatness
by Dan Dimicco
Published 3 Mar 2015

Cline, “Renminbi Undervaluation, China’s Surplus, and the US Trade Deficit,” Peterson Institute, http://www.piie.com/publications/pb/pb10-20.pdf; Robert E. Scott, “The China Toll,” Economic Policy Institute, August 23, 2012, http://www.epi.org/publication/bp345-china-growing-trade-deficit-cost/. No discussion of free trade is complete without a mention of Scottish moral philosopher Adam Smith, whose free-trade theories—laid out in his most famous book, The Wealth of Nations—came about in reaction to British mercantilism. “If a foreign country can supply us with a commodity cheaper than we ourselves can make it,” Smith wrote, “better buy it from them with some part of the produce of our own industry, employed in a way in which we have some advantage.”8 When you read Smith, remember that Great Britain could only afford to embrace free trade after centuries of building up its economy under the mercantilist system.

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Bureau of Economic Analysis, “Value Added by Industry as a Percentage of Gross Domestic Product,” November 13, 2012, http://www.bea.gov/industry/gdpbyind_data.htm. 7. Robert E. Scott, “Trading Away the Manufacturing Advantage,” Economic Policy Institute, September 30, 2013, http://www.epi.org/publication/trading-manufacturing-advantage-china-trade/. 8. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776. 9. “Certain Oil Country Tubular Goods from China Injure U.S. Industry, Says USITC,” USITC, December 30, 2009, http://usitc.gov/press_room/news_release/2009/er1230gg1.htm. Chapter 6 1. President Barack Obama, Weekly Address, August 1, 2009, http://www.whitehouse.gov/the-press-office/weekly-address-president-obama-says-gdp-numbers-show-recovery-act-working-long-term. 2.

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When we think of mercantilism, we usually think of England and Spain in the sixteenth or seventeenth centuries, trying to amass as much gold and silver as they could get their hands on. A mercantilist trading policy is one in which a government protects and heavily subsidizes key industries, exporting as much as possible and importing as little as possible. The great Scottish philosopher and economist Adam Smith said the remedy to mercantilism was laissez-faire capitalism. The “invisible hand” of capitalism has always struggled with the heavy hand of government meddling. The U.S. trade deficit, which had fallen 60 percent during Reagan’s second term and into the elder Bush’s presidency, began to expand again in the early 1990s.7 The move toward free trade (which we’ll discuss at greater length in chapter 5) left U.S. industries vulnerable once again to predatory foreign trade practices.

Having and Being Had
by Eula Biss
Published 15 Jan 2020

He means consumption, which was once the name for a wasting disease, and is now the word anthropologists use for almost everything we do outside of work—eating, shopping, reading, listening to music. Consume, he notes, is from the Latin consumere, meaning “to seize or take over completely.” A person might consume food or be consumed by rage. In its earliest usage, consumption always implied destruction. Consumption was the opposite of production in Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations. He made this inquiry in 1776, when work was being relocated into factories and lives were newly divided between home and work. We still use the math of that time to subtract what is consumed at home from what is produced at work. In that crude equation, only work that earns money is productive.

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The Mushroom at the End of the World: On the Possibility of Life in Capitalist Ruins, Anna Lowenhaupt Tsing. Princeton University Press, 2017. The Precariat: The New Dangerous Class, Guy Standing. Bloomsbury Academic, 2011. WATER An Inquiry into the Nature and Causes of the Wealth of Nations, volume 1, Adam Smith. Liberty Fund, 2009. First Published 1776. ART The Coronation of the Emperor Napoleon I and the Crowning of the Empress Joséphine in Notre-Dame Cathedral on December 2, 1804, Jacques-Louis David. 1807. “Apeshit,” music video directed by Ricky Saiz. Parkwood, Roc Nation, 2018.

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The spray was like little stones on my face as I swam toward the waterfall, and I could feel the incredible power of it, the energy churning under the surface. This village has a museum called Musée de l’Eau, the Museum of Water, but I don’t go in. I already feel like I’m in a museum of water. “Nothing is more useful than water,” Adam Smith wrote in 1776, “but it will purchase scarce any thing; scarce any thing can be had in exchange for it.” Diamonds are useless, he added, but they can be exchanged for many things. He didn’t foresee a time when wars would be fought over water as often as diamonds, but he could already see that the things that meet our most urgent needs are often worthless.

Big Data: A Revolution That Will Transform How We Live, Work, and Think
by Viktor Mayer-Schonberger and Kenneth Cukier
Published 5 Mar 2013

His technical description of reCaptchas is at Luis von Ahn et al., “reCAPTCHA: Human-Based Character Recognition via Web Security Measures,” Science 321 (September 12, 2008), pp. 1465–68 (http://www.sciencemag.org/content/321/5895/1465.abstract). [>] Smith’s pin factory—Adam Smith, The Wealth of Nations (reprint, Bantam Classics, 2003), book I, chapter one. (A free electronic version is at http://www2.hn.psu.edu/faculty/jmanis/adam-smith/Wealth-Nations.pdf). [>] Storage—Viktor Mayer-Schönberger, Delete: The Virtue of Forgetting in the Digital Age (Princeton University Press, 2011), p. 63. [>] On electrical cars’ power usage—IBM, “IBM, Honda, and PG&E Enable Smarter Charging for Electric Vehicles,” press release, April 12, 2012 (http://www-03.ibm.com/press/us/en/pressrelease/37398.wss).

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The Signal and the Noise: Why So Many Predictions Fail—But Some Don’t. Penguin, 2012. Singel, Ryan. “Netflix Spilled Your Brokeback Mountain Secret, Lawsuit Claims.” Wired, December 17, 2009 (http://www.wired.com/threatlevel/2009/12/netflix-privacy-lawsuit/). Smith, Adam. The Wealth of Nations (1776). Reprinted Bantam Classics, 2003. A free electronic version is available (http://www2.hn.psu.edu/faculty/jmanis/adam-smith/Wealth-Nations.pdf). Solove, Daniel J. The Digital Person: Technology and Privacy in the Information Age. NYU Press, 2004. Surowiecki, James. “A Billion Prices Now.” New Yorker, May 30, 2011 (http://www.newyorker.com/talk/financial/2011/05/30/110530ta_talk_surowiecki).

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Or think of billions of old search queries, or the price of nearly every seat on every commercial airline flight in the United States going back years. Until recently there were no easy ways to collect, store, and analyze such data, which severely limited the opportunities to extract its potential value. In Adam Smith’s celebrated example of the pin maker, with which he discussed the division of labor in the eighteenth century, it would have required observers watching all the workers not just for one particular study, but at all times everyday, taking detailed measurements, and counting the output on thick paper with feathery quill pens.

Company: A Short History of a Revolutionary Idea
by John Micklethwait and Adrian Wooldridge
Published 4 Mar 2003

Both quoted in Anthony Sampson, Company Man: The Rise and Fall of Corporate Life (New York: Times Business, 1995), 17. 27. Quoted in Lawrence James, Raj: The Making and Unmaking of British India (London: Abacus, 1998), 49. 28. Beatty, Colossus, 18. 29. Stephen Innes, “From Corporation to Commonwealth,” in ibid., 18. 30. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 2 (New York: Oxford University Press, 1976), 733. He details the shortcomings of chartered companies on pp. 733–58. 31. K. N. Chaudhuri, The Trading World of Asia and the English East India Company (Cambridge: Cambridge University Press, 1978), 454. 32. Ann Carlos and Stephen Nicholas, “Giants of an Earlier Capitalism: The Chartered Trading Companies as Modern Multinationals,” Business History Review 62 (Autumn 1988): 398–419. 33.

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The Victorians also gave us many of the most profound arguments that swirl around companies. Nowadays it is assumed that the causes of capitalism and companies are inseparable. Yet many of the earliest critics of the joint-stock company and the “subsidy” of limited liability were economic liberals, taking their cue from Adam Smith, who had derided them as antiquated and inefficient. One noted Victorian thinker, A. V. Dicey, fretted that the company would become the harbinger of a new age of collectivism: “one trade after another” would pass from the “management of private persons into the hands of corporate bodies created by the state.”3 (Karl Marx gave a grudging welcome to companies for much the same reason.)

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In 1619, the Virginia Company effectively introduced representative democracy into the colonies, authorizing a General Assembly in which members elected the company’s officers.28 John Winthrop (1588–1649) took Massachusetts down the same road in 1630 when the General Court of the Massachusetts Company transformed itself into a commonwealth, redefining “freemen” from stockholders in a commercial venture to citizens of a state.29 Roughly put, the General Courts evolved into increasingly rebellious state legislatures. Economic liberals produced a different array of charges. Adam Smith (1723–1790), who was obsessed with the East India Company’s abuses in Bengal, had two basic complaints. First, he disliked the fact that chartered companies possessed monopolies (albeit ones that were being diluted, even as he scribbled away, by both licensed and clandestine competition). For him, the chartered companies were “either burdensome or useless” and they “either mismanaged or confined” trade.30 Second, he thought that joint-stock companies were inherently less efficient than sole traders.

Progress: Ten Reasons to Look Forward to the Future
by Johan Norberg
Published 31 Aug 2016

New York: Random House, 1969, p. 121. 2 Braudel 2002, p. 283. 3 Maddison 2003, p. 262. 4 Francois Bourguignon and Christian Morrisson, ‘Inequality among world citizens: 1820–1992’, American Economic Review, 92, 4 (2002), 727–44; World Bank, PovcalNet, http://iresearch.worldbank.org/PovcalNet; Marcio Cruz, James Foster, Bryce Quillin and Philip Schellekens, ‘Ending extreme poverty and sharing prosperity: progress and policies’, Policy Research Note no. 3, October 2015. 5 Martin Ravallion, ‘Poverty in the rich world when it was not nearly so rich’ (2014), blog post, Center for Global Development, Washington DC, http://www.cgdev.org/blog/poverty-rich-world-when-it-was-not-nearly-so-rich (accessed on 12 April 2016). 6 Fogel 2004, p. 41. 7 Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Glasgow Edition of the Works and Correspondence of Adam Smith. Indianapolis: Liberty Fund, 1981, bk. 1, ch. 8. 8 Peter Lindert and Jeffrey Williamson, ‘English workers’ living standards during the Industrial Revolution: a new look’, in Joel Mokyr (ed.), The Economics of the Industrial Revolution.

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It was considered the only way to incentivize people to work hard, and it was thought that only low wages could reduce the cost of production so that a country could remain competitive. If the poor got a raise, they would leave the job and end up in the alehouse, according to many thinkers of the time. The Scottish economist Adam Smith, the arch-enemy of the Mercantilists, thought that this was wrong, arguing that higher wages could in fact make people work more and that ‘no society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.’7 The ideas of Smith and other Enlightenment thinkers developed a growing respect for the hard-working poor.

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Like the Leveller Richard Rumbold, Enlightenment thinkers most often believed in the equality of rights, and rejected the notion that the greater part of humanity was born with saddles on their backs and bridles in their mouths, with some few booted and spurred to drive them. The classical liberals of the Scottish Enlightenment, Francis Hutcheson and Adam Smith, condemned slavery early on, and in 1772 the Chief Justice of England declared slavery illegal. Any slave brought into the country would be set free the moment they set foot in England or Scotland. In Parliament, William Wilberforce fought against the British slave trade and for complete abolition for almost half a century.

The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World
by Paul Gilding
Published 28 Mar 2011

There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living and much more likelihood of its being improved, when minds cease to be engrossed by the art of getting on. Scarcely necessary indeed. We can go still further back, virtually to the beginning of economics as a field of study, to Adam Smith, whose famous 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, was described as “the effective birth of economics as a separate discipline.” Adam Smith assumed and indeed forecast the end of economic growth and the transition to a stable-state economy, for various reasons—including what he saw as the obvious limits of natural resources. Smith reasoned that all economies would eventually reach a “stationary state” when they had “acquired that full complement of riches which the nature of its soil and climate, and its situation with respect to other societies allowed it to acquire; which could, therefore advance not further and which was not going backwards.”1 So over two hundred years ago, the founder of modern liberal economies recognized what we have since forgotten—that any economy remains constrained by its “soil and climate” or its natural resource base.

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A Steady-State Economy, commissioned by the Sustainable Development Commission, April 24, 2008, http://www.sd-commission.org.uk/publications.php?id=775. 2. Ibid. 3. Representative Barber Conable is credited as the source of this quote. 4. See http://www.climatespectator.com.au/commentary/sizing-low-carbon-economy. CHAPTER 15: THE HAPPINESS ECONOMY 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 5th ed., edited by Edwin Cannan (London: Methuen & Co., Ltd., 1904). 2. Centre for the Advancement of Steady State Economics, http://steadystate.org. 3. See http://www.happyplanetindex.org. 4. Paper by Professor Clive Hamilton and Professor Tim Kasser, presented at Oxford University conference 2009, 4 degrees and beyond, http://www.clivehamilton.net.au/cms/media/documents/articles/oxford_four_degrees_paper _final.pdf.

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This starts to slow the economy without increasing unemployment as a result. It also generates a cultural understanding and live examples of people living happily in new ways—less work, less debt, less stuff, more fun, more community, and more security. What the work of all these pioneers, from Adam Smith to Herman Daly, and the work of groups like Center for the Advancement of the Steady State Economy (CASSE)2 and NEF tell us is clear. The task before us, while not simple, is also far from impossible. Given such change is the only option we have before us, short of allowing society to collapse, this is a welcome relief!

The Moral Animal: Evolutionary Psychology and Everyday Life
by Robert Wright
Published 1 Jan 1994

What did the Northwest Coast Indians have that the Shoshone didn’t have? What was the key to prehistoric economic development? WORKING OVERTIME Maybe we should direct these questions to a noted authority on economic development (and on non-zero-sumness, though he long predates such terminology): Adam Smith. Two factors, Smith noted in The Wealth of Nations, are especially conducive to the growing division of labor that characterizes economic advance. One is cheap transportation. Spending your afternoon making yarn for a Chilkat robe makes sense only if the finished product can be transported at a cost acceptable to its buyer.

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University of Chicago Press. Shelton, Jo-Ann, ed. (1988) As the Romans Did. Oxford University Press. Singer, Charles, et al., eds. (1954–56) A History of Technology, 2vols. Oxford University Press. Singer, Peter (1981) The Expanding Circle: Ethics and Socibiology. Farrar, Straus and Giroux. Smith, Adam (1937) The Wealth of Nations. Random House Modern Library. (Originally published, 1776.) Smith, Bruce D. (1995) The Emergence of Agriculture. Scientific American Library. Smith, Merritt Roe, and Leo Marx, eds. (1994) Does Technology Drive History? MIT Press. Smith, Michael E. (1997) “Life in the Provinces of the Aztec Empire.”

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So, all along, the difference between native Americans of Amazonia and of the Northwest Coast hadn’t been their work ethic. The difference had been that the Amazonians weren’t getting paid to work overtime. Neither were the Shoshone. The arid Great Basin was even less conducive to thick population than were South American jungles. ADAM SMITH AMENDED Maybe we should amend Adam Smith’s trademark metaphor of the invisible hand. Smith’s point, of course, was that a bunch of far-flung people pursuing individual gain can, without really trying, collectively orchestrate a large-scale social process. The ingredients of a beautiful robe just seem to magically congregate, assemble themselves, and then find a buyer, as if guided from above.

Nonzero: The Logic of Human Destiny
by Robert Wright
Published 28 Dec 2010

What did the Northwest Coast Indians have that the Shoshone didn’t have? What was the key to prehistoric economic development? WORKING OVERTIME Maybe we should direct these questions to a noted authority on economic development (and on non-zero-sumness, though he long predates such terminology): Adam Smith. Two factors, Smith noted in The Wealth of Nations, are especially conducive to the growing division of labor that characterizes economic advance. One is cheap transportation. Spending your afternoon making yarn for a Chilkat robe makes sense only if the finished product can be transported at a cost acceptable to its buyer.

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University of Chicago Press. Shelton, Jo-Ann, ed. (1988) As the Romans Did. Oxford University Press. Singer, Charles, et al., eds. (1954–56) A History of Technology, 2vols. Oxford University Press. Singer, Peter (1981) The Expanding Circle: Ethics and Socibiology. Farrar, Straus and Giroux. Smith, Adam (1937) The Wealth of Nations. Random House Modern Library. (Originally published, 1776.) Smith, Bruce D. (1995) The Emergence of Agriculture. Scientific American Library. Smith, Merritt Roe, and Leo Marx, eds. (1994) Does Technology Drive History? MIT Press. Smith, Michael E. (1997) “Life in the Provinces of the Aztec Empire.”

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So, all along, the difference between native Americans of Amazonia and of the Northwest Coast hadn’t been their work ethic. The difference had been that the Amazonians weren’t getting paid to work overtime. Neither were the Shoshone. The arid Great Basin was even less conducive to thick population than were South American jungles. ADAM SMITH AMENDED Maybe we should amend Adam Smith’s trademark metaphor of the invisible hand. Smith’s point, of course, was that a bunch of far-flung people pursuing individual gain can, without really trying, collectively orchestrate a large-scale social process. The ingredients of a beautiful robe just seem to magically congregate, assemble themselves, and then find a buyer, as if guided from above.

Debunking Economics - Revised, Expanded and Integrated Edition: The Naked Emperor Dethroned?
by Steve Keen
Published 21 Sep 2011

(Quesnay, cited in Meek 1972) Since land determined the value of commodities, and the price paid for something was normally equivalent to its value, the ratio between the prices of two commodities should be equivalent to the ratios of the land needed to produce them. Smith (and Ricardo) The physiocratic answer to the source of value reflected the school’s origins in overwhelmingly rural France. Adam Smith, a son of Scotland and neighbor to the ‘nation of shopkeepers,’ was strongly influenced by the physiocrats. But in The Wealth of Nations (which was published in the year in which the first steam engine was installed) Smith argued that labor was the source of value. In Smith’s words: ‘The annual labor of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always either in the immediate produce of that labor, or in what is purchased with that produce from other nations’ (Smith 1838 [1776]).

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Silvestre, J. (1993) ‘The market-power foundations of macroeconomic policy,’ Journal of Economic Literature, 31(1): 105–41. Simon, H. A. (1996) The Sciences of the Artificial, Cambridge, MA: MIT Press. Sippel, R. (1997) ‘An experiment on the pure theory of consumer’s behaviour,’ Economic Journal, 107(444): 1431–44. Smith, A. (1838 [1776]) An Inquiry into the Nature and Causes of the Wealth of Nations, Edinburgh: Adam and Charles Black. Solow, R. M. (1956) ‘A contribution to the theory of economic growth,’ Quarterly Journal of Economics, 70(1): 65–94. Solow, R. M. (2001) ‘From neoclassical growth theory to new classical macroeconomics,’ in J. H. Drèze (ed.), Advances in Macroeconomic Theory, New York: Palgrave.

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Sciabarra, Chris scientific realism second-order linear differential equations self-employment self-interest self-organization of systems Shadowstats.com Shaikh, Anwar, ‘Neo-Ricardian economics’ Sharpe, W. F. Shedlock, Mish Shiller, Robert shocks, exogenous short run short-term funding, dependence on Simulink system dynamics program Sippel, Reinhard size, importance of Smith, Adam; The Wealth of Nations Smith, Edgar, Common Stocks as Long Term Investment Smith, Yves social conflict, not taken into account social security social welfare; maximization of social well-being socialism; perceived inevitability of; scientific socialist economies, shortages in society, as sum of individuals soft budget constraint Solow, Robert Sonnenschein, H.

Who Gets What — and Why: The New Economics of Matchmaking and Market Design
by Alvin E. Roth
Published 1 Jun 2015

Many doctors, hospitals, foundations, and patients argue that the law should be changed to allow living kidneys to be bought, so that the supply of kidneys can keep up with the demand. Economists have long been accustomed to the fact that cash payments can fill such gaps by providing incentives to increase supply. Adam Smith, in his book An Inquiry into the Nature and Causes of the Wealth of Nations (1776), famously observed, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Economists mostly think that allowing some incentives, monetary or otherwise, to be offered for giving someone a kidney could increase the supply of kidneys.

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. [>] allow living kidneys: See, for example, the passionate advocacy of Sally Satel, herself a kidney transplant recipient and a doctor, and the author of When Altruism Isn’t Enough: The Case for Compensating Kidney Donors (Washington, DC: AEI Press, 2008), or the argument presented to economists by the late Nobel laureate Gary Becker and his coauthor Julio Elías in “Introducing Incentives in the Market for Live and Cadaveric Organ Donations,” Journal of Economic Perspectives 21, no. 3 (Summer 2007): 3–24, http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.21.3.3. [>] “It is not”: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Oxford: Oxford University Press, 2008), bk. 1, chap. 2, para. 2. [>] opposition to legalizing kidney sales: One of the most outspoken opponents of legalizing kidney sales is one of the heroes of kidney exchange, Frank Delmonico. He has been active in formulating the Declaration of Istanbul and is executive director of its custodian group, whose mission is “to promote, implement and uphold the Declaration of Istanbul so as to combat organ trafficking, transplant tourism and transplant commercialism and to encourage adoption of effective and ethical transplantation practices around the world.”

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See also markets and marketplaces FreeMarkets, 121–22 futures markets, 16–17, 82–89 Gale, David, 141–43, 158 game theory, 10–11 thought experiments in, 32–33 on trading cycles, 32–41 gaming the system, 10–11 banning markets and, 213–14 in Boston school choice, 126–30 in early transactions, 57–80 in New York City school system, 109–10, 153–55 in the Oklahoma Land Rush, 58–60 gastroenterology fellowships, 75–78 Google, 190–91 Android, 21–22 Great Recession (2008), 66 Green, Jerry, 3–4, 8 Green, Pamela, 3–4 Greiner, Ben, 118 gun ownership, 198 Hamlet (Shakespeare), 200 Hayek, Friedrich, 226–27 health care reimbursement, 206–7, 223–24 for kidney transplants, 51, 206–7, 208–10 health codes, 220–21 Hendren, Hardy, 138, 141 Hil, Garet, 45–46, 49 Hopwood, Shon, 97, 239 horsemeat, 195–97 Hoxby, Caroline, 126 human dignity, 207 IBM, 19 identity theft, 116 immune systems, 133–34 indentured servitude, 199–200 India, 201–2 industry standards, 22 information early transactions and missing, 60 importance of sharing all, 153–61 privacy and, 119–22 on qualifications and interest (See signals and signaling) reliable, 118–19 safety of sharing in Boston Public Schools, 122–28 in clearinghouses, 112 for kidney exchanges, 34, 36, 37, 47–49 market efficiency and, 119–21 for medical residencies, 137–43, 150–51 in New York City school system, 109–10, 112, 153–61 speed of, cotton market and, 89–90 in-kind exchanges, 202–5 Inquiry into the Nature and Causes of the Wealth of Nations, An (Smith), 206–7 insider trading, 48, 85 Institute for Innovation in Public School Choice, 165 interest charges, 200–201, 202, 205 Internet marketplaces, 7, 20–26 Airbnb, 99–103 congestion in, 99–106 dating sites, 72, 169, 175–77 eBay, 104–5, 116–21 payment systems in, 23–26 privacy and, 119–22 real estate, 224–25 reputation in, 115–16, 117–19 safety of, 105 signaling in, 169 targeted ads in, 189–92 thickness of, 105 trust in, 105 Uber, 103–4 Internet of Things, 101 iPhone, 21–22, 24 Iran, Islamic Republic of, 205–6 Iron Law of Marriage, 145 Islam, 200, 201, 205 iStopOver, 102 Japan college applications in, 171 exploding job offers in, 98–99 Jevons, William Stanley, 32 job markets.

Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy
by Robert W. McChesney
Published 5 Mar 2013

James Maitland, the eighth Earl of Lauderdale (1759–1839), was the author of An Inquiry into the Nature and Origin of Public Wealth and into the Means and Causes of Its Increase (1804). Lauderdale argued that there is an inverse correlation between public and private wealth, such that an increase in the latter diminishes the former.3 Scarcity is necessary for something to have value in exchange and to augment private riches. “Scarcity,” as Adam Smith said in The Wealth of Nations, “is degraded by abundance,” and is a requirement for capitalist markets.4 But this is not the case for public wealth, which encompasses all value in use and thus includes not only what is scarce but also what is abundant. This paradox led Lauderdale to argue that increases in the scarcity of necessary and normally abundant elements of life like air, water, and food would, if exchange values were attached to them, enhance individual private riches and indeed the riches of the country conceived of as “the sum-total of individual riches”—but only at the expense of the common wealth.

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An excellent discussion of this is in Wu, Master Switch, ch. 17. 137. Jaron Lanier, You Are Not a Gadget: A Manifesto (New York: Knopf, 2010), 87. 138. Steven Levy, “How the Propeller Heads Stole the Electronic Future,” New York Times Magazine, Sept. 24, 1995, 58. 139. Lanier, You Are Not a Gadget, 87. 140. Adam Smith, The Wealth of Nations (1776; New York: Modern Library, 1937), 173. 141. This episode is chronicled in John Motavalli, Bamboozled at the Revolution: How Big Media Lost Billions in the Battle for the Internet (New York: Viking, 2002). See also Rich Media, Poor Democracy, chap. 3. 142. One striking development is that media conglomerates are moving into education as a potential “cash cow” for textbooks and, especially, digital material.

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New York Times, July 14, 2012. 2. This point was developed brilliantly in Robert Heilbroner, The Nature and Logic of Capitalism (New York: W.W. Norton, 1985). 3. This section draws on John Bellamy Foster, Brett Clark, and Richard York, The Ecological Rift (New York: Monthly Review Press, 2010), 53–72. 4. Adam Smith, The Wealth of Nations (1776; New York: Modern Library, 1937), 173. 5. The findings come from a 2012 survey commissioned by Good Technology and conducted by OnePoll in May 2012. “Good Technology Survey Reveals Americans Are Working More, But on Their Own Schedule,” July 2, 2012, good.com/news/press-releases/current-press-releases/161009045.html.

Cod: A Biography of the Fish That Changed the World
by Mark Kurlansky
Published 30 Jun 1998

Theirs was a cult of the individual, with commerce becoming almost the New England religion. Even the fishermen were independent entrepreneurs, working not on salary but, as they still do in most of the world, for a share of the catch. Adam Smith, the eighteenth-century economist, singled out the New England fishery for praise in his seminal work on capitalism, The Wealth of Nations. To Smith, the fishery was an exciting example of how an economy could flourish if individuals were given an unrestricted commercial environment. The British Crown had never intended to grant such freedom, and now it had a colony that no longer needed it—a dangerous precedent in the midst of the empire.

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New York: Oxford University Press, 1978. Nugent, Maria. Lady Nugent’s Journal: Jamaica One Hundred and Thirty Years Ago. Edited by Frank Cundall. London: West India Committee, 1934. Perley, Sidney. The History of Salem Massachusetts. Salem: published by the author, 1924. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Edited by Edwin Cannon. New York: Modern Library, 1937. First published in 1776. Thoreau, Henry David. Cape Cod. New York: Penguin, 1987. First published in 1865. FISH AND FISHERIES Binkley, Marian. Voices from Off Shore: Narratives of Risk and Danger in the Nova Scotian Deep-Sea Fishery.

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New England produced too much cod for the British market. It could not all be sold in Britain, and the British merchant fleet did not have the capacity to reexport that much cod. In spite of the Trade and Navigation Acts, the British had to allow the New Englanders to trade it. Freed from restraint, as Adam Smith pointed out, the trade grew. By 1700, the British West Indies could not absorb all of New England’s cod. Nor could it fully supply New England’s rum industry, which was a byproduct of the cod trade. Typical of the difference between New England and Newfoundland, Newfoundland imported Jamaican rum for local bottling, and still does, whereas New England imported molasses and built its own rum industry to sell in foreign markets.

The Idea of Decline in Western History
by Arthur Herman
Published 8 Jan 1997

It unites them, by one of the strongest of all ties, the desire of supplying their mutual wants.”21 It became a commonplace to say, as we do today, that a market economy depends on people pursuing their own self-interest. But self-interest to a student of civil society such as Adam Smith did not mean avarice or greed. Those were the typical antisocial attitudes of a more primitive state of economy and society, in which the fear of material scarcity is genuine and real. Instead, self-interest in a civilized or “polite” society involves the rational desire to provide goods and services at a profit to an equally self-interested consumer. For the eighteenth century, commerce not only produced the “wealth of nations,” it was also the primary mechanism of achieving human progress and turning men from beasts into civilized beings.

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“The experience of four thousand years should enlarge our hopes and diminish our apprehensions,” Gibbon wrote. “No people, unless the face of nature is changed, will relapse into their original barbarism.”30 * See Chapter 5. * It is worth remembering that Adam Smith had no illusions about what the triumph of the commercial spirit and the division of labor’s emphasis on specialization might mean for those who were part of it. “Another bad effect of commerce,” he wrote in The Wealth of Nations, “is that the minds of men are contracted, and rendered incapable of elevation. Education is despised, or at least neglected, and heroic spirit is almost utterly extinguished. To remedy these defects,” Smith concluded, “would be an object worthy of serious attention

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A half century later, the natural law philosopher Francis Hutcheson argued that human society grew out of man’s innate sociability or desire to be with others—the “natural bonds of beneficence and humanity in all.” Hutcheson served as mentor to a generation of Enlightenment thinkers, including David Hume and Adam Smith. Although these men would become more skeptical about humanity’s prospects than their great teacher, the so-called Scottish school did remain true to Hutcheson’s basic supposition. A single, universal set of natural bonds underpins all human communities throughout history, and these develop in increasing complexity—from family, tribe, and clan to community and empire—according to the same regular pattern.

23 Things They Don't Tell You About Capitalism
by Ha-Joon Chang
Published 1 Jan 2010

Notes THING 1 1 On how tariff (hampering free trade in goods) was another important issue in the making of the American Civil War, see my earlier book Kicking Away the Ladder – Development Strategy in Historical Perspective (Anthem Press, London, 2002), pp. 24–8 and references thereof. THING 2 1 A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Clarendon Press, Oxford, 1976), p. 741. 2 N. Rosenberg and L. Birdzell, How the West Grew Rich (IB Tauris & Co., London, 1986), p. 200. 3 A. Glyn, Capitalism Unleashed – Finance, Globalisation, and Welfare (Oxford University Press, Oxford, 2004), p. 7, fig. 1.3. 4 J. G. Palma, ‘The revenge of the market on the rentiers – Why neo-liberal reports on the end of history turned out to be premature’, Cambridge Journal of Economics, 2009, vol. 33, no. 4, p. 851, fig. 12. 5 See W.

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Mind the gap All my criticisms so far about the overdevelopment of the financial sector in the last two or three decades are not to say that all finance is a bad thing. Had we listened to Adam Smith, who opposed limited liability companies (see Thing 2) or Thomas Jefferson, who considered banking to be ‘more dangerous than standing armies’, our economies would still be made up of the ‘Satanic mills’ of the Victorian age, if not necessarily Adam Smith’s pin factories. However, the fact that financial development has been crucial in developing capitalism does not mean that all forms of financial development are good.

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It was believed that those who were managing a limited liability company without owning it 100 per cent would take excessive risks, because part of the money they were risking was not their own. At the same time, the non-managing investors in a limited liability company would also become less vigilant in monitoring the managers, as their risks were capped (at their respective investments). Adam Smith, the father of economics and the patron saint of free-market capitalism, opposed limited liability on these grounds. He famously said that the ‘directors of [joint stock] companies … being the managers rather of other people’s money than of their own, it cannot well be expected that they would watch over it with the same anxious vigilance with which the partners in a private copartnery [i.e., partnership, which demands unlimited liability] frequently watch over their own’.1 Therefore, countries typically granted limited liability only to exceptionally large and risky ventures that were deemed to be of national interest, such as the Dutch East India Company set up in 1602 (and its arch-rival, the British East India Company) and the notorious South Sea Company of Britain, the speculative bubble surrounding which in 1721 gave limited liability companies a bad name for generations.

Empire of Things: How We Became a World of Consumers, From the Fifteenth Century to the Twenty-First
by Frank Trentmann
Published 1 Dec 2015

From the late seventeenth century, economic commentators began to argue that the purchase of goods and services not only satisfied individual wants but, in the process, enriched a nation by enlarging the market for producers and investors. Personal vanities, like a snuffbox or extravagant clothes, could yield public benefits, at least in material terms. Such linkages unsettled earlier moral certainties. A major milestone was Adam Smith’s The Wealth of Nations in 1776, in which he argued that ‘consumption is the sole end and purpose of all production.’5 Notwithstanding this dictum, Smith and his immediate successors were some way from making consumption the centre of economics, let alone from imagining that there could be sustained growth.

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It was ‘the highest impertinence and presumption’, Smith concluded, for ‘kings and ministers to pretend to watch over the economy of private people, and to restrain their expense, either by sumptuary laws, or by prohibiting the importation of foreign luxuries. They are themselves always, and without any exception, the greatest spendthrifts in the society.’68 In the Wealth of Nations (1776), Adam Smith looked back on the decline of feudalism and rise of commerce in Europe. It was the great barons’ appetite for diamond buckles and ‘trinkets and baubles’ that made them gradually barter away their authority, he argued. They literally consumed their power. To fund their growing appetite for goods they first reduced the number of their retainers.

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Or, as one advocate of consumer protection put it, ‘maybe we can start realizing a “good” in between “God” and “goods”,’ similar to the Middle Path of Buddha or Aristotle’s golden mean.97 Sometimes, nationalist history is bent to fit that purpose. Gandhi has been reincarnated by government agencies as the friend of the consumer who had the prophetic wisdom to recognize ‘the customer’ as the ‘most important visitor on our premises’, the ‘purpose’ of our work and the element on whom everything depends.98 Adam Smith had said something like that in the Wealth of Nations. Whether Gandhi would have liked to appear as an Indian mouthpiece of Smith is doubtful. As early as 1915, passengers irritated with transport services set up an association to voice their complaints. Half a century later, a more general Consumer Guidance Society of India was founded.

WTF?: What's the Future and Why It's Up to Us
by Tim O'Reilly
Published 9 Oct 2017

If the population or resources are small, the country must reach outside its borders for both, but in many cases, this local population is sufficient to bootstrap a robust marketplace, with plenty of consumers and plenty of providers of goods and services. But there’s an important lesson from the wealth of nations: If the population doesn’t have enough money to buy goods and services on offer either from its own sellers or from those trading from other countries, the country remains poor. The marketplace is out of balance. This is the situation in much of the world economy today, where growth is slow, because wealth has become concentrated in too few hands and there aren’t enough buyers for all the goods and services that might otherwise be on offer.

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During earlier research on economic differences between the twenty regional governments of Italy, Putnam had noticed that there was a close correlation between civic engagement and prosperity. “These communities did not become civic simply because they were rich. The historical record strongly suggests precisely the opposite: They have become rich because they were civic.” Social capital is as important as financial capital in the wealth of nations. Mark Zuckerberg came to much the same conclusion. “There has been a striking decline in the important social infrastructure of local communities over the past few decades,” he noted. “The decline raises deeper questions alongside surveys showing large percentages of our population lack a sense of hope for the future.

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Yet today, I am seeing progress toward many of my youthful dreams. And that brings me back to AI. AI is not some kind of radical discontinuity. AI is not the machine from the future that is hostile to human values and will put us all out of work. AI is the next step in the spread and usefulness of knowledge, which is the true source of the wealth of nations. We should not fear it. We should put it to work, intentionally and thoughtfully, in ways that create more value for society than they disrupt. It is already being used to enhance, not replace, human intelligence. “We’ve already seen chess evolve to a new kind of game where young champions like Magnus Carlsen have adopted styles of play that take advantage of AI chess engines,” notes Bryan Johnson.

Free Market Missionaries: The Corporate Manipulation of Community Values
by Sharon Beder
Published 30 Sep 2006

Witnesses to the hearings told the parliamentary committee that share plans were ‘a means of aligning the interests of business and employees so as to achieve better business results’; a way of rewarding employees for their efforts in a ‘tax-effective’ manner; a method of encouraging savings and ‘a means of “democratising” capital: that is, spreading capital ownership and access to capital more widely within the community’.47 Nelson argued that ‘employee share plans bind people more closely to the activities of their fellow citizens who work within a particular organization’ and ‘create a more inclusive workplace’.48 Shann Turbull, a founding member of the Australian Employee Ownership Association, and author of Democratising the Wealth of Nations, argued that corporations misused employee share ownership schemes as a way of legitimizing excessive payments to top executives by offering shares to all employees: ‘I am suggesting that we want to see beyond that to get not just a mandate within a corporation, but a mandate within the whole voting constituency of Australia, so that all people have an inclusive vested interest in property ownership.’49 The Business Council of Australia (BCA) also support employee share ownership plans because they give large numbers of people a financial stake in the company they work for and therefore an incentive to contribute to its success: ‘Shared ownership can create an environment of common goals and shared interest between employees and management.’50 Eighty per cent of its members listed on the stock exchange had such plans.

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Desai, ‘Second-Hand Dealers in Ideas’, p31; James, ‘The Idea Brokers’, p497; Thatcher quoted in Cockett, Thinking the Unthinkable, p173. Quoted in Yergin and Stanislaw, The Commanding Heights. Dexter Whitfield, Making It Public: Evidence and Action against Privatisation, London, Pluto Press, 1983, p47; Adam Smith Institute, ‘The Adam Smith Institute’, Adam Smith Institute, www.adamsmith.org.uk/ accessed 7 May 2001. Ashford, ‘Politically Impossible?’, p24; Whitfield, Making It Public, p46. Robin Oakley, ‘Privatized Policy-Making for the Tory Right’, The Times, 17 February 1989; Alan Rusbridger, ‘A Thought for Tomorrow’, The Guardian, 22 December 1987.

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Corson (ed) Education for Work: Background to Policy and Curriculum, Dunmore Press, Palmerston North, pp33–46 Yarrow, A. (2003) ‘The Big Postwar Story: “New Era” of “People’s Capitalism” Dawns Where “Everybody’s Rich in the U.S.,” or So They Said’, George Mason University, Fairfax, VA, http://mason.gmu.edu/~ayarrow/economic%20journalismform.PDF accessed 2 January 250 FREE MARKET MISSIONARIES Yergin, D. and Stanislaw, J. (1998) The Commanding Heights: The Battle between Government and the Marketplace That Is Remaking the World, Simon & Schuster, New York Index 3M 209, 210, 222 Abbott Laboratories 69 Academy of Enterprise 214 Access Economics 138 ACIL Economics/ACIL Tasman 138 Adam Smith Club 128 Adam Smith Institute 113 Adler, Rodney 135 The Advertiser 129 advertising 1970s campaigns 63–75 free enterprise advertising 15, 16, 20, 22, 23, 26, 29–42 post-war campaigns 32–39 pre-war criticism 29 role 30–32 share ownership campaigns 195, 196 techniques 16, 67 use of polling 32 wartime 30 Advertising Council (US) 26, 30, 32–35, 39, 46, 64, 65–69, 74–75 Advertising Federation of America 49 AFL 33–34 AIG 210 Aims for Freedom and Enterprise (AIMS) 79, 87 Aims of Industry 113 Alcoa 37–38, 50, 132 Allen Consulting 138 Allende, Salvador 97, 145 see also Chile Alliance for Worker Retirement Security 172 Allied Chemical 69 American Bankers Association 53 American Bar Association 63 American Chamber of Commerce in Australia 84, 211 American Council on Education 47 American Cyanamid 51, 69 American Economic Association 219 American Economic Foundation (AEF) 47, 54 American Enterprise Association 48 American Enterprise Forum 71 American Enterprise Institute (AEI) 54, 117, 119, 121, 131, 135, 136 American Express 119, 212, 215 American Federation of Advertising 30 American Heritage Foundation 26 American Iron and Steel Institute 26, 53 American Legion 49 American Management Association 55 American Medical Asociation 49 American Petroleum Institute 26, 50, 53, 119 American Shareholders Association 174, 183 American Tobacco 3, 4 American Vocational Association 47 American way of life 15, 16, 21, 33, 57 Americans for the Competitive Enterprise System 54 AMP Insurance 134 Arthur Andersen 133 Assembly of Australian Business Organisations (AABO) 83 Association of British Chambers of Commerce 81, 113 Association of National Advertisers 32 Association of Private Enterprise Education (APEE) 221–222 Atlas Economic Research Foundation 114–115 AT&T 15, 31, 102, 193, 209, 222 AusIndustry 213 Australia children’s enterprise education 209, 210, 211, 212–213 civil service 89, 130, 131, 135, 138, 158–160, 163 consultants, management 138, 158 economic advisers 155–165 economic education 81–89, 224 economic literacy 218 employee share ownership 180–181 key civil servants 159–162 key people and connections 137 market liberalization 152, 155–163, 164–165 National Priorities Project 132 New Right 130–131, 159, 160 privatizations 132, 138, 196 privatizations of pensions 183–184 Senior Executive Service 158–159 share ownership 174, 201–202 social justice 165, 192 think tanks 84, 127–138 Treasury 156–157, 161 see also Stone, John 252 FREE MARKET MISSIONARIES universities 89, 159 Washington consensus 149, 154 Workers’ Party 127–128 Australian Bankers Association 84 Australian Business Week 212–213 Australian Chamber of Commerce 64, 81–83, 86 Australian Chamber of Manufacturers 83, 134 Australian Coal Association 133 Australian Employers’ Federation 132 see also Hay, Andrew Australian Farmers’ Federation 83 Australian Federation of Commercial Broadcasters 88 Australian Free Enterprise Association 85 Australian Gas Light Company 180 Australian Industries Development Association 84 Australian Institute of Public Policy (AIPP) 135 Australian Labor Party (ALP) 84, 85, 134, 152, 156–158, 175 Australian Lecture Foundation 129 Australian Mining Industry Council 83, 84, 129, 132, 133 Australian National University 155, 160 Australian Public Service Association 138 Australian Share Ownershp Association 180 Australian Small Business Association 132 Australian Stock Exchange 130 Australian Wool Growers and Graziers’ Council 83 Balderstone, James 134 Balladur, Edouard 197 Bank of America 215 Baroody, William Jr 117 Barratt, Paul 162 Barton, Bruce 15, 30 Baumol, William 102, 103 Baxter, Ken 160, 162 Bennet, William 171 Bergen Chamber Economic Education Foundation 72 Bergen County Chamber of Commerce 72 Bernays, Edward 1, 3–4 Best Buy 210 Boeing 212 Booker T.

Hopes and Prospects
by Noam Chomsky
Published 1 Jan 2009

For insightful accounts of the roots of the crisis, see Dean Baker, Plunder and Blunder (Sausalito, CA: PoliPoint Press, 2009); John Bellamy Foster and Fred Magdoff, The Great Financial Crisis (New York: Monthly Review Press, 2009). Three: Democracy and Development: Their Enemies, Their Hopes 1. Solow, “Interview,” Challenge, January–February 2000. Bairoch, Economics and World History (Chicago: University of Chicago Press, 1993). Chang, Kicking Away the Ladder. See also Shahid Alam, Poverty from the Wealth of Nations (New York: St. Martin’s Press, 2000). An enduring classic is Frederick Clairmonte, Economic Liberalism and Underdevelopment (New York: Asia Publishing House, 1960). 2. The Jacksonian Democrats sought to do just that, to great economic and geopolitical advantage, specifically with cotton.

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As we know, the voyages of Columbus opened the way to the European conquest of the Western hemisphere, with hideous consequences for the indigenous population, and soon for Africans brought here in one of the vilest episodes of history. Vasco da Gama soon opened the way to bring to Africa and Asia the “the savage injustice of the Europeans,” to borrow Adam Smith’s rueful phrase, referring primarily to Britain’s terrible crimes in India, plain enough even in his day. Also in 1492, Christian conquerors extended their barbaric sway over the most advanced and tolerant civilization in Europe, Moorish Spain, forcing Jews to flee or convert to the civilization of the Inquisition and initiating the vast ethnic cleansing of the Muslim population (“Moors”), while also destroying much of the rich record of classical learning that they had preserved and developed—rather like the Mongol invasion of Iraq two centuries earlier, or the even worse destruction of the treasures of civilization in the course of the U.S.

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Clive was amazed at what he found. He described the great textile center of Dacca, now the capital of Bangladesh, as “extensive, populous and as rich as the city of London.” After a century of British rule its population had fallen from 150,000 to 30,000, and it was reverting to jungle and malaria. Adam Smith wrote that hundreds of thousands die in Bengal every year as a result of British regulations that even forced farmers to “plough up rich fields of rice or other grain for plantations of poppies” for opium production, turning “dearth into a famine.” In the words of the rulers themselves, “The misery hardly finds a place in the history of commerce.

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order
by Paul Vigna and Michael J. Casey
Published 27 Jan 2015

On that basis, the metallism crowd views the beginnings of money through the eyes of Aristotle, who wrote, “When the inhabitants of one country became more dependent on those of another and they imported what they needed, and exported what they had too much of, money necessarily came into use.” This view, that once trade became so complex that barter would no longer cut it, was resurrected two millennia later by Adam Smith in The Wealth of Nations. Smith described the New World communities of Peru and elsewhere as burdened by barter until the genius of European coinage was introduced. Smith’s view was critical to the conventional wisdom that we’ve sequenced from barter to money to debt. He argued that as human beings divided labor according to their talents, they produced surplus goods to trade but were trapped by the failure to meet what economists call a “coincidence of wants.”

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This “metallism” viewpoint: Distinctions between metallism and chartalism informed by Stephanie Bell, “The Hierarchy of Money” (Jerome Levy Economics Institute of Bard College, April 1998). Aristotle, who wrote, “When the inhabitants”: B. J. Gordon, “Aristotle, Schumpeter, and the Metallist Tradition,” Quarterly Journal of Economics 75 (4) (1961): 608–14. Adam Smith in The Wealth of Nations: Martin, Money, 8–10. The anthropologist David Graeber hypothesizes: David Graeber, “On the Invention of Money—Notes on Sex, Adventure, Monomaniacal Sociopathy and the True Function of Economics,” http://www.nakedcapitalism.com/2011/09/david-graeber-on-the-invention-of-money-%E2%80%93-notes-on-sex-adventure-monomaniacal-sociopathy-and-the-true-function-of-economics.html.

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Casey, “BitBeat: For Bitcoin Miners, a Hot Problem This Summer,” Wall Street Journal, MoneyBeat blog, April 29, 2014, http://blogs.wsj.com/moneybeat/2014/04/29/bitbeat-for-bitcoin-miners-a-hot-problem-this-summer/. Adam Smith opined on a similar matter in the eighteenth century: Paul Krugman, “Adam Smith Hates Bitcoin,” New York Times, Conscience of a Liberal blog, April 12, 2013, http://krugman.blogs.nytimes.com/2013/04/12/adam-smith-hates-bitcoin/. One such vulnerability was thrust: Account of the hardfork in the blockchain comes from a thread on the #bitcoin-dev list at the Bitcoin Forum, March 11, 2013, http://bitcoinstats.com/irc/bitcoin-dev/logs/2013/03/11.

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants
by Maurice E. Stucke and Ariel Ezrachi
Published 14 May 2020

The Chicago School justification for this is that if we are motivated by greed, we’ll compete hard to steal business from our rivals to make even more money, and the end result will be that society as a whole will be wealthier, healthier, and perhaps happier. Under this concept of competition, greed and selfishness are repackaged as virtues. As Easterbrook opined in another decision, which affirmed a lower court ruling: Greed is the foundation of much economic activity, and Adam Smith told us [in The Wealth of Nations] that each person’s pursuit of his own interests drives the economic system to produce more and better goods and services for all. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”26 In conclusion, Easterbrook agreed that the judge in the lower court had “properly declined to allow the jury to convert moral and ethical claims into legal duties.”

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For Smith, benevolence, which causes individuals to act, at times, out of goodness, even when they derive nothing financially from it, was not simply one of mankind’s “splendid virtues,” but an expression of basic “principles in his nature.”33 And fairness and altruism weren’t just qualities without any practical value, but virtues that “played an essential role in market interactions, allowing trust, repeated transactions and material gains to occur.”34 Fairness he viewed as the “main pillar that upholds the whole edifice. If it is removed, the great, the immense fabric of human society . . . must in a moment crumble to atoms.”35 These sentiments are as much a part of classical economic theory as those expressed in The Wealth of Nations. Thus, Smith has become the patron saint of a new wave of economists—known as the behavioral economists—like recent Nobel Prize laureates Daniel Kahneman and Richard Thaler. Looking at the empirical evidence, they conclude that most people are not as purely “self-interested” as the Chicago School’s theorists suppose.

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Should we accept the possibility of competition being bad at times? And, if so, how would we recognize when that is the case? Let’s start with the famous Scottish economist Adam Smith, known as the patron saint of competition, and the hockey player Craig MacTavish. Part I When Is Competition Toxic? Chapter 1 First Overdose The Race to the Bottom Two centuries after his death, the Scottish economist Adam Smith might still be the most powerful man in the world. Although he only used the term a few times in his writing, Smith’s “invisible hand” became one of social science’s most well-known metaphors, and the foundational principle of a lot of complex economic systems.

Age of Anger: A History of the Present
by Pankaj Mishra
Published 26 Jan 2017

Montaigne, for instance, had been under the impression that in a trade one man can only benefit at the expense of another. In the eighteenth century, however, moneymaking through trade and commerce began to appear more desirable than the old kind of wealth. Montesquieu was already writing approvingly in The Spirit of the Laws (1748), two decades before the Wealth of Nations (1776), that politicians ‘speak to us only of manufactures, commerce, finance, wealth, and even luxury’. Rousseau echoed him complainingly in Discourse on the Arts and Sciences (1750) when he wrote that ‘ancient politicians spoke incessantly about morals and virtue, ours speak only of business and money’.

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Over the last two decades, elites in even many formerly socialist countries came to uphold an ideal of cosmopolitan liberalism: the universal commercial society of self-interested rational individuals that was originally advocated in the eighteenth century by such Enlightenment thinkers as Montesquieu, Adam Smith, Voltaire and Kant. Indeed, we live today in a vast, homogeneous world market, in which human beings are programmed to maximize their self-interest and aspire to the same things, regardless of their difference of cultural background and individual temperament. The world seems more literate, interconnected and prosperous than at any other time in history.

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Beginning in the 1990s, a democratic revolution of aspiration – of the kind Tocqueville witnessed with many forebodings in early nineteenth-century America – swept across the world, sparking longings for wealth, status and power, in addition to ordinary desires for stability and contentment, in the most unpromising circumstances. Egalitarian ambition broke free of old social hierarchies, caste in India as well as class in Britain. The culture of individualism went universal, in ways barely anticipated by Tocqueville, or Adam Smith, who first theorized about a ‘commercial society’ of self-seeking individuals. The emphasis on individual rights has heightened awareness of social discrimination and gender inequality; in many countries today, there is a remarkably greater acceptance of different sexual orientations. The larger political implications of this revolutionary individualism, however, are much more ambiguous.

The Toaster Project: Or a Heroic Attempt to Build a Simple Electric Appliance From Scratch
by Thomas Thwaites
Published 27 Sep 2011

I suppose Professor Cilliers not having to spend much time toasting his bread in the morning is one small contributing factor to the reason why he has time to become an expert in bubbles, and in studying bubbles he makes mining copper more efficient, which in turn makes toasters cheaper, which means more people can devote less time to making their toast and more time to other activities, like going to art school and doing ridiculous things like taking nine months to make a single toaster from scratch. So this is what Adam Smith was going on about in his Inquiry into the Nature and Causes of the Wealth of Nations (1776), when he wrote: In the first fire-engines, a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder, according as the piston either ascended or descended. One of those boys, who loved to play with his companions, observed that, by tying a string from the handle of the valve which opened this communication to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his playfellows.

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I even have one of his iPhones, which at the moment I quite like (though strangely it does make me feel like a bit of an idiot when everyone else in the room has one too—like going to a party and everyone’s wearing the same “fashionable” top—but that’s the point of fashion right?). However, before we get too chummy with Adam Smith and his invisible hand, it seems that the need to buy more stuff to stimulate our economy, and the need to consume less to save our environment, are on a collision course. So while the £1187.54 price of my toaster doesn’t really include all that it cost to make it, £3.94 isn’t really what the Argos Value version cost either.

The Age of Surveillance Capitalism
by Shoshana Zuboff
Published 15 Jan 2019

Until the last few moments of the human story, life was necessarily local, and the “whole” was necessarily invisible to the “part.” Adam Smith’s famous metaphor of the “invisible hand” drew on these enduring realities of human life. Each individual, Smith reasoned, employs his capital locally in pursuit of immediate comforts and necessities. Each one attends to “his own security… his own gain… led by an invisible hand to promote an end which was no part of his intention.” That end is the efficient employ of capital in the broader market: the wealth of nations. The individual actions that produce efficient markets add up to a staggeringly complex pattern, a mystery that no one person or entity could hope to know or understand, let alone to direct: “The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would… assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever.…”1 The neoliberal economist Friedrich Hayek, whose work we discussed briefly in Chapter 2 as the foundation for the market-privileging economic policies of the past half century, drew the most basic tenets of his arguments from Smith’s assumptions about the whole and the part.

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Read this book to understand the inner workings of today’s digital capitalism, its threats to twenty-first-century society, and the reforms we must make for a better tomorrow.” —Frank Pasquale, University of Maryland Carey School of Law “I will make a guarantee: Assuming we survive to tell the tale, The Age of Surveillance Capitalism has a high probability of joining the likes of Adam Smith’s The Wealth of Nations and Max Weber’s Economy and Society as defining social-economics texts of modern times. It is not a ‘quick read’; it is to be savored and re-read and discussed with colleagues and friends. No zippy one-liners from me, except to almost literally beg you to read/ingest this book.” —Tom Peters, coauthor of In Search of Excellence “The Age of Surveillance Capitalism is brilliant and essential.

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Neil McKendrick, “The Consumer Revolution of Eighteenth-Century England,” in Birth of a Consumer Society: The Commercialization of Eighteenth-Century England, ed. John Brewer and J. H. Plumb (Bloomington: Indiana University Press, 1982), 11. 4. Nathaniel Forster, An Enquiry into the Causes of the Present High Price of Provisions (London: J. Fletcher, 1767), 41. 5. Adam Smith, The Wealth of Nations, ed. Edwin Cannan (New York: Modern Library, 1994). 6. Lee Rainie and Janna Anderson, “The Future of Privacy: Above-and-Beyond Responses: Part 1,” Pew Research Center: Internet, Science & Tech, December 18, 2014, http://www.pewinternet.org/2014/12/18/above-and-beyond-responses-part-1-2/. 7.

On Anarchism
by Noam Chomsky
Published 4 Nov 2013

In fact, there are no two points of view more antithetical than classical liberalism and capitalism—and that’s why when the University of Chicago publishes a bicentennial edition of Smith, they have to distort the text (which they did): because as a true classical liberal, Smith was strongly opposed to all of the idiocy they now spout in his name. So if you read George Stigler’s introduction to the bicentennial edition of The Wealth of Nations—it’s a big scholarly edition, University of Chicago Press, so it’s kind of interesting to look at—it is diametrically opposed to Smith’s text on point after point. Smith is famous for what he wrote about division of labor: he’s supposed to have thought that division of labor was a great thing.

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And that’s one of the main purposes of socialism, I think: to reach a point where people have the opportunity to decide freely for themselves what their needs are, and not just have the “choices” forced on them by some arbitrary system of power. [ . . . ] ADAM SMITH: REAL AND FAKE MAN: You said that classical liberalism was “anticapitalist.” What did you mean by that? Well, the underlying, fundamental principles of Adam Smith and other classical liberals were that people should be free: they shouldn’t be under the control of authoritarian institutions, they shouldn’t be subjected to things like division of labor, which destroys them. So look at Smith: why was he in favor of markets?

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Well, the underlying, fundamental principles of Adam Smith and other classical liberals were that people should be free: they shouldn’t be under the control of authoritarian institutions, they shouldn’t be subjected to things like division of labor, which destroys them. So look at Smith: why was he in favor of markets? He gave kind of a complicated argument for them, but at the core of it was the idea that if you had perfect liberty, markets would lead to perfect equality—that’s why Adam Smith was in favor of markets. Adam Smith was in favor of markets because he thought that people ought to be completely equal—completely equal—and that was because, as a classical liberal, he believed that people’s fundamental character involves notions like sympathy, and solidarity, the right to control their own work, and so on and so forth: all the exact opposite of capitalism.

The Constitution of Knowledge: A Defense of Truth
by Jonathan Rauch
Published 21 Jun 2021

But the founders were not just blundering along; they self-consciously sought to create an alternative to the failed regimes of the past. The greatest of them—especially John Locke, Adam Smith, and James Madison, the big three of modern liberalism—were men of genius, whose acuity and sophistication remain astonishing even today. The economic system has no formal constitution. It does have something like a founding document, in the form of Smith’s The Wealth of Nations, plus Smith’s equally important and closely connected, though until recently neglected, treatise on moral development and social behavior, his Theory of Moral Sentiments.

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See canceling and cancel culture Shapiro, Barbara J., 102, 121 Sherif, Muzafer, 34–35, 71 Shields, Jon A., 226 Silverglate, Harvey, 243–44 Simmons, Ruth, 208–09 Simpson, Thomas, 237 Singal, Jesse, 212, 218 skepticism, 57–58 Skripa, Sergei, 165 slavery, 81, 253–54 Sloman, Steven: The Knowledge Illusion (with Fernbach), 34, 72 smearing. See canceling and cancel culture; trolls and trolling Smith, Adam: on cooperation and empathy, 46–47; Madison and, 83, 85; Theory of Moral Sentiments, 46; The Wealth of Nations, 46 Smit, Lamar, 182 snowflakes, 246–51 Soave, Robby, 10, 205 Sobieraj, Sarah: The Outrage Industry (with Berry), 127, 129 socialization, 48 social justice, 44, 235, 240, 247, 254, 260 social media. See digital media; specific platforms social networks: biases in, 73–75; globalization and, 68–70; knowledge in, 60–61, 65, 67, 70–73; public goods of, 75–78; reality in, 86–87; scientific development in, 62–68, 70–73.

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It required the work of thousands of practitioners. Although they held no constitutional convention, they did establish the Constitution of Knowledge’s conventions. In the late 1700s, a Scottish natural philosopher named James Hutton published what he called a new theory of the earth. By no coincidence, he was a contemporary of Adam Smith and David Hume and a product of the same Scottish Enlightenment milieu. The debate he had entered was full of conjectures about how and when the world had come into being, most of which relied one way or another on stories in the Bible. One prominent theory claimed the earth was formed 6,000 years ago, devoid of all topography, with man as its occupant.

When the Money Runs Out: The End of Western Affluence
by Stephen D. King
Published 17 Jun 2013

The Love of Money, and the Case for the Good Life (Allen Lane, London, 2012). 2. T. Malthus, An Essay on the Principle of Population, ed. G. Gilbert (Oxford University Press, Oxford, 1993). 3. The Economics of Climate Change: The Stern Review (Cambridge University Press, Cambridge, 2006). 4. A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book 1, ch. 8: ‘Of the Wages of Labour’. 5. D. Kahneman, J. L. Knetsch and R. H. Thaler, ‘Experimental Tests of the Endowment Effect and the Coase Theorem’, Journal of Political Economy, 98.6 (1990). 6. Source: Maddison; all data can be found at the historical statistics section at http://www.ggdc.net/maddison/oriindex.htm. 7.

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‘Sober Set with Quaker Roots’, Times Higher Education, 3 May 2002 Schama, S. Citizens: A Chronicle of the French Revolution, Knopf, New York, 1989 Skidelsky, R. and Skidelsky, E. How Much Is Enough? The Love of Money, and the Case for the Good Life, Allen Lane, London, 2012 Smith, A. An Inquiry in the Nature and Causes of the Wealth of Nations, Penguin, London, 1999 Snyder, T. (ed.). ‘120 Years of American Education: A Statistical Portrait’, US Department of Education, Office of Educational Research and Improvement, Washington, DC, Jan. 1993 Stern, N. The Economics of Climate Change: The Stern Review. Cambridge University Press, Cambridge, 2006 Stevenson B. and Wolfers, J.

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Argentina may have lost its way during the twentieth century but the increase in living standards elsewhere owed a great deal to continuous invention and innovation. Argentina simply failed to harness what was rapidly becoming available elsewhere. Yet while the denial of productivity gains may be the most readily identified Malthusian failing, there is another major problem with Malthusian views, admirably identified by Adam Smith long before Malthus put pen (or quill) to paper. We need economic growth because, without it, society is in danger of fragmenting: It is in the progressive state, while the society is advancing to the further acquisition, rather than when it has acquired its full complement of riches, that the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable.

Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life
by Rory Sutherland
Published 6 May 2019

It’s a different kind of thing, which I call ‘non-sense’. Behavioural economics is an odd term. As Warren Buffett’s business partner Charlie Munger once said, ‘If economics isn’t behavioural, I don’t know what the hell is.’ It’s true: in a more sensible world, economics would be a subdiscipline of psychology.* Adam Smith was as much a behavioural economist as an economist – The Wealth of Nations (1776) doesn’t contain a single equation. But, strange though it may seem, the study of economics has long been detached from how people behave in the real world, preferring to concern itself with a parallel universe in which people behave as economists think they should.

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*In understanding the folly of seeking universal laws for human behaviour, I have been greatly enlightened by the anthropologist Oliver Scott Curry and the recent book Skin in the Game by Nassim Nicholas Taleb. The attempt by philosophers to impose context-free moral obligations on people seems to fall foul of our evolved nature. *One of the brothers Geoff and Vince Graham. *Before The Wealth of Nations, Smith wrote a book called The Theory of Moral Sentiments (1759). Commonly described as a work of moral philosophy, it is also a fabulous primer on behavioural science and consumer psychology. See Chapter 3.10. *And it’s usually a he, isn’t it? *Why do you think Management Consultancies are so successful?

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The problem here is that real life is not a conventional science – the tools which work so well when designing a Boeing 787, say, will not work so well when designing a customer experience or a tax programme. People are not nearly as pliable or predictable as carbon fibre or metal alloys, and we should not pretend that they are. Adam Smith, the father of economics, identified this problem in the late eighteenth century,* but it is a lesson which many economists have been ignoring ever since. If you want to look like a scientist, it pays to cultivate an air of certainty, but the problem with attachment to certainty is that it causes people completely to misrepresent the nature of the problem being examined, as if it were a simple physics problem rather than a psychological one.

The Establishment: And How They Get Away With It
by Owen Jones
Published 3 Sep 2014

When Pirie was in the United States in 1976, celebrations marking the 200th anniversary of the Declaration of Independence were in full swing. For the followers of free-market economics, it was also two centuries since another landmark date: the publication of Scottish thinker Adam Smith’s The Wealth of Nations, which set out for the first time some of the ideology that underpinned capitalism. With a colleague, Eamonn Butler, Pirie decided to found a new think tank – and so the Adam Smith Institute was born, in 1977 and in London. Pirie was determined to bury the post-war Establishment, but he did not anticipate how much he and his fellow travellers would be pushing at an open door.

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On its foundation in 1977, Pirie’s Adam Smith Institute began a relentless campaign of agitation. Its members petitioned politicians in their parliamentary offices, over lunches and at conferences. They wrote articles in key newspapers, with the hope of bringing their ideas to the attention of those in power, and established close relationships with influential journalists. ‘John O’Sullivan, writing for the Telegraph first, and then The Times, could usually contrive some reference to our latest publication or induce one of his colleagues to cover it’, as the official history of the Adam Smith Institute puts it.12 The Adam Smith Institute was transforming journalists into its very own outriders, disseminating their work to a mass audience.

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‘John O’Sullivan, writing for the Telegraph first, and then The Times, could usually contrive some reference to our latest publication or induce one of his colleagues to cover it’, as the official history of the Adam Smith Institute puts it.12 The Adam Smith Institute was transforming journalists into its very own outriders, disseminating their work to a mass audience. Feature articles based on their research were published in newspapers like the Daily Mail. The Institute was nothing if not ambitious. ‘Our aim was almost to try and build another consensus – or not quite a consensus, but to create the impression that a tide was surging in that direction,’ says Pirie. Soon it became a coordinated offensive. The Adam Smith Institute joined with the IEA, CPS and other free-market organizations to found the St James Society, named after the St James’ Court hotel in Westminster where they first convened.

Green Tyranny: Exposing the Totalitarian Roots of the Climate Industrial Complex
by Rupert Darwall
Published 2 Oct 2017

In 2000, the eponym of the first law and cofounder of Intel, Gordon Moore, and his wife set up the Palo Alto–based Moore Foundation with five billion dollars and later would spend one million dollars on the anti–Prop. 23 campaign.4 Climate change is ethics for the wealthy: It legitimizes great accumulations of wealth. Pledging to combat it immunizes climate-friendly corporate leaders and billionaires from being targeted as members of the top one-tenth of the top one percent. This signifies a profound shift in the nature and morality of capitalism. In the famous passage on the invisible hand in The Wealth of Nations, Adam Smith wrote of individuals who, intending their own gain, promote an end that was no part of their intention. “By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.”5 Less well known are the two sentences that immediately follow: I have never known much good done by those who affected to trade for the public good.

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Capitalism’s Fort Sumter 1Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago, 1976), p. 363. 2Mark Mills interview with author, June 27, 2015. 3Mark Mills, “Will the Paris Climate Summit Lead to More Money for Scientists or Solyndras?” Forbes.com, December 2, 2015, http://www.forbes.com/sites/markpmills/2015/12/02/progress-in-paris-at-the-cop21-more-money-for-scientists-or-corporatists/print/ (accessed January 15, 2016). 4Steven Malanga, “The Green behind California’s Greens,” City Journal, Spring 2015. 5Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago, 1976), p. 477. 6Ibid., p. 478. 7Joel Kotkin, “Are We Heading for an Economic Civil War?”

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In 1968, Hardin gave a lecture to the American Association for the Advancement of Science that became one of ecology’s canonical texts (Science lists over 26,000 citations). “The Tragedy of the Commons” takes a (hypothetical) example of open pasture leading to overgrazing. On the basis of this, Hardin asserted that freedom in a commons brings ruin to all. Adam Smith’s invisible hand had to be replaced by government coercion. It was theorizing without facts. As the Nobel economist Elinor Ostrom wrote in a 1999 critique, such a prescription was not supported by extensive research. In fact, there is a wide diversity of institutional arrangements for coping with common-pool resources—when they had not been prevented by central authorities.42 Population control was at the core of Hardin’s concerns: “Freedom to breed will bring ruin to us all.”43 In an earlier biology textbook, Hardin had asked students to confront the benefits of eugenics in reducing the “supply of mutant types at equilibrium.”44 Should society resort to eugenics?

A Small Farm Future: Making the Case for a Society Built Around Local Economies, Self-Provisioning, Agricultural Diversity and a Shared Earth
by Chris Smaje
Published 14 Aug 2020

Sometimes household farmers make the same judgement, especially when the wider economy forces their hand, although this is often a strategy to retain the farm for long-term security, not abandon it. Still, small-scale farmers do try to retain autonomy by preserving the zero-price household economy as best they can. Such efforts are likely to spread and deepen in the future as a response to interlocking global crises. Pioneer economist Adam Smith famously wrote in The Wealth of Nations (1776): ‘It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard for their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.’31 This isn’t how people behave in societies where capital hasn’t fully penetrated, however.

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This nearly brings me to the end of my story, an alternative narrative to that which Adam Smith presented, but geared to the small farm future that’s upon us by exploring the dynamics of status and autonomy. If it seems no more than an over-complicated way of saying that in the future we’ll have to consume less, I apologise. However, I’ve tried to show that reduced consumption might not be a simple matter of necessity, but a complex matter of cultural fulfilment. Therefore, the idea of a lower-energy and lower-consumption future might be more than just a futile environmentalist exhortation destined to crash into the real-world rocks of Adam Smith’s ‘propensity in human nature to truck, barter and exchange’.

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This lesson is written into our concept of utopia – an improved or perfected society of ideal well-being, which we correctly view as an impossibility (a ‘no-place’ in its Greek etymology). And yet we’ve come to think that the pursuit of private, individual self-interest creates ever-compounding public benefit through mystical concepts like Adam Smith’s invisible hand of the market.149 In service of such concepts we restrict the ability of our political communities to limit private accumulation through markets, instead combusting ever more fossil fuels that imperil the ability of Earth to sustain its current complement of life in order to produce mass consumer goods and possibilities for endless travel that we think will improve our happiness.

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs
by Andy Kessler
Published 1 Feb 2011

Now I’m not suggesting we actually eat anyone, as in the 1973 Charlton Heston sci-fi cult classic, Soylent Green, about overpopulation in the year 2022 (“Soylent Green is people!”). But we do need to get rid of worthless jobs. On the surface, I know that this might sound contrary to the old “help your fellow man” mantra, but really, truly, the road to wealth passes through the graveyard of today’s jobs. Adam Smith figured this out a long time ago. In The Wealth of Nations, he wrote that “all useful machines and instruments of trade” were designed to “facilitate and abridge labour.” Reduce. Condense. Curtail. Swim with the fishes. But which ones? The English classification system was quite simple: Tinker, Tailor, Soldier, Sailor Rich Man, Poor Man, Beggar Man, Thief And then Americans added: Doctor, Lawyer, Indian Chief.

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RULE #5 Wealth Comes from Productivity; Everything Else Is Gravy IN THE FIRST PART OF 2010, IN AN OP-ED FOR THE WALL STREET Journal, I wrote, “It’s been ten long years since the economy has created real wealth, as opposed to easy-credit-induced real estate or paper wealth.” I got tons of responses, but one e-mail stuck out, from a guy named James: Do you have any suggestions on reading or other background on the concept of what “real wealth” is? I’m not sure Adam Smith addressed it, and I don’t think my business school (Chicago) did either. Now James may have been pulling my chain, subtly telling me I had no idea what I was talking about and that Adam Smith and the Chicago Booth School are the sources of all things economic. Or maybe he was pushing me to explain. So here it goes: Saul Alinsky had his Rules for gaining power. And with power come wealth, or at least the power to redistribute wealth.

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Even the people who ultimately trade for actual fish see an increase in their living standards because they don’t have to sit around all day fishing; they can spend more time designing bear traps or other newfangled innovations. All productivity, all the time. I don’t want to do a whole economics lesson of the butcher and baker and candlestick maker and the lovely benefits of free trade. Go read Adam Smith or something. I just want to remind you (and myself) that it’s all about productivity. According to the Economic Policy Institute, “Labor productivity is a measure of the amount of goods and services that the average worker produces in an hour of work. The level of productivity is the single most important determinant of a country’s standard of living, with faster productivity growth leading to an increasingly better standard of living.”

Karl Marx: Greatness and Illusion
by Gareth Stedman Jones
Published 24 Aug 2016

Its determinateness of form is completely extinguished.’20 This meant that capital was ‘this unity of production and valorisation not immediately, but only as a process tied to certain conditions’.21 3. THE ORIGINS OF A SOCIAL FORM Why and how did this social form come into being? At the beginning of The Wealth of Nations, Adam Smith stated that the division of labour was ‘the necessary, though very slow and gradual, consequence of a certain propensity in human nature … the propensity to truck, barter, and exchange one thing for another’.22 Similar assumptions were made in manuals of popular political economy, which Karl attacked at the beginning of his introduction to the Grundrisse.

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Andrew Ure, The Philosophy of Manufactures: or, An Exposition of the Scientific, Moral and Commercial Economy of the Factory System of Great Britain, London, Charles Knight, 1835; Charles Babbage, On the Economy of Machinery and Manufactures, London, Charles Knight, 1832. 17. Marx, Economic Manuscripts of 1857–58, p. 131. 18. Ibid., p. 133. 19. Ibid., p. 134 (capitals in original text). 20. Ibid., vol. 28, p. 230. 21. Ibid., p. 334. 22. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan, Chicago, University of Chicago Press, 1976 [1776], book 1, ch. 11, p. 17. 23. Marx, ‘Introduction’ to Economic Manuscripts of 1857–58, pp. 17–18. 24. Ibid., p. 18. 25. Ibid. 26. Marx, Economic Manuscripts of 1857–58, pp. 413, 420. 27. Ibid., pp. 409–10. 28.

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Juni 1849, oder der letzte Sieg der Bourgeoisie in Frankreich, Hamburg, Joffman und Campe, 1850 Sismondi, J.-C.-L. Simonde de, Nouveaux principes d’économie politique, ou, De la richesse dans ses rapports avec la population, 2 vols., Paris, Chez Delaunay, 1819 Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan, Chicago, University of Chicago Press, 1976 [1776] Stein, Lorenz von, Der Socialismus und Communismus des heutigen Frankreichs: ein Beitrag zur Zeitgeschichte, 2nd edn, Leipzig, Otto Wigand, 1848 Stekloff, G. M., History of the First International, London, M. Lawrence, 1928 Stern, Daniel, Histoire de la Révolution de 1848, Paris, André Balland, 1985 [1850–52] Stirner, Max, The Ego and Its Own, ed.

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era
by Gary Gerstle
Published 14 Oct 2022

Wood, The Radicalism of the American Revolution (New York: Vintage Books, 1993); Thomas Bender, A Nation Among Nations: America’s Place in World History (New York: Hill and Wang, 2006), chapter 2; David Armitage, The Declaration of Independence: A Global History (Cambridge, MA: Harvard University Press, 2007); Joanna Innes and Mark Philp, eds., Re-Imagining Democracy in the Age of Revolutions: America, France, Britain, and Ireland (New York: Oxford University Press, 2013); Eric Hobsbawm, The Age of Revolution: Europe, 1789–1848 (New York: New American Library, 1962). 7.Gary Gerstle, Liberty and Coercion: The Paradox of American Government from the Founding to the Present (Princeton, NJ: Princeton University Press, 2015), chapter 1. 8.Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan (1776; reprint, New York: Modern Library, 1965), 13 and passim; Gerstle, Liberty and Coercion, chapter 1. The emancipatory character of liberal thought, in its eighteenth-century guise, is often underestimated. See Istvan Hont and Michael Ignatieff, “Needs and Justice in the Wealth of Nations: An Introductory Essay,” in Istvan Hont and Michael Ignatieff, eds., Wealth and Virtue: The Shaping of Political Economy in the Scottish Enlightenment (New York: Cambridge University Press, 1983), 1–44; Gerstle, “The Protean Character of American Liberalism.” 9.Helena Rosenblatt, The Lost History of Liberalism: From Ancient Rome to the Twenty-First Century (Princeton, NJ: Princeton University Press, 2018); the following four books by David Brion Davis: The Problem of Slavery in Western Culture (Ithaca, NY: Cornell University Press, 1966); The Problem of Slavery in the Age of Revolution, 1770-1823 (Ithaca, NY: Cornell University Press, 1975); The Problem of Slavery in the Age of Emancipation (New York: Knopf, 2014); and Inhuman Bondage: The Rise and Fall of Slavery in the New World (New York: Oxford University Press, 2006); Thomas L.

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This emphasis on human freedom and its protection was foundational to classical liberalism—and to the American republic.7 The Bill of Rights spoke to the political dimension of classical liberalism. An economic dimension of liberalism drew on the thought of Adam Smith, the Scottish political economist and philosopher who had published his magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations, in the same year that the Americans had declared their independence from Britain. In Wealth of Nations, Smith stressed the imperative of creating an economy in which people would be free to pursue their economic interests and advantage.

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Efficiency would spring from such specialization, increasing the quantity of production while decreasing the price of each manufactured unit, thus enhancing opportunities for market exchange. This specialization and differentiation of labor would also occur on a macro level between sectors of the economy and between nations, increasing domestic and international trade, all accruing to the “wealth of nations.” The proponents of this dimension of liberalism, what they celebrated as market freedom, argued that it would trigger extraordinary economic growth. Economic liberalism also carried within it an emancipatory current, since creating a world of free exchange required liberating national economies from the state controls that monarchs and mercantilists had everywhere imposed and that Smith despised.

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries
by Safi Bahcall
Published 19 Mar 2019

Rae, John. Life of Adam Smith. Macmillan, 1895. Romilly, Sir Samuel. “Letter LXXI, To Madam G—,” Aug. 20, 1790, in Memoirs of the Life of Sir Samuel Romilly, edited by His Sons, Vol. I (1840), 404. Ross, Ian S. The Life of Adam Smith. Oxford, 2010. Rothschild, Emma. Economic Sentiments. Harvard, 2001. Schofield, Robert E. “An Evolutionary Taxonomy of Eighteenth-Century Newtonianisms.” Stu. Eighteenth-Cent. Cult. 7 (1978): 175. Scott, Andrew C., et al. Fire on Earth: An Introduction. Wiley, 2014. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Glasgow Ed., Vol. 2.

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Malamud, Bruce D., et al. “Forest Fires: An Example of Self-Organized Critical Behavior.” Science 281 (1998): 1840. Mandelbrot, Benoit B., and Richard L. Hudson. The (Mis)Behavior of Markets. Basic Books, 2004. McLean, Iain. Adam Smith: Radical and Egalitarian. Edinburgh, 2006. Mirowski, Philip. More Heat Than Light. Cambridge, 1989. Montes, Leonidas. “Newtonianism and Adam Smith.” In The Oxford Handbook of Adam Smith, edited by C. Berry et al., 36. Oxford, 2013. Nagel, Kai, et al. “Still Flowing: Approaches to Traffic Flow and Traffic Jam Modeling.” Op. Res. 51 (2003): 681. Newman, M. E. J. Networks: An Introduction.

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The scholar, relieved, joined his friends for supper. At half past nine, he rose to return to bed, announcing, “I love your company, gentlemen, but I believe I must leave you to go to another world.” Six days later he died. Adam Smith, who knew how to make an exit, has grown into a misty icon, a hero to libertarians and free-marketeers who like their economics neat, hold the morals. (The real Adam Smith argued for restraints on markets and prized his work on ethics more than his work on economics.) The manuscript Smith asked his friends to spare had nothing to do with either ethics or economics. It was his History of Astronomy, written shortly after he finished graduate school.

Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition
by Kindleberger, Charles P. and Robert Z., Aliber
Published 9 Aug 2011

Kelley, 1967), p. 96. 6. Walter Bagehot, Lombard Street: a Description of the Money Market (1873; reprint edn, London: John Murray, 1917), p. 18. 7. Sir John Clapham, The Bank of England: a History (Cambridge: Cambridge University Press, 1945), vol. 2, p. 326. 8. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; reprint edn, New York: Modern Library, 1937), pp. 703–4. 9. Alfred Marshall, Money, Credit and Commerce (1923; reprint edn, New York: Augustus M. Kelley, 1965), p. 305. 10. More and more economic theorists are moving away from unswerving reliance on the assumption that market participants are uniformly intelligent, informed, and independent in thought, introducing such concepts as asymmetric information (different knowledge available to different participants), cognitive dissonance (unconscious suppression of information that fails to fit a priori views), herd behavior, procrastination that results in failure to act in timely fashion, and so on.

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Hawtrey, The Art of Central Banking (London: Longmans, Green, 1932), pp. 128–9. 28. See Herman E. Krooss, ed., Documentary History of Banking and Currency in the United States (New York: Chelsea House, 1969), vol. 1, p. 31. 29. Viner, Studies in International Trade, pp. 245ff., esp. pp. 249–50. 30. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; reprint edn, New York: Modern Library, 1937), pp. 293–7. 31. R.G. Hawtrey, Currency and Credit, 3rd edn (New York: Longmans, Green 1930), p. 224. 32. Arthur D. Gayer, W.W. Rostow, and Anna Jacobson Schwartz, The Growth and Fluctuation of the British Economy, 1790–1850 (Oxford: Oxford University Press, Clarendon Press, 1953), vol. 1, p. 105. 33.

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Manias, Panics and Crashes Examine the record of history, recollect what has happened within the circle of your own experience, consider with attention what has been the conduct of almost all the great unfortunate, either in private or public life, whom you may have either read of, or heard of, or remember; and you will find that the misfortunes of by far the greater part of them have arisen from their not knowing when they were well, when it was proper for them to sit still and be contented. – Adam Smith The Theory of Moral Sentiments Much has been written about panics and manias, much more than with the most outstretched intellect we are able to follow or conceive; but one thing is certain, that at particular times a great deal of stupid people have a great deal of stupid money. ... At intervals, from causes which are not to the present purpose, the money of these people – the blind capital, as we call it, of the country – is particularly large and craving; it seeks for someone to devour it, and there is a ‘plethora’; it finds someone, and there is ‘speculation’; it is devoured, and there is ‘panic

When More Is Not Better: Overcoming America's Obsession With Economic Efficiency
by Roger L. Martin
Published 28 Sep 2020

Based on that core principle, American economists, policy makers, and business managers have consistently optimized measures that encourage ever greater efficiency. They have been encouraged in this endeavor—and, more generally, in their beliefs—by the contributions of a handful of influential thinkers. Adam Smith It is an interesting and important historical coincidence that Adam Smith’s The Wealth of Nations was published in 1776, the same year that America declared its independence from Britain. In it, Smith provides two important underpinnings for a model of efficiency. First is the “invisible hand” of an unfettered market of buyers and sellers that produces, without explicit organization, a price that generates efficient use of resources to provide the optimal quantity of goods.

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Smith’s work was well known to the Founding Fathers, including Thomas Jefferson, Alexander Hamilton, and James Madison, who led the formulation of the US constitution and developed the basic principles of US economic policy in the quarter century following the Declaration of Independence. A full 28 percent of American libraries from 1777 to 1790 held The Wealth of Nations.18 Hamilton made specific reference to the benefits of the division of labor in his 1791 Report on the Subject of Manufactures, lauding the “greater skill and dexterity naturally resulting from a constant and undivided application to a single object” and arguing that it “has the effect of augmenting the productive powers of labor, and with them, the total mass of the produce or revenue of a country.”19 Both Smith’s invisible hand and division of labor were embraced as the economic policy of the US was formulated in this seminal period.

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For most of the past seven decades or so, we have been busily signing one free-trade agreement after another because the zero-tariff level that they (in their ultimate manifestation) provide is equated with the efficiency of our economy. Proxies and Their Lineage It is both important and only fair to note that, in the main, the fathers of the efficiency-oriented intellectual traditions would almost certainly not have taken their ideas as far as we have seen them taken. Adam Smith did not argue that labor divided more ways is always better. David Ricardo did not insist that more free trade agreements are always better. And most certainly W. Edwards Deming did not argue for the utter elimination of slack—in fact, he argued for the importance of maintaining an optimal level of slack.

The Broken Ladder
by Keith Payne
Published 8 May 2017

Saad, “Americans Say Family of Four Needs Nearly $60K to ‘Get By,’” Gallup, May 17, 2013, www.gal lup.com/poll/162587/americans-say-family-four-needs-nearly-60k.aspx. among American households below the federal poverty line: J. Siebens, “Extended Measures of Well-Being: Living Conditions in the United States: 2011,” U.S. Census Bureau, September 2013, www.census.gov/prod/2013pubs/p70-136.pdf. Adam Smith made this very point: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: Methuen, 1776). His team rigged some soup bowls: B. Wansink, J. E. Painter, and J. North, “Bottomless Bowls: Why Visual Cues of Portion Size May Influence Intake,” Obesity Research 13 (2005): 93–100. he conducted an experiment that appeared: D.

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By material standards, he would be judged to be poorer than the poor in today’s developed countries. Why, then, do we not regard him as having been poor? Because, as the historical perspective makes clear, poverty and wealth are always relative to what other people have in a particular time and place. Adam Smith made this very point in The Wealth of Nations: By necessaries I understand, not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. . . .

Inside the Robot Kingdom: Japan, Mechatronics and the Coming Robotopia
by Frederik L. Schodt
Published 31 Mar 1988

For the moment at least, the voices of opposition to robots in Japan have been drowned— drowned in the avalanche of wealth and materialism that the robots helped create. Robots and the Wealth of Nations * * * In manufactures the same number of hands, assisted with the best machinery, will work up a much greater quantity of goods than with more imperfect instruments of trade. ADAM SMITH, THE WEALTH OF NATIONS, 1776 * * * In 1985 the report of the United States President's Commission on Industrial Competitiveness, headed by John Young of Hewlett-Packard, noted that Japanese productivity growth has been five times greater than our own.

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Tsusansho ga chosa e" [Parent Firms Using High Interest Rates, Warned Against Bullying Subcontractors. MITI to Conduct Survey], Nikkan kogyo shinbun, 31 May 1986, p. 1 Sidebar "Hasegawa's New Laws of Robotics." From Hasegawa, Robotto to shakai, p. 145. Chapter 9: Robots and the Wealth of Nations Epigraph from Adam Smith, The Wealth of Nations: Books I-III (Harmondsworth, England: Penguin Classics, 1986), p. 383. Global Competition: The New Reality, 1985, p. 11. In a 1982 poll, 75.9 percent of 521 firms in Aichi Prefecture introduced robots to reduce labor; 68.9 percent reported success. Eiji Ogawa, "Robottoka to sangyo kozo" [Robotization and the Structure of Industry], Journal of the Robotics Society of Japan, vol. 3, no. 1 (February 1985), p. 35; Engelberger's opening speech at the RIA Joseph F.

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PART TWO Before Industrial Robots: A State of Mind 3 The First Japanese Robot 4 Robots of the Imagination 5 The Toy Robot Kingdom PART THREE After Industrial Robots: Building the Kingdom 6 Japan Manufactures the Industrial Robot 7 An Empire of Yellow Robots 8 The Man—Machine Interface 9 Robots and the Wealth of Nations PART FOUR Beyond Industrial Robots 10 Religion and Robots 11 Six Legs, Four Legs, Two Legs, or None? Color Photo Section Notes Bibliography Index Credits About The Author On the New Digital Edition of Inside the Robot Kingdom I began doing research for Inside the Robot Kingdom in the mid-1980s.

Willful: How We Choose What We Do
by Richard Robb
Published 12 Nov 2019

New Internationalist, April 5, 1997. https://newint.org/features/1997/04/05/peter-singer-drowning-child-new-internationalist (accessed February 2, 2019). Skidelsky, Robert. John Maynard Keynes: The Economist as Saviour, 1920–1937. London: Macmillan, 1992. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Chicago: University of Chicago Press, 1976. ———. The Theory of Moral Sentiments. London: A. Millar, 1759. Sturges, Preston. The Palm Beach Story. Motion picture. Paramount Pictures, 1942. Taylor, Michael. Rationality and the Ideology of Disconnection. Cambridge, UK: Cambridge University Press, 2006.

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For-itself investing has always been and will always be in short supply because of the anxiety it entails—people can only bear so much, and institutions are not built for it. When we confront a one-time event without the guidance of familiar rules, we’re on our own. This indeterminacy and freedom and the ensuing sense of isolation and responsibility can give rise to dread. Adam Smith expressed it perfectly when he suggested that “anxious vigilance” was the defining quality of a good manager, who must often operate under novel and uncertain conditions, doing that which can’t be transcribed into rules and delegated.3 Anyone who spots an opportunity to buy or sell because prices have drifted from their fundamental value places herself in opposition to the prevailing canon.

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I didn’t panic or despair when losing or become exuberant and rash when winning. Together, these factors allowed me to take for-itself action. Lots of people probably shared the intuition that soybean prices were unsustainably low, but I was in a position to act. Although these trades were accompanied by Adam Smith’s “anxious vigilance” to some degree, it took a bet on a wind farm to bring home the full (and sometimes grueling) implications of a for-itself leap under novel and uncertain conditions. Thanet Offshore Wind: A Big Leap There is a sentiment among traders that it’s a bad omen to win on your first trade.

The AI Economy: Work, Wealth and Welfare in the Robot Age
by Roger Bootle
Published 4 Sep 2019

Different periods experience a different balance of these various factors. The Industrial Revolution saw a combination of all of them. And the benefits were interactive as the expansion of markets made possible by increased trade enabled the exploitation of economies of scale in production – just as Adam Smith argued would happen in The Wealth of Nations, published in 1776. Economic development continued throughout the nineteenth century and into the twentieth. But twentieth-century economic performance did not at first show the full benefits because other factors intervened. The first half of the century was scarred by two world wars that destroyed capital on a massive scale and diverted resources into war production.

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He says: “Consider the lilies of the field, how they grow: they neither toil nor spin.”3 Many of the negative attitudes toward work that persist today can be traced back, if not to the Garden of Eden, then at least to the Industrial Revolution. This sucked people into factories, changing the character of work. The division of labor championed by Adam Smith may have been more efficient than one person working at several different tasks, but it also had its downsides, and he acknowledged as much. In The Wealth of Nations, published in 1776, he wrote: “The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding.”4 Marx took this point further.

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London: Institute of Economic Affairs. Shadbolt, N., and Hampson, R. (2018) The Digital Ape, London: Scribe. Shanahan, M. (2015) The Technological Singularity, Cambridge: The MIT Press. Simon, H. (1965) The Shape of Automation for Men and Management, New York: Harper. Smith, A. (1776) The Wealth of Nations, London: William Strahan. Stiglitz, J. E. (1969) New Theoretical Perspectives on the Distribution of Income and Wealth among Individuals, London: The Econometric Society. Susskind, R. and Susskind, D. (2017) The Future of the Professions: How Technology Will Transform the Work of Human Experts, Oxford: Oxford University Press.

The Aristocracy of Talent: How Meritocracy Made the Modern World
by Adrian Wooldridge
Published 2 Jun 2021

Louis XIV promoted low-born favourites such as Sébastien de Vauban, the great engineer, and Jean Racine, the great dramatist.18 A Scottish laird, John Stuart, took a shine to a cobbler’s son, James Mill, and provided him with an education in exchange for tutoring his daughter (Mill honoured him by naming his eldest son after him). Adam Smith had the leisure to write The Wealth of Nations because the Duke of Buccleuch spotted his genius. Patrons often felt an obligation to recommend competent clients – a complete duffer might prove embarrassing. Equally, clients often felt an obligation to bring credit to their sponsors. ‘The Crown and the Executive found in this system guarantees of fidelity and good conduct,’ Winston Churchill wrote in his life of Marlborough, ‘and no one troubled himself about the obstacles placed in the path of unpropertied ability.’19 Samuel Pepys, who owed his career to the patronage of his first cousin once removed, Lord Montagu, is a good example of the working of the patronage system at its best.

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Still, it was not enough to delegitimize the old establishment. You also needed to devise a way of identifying men of merit who could take their place. Leading critics of the old regime advanced general arguments in favour of examinations without getting down to the details. Adam Smith suggested vaguely in The Wealth of Nations that every man ‘undergo an examination or probation in them before he can obtain the freedom in any corporation to be allowed to set up any trade’.14 Jeremy Bentham was equally vague in his (wonderfully titled) Official Aptitude Maximized; Expense Minimized (1830). The breakthrough was made by Cambridge University, which led the way in introducing written examinations to replace the older tradition of oral examinations, and in linking examination results to substantial rewards in the form of prizes and college fellowships.

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Allen, The Institutional Revolution: Measurement and the Economic Emergence of the Modern World (Chicago and London, University of Chicago Press, 2012), p. 44 13 Jonathan Rose, The Intellectual Life of the British Working Classes (London, Yale University Press, 2001), pp. 16, 117 14 Adam Smith, The Wealth of Nations, 2 Vols. (first pub. 1776), Vol. 1 p. 270 15 Michael Sadler, Essays on Examinations (London, Macmillan, 1936) p. 53 16 Joseph F. Kett, Merit: The History of a Founding Ideal from the American Revolution to the Twenty-First Century (Ithaca, NY, Cornell University Press, 2013), pp. 84–5.

The Empathic Civilization: The Race to Global Consciousness in a World in Crisis
by Jeremy Rifkin
Published 31 Dec 2009

Their success in mitigating future abuses and criminal behavior, while mixed, is nonetheless encouraging and suggests a broadening of the vision of criminal justice and the role of law in addressing wrongdoing in society. Even economics, the dismal science, has undergone a partial makeover. For two centuries Adam Smith’s observation that nature inclines each individual to pursue his or her own individual self- interest in the marketplace seemed the undisputable last word on the nature of human nature. In his Inquiry into the Nature and Causes of the Wealth of Nations (1776), Smith contended that[e]very individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of society, which he has in view.

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“Reinhold Niebuhr’s The Self and the Dramas of History: A Criticism,” Pastoral Psychology 9, 1958. pp. 15-17. 14 Gay, Peter. The Enlightenment: The Science of Freedom. New York: W. W. Norton, 1996. p. 150. 15 Wilson, Edward O. Biophilia. Cambridge, MA: Harvard University Press, 1984. 16 Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Edwin Cannan, ed. London: Methuen & Co., 1961. Vol. 1. p. 475. 17 Harlow, Harry F. “The Nature of Love.” American Psychologist. Vol. 13. No. 12. 1958. p. 676. 18 Ibid. p. 677. 19 Canetti, Elias. Crowds and Power. Carol Stewart, trans. London: Gollancz, 1962. p. 448. 20 Gimbutas, Marija.

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New York: Avon Books, 1990. ———. A Darwinian Left: Politics, Evolution and Cooperation. New Haven, CT: Yale University Press, 1999. Skolimowski, Henryk. The Participatory Mind: A New Theory of Knowledge and of the Universe. London: Penguin, 1994. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. Edwin Cannan, London: Methuen, 1961. Sober, Elliott, and David S. Wilson. Unto Others: The Evolution and Psychology of Unselfi sh Behavior. Cambridge, MA: Harvard University Press, 1998. Soddy, Frederick. Matter and Energy. New York: Holt, 1912. Sperber, Jonathan. The European Revolutions, 1848-1851. 2nd ed.

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory
by Kariappa Bheemaiah
Published 26 Feb 2017

As digitization leads to massive increases in efficiency and network effects, markets are getting more Schumpeterian in the sense that those market players who are capable of digitizing business models are capable of overtaking existing incumbents and gaining larger portions of market share. In The Wealth of Nations, Adam Smith famously said that the division of labor is limited by the extent of the market. Thus, as digitization overcomes the physical barriers to access markets, we notice that it is creating room for specializations that address granular subdivisions in existing and niche markets. Moreover, as the barriers of technical know-how and location get porous, the impact on strategy has been the obsession on customer focus.

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The logarithmic curve seen in Figure 4-3 is representative of this fact Figure 4-3.Moore’s Law: Over 199 Years And Going Strong Image Source: BCA Research Special Report, ‘Human Intelligence and Economic Growth - From 50,000 B.C. to the Singularity’ (2013). As the graph shows, these exponential curves are relatively recent in the history of economics. When Adam Smith published the ‘Wealth of Nations’, in 1776, the subject of economics represented linear scales. Technology evolved at a much slower pace (refer to Figure 4-1) and this made the social science of economics develop models that were well suited to linear technological growth curves and our linear way of predictive thinking.

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As agents adapt and inform themselves via feedback, they begin to form alliances based on internal constraints and preferences and subsequently establish themselves into autonomous organizational structures that do not need central co-ordination. Dissecting the emergence of this organizational process is akin to witnessing the physical embodiment of Adam Smith’s invisible hand. Path Dependence In a word, path dependence can be summarized as history. Path dependence is the dependence of economic outcomes on the path of previous outcomes, rather than based on current conditions. For example, the statement “we saved and invested last year and therefore we have assets today” might be more fashionably expressed as, “the capital stock is path dependent”’ (Margolis and Liebowitz, 1998).

The Origins of Political Order: From Prehuman Times to the French Revolution
by Francis Fukuyama
Published 11 Apr 2011

Marx’s influence has been such that many generations of students have continued to see the “rise of the bourgeoisie” as something that simply happens as a concomitant of economic modernization, without the need for further explanation, and to see that class’s political power as flowing from its economic power.16 Writing almost seventy-five years before Marx, Adam Smith in The Wealth of Nations provided a more nuanced and ultimately convincing account of the provenance of the bourgeoisie, one that sees politics as cause as much as consequence of its rise. At the beginning of book three of the first volume, Smith notes that there should be a natural progression in what he calls “opulence,” or economic growth, starting with improved agricultural productivity, leading to greater internal trade between countryside and town, and only in the end to increased international trade.

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Thus, while having a coherent state and reasonably good governance is a condition for growth, it is not clear that democracy plays the same positive role. Between economic growth and social development, or the development of civil society A lot of classic social theory links the emergence of modern civil society to economic development.28 Adam Smith in The Wealth of Nations noted that the growth of markets was related to the division of labor in society: as markets expand and firms take advantage of economies of scale, social specialization increases and new social groups (for example, the industrial working class) emerge. The fluidity and open access demanded by modern market economies undermine many traditional forms of social authority and force their replacement with more flexible, voluntary forms of association.

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An oppressed class under the sway of the feudal nobility, an armed and self-governing association in the mediaeval commune; here independent urban republic (as in Italy and Germany), there taxable ‘third estate’ of the monarchy (as in France), afterwards, in the period of manufacture proper, serving either the semi-feudal or the absolute monarchy as a counterpoise against the nobility, and, in fact, corner-stone of the great monarchies in general, the bourgeoisie has at last, since the establishment of Modern Industry and of the world-market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie.” Political power is thus for him the consequence and not the cause of this class’s economic power. 17 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Indianapolis: Liberty Classics, 1981), book III, chap. 1. 18 Ibid., part III, chap. 2. 19 Ibid., part III, chap. 3. 20 Ibid., part III, chap. 5. 21 Ertman, Birth of the Leviathan, pp. 176–77. 22 Aylmer, Rebellion or Revolution?, pp. 5–6. 23 Joel Hurstfield, Freedom, Corruption and Government in Elizabethan England (Cambridge, MA: Harvard University Press, 1973), pp. 137–62. 24 Ertman, Birth of the Leviathan, p. 184. 25 As in all wars, the back-and-forth fortunes of the two sides was subject to considerable contingency, based on individual acts of heroism, misjudgment, cowardice, or incompetence.

Empire: How Britain Made the Modern World
by Niall Ferguson
Published 1 Jan 2002

The money taxpayers would have saved as a result of this could have been spent on electricity, cars and consumer durables, thus encouraging industrial modernization at home. Nearly a century ago, the likes of J. A. Hobson and Leonard Hobhouse were arguing along very similar lines; they in turn were in some measure the heirs of Richard Cobden and John Bright in the 1840s and 1850s. In The Wealth of Nations (1776), Adam Smith had expressed his doubts about the wisdom of ‘raising up a nation of customers who should be obliged to buy from the shops of our different producers, all the goods with which these could supply them’. But it was Cobden who had originally insisted that the expansion of British trade should go hand in hand with a foreign policy of complete non-intervention.

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As revenue imploded and costs exploded, the company had to rely on bond sales and short-term borrowing to remain afloat. Finally, the directors were forced not only to reduce the annual dividend but to turn to the government for assistance – to the disgust of the free market economist, Adam Smith. As Smith noted contemptuously in The Wealth of Nations (1776): Their debts, instead of being reduced, were augmented by an arrear to the treasury … of … four hundred thousand pounds, by another to the custom-house for duties unpaid, by a large debt to the bank for money borrowed, and by a fourth for bills drawn upon them from India, and wantonly accepted, to the amount of upwards of twelve hundred thousand pounds.

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In the former category belong both the nationalists and the Marxists, from the Mughal historian Gholam Hossein Khan, author of the Seir Mutaqherin (1789) to the Palestinian academic Edward Said, author of Orientalism (1978), by way of Lenin and a thousand others in between. In the latter camp belong the liberals, from Adam Smith onwards, who have maintained for almost as many years that the British Empire was, even from Britain’s point of view, ‘a waste of money’. The central nationalist/Marxist assumption is, of course, that imperialism was economically exploitative; every facet of colonial rule, including even the apparently sincere efforts of Europeans to study and understand indigenous cultures, was at root designed to maximize the ‘surplus value’ that could be extracted from the subject peoples.

Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us About Economics and Life
by Alan B. Krueger
Published 3 Jun 2019

These data come from author’s calculations of data on CEO compensation of publicly traded companies, athletes, and musician earnings. See “Equilar | New York Times 200 Highest-Paid CEOs,” Equilar, May 25, 2018; “The World’s Highest-Paid Athletes,” Forbes, June 13, 2018; and Ed Christman, “Billboard’s 2018 Money Makers: 50 Highest-Paid Musicians,” Billboard, Jul. 20, 2018. 24. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776). 25. Grateful Dead, “Playing in the Band,” Ace, Warner Bros., 1972. 26. Frank Sinatra, Sinatra at the Sands, Reprise Records, 1966. 27. Author’s calculations using data from Billboard Top 100 Songs. 28.

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Paul Resnikoff, “Two-Thirds of All Music Sold Comes from Just 4 Companies,” Digital Music News, Aug. 3, 2016. 33. “Tech Firms Shell Out to Hire and Hoard Talent,” The Economist, Nov. 5, 2016. 34. “Knorr, Wabtec Settle with U.S. over Agreements to Not Poach Workers,” Reuters, Apr. 3, 2018. 35. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776). 36. Federal Trade Commission, “Antitrust Guidance for Human Resource Professionals,” Department of Justice, Antitrust Division, Oct. 2016. 37. David Clark, “Antitrust Action Against No-Poaching Agreements: Obama Policy to Be Continued by the Trump Administration,” National Law Review, Jan. 26, 2018.

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But if possible, I advise students, they should find a field that they enjoy and that others find less enjoyable, because that limits the supply of people going into their field, thereby increasing pay for those who do go into it. Music falls squarely in the first of these categories. I used to think that musicians entered the field because of overconfidence, with oversized expectations that they will attain fame and fortune despite the long odds. After all, Adam Smith, the eighteenth-century founder of economics, long ago argued that “the contempt of risk, and the presumptuous hope of success, are in no period of life more active than at the age at which young people choose their professions.”24 But even presumptuous young musicians seem to me to be under little illusion that they will achieve fame and fortune.

Globalists: The End of Empire and the Birth of Neoliberalism
by Quinn Slobodian
Published 16 Mar 2018

For pioneering studies of this perspective, see Stephen Gill, “Economic Globalization and the Internationalization of Authority: Limits and Contradictions,” Geoforum 23, no. 2 (1992): 269–283; Gill, “New Constitutionalism, Demo­cratisation and Global Po­liti­cal Economy,” Pacifica Review: Peace, Security and Global Change 10, no. 1 (1998): 23–38. For other key studies, see Sarah Babb, ­Behind the Development Banks: Washington Politics, World Poverty, and the Wealth of Nations NOTES TO PAGES 4–6 21. 22. 23. 24. 25. 26. 27. 293 (Chicago: University of Chicago Press, 2009); Nitsan Chorev, “The Institutional Proj­ect of Neo-­Liberal Globalism: The Case of the WTO,” Theory and Society 34, no. 3 (2005): 317–355; A. Claire Cutler, Private Power and Global Authority: Transnational Merchant Law in the Global Po­liti­cal Economy (New York: Cambridge University Press, 2003); John Gray, False Dawn: The Delusions of Global Capitalism (New York: New Press, 1998); David J.

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Wassily Leontief, “For a National Economic Planning Board,” New York Times, March 14, 1974. 23. Wassily Leontief, The ­Future of the World Economy (New York: United Nations, 1976). 24. Tinbergen et al., Reshaping the International Order. 25. See Sarah Babb, ­Behind the Development Banks: Washington Politics, World Poverty, and the Wealth of Nations (Chicago: University of Chicago Press, 2009). 26. Hank Overbeek and Kees van der Pijl, “Restructuring Capital and Restructuring Hegemony: Neo-­Liberalism and the Unmaking of the Post-­war Order,” in Overbeek, Restructuring hegemony, 19. See also Bair, “Taking Aim,” 360–361; Martijn Konings, “Governing the System: Risk, Finance, and Neoliberal Reason,” Eu­ro­ pean Journal of International Relations 22, no. 2 (2016): 268–288; Greta R.

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After protests shut down its 1999 meeting, it pivoted to emphasize the h ­ uman side of globalization. Even though the policies described as neoliberal had long been criticized, the IMF report was still significant for recognizing the label “neoliberalism.” The term appeared poised for the mainstream, appearing in the Financial Times, the Guardian, and other newspapers.11 Also in 2016, the Adam Smith Institute, founded in 1977 and a source of guidance for Margaret Thatcher, “came out as neoliberals,” in their words, shedding their former moniker, “libertarian.”12 “Globalist in outlook” was one of the princi­ples they claimed for themselves. In 2017 the director of the Walter Eucken Institute in Germany publicly defended the honor of what he called “classic neoliberalism” and its call for “a strong state standing above the interests of lobbies.”13 It seemed that for both critics and proponents “the movement that dared not speak its own name” could now be named.14 This was a clarifying development.

Radical Markets: Uprooting Capitalism and Democracy for a Just Society
by Eric Posner and E. Weyl
Published 14 May 2018

For example, in a poll conducted by PRRI and The Atlantic after the election, two-thirds of Trump voters described his election as “the last chance to stop American decline,” https://www.prri.org/research/prri-atlantic-poll-post-election-white-working-class/, and a poll by Lord Ashcroft found that by 16 percentage points, those favoring Brexit believed life was worse in Britain than it was 30 years ago, while those favoring “Remain” had the opposite view by 46 percentage points, http://lordashcroftpolls.com/2016/06/how-the-united-kingdom-voted-and-why/. 21. Arlie Hochshild, Strangers in Their Own Land: Anger and Mourning on the American Right (New Press, 2016). 22. Adam Smith, The Wealth of Nations, Part I, 56 (Collier, 1902). 23. The distinction we are drawing is famously associated with the 1893 work of the great sociologist Émile Durkheim, The Division of Labour in Society (Simon & Schuster, 1997). 24. See Michael J. Sandel, What Money Can’t Buy: The Moral Limits of Markets (Farrar, Straus and Giroux, 2012); Samuel Bowles, The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens (Yale University Press, 2016) for a contemporary defense of moral economies. 25.

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With an improved public life, crime would be reduced, street life would be restored, and the retreat into private communities would cease. Far from the usual image of markets substituting for and undermining the public sphere, Radical Markets would bolster trust in public life. Chapter 2 explains how an auction could organize politics. Radical Heroes Our argument draws on an intellectual tradition that goes back to Adam Smith. Smith is frequently invoked by conservative thinkers these days, including Market Fundamentalists. But Smith was a radical—in the two ways highlighted by our epigraph. First, he dug deeply into the roots of economic organization and proposed theories that remain influential today. Second, he attacked the prevailing ideas and institutions of his day and presented a series of daring propositions and reforms.

…

Even the best-run governments of the most advanced countries rally around the mainstream technocratic approach of the past despite its many failures. In searching for a way out of this impasse, we have thus found ourselves rereading the works of the founding fathers of modern social organization: a group of self-styled “political economists” and “Philosophical Radicals” of the late eighteenth and nineteenth centuries, including Adam Smith, the Marquis de Condorcet, Jeremy Bentham, John Stuart Mill, Henry George, Léon Walras, and Beatrice Webb. Although these thinkers—whose ideas we will explore in later chapters—lived in a world different from ours, they faced some similar challenges. The economic and political system they had inherited from the eighteenth century could not keep up with changes in technology, demographics, the globalization of the time, and the larger cultural environment.

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return
by Mihir Desai
Published 22 May 2017

The simple maxim that “the greatest happiness of the greatest number is the foundation of morals and legislation,” a phrase Bentham attributed to Joseph Priestley, was remarkably radical for its time and still serves as the foundation of much economic and philosophical analysis. Bentham was also the first great defender of the use of credit and the idea of leverage. In his showdown with Adam Smith on lending, they take quite uncharacteristic positions. The typically eloquent exponent of markets (Smith) advocates for limits on markets, while the radical reformer (Bentham) embraces the unfettered market for debt. In The Wealth of Nations, Smith had argued that interest rates on loans should be capped at 5 percent. His logic manifested the deep historical bias against borrowers. Smith ventured that if interest rates were allowed to be higher, only “prodigals and projectors” would take the loans, and people with reasonable projects wouldn’t take loans.

…

Details of the actual meeting are at “Jeremy Bentham Makes Surprise Visit to UCL Council.” UCL. July 10, 2013. https://www.ucl.ac.uk/silva/news/news-articles/0713/10072013-Jeremy-Bentham-UCL-Council-visit. The discussion of the feud draws on Smith, Adam. The Wealth of Nations. New York: Bantam Classics, 2003. Bentham, Jeremy. Defence of Usury. London: Routledge/Thoemmes, 1992; and Hollander, Samuel. “Jeremy Bentham and Adam Smith on the Usury Laws: A ‘Smithian’ Reply to Bentham and a New Problem.” European Journal of the History of Economic Thought 6, no. 4 (1999): 523–51. The discussion of the role of debt in The Merchant of Venice draws on Shakespeare, William.

…

Triumphs of Experience: The Men of the Harvard Grant Study. Cambridge, MA: Belknap Press of Harvard University Press, 2012; and Jefferson, Thomas. Thomas Jefferson to José Corrêa da Serra. December 27, 1814. Monticello, Charlottesville, Virginia. http://founders.archives.gov/documents/Jefferson/03-08-02-0143. “prodigals and projectors”: Smith, The Wealth of Nations, book II, chapter 4. “there are, in this case”: Bentham, Defence of Usury, 174. “it is the highest impertinence”: ibid., 157. “stamp of indiscriminate”: ibid., 135. “He lends out”: Shakespeare, The Merchant of Venice, act I, scene 3. “infinite obligation that”: Auden, “A Merchant in Venice,” 147.

Exploring Everyday Things with R and Ruby
by Sau Sheong Chang
Published 27 Jun 2012

How do the fashion boutiques know which clothes to stock and how much to sell them for? How does Darty (a French electronics chain) know which are the best mobile phones to sell? These questions are answered succinctly by 18th-century Scottish economist and social philosopher Adam Smith. His book An Inquiry into the Nature and Causes of the Wealth of Nations (excerpted here) is considered the first modern work of economics, while he himself is often regarded as the father of economics: It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest.

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: (question mark, colon), in Ruby ternary conditional expression, if and unless > (right angle bracket), The R Console, Variables and Functions -> assignment operator, R, Variables and Functions > R console prompt, The R Console ' ' (single quotes), enclosing Ruby strings, Strings [ ] (square brackets), Vectors, Matrices, Data frames accessing subset of R data frame, Data frames enclosing R matrix indexes, Matrices enclosing R vector indexes, Vectors [[ ]] (square brackets, double), enclosing single R vector index, Vectors A aes() function, R, Aesthetics An Inquiry into the Nature and Causes of the Wealth of Nations (University of Chicago Press), The Invisible Hand apply() function, R, Interpreting the Data Armchair Economist (Free Press), How to Be an Armchair Economist array() function, R, Arrays arrays, R, Arrays–Arrays arrays, Ruby, Arrays and hashes–Arrays and hashes, Arrays and hashes artificial society, Money (see Utopia example) as.Date() function, R, Number of Messages by Day of the Month ascultation, Auscultation assignment operators, R, Variables and Functions at sign, double (@@), preceding Ruby class variables, Class methods and variables attr keyword, Ruby, Classes and objects Audacity audio editor, Homemade Digital Stethoscope average, Interpreting the Data (see mean() function, R) Axtell, Robert (researcher), It’s a Good Life Growing Artificial Societies: Social Science from the Bottom Up (Brookings Institution Press/MIT Press), It’s a Good Life B backticks (` `), enclosing R operators as functions, Variables and Functions bar charts, Plotting charts, Interpreting the Data–Interpreting the Data, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation barplot() function, R, Plotting charts batch mode, R, Sourcing Files and the Command Line Bioconductor repository, Packages birds flocking, Schooling Fish and Flocking Birds (see flocking example) bmp() function, R, Basic Graphs Boids algorithm, Schooling Fish and Flocking Birds–The Origin of Boids Box, George Edward Pelham (statistician), regarding usefulness of models, The Simple Scenario break keyword, R, Conditionals and Loops brew command, Installing Ruby using your platform’s package management tool butterfly effect, The Changes C c() function, R, Vectors CALO Project, The Emailing Habits of Enron Executives camera, pulse oximeter using, Homemade Pulse Oximeter case expression, Ruby, case expression chaos theory, The Changes charts, Charting–Adjustments, Plotting charts, Statistical transformation, Geometric object, Interpreting the Data–Interpreting the Data, Interpreting the Data–Interpreting the Data, Interpreting the Data–Interpreting the Data, The Second Simulation, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation, The Final Simulation–The Final Simulation, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate, Money–Money, Money–Money, Implementation bar charts, Plotting charts, Interpreting the Data–Interpreting the Data, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation histograms, Statistical transformation, Geometric object, Money–Money line charts, Interpreting the Data–Interpreting the Data, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation Lorenz curves, Money–Money scatterplots, Interpreting the Data–Interpreting the Data, The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, Implementation waveforms, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate class methods, Ruby, Class methods and variables class variables, Ruby, Class methods and variables–Class methods and variables classes, R, Programming R classes, Ruby, Classes and objects–Classes and objects code examples, Using Code Examples (see example applications) colon (:), Symbols, Vectors creating R vectors, Vectors preceding Ruby symbols, Symbols comma-separated value (CSV) files, Importing data from text files (see CSV files) Comprehensive R Archive Network (CRAN), Packages conditionals, R, Conditionals and Loops conditionals, Ruby, Conditionals and loops–case expression contact information for this book, How to Contact Us conventions used in this book, Conventions Used in This Book cor() function, R, The R Console Core library, Ruby, Requiring External Libraries corpus, Text Mining correlation, R, The R Console CRAN (Comprehensive R Archive Network), Packages CSV (comma-separated value) files, Importing data from text files, The First Simulation–The First Simulation, The First Simulation, Interpreting the Data, The Simulation, Extracting Data from Sound–Extracting Data from Sound, Extracting Data from Video extracting video data to, Extracting Data from Video extracting WAV data to, Extracting Data from Sound–Extracting Data from Sound reading data from, Interpreting the Data writing data to, The First Simulation–The First Simulation, The Simulation csv library, Ruby, The First Simulation, The Simulation, Grab and Parse curl utility, Ruby Version Manager (RVM) D data, Data, Data, Everywhere–Data, Data, Everywhere, Bringing the World to Us, Importing Data–Importing data from a database, Importing data from text files, The First Simulation–The First Simulation, Interpreting the Data, How to Be an Armchair Economist, The Simulation, Grab and Parse–Grab and Parse, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives, Homemade Digital Stethoscope–Extracting Data from Sound, Extracting Data from Sound–Extracting Data from Sound, Homemade Pulse Oximeter–Extracting Data from Video, Extracting Data from Video analyzing, Data, Data, Everywhere–Data, Data, Everywhere, Bringing the World to Us, How to Be an Armchair Economist charts for, How to Be an Armchair Economist (see charts) obstacles to, Data, Data, Everywhere–Data, Data, Everywhere simulations for, Bringing the World to Us (see simulations) audio, from stethoscope, Homemade Digital Stethoscope–Extracting Data from Sound CSV files for, Importing data from text files, The First Simulation–The First Simulation, Interpreting the Data, The Simulation, Extracting Data from Sound–Extracting Data from Sound, Extracting Data from Video from Enron, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives from Gmail, Grab and Parse–Grab and Parse importing, R, Importing Data–Importing data from a database video, from pulse oximeter, Homemade Pulse Oximeter–Extracting Data from Video data frames, R, Data frames–Data frames data mining, The Idea data.frame() function, R, Data frames database, importing data from, Importing data from a database–Importing data from a database dbConnect() function, R, Importing data from a database dbGet() function, R, Importing data from a database DBI packages, R, Importing data from a database–Importing data from a database Debian system, installing Ruby on, Installing Ruby using your platform’s package management tool def keyword, Ruby, Classes and objects dimnames() function, R, Matrices distribution, normal, Money dollar sign ($), preceding R list item names, Lists doodling example, Shoes doodler–Shoes doodler double quotes (" "), enclosing Ruby strings, Strings duck typing, Ruby, Code like a duck–Code like a duck dynamic typing, Ruby, Code like a duck–Code like a duck E economics example, A Simple Market Economy–A Simple Market Economy, The Producer–The Producer, The Consumer–The Consumer, Some Convenience Methods–Some Convenience Methods, The Simulation–The Simulation, Analyzing the Simulation–Analyzing the Simulation, The Producer–The Producer, The Consumer–The Consumer, Market–Market, The Simulation–The Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation, Price Controls–Price Controls charts for, Analyzing the Simulation–Analyzing the Simulation, Analyzing the Second Simulation–Analyzing the Second Simulation Consumer class for, The Consumer–The Consumer, The Consumer–The Consumer Market class for, Some Convenience Methods–Some Convenience Methods, Market–Market modeling, A Simple Market Economy–A Simple Market Economy price controls analysis, Price Controls–Price Controls Producer class for, The Producer–The Producer, The Producer–The Producer simulations for, The Simulation–The Simulation, The Simulation–The Simulation email example, Grab and Parse–Grab and Parse, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives, Number of Messages by Day of the Month–Number of Messages by Day of the Month, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, MailMiner–MailMiner, Number of Messages by Day of Week–Number of Messages by Hour of the Day, Interactions–Comparative Interactions, Text Mining–Text Mining charts for, Number of Messages by Day of the Month–Number of Messages by Hour of the Day content of messages, analyzing, Text Mining–Text Mining data for, Grab and Parse–Grab and Parse Enron data for, The Emailing Habits of Enron Executives–The Emailing Habits of Enron Executives interactions in email, analyzing, Interactions–Comparative Interactions number of messages, analyzing, Number of Messages by Day of the Month–Number of Messages by Day of the Month, Number of Messages by Day of Week–Number of Messages by Hour of the Day R package for, creating, MailMiner–MailMiner emergent behavior, The Origin of Boids (see also flocking example) Enron Corporation scandal, The Emailing Habits of Enron Executives Epstein, Joshua (researcher), It’s a Good Life Growing Artificial Societies: Social Science from the Bottom Up (Brookings Institution Press/MIT Press), It’s a Good Life equal sign (=), assignment operator, R, Variables and Functions Euclidean distance, Roids evolution, Evolution example applications, Using Code Examples, Shoes stopwatch–Shoes stopwatch, Shoes doodler–Shoes doodler, The R Console–Sourcing Files and the Command Line, Data frames–Introducing ggplot2, qplot–qplot, Statistical transformation–Geometric object, Adjustments–Adjustments, Offices and Restrooms, A Simple Market Economy, Grab and Parse, My Beating Heart, Schooling Fish and Flocking Birds, Money artificial utopian society, Money (see Utopia example) birds flocking, Schooling Fish and Flocking Birds (see flocking example) doodling, Shoes doodler–Shoes doodler economics, A Simple Market Economy (see economics example) email, Grab and Parse (see email example) fuel economy, qplot–qplot, Adjustments–Adjustments heartbeat, My Beating Heart (see heartbeat example) height and weight, The R Console–Sourcing Files and the Command Line league table, Data frames–Introducing ggplot2 movie database, Statistical transformation–Geometric object permission to use, Using Code Examples restrooms, Offices and Restrooms (see restrooms example) stopwatch, Shoes stopwatch–Shoes stopwatch expressions, R, Programming R external libraries, Ruby, Requiring External Libraries–Requiring External Libraries F factor() function, R, Factors, Text Mining factors, R, Factors–Factors FFmpeg library, Extracting Data from Video, Extracting Data from Video field of vision (FOV), Roids fish, schools of, Schooling Fish and Flocking Birds (see flocking example) flocking example, Schooling Fish and Flocking Birds–The Origin of Boids, The Origin of Boids, Simulation–Simulation, Roids–Roids, The Boid Flocking Rules–Putting in Obstacles, The Boid Flocking Rules–The Boid Flocking Rules, A Variation on the Rules–A Variation on the Rules, Going Round and Round–Going Round and Round, Putting in Obstacles–Putting in Obstacles Boids algorithm for, Schooling Fish and Flocking Birds–The Origin of Boids centering path for, Going Round and Round–Going Round and Round obstacles in path for, Putting in Obstacles–Putting in Obstacles research regarding, A Variation on the Rules–A Variation on the Rules Roid class for, Roids–Roids rules for, The Origin of Boids, The Boid Flocking Rules–The Boid Flocking Rules simulations for, Simulation–Simulation, The Boid Flocking Rules–Putting in Obstacles flows, Shoes, Shoes stopwatch fonts used in this book, Conventions Used in This Book–Conventions Used in This Book for loop, R, Conditionals and Loops format() function, R, Number of Messages by Day of the Month FOV (field of vision), Roids fuel economy example, qplot–qplot, Adjustments–Adjustments function class, R, Programming R functions, R, Variables and Functions–Variables and Functions G GAM (generalized addictive model), The Changes gem command, Ruby, Requiring External Libraries .gem file extension, Requiring External Libraries generalized addictive model (GAM), The Changes Gentleman, Robert (creator of R), Introducing R geom_bar() function, R, Interpreting the Data, The Second Simulation, The Final Simulation geom_histogram() function, R, Geometric object geom_line() function, R, Analyzing the Simulation geom_point() function, R, Plot, Interpreting the Data, Generating the Heart Sounds Waveform geom_smooth() function, R, Interpreting the Data ggplot() function, R, Plot ggplot2 package, R, Introducing ggplot2–Adjustments Gini coefficient, Money Git utility, Ruby Version Manager (RVM) Gmail, retrieving message data from, Grab and Parse–Grab and Parse graphics device, opening, Basic Graphs graphics package, R, Basic Graphs graphs, Charting (see charts) Growing Artificial Societies: Social Science from the Bottom Up (Brookings Institution Press/MIT Press), It’s a Good Life H hash mark, curly brackets (#{ }), enclosing Ruby string escape sequences, Strings hashes, Ruby, Arrays and hashes–Arrays and hashes heart, diagram of, Generating the Heart Sounds Waveform heartbeat example, My Beating Heart, My Beating Heart, My Beating Heart, Homemade Digital Stethoscope, Homemade Digital Stethoscope, Homemade Digital Stethoscope–Extracting Data from Sound, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heart Sounds Waveform, Finding the Heart Rate–Finding the Heart Rate, Homemade Pulse Oximeter–Homemade Pulse Oximeter, Homemade Pulse Oximeter–Extracting Data from Video, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate charts for, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate data for, Homemade Digital Stethoscope–Extracting Data from Sound, Homemade Pulse Oximeter–Extracting Data from Video audio from stethoscope, Homemade Digital Stethoscope–Extracting Data from Sound video from pulse oximeter, Homemade Pulse Oximeter–Extracting Data from Video heart rate, My Beating Heart, Finding the Heart Rate–Finding the Heart Rate, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate finding from video file, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate finding from WAV file, Finding the Heart Rate–Finding the Heart Rate health parameters for, My Beating Heart heart sounds, My Beating Heart, My Beating Heart, Homemade Digital Stethoscope, Generating the Heart Sounds Waveform health parameters for, My Beating Heart recording, Homemade Digital Stethoscope types of, My Beating Heart, Generating the Heart Sounds Waveform homemade pulse oximeter for, Homemade Pulse Oximeter–Homemade Pulse Oximeter homemade stethoscope for, Homemade Digital Stethoscope height and weight example, The R Console–Sourcing Files and the Command Line here-documents, Ruby, Strings hex editor, Extracting Data from Sound histograms, Statistical transformation, Geometric object, Money–Money Homebrew tool, Installing Ruby using your platform’s package management tool hyphen (-), Variables and Functions, Variables and Functions -> assignment operator, R, Variables and Functions <- assignment operator, R, Variables and Functions I icons used in this book, Conventions Used in This Book if expression, R, Conditionals and Loops if expression, Ruby, if and unless–if and unless Ihaka, Ross (creator of R), Introducing R ImageMagick library, Extracting Data from Video IMAP (Internet Message Access Protocol), Grab and Parse importing data, R, Importing Data–Importing data from a database inheritance, Ruby, Inheritance–Inheritance initialize method, Ruby, Classes and objects inner product, Roids–Roids installation, Installing Ruby–Installing Ruby using your platform’s package management tool, Installing Shoes–Installing Shoes, Introducing R, Installing packages–Installing packages R, Introducing R R packages, Installing packages–Installing packages Ruby, Installing Ruby–Installing Ruby using your platform’s package management tool Shoes, Installing Shoes–Installing Shoes Internet Message Access Protocol (IMAP), Grab and Parse Internet Message Format, The Emailing Habits of Enron Executives invisible hand metaphor, The Invisible Hand irb application, Running Ruby–Running Ruby J jittering, Adjustments jpeg() function, R, Basic Graphs L Landsburg, Stephen E.

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:), in Ruby ternary conditional expression, if and unless R R Development Core Team, Introducing R R language, Packing Your Bags, Introducing R–Introducing R, Introducing R, Introducing R, Using R–Using R, The R Console–The R Console, The R Console, The R Console, Sourcing Files and the Command Line–Sourcing Files and the Command Line, Sourcing Files and the Command Line, Packages–Using packages, Programming R, Variables and Functions, Variables and Functions–Variables and Functions, Variables and Functions–Variables and Functions, Conditionals and Loops, Conditionals and Loops–Conditionals and Loops, Vectors–Vectors, Lists–Lists, Matrices–Matrices, Arrays–Arrays, Factors–Factors, Data frames–Data frames, Importing Data–Importing data from a database, Charting–Adjustments, Basic Graphs, MailMiner–MailMiner arrays, Arrays–Arrays assignment operators, Variables and Functions batch mode, Sourcing Files and the Command Line charting, Charting–Adjustments conditionals, Conditionals and Loops console for, The R Console–The R Console data frames, Data frames–Data frames expressions, Programming R factors, Factors–Factors functions, Variables and Functions–Variables and Functions importing data, Importing Data–Importing data from a database installing, Introducing R lists, Lists–Lists loops, Conditionals and Loops–Conditionals and Loops matrices, Matrices–Matrices output formats, Basic Graphs packages for, Packages–Using packages packages for, creating, MailMiner–MailMiner running, Using R–Using R running code from a file, Sourcing Files and the Command Line–Sourcing Files and the Command Line statistical functions, The R Console variables, Variables and Functions–Variables and Functions vectors, The R Console, Vectors–Vectors version of, Introducing R R-Forge repository, Packages .rb file extension, Running Ruby rbind() function, R, Data frames read() function, R, Importing data from text files read.table() function, R, Interpreting the Data, Number of Messages by Day of the Month repeat loop, R, Conditionals and Loops require statement, Ruby, Requiring External Libraries restrooms example, Offices and Restrooms–The Final Simulation, Offices and Restrooms, The Simple Scenario–The Simple Scenario, The Simple Scenario–The First Simulation, Representing Restrooms and Such, Representing Restrooms and Such, Representing Restrooms and Such, Interpreting the Data–Interpreting the Data, Interpreting the Data–Interpreting the Data, The Second Simulation–The Final Simulation, The Second Simulation, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation charts for, Interpreting the Data–Interpreting the Data, The Second Simulation, The Second Simulation–The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation data results, interpreting, Interpreting the Data–Interpreting the Data Facility class for, Representing Restrooms and Such HSE (Health and Safety Executive) data regarding, Offices and Restrooms modeling, The Simple Scenario–The Simple Scenario Person class for, Representing Restrooms and Such Restroom class for, Representing Restrooms and Such simulations for, The Simple Scenario–The First Simulation, The Second Simulation–The Final Simulation return keyword, R, Variables and Functions return keyword, Ruby, Methods Reynolds, Craig (creator of Boids algorithm), Schooling Fish and Flocking Birds RIFF format, Extracting Data from Sound right angle bracket (>), The R Console, Variables and Functions -> assignment operator, R, Variables and Functions > R console prompt, The R Console RMagick library, Extracting Data from Video, Extracting Data from Video Ruby language, Packing Your Bags, Ruby–Why Ruby, Why Ruby, Installing Ruby–Installing Ruby using your platform’s package management tool, Installing Ruby from source, Running Ruby–Running Ruby, Running Ruby, Running Ruby, Requiring External Libraries–Requiring External Libraries, Strings–Strings, Strings, Arrays and hashes–Arrays and hashes, Arrays and hashes–Arrays and hashes, Arrays and hashes, Symbols, Conditionals and loops–case expression, Loops, Classes and objects–Classes and objects, Classes and objects–Classes and objects, Methods, Class methods and variables, Class methods and variables–Class methods and variables, Inheritance–Inheritance, Inheritance–Inheritance, Inheritance, Inheritance, Code like a duck–Code like a duck, Code like a duck–Code like a duck, Shoes–Shoes doodler, Roids arrays, Arrays and hashes–Arrays and hashes, Arrays and hashes class methods, Class methods and variables class variables, Class methods and variables–Class methods and variables classes, Classes and objects–Classes and objects compiling from source code, Installing Ruby from source conditionals, Conditionals and loops–case expression duck typing, Code like a duck–Code like a duck dynamic typing, Code like a duck–Code like a duck external libraries for, Requiring External Libraries–Requiring External Libraries hashes, Arrays and hashes–Arrays and hashes here-documents, Strings inheritance, Inheritance–Inheritance installing, Installing Ruby–Installing Ruby using your platform’s package management tool interactive tool for, Running Ruby interpreter for, Running Ruby loops, Loops methods, Methods mixin mechanism, Inheritance modules, Inheritance objects, Classes and objects–Classes and objects open classes, Roids running, Running Ruby–Running Ruby Shoes toolkit for, Shoes–Shoes doodler strings, Strings–Strings subclassing, Inheritance–Inheritance symbols, Symbols website for, Why Ruby Ruby Version Manager (RVM), Ruby Version Manager (RVM) RubyGems package manager, Requiring External Libraries RubyInstaller, RubyInstaller RVideo library, Extracting Data from Video RVM (Ruby Version Manager), Ruby Version Manager (RVM) S saccadic masking, Data, Data, Everywhere sample frame, Extracting Data from Sound sample points, Extracting Data from Sound sapply() function, R, Variables and Functions scale_shape_manual() function, Interpreting the Data scale_x_continuous() function, Interpreting the Data scale_y_continuous() function, Interpreting the Data scatterplot, R, The R Console, Sourcing Files and the Command Line scatterplots, Interpreting the Data–Interpreting the Data, The Second Simulation, The Third Simulation–The Third Simulation, The Final Simulation–The Final Simulation, Number of Messages by Day of the Month–Number of Messages by Hour of the Day, Implementation schools of fish, Schooling Fish and Flocking Birds (see flocking example) sd() function, R, The R Console self keyword, Ruby, Class methods and variables seq() function, R, Vectors Shapiro-Wilk test, Money Shoes toolkit, Shoes–Shoes doodler, A Rainbow of Shoes, Installing Shoes–Installing Shoes, Programming Shoes–Shoes doodler, Shoes stopwatch, Shoes stopwatch, Shoes stopwatch, Simulation–Simulation, Roids–Roids flows, Shoes stopwatch installing, Installing Shoes–Installing Shoes programming in, Programming Shoes–Shoes doodler slots, Shoes stopwatch stacks, Shoes stopwatch versions (colors) of, A Rainbow of Shoes simulations, Bringing the World to Us, The Simple Scenario–The First Simulation, The Simple Scenario–The First Simulation, The Second Simulation–The Final Simulation, The Simulation–The Simulation, The Simulation–The Simulation, Simulation–Simulation, The Boid Flocking Rules–Putting in Obstacles economics example, The Simulation–The Simulation, The Simulation–The Simulation flocking example, Simulation–Simulation, The Boid Flocking Rules–Putting in Obstacles Monte Carlo method, The Simple Scenario–The First Simulation restrooms example, The Simple Scenario–The First Simulation, The Second Simulation–The Final Simulation single quotes (' '), enclosing Ruby strings, Strings slots, Shoes, Shoes stopwatch Smith, Adam (author), The Invisible Hand An Inquiry into the Nature and Causes of the Wealth of Nations (University of Chicago Press), The Invisible Hand source() function, R, Sourcing Files and the Command Line square brackets ([ ]), Vectors, Matrices, Data frames accessing subset of R data frame, Data frames enclosing R matrix indexes, Matrices enclosing R vector indexes, Vectors square brackets, double ([[ ]]), enclosing single R vector index, Vectors stacks, Shoes, Shoes stopwatch standard deviation, R, The R Console Standard library, Ruby, Requiring External Libraries Starlings in Flight (STARFLAG) project, A Variation on the Rules statistical functions, R, The R Console, Packages, Interpreting the Data–Interpreting the Data stats package, R, Packages stat_bin() function, R, Statistical transformation, Statistical transformation stethoscope, homemade, Homemade Digital Stethoscope stopwatch example, Shoes stopwatch–Shoes stopwatch String class, Extracting Data from Sound strings, Ruby, Strings–Strings subclassing, Ruby, Inheritance–Inheritance sudo command, Installing Ruby using your platform’s 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waveforms, Generating the Heart Sounds Waveform–Generating the Heart Sounds Waveform, Generating the Heartbeat Waveform and Calculating the Heart Rate–Generating the Heartbeat Waveform and Calculating the Heart Rate webcam, pulse oximeter using, Homemade Pulse Oximeter website resources, How to Contact Us, Why Ruby, Installing Ruby from source, Ruby Version Manager (RVM), RubyInstaller, Introducing R, Packages, The Emailing Habits of Enron Executives, The Emailing Habits of Enron Executives Enron email data, The Emailing Habits of Enron Executives for this book, How to Contact Us Internet Message Format, The Emailing Habits of Enron Executives R language, Introducing R R packages, Packages Ruby language, Why Ruby Ruby source code, Installing Ruby from source RubyInstaller, RubyInstaller RVM (Ruby Version Manager), Ruby Version Manager (RVM) weight example, The R Console (see height and weight example) while loop, R, Conditionals and Loops while loop, Ruby, Loops Wickham, Hadley (creator of ggplot2 package), Introducing ggplot2 Wilkinson, Leland (author), Introducing ggplot2 The Grammar of Graphics (Springer), Introducing ggplot2 win.metafile() function, R, Basic Graphs Windows, RubyInstaller, Installing Shoes, Using R, Basic Graphs installing Ruby on, RubyInstaller installing Shoes on, Installing Shoes opening graphics device, Basic Graphs R user interface for, Using R windows() function, R, Basic Graphs with() function, R, Data frames, Importing data from a database write() method, Ruby, The Simulation X X11() function, R, Basic Graphs About the Author Sau Sheong Chang has been in software development, mostly web applications and recently cloud- and data-related systems, for almost 17 years and is still a keen and enthusiastic programmer.

Money: Vintage Minis
by Yuval Noah Harari
Published 5 Apr 2018

Today, there is so much credit in the world that governments, business corporations and private individuals easily obtain large, long-term and low-interest loans that far exceed current income. The belief in the growing global pie eventually turned revolutionary. In 1776 the Scottish economist Adam Smith published The Wealth of Nations, probably the most important economics manifesto of all time. In the eighth chapter of its first volume, Smith made the following novel argument: when a landlord, a weaver or a shoemaker has greater profits than he needs to maintain his own family, he uses the surplus to employ more assistants, in order to further increase his profits.

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That was the lesson taught by the Mississippi Bubble of 1719, and anyone who forgot it was reminded by the US housing bubble of 2007, and the ensuing credit crunch and recession. The Capitalist Hell THERE IS AN even more fundamental reason why it’s dangerous to give markets a completely free rein. Adam Smith taught that the shoemaker would use his surplus to employ more assistants. This implies that egoistic greed is beneficial for all, since profits are utilised to expand production and hire more employees. Yet what happens if the greedy shoemaker increases his profits by paying employees less and increasing their work hours?

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society
by Binyamin Appelbaum
Published 4 Sep 2019

The English economist William Petty, whom Karl Marx called the “founder of political economy,” made himself useful, first to the Commonwealth and then to King Charles II, by taking the measure of private wealth to inform and justify the state’s growing reliance on taxation.20 Partisans began to rely on the language of economics to muster public support for their views, and to shift government policy. The first great work of economics, published in 1776, was called The Wealth of Nations because Adam Smith had a recipe for increasing that wealth: free markets and free trade. A few decades later, in 1817, the economist David Ricardo sharpened the point, arguing that nations could prosper by abandoning production of some goods and focusing on areas of “comparative advantage.” The other stuff could then be imported.

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Mostly it is ignored.”32 Stigler said people made imperfect decisions because information had a price, just like anything else. People were unlikely to invest the necessary time and energy to thoroughly research the cost of toothpaste. One implication, Stigler argued in a 1964 paper, was that the government should worry less about corporate concentration. The paper was a direct rebuttal of a sacred text, Adam Smith’s The Wealth of Nations, in which Smith famously observed, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” By the 1960s, this observation had been formalized by academics who shared the prevailing distrust of markets, and adopted as policy by the federal government, which assumed that the odds of collusion increased as competition declined.

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“From the business standpoint, they are patent factories: They manufacture the raw material of monopoly.”44 In a 1954 book, Fair Competition, he defended the idea that the government should protect small business at the expense of consumers. “One cannot simply equate the ‘public interest’ in a democracy with the ‘consumer interest,’ ” he wrote. Adam Smith had famously asserted that consumption was the purpose of production. Kahn rejoined that this was “not true, even though Adam Smith said it.” People, he wrote, also had interests as producers and as “citizens of an urbanized civilization.”45 It was not good for a factory town to lose its factories. Kahn’s most important book, The Economics of Regulation (1970), was a sweeping critique of the practice of regulation — and a defense of the value of effective regulation.

What Kind of Creatures Are We? (Columbia Themes in Philosophy)
by Noam Chomsky
Published 7 Dec 2015

See Noam Chomsky, Cartesian Linguistics: A Chapter in the History of Rationalist Thought, 3rd ed., ed., with introduction, James McGilvray (Cambridge: Cambridge University Press, 2009); and Javier Virués Ortega, “Juan Huarte de San Juan in Cartesian and Modern Psycholinguistics: An Encounter with Noam Chomsky,” Psicothema 17, no. 3 (2005): 436–40, http://www.psicothema.com/pdf/3125.pdf. 3. WHAT IS THE COMMON GOOD? 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan (1776; Chicago: University of Chicago Press, 1976), book 5, chap. 1, part 3, art. 2 (ii, 302–3). 2. Adam Smith, The Theory of Moral Sentiments (1759; New York: Penguin, 2009); “vile maxim”: Smith, Wealth of Nations, book 3, chap. 4 (i, 437). 3. Rudolf Rocker, Anarcho-Syndicalism: Theory and Practice (London: Secker and Warburg, 1938). 4.

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The words are quoted from Wilhelm von Humboldt, one of the founders of classical liberalism among many other accomplishments. It follows that institutions that constrain such human development are illegitimate, unless they can somehow justify themselves. Humboldt was expressing views that were familiar during the Enlightenment. Another illustration is Adam Smith’s sharp critique of division of labor, and particularly his reasons.1 In his words, “The understandings of the greater part of men are necessarily formed by their ordinary employments,” and that being so, the man whose 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… and generally becomes as stupid and ignorant as it is possible for a human creature to be….

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right
by Philippe Legrain
Published 22 Apr 2014

While many excellent economists have shed light on a wide variety of subjects, we still have only a sketchy grasp of how economies work – and what passes for economic “science” is often bunk. Fortunately, technological progress doesn’t depend on our economic understanding of why it occurs – although it can be stunted by bad policies. Political economy – as it was then called – emerged in the eighteenth century, when the Scottish philosopher Adam Smith pursued “an inquiry into the nature and causes of the wealth of nations”.538 His key insight – that competition between selfish profit-seeking producers tends to advance the common good – is profound and often true.539 At the time, political economy was descriptive, analytical and firmly anchored in a political and social context.

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This wouldn’t reduce the supply of land, which is fixed and immovable: Mayfair can’t be spirited away to a tax haven. Nor would it push up rents, which depend on what tenants are prepared to pay rather than landlords’ expenses.725 Thus, unlike most taxes, it wouldn’t crimp economic activity, as Adam Smith explained in The Wealth of Nations. On the contrary, a land tax would encourage development. Since it would be payable irrespective of how land is used, it would stimulate the regeneration of derelict and unused sites. Infrastructure investment that raises surrounding land values, such as new Tube (metro) lines or a high-speed rail network, would pay for itself and thus escape short-sighted budget cuts.

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In the UK it was $24,119. www.gapminder.org 530 GDP per person in Estonia was $7,734 in 1994 and $18,858 in 2012 in 2005 dollars adjusted for differences in purchasing power. www.gapminder.org 531 GDP per person in Estonia was $6,976 in 1994 and $11,058 in 2012 in 2005 dollars adjusted for differences in purchasing power. www.gapminder.org 532 GDP per person in Ireland was $38,856 in 2005 dollars adjusted for differences in purchasing power in 2012, up from $18,869 in 1994. www.gapminder.org 533 GDP per person in Spain was $26,458 in 2005 dollars adjusted for differences in purchasing power in 2012, up from $18,783 in 1994. www.gapminder.org 534 GDP per person in Britain was $31,295 in 2005 dollars adjusted for differences in purchasing power in 2012, up from $24,119 in 1994. www.gapminder.org 535 Kaja Bonesmo Fredriksen, “Income Inequality in the European Union”, OECD Economics Department Working Papers, No. 952, 2012. http://dx.doi.org/10.1787/5k9bdt47q5zt-en 536 Personal calculations from Eurostat, median equivalised net income, at purchasing power standard. Code: ilc_di03 537 Personal calculations from Eurostat, income of first decile, top cut-off point, at purchasing power standard Code: ilc_di01 538 Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776 539 In The Theory of Moral Sentiments (1759), Smith also argued that people had regard for others: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.

The Long Twentieth Century: Money, Power, and the Origins of Our Times
by Giovanni Arrighi
Published 15 Mar 2010

This extraordinary capacity was a manifestation of hegemony — that is, of the capacity to claim with credibility that the expansion of UK power served not just UK national interest but a “universal” interest as well. Central to this hegemonic claim was a distinction between the power of rulers and the “wealth of nations” subtly drawn in the liberal ideology propagated by the British intelligentsia. In this ideology, the expansion of the power of British rulers relative to other rulers was presented as the motor force of a general expansion of the wealth of nations. Free trade might undermine the sovereignty of rulers, but it would at the same time expand the wealth of their subjects, or at least of their propertied subjects. The appeal and credibility of this claim were based on systemic circumstances created by the revolutionary upheavals of 1776-1848.

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(Marx 1959: 754-5) Marx’s focus on the domestic aspects of capital accumulation prevented him from appreciating the continuing significance of national debts in a system of states in constant competion with one another for assistance from capitalists for their power pursuits. For Marx, the alienation of the assets and future revenues of states was simply an aspect of “primitive accumulation” — Adam Smith’s “previous accumulation,” “an accumulation not the result of the capitalist mode of production, but its starting point” (Marx 1959: 713). Nevertheless, Marx did acknowledge the continuing significance of national debts, not as the expression of interstate competition, but as means of an “invisible” inter-capitalist cooperation, which “started” capital accumulation over and over again across the space—time of the capitalist world-economy from its inception through his own day: With the national debt arose an international credit system, which often conceals one of the sources of primitive accumulation in this or that people.

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Or, to rephrase it, do the structures of US capitalism constitute the ultimate limit of the six centuries-long process through which capitalist power has attained its present, seemingly allencompassing scale and scope? In seeking plausible answers to these questions, the complementary insights of Weber and Marx concerning the role of high finance in the modern era must be supplemented by Adam Smith’s insights concerning the process of world market formation. Like Marx after him, Smith saw in the European “discoveries” of America and of a passage to the East Indies via the Cape of Good Hope a decisive turning point in world history. He 20 THE LONG TWENTIETH CENTURY was none the less far less sanguine than Marx about the ultimate benefits of these events for humanity: Their consequences have already been great; but, in the short period of between two and three centuries which has elapsed since these discoveries were made, it is impossible that the whole extent of their consequences can have been seen.

Falling Behind: Explaining the Development Gap Between Latin America and the United States
by Francis Fukuyama
Published 1 Jan 2006

In a land where a free government Why Institutions Matter 231 was not favored by tradition and whose people “bereft of public spirit” survived in a state of distrust, the best thing was to cut one’s losses and not apply direct taxes (moreover, according to Alberdi, the experience of direct taxes during the Rosas dictatorship had been disastrous).22 Hamilton’s and Alberdi’s recommendations contained some maxims well known to that class of legislators since Adam Smith, in 1776, had stipulated in The Wealth of Nations four principles common to all taxes generally. First, citizens should pay in proportion to their incomes; second, the tax that each individual is obligated to pay should be “certain, and not arbitrary”; third, every tax ought to be “levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it”; and, fourth, the administration for collecting taxes should not be excessive nor facilitate evasion.23 In sum, equality, certainty, ease of payment, and restraint in what could be called the economy of tax collection were for Adam Smith the four cardinal points of sound fiscal policy.

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Juan Bautista Alberdi, Sistema económico y rentístico de la Confederación Argentina según su Constitución de 1853 (Buenos Aires: La Cultura Argentina, 1921 [1855]), p. 20. Ibid., p. 178. Ibid., p. 199. Ibid., p. 198. Ibid., p. 195. Institutional Factors in Latin America’s Development 22. Ibid., p. 193. 23. Adam Smith, The Wealth of Nations, vol. 2, edited by Edwin Cannan ( New York: Putnam’s, 1904), book 5, chapter 2, part 2, pp. 310–311. 24. Ibid., p. 312. 25. Ibid., citing Henry Home, Lord Kames, Sketches of the History of Man, vol. 1 (1774), p. 474. 26. Immanuel Kant, The Metaphysical Elements of Justice (1965), pp. 92–93, cited in Stephen Holmes, Passions and Constraint: On the Theory of Liberal Democracy (Chicago: University of Chicago Press, 1995), pp. 249–250. 27.

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First, citizens should pay in proportion to their incomes; second, the tax that each individual is obligated to pay should be “certain, and not arbitrary”; third, every tax ought to be “levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it”; and, fourth, the administration for collecting taxes should not be excessive nor facilitate evasion.23 In sum, equality, certainty, ease of payment, and restraint in what could be called the economy of tax collection were for Adam Smith the four cardinal points of sound fiscal policy. Note that they point to both the objective dimension (the legislature establishes them) and the subjective dimension (the citizen abides by them), and they do not discriminate as to the differing qualities attributed to direct or indirect taxes. Clearly, what concerned Adam Smith were the principles of justice contained in the laws and their consequences: “[t]he law, contrary to all the ordinary principles of justice, first creates the temptation, and then punishes those who yield to it; and it commonly enhances the punishment too in proportion to the very circumstance which ought certainly to alleviate it, the temptation to commit the crime.”24 One should underscore that this vindication of justice is mainly tied to the principle of fiscal proportionality.

Humankind: A Hopeful History
by Rutger Bregman
Published 1 Jun 2020

Many scholars have thus come to regard the extermination of six million Jews as not only the height of brutality, but of modernity.9 The Enlightenment’s contradictions stand out when we examine its portrayal of human nature. On the face of it, philosophers like David Hume and Adam Smith took a cynical view. Modern capitalism, democracy and the rule of law are all founded on the principle that people are selfish. But if you actually read their books you come to realise that Enlightenment authors were not diehard cynics at all. Seventeen years before publishing The Wealth of Nations (destined to become the capitalist bible), Adam Smith wrote a volume titled The Theory of Moral Sentiments. In it, we find passages like this one: 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.

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If there was one sin that Enlightenment thinkers espoused, it was greed, which they trumpeted under the motto ‘private vices, public benefits’.3 This stood for the ingenious notion that behaviour which was antisocial at the individual level could have payoffs for wider society. Enlightenment economist Adam Smith set out this idea in his classic The Wealth of Nations (1776), which was the first book to defend the principles of the free market. In it, he famously wrote: ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.’

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A Short History of Drugs and War (Oxford, 2016). 45Lee, Up Close and Personal, p. 27. 46Snipers much more often belong to the 1 to 2 per cent of soldiers who are psychopaths and have no natural aversion to killing. See Susan Neiman, Moral Clarity. A Guide for Grown-Up Idealists (Princeton, 2008), p. 372. 47Dave Grossman, ‘Hope on the Battlefield’, in Dacher Keltner, Jason Marsh and Jeremy Adam Smith (eds), The Compassionate Instinct. The Science of Human Goodness (New York, 2010), p. 41. 48Grossman, On Killing, p. 178. 49Many soldiers who fought in the First and Second World Wars were also traumatised; however, Vietnam was comparatively much more traumatic. Of course, other factors were also to blame (such as the chilly reception Vietnam vets received on their return), but all the evidence suggests that the biggest was how the soldiers were conditioned to kill.

Tenants: The People on the Frontline of Britain's Housing Emergency
by Vicky Spratt
Published 18 May 2022

Drawing attention to the precarity of the status quo when it comes to housing is contentious; whether they are hedge fund investors, cryptocurrency speculators or landlords, those who speculate to make something out of nothing the world over don’t like to be challenged on the mechanisms which facilitate it. ‘As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed,’ the economist Adam Smith wrote in 1776 in his book The Wealth of Nations, ‘and demand a rent even for its natural produce.’ However, it is important to get something straight: the problem with the private rented sector is not that it is entirely a scam in which landlords are de facto screwing over tenants (although, as this book will expose in later chapters, there are rogue landlords who do exactly this).

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Available at www.ethnicity-facts-figures.service.gov.uk/housing/owning-and-renting/renting-from-a-private-landlord/latest The number of families who became homeless: Shelter, ‘Over half of homeless families in England are in work, shock new figures show’, 23 July 2018, england.shelter.org.uk/media/press_release/over_half_of_homeless_families_in_england_are_in_work,_shock_new_figures_show most of which are privately owned: Vicky Spratt, ‘Welcome to Eros House, where desperate families are forced to live in “inhumane” flats that cost up to £380 per week’, i Paper, 14 December 2018, inews.co.uk/opinion/the-mould-is-in-my-childs-bed-the-families-temporarily-housed-in-dilapidated-former-office-block-are-still-there-one-year-later-235452 a 430 per cent increase: ‘LGA – 430% increase in B&B spend for people who are homeless reveals urgency for more social housing’, Local Government Association, 3 July 2021, www.local.gov.uk/about/news/lga-430-increase-bb-spend-people-who-are-homeless-reveals-urgency-more-social-housing the right to adequate housing: The Right to Adequate Housing: Fact Sheet No. 21/Rev.1, UN-Habitat (2014), www.ohchr.org/documents/publications/fs21_rev_1_housing_en.pdf One third of all households in poverty: Alison Wallace, David Rhodes and Firona Roth, ‘Home owners and poverty’, Joseph Rowntree Foundation, 15 February 2018, www.jrf.org.uk/report/home-owners-and-poverty ‘and demand a rent even for its natural produce.’: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Book 1, Chapter 6. Available online at geolib.com/smith.adam/won1-06.html the unconditional and unqualified ownership of property: Jean-Jacques Rousseau, The Social Contract (1762; London: Penguin, 2004). 1,187,641 households: ‘Shelter: 1.15 million households stuck on social housing waiting lists, while there was a net loss of over 17,000 social homes in the last year’, PolicyMogul, 28 January 2020, policymogul.com/monitor/key-updates/6587/shelter-1-15-million-households-stuck-on-social-housing-waiting-lists-while-there-was-a-net-loss-of-over-17-000-social-homes-in-the-last-year 6,850 social homes were sold off: You’ll notice a slight decline in the number of Right to Buy sales here between 2020 and 2021.

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And yet, because of the financialisaton of housing, tenants have been turned into consumers: they pay landlords to provide a service – housing. But the truth is we have often more rights as consumers when we rent a car, buy a fridge-freezer or take out a loan than we do as private renters. Even free marketeer think tanks such as the Adam Smith Institute have begun to criticise this in recent years, calling for the consumer rights we’re used to having in other markets, from utilities to financial services, to be applied to the private rented sector. ‘It’s so hopeless,’ Amy said, sighing. ‘It takes him weeks and weeks to do anything. And then, when he does call workmen and get them to come over, they always ask me for payment.

Affluence Without Abundance: The Disappearing World of the Bushmen
by James Suzman
Published 10 Jul 2017

This was because, among foraging Ju/’hoansi, self-interest was always policed by its shadow, jealousy, and jealousy in turn ensured that everyone got their fair share. Jealousy was the “invisible hand” of the Ju/’hoan social economy. Yet it exerted its influence very differently from the “invisible hand” famously imagined by Adam Smith in The Wealth of Nations. For Smith, man “intends only his own gain,” but in doing so he is guided by an invisible hand “to promote an end which was no part of his intention.” And this, according to Smith, is to promote the interests of society more effectively than man could, even if he had intended to. Smith believed that trade and enterprise in pursuit of personal enrichment and unburdened by regulatory interference ensured the fairest and most effective “distribution of the necessaries of life” and so advanced the interests of society.

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Schuster, “Khoisan Hunter-Gatherers Have Been the Largest Population Throughout Most of Modern-Human Demographic History.” Nature Communications 5, article no. 5692 (December 4, 2014). Chapter 3: A Beachside Brawl 1   E. G. Ravenstein, trans., A Journal of the First Voyage of Vasco da Gama (Cambridge, MA: Cambridge University Press, 2010), 1497–99. 2   Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 1 (London: W. Strahan, 1776). Chapter 4: The Settlers 1   Noel Mostert, Frontiers (London: Jonathan Cape, 1992), 110. 2   R. Raven-Hart, The Cape of Good Hope, 1652–1702: The First Fifty Years of Dutch Colonisation as Seen by Callers (Cape Town: A. A. Balkema, 1971), 205. 3   Mostert, Frontiers, 115. 4   Ibid., 117. 5   Ibid., 118. 6   Robert Moffat, Missionary Labours and Scenes in Southern Africa (New York: Robert Carter, 1843), 54, 59. 7   Thomas Smith and John O.

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In tandem with Christopher Columbus’s accidental discovery of the Americas, da Gama’s voyage to the Indies would later be hailed as the “big bang” of economic globalization—the moment that catalyzed the transformation of the world from a series of often discrete economic communities into a single complex and multifaceted economic system. Articulating a view that would later be reaffirmed by many others, Adam Smith, the “father of economics,” declared da Gama’s voyage and Columbus’s “discovery” of the Americas to be “the two greatest and most important events recorded in the history of mankind.”2 Whether this particular moment was more important than any others in the emergence of a globalized economy is debatable.

About Time: A History of Civilization in Twelve Clocks
by David Rooney
Published 16 Aug 2021

But though he hated the apparent isolation of the Cape, and returned to Britain a few months later, Thomas Henderson was proud to play his role in Britain’s growing prosperity. With his clocks and his gun, he was helping the ships of the British Empire move defiantly and freely across the globe. THE ECONOMIST ADAM Smith said that the discovery of a sea route between Europe and Asia via the Cape of Good Hope was one of the two “greatest and most important events recorded in the history of mankind” (the other was the so-called discovery of America).2 He was writing about what made nations rich, and his book The Wealth of Nations was published on March 9, 1776. Fifteen days later, John Harrison died, having invented the marine chronometer. Southern Africa was one of so many places in the world where the maritime expansion of Western empires was keenly, repeatedly and violently felt.

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(Delhi: Motilal Banarsidass Publishers Private Ltd., 2015), 124. 2.Sharma, Sawai Jai Singh, 290–91. 3.Quoted in Susan Johnson-Roehr, “The Spatialization of Knowledge and Power at the Astronomical Observatories of Sawai Jai Singh II, c. 1721–1743 CE” (Urbana: University of Illinois at Urbana-Champaign, 2011), 228. 4.Quoted in Raymond Mercier, “Account by Joseph Dubois of Astronomical Work under Jai Singh Sawā’ī,” Indian Journal of History of Science 28, no. 2 (1993): 162. 5.Quoted in “Full Text: ‘Bin Laden’s Message,’” BBC News, 12 November 2002, http://news.bbc.co.uk/1/hi/world/middle_east/2455845.stm. 6.Translated from the French original quoted in René Taton, “Les Origines et les débuts de l’Observatoire de Paris,” Vistas in Astronomy 20 (1976): 67. 7.Bernard Lovell, The Story of Jodrell Bank (New York and Evanston, Ill.: Harper & Row, 1968), 196. 6. EMPIRES 1.Quoted in Brian Warner, Astronomers at the Royal Observatory Cape of Good Hope: A History with Emphasis on the Nineteenth Century (Cape Town: A. A. Balkema, 1979), 34. 2.Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. II (London, 1776), 235. 3.Robert Percival, An Account of the Cape of Good Hope (London, 1804), 9. 4.David Gill, A History and Description of the Royal Observatory, Cape of Good Hope (London: HMSO, 1913), x. 5.Quoted in Warner, Astronomers at the Royal Observatory, 34. 6.Quoted in Brian Warner, Royal Observatory, Cape of Good Hope 1820–1831: The Founding of a Colonial Observatory (Dordrecht: Kluwer Academic Publishers, 1995), 180–81. 7.John Cannon, “Masons,” Cape Town Gazette and African Advertiser, August 12, 1825, 2. 8.Quoted in Warner, Royal Observatory, Cape of Good Hope 1820–1831, 182. 9.Quoted in Brian Warner, Charles Piazzi Smyth, Astronomer-Artist: His Cape Years 1835–1845 (Cape Town: A.

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P., 162 Thorndike, Sybil, 178 Thwaites and Reed, 202, 202 time passage of, 58–59 wasting, 40–41 time balls, 99–100, 103, 104–5, 124–25 time capsules, 214–17, 215, 223, 226 timescales, 76–77 time-stamping, 75–77, 79, 81 time standardization clockmaking trade changes and, 132 electric clocks and, 144–46, 148, 149, 153–54 imperialism/colonialism and, 174–75 observatories and, 97 public control and, 153, 156–57, 161 pubs and, 149–51 railways and, 146–48, 161 resistance against, 166 working hours and, 151–53 See also Greenwich Mean Time tomb of Henri-Claude d’Harcourt (Jean-Baptiste Pigalle), 59–60 Tomorrow Never Dies, 213 Toms, Daniela, 188 Tower of the Winds (Athens), 12–14, 13 transits, 111 Treatise of Self-Denial, A (Richard Baxter), 40 Triumph of Death, The (Pieter Bruegel), 61–62, 61 “Triumph of Time” (Petrarch), 58–59 Tryon, George, 179–80 “Tyranny of the Clock, The” (George Woodcock), 161 Ulugh Beg (Timurid ruler), 91–92 Valerius, Manius, 9, 10, 12 vanitas pictures, 62–63 Varro, Marcus Terentius, 53 Venezuela, 193 Verhoef, Henk, 68 Victoria (queen of England), 126 Victorian culture, 121–27 commerce and, 121, 122–24, 125–26, 127 modernity and, 125, 128, 135, 149 morality and, 150 navigation and, 124–25 regulators and, 126–27 Vidyādhar, 83–84 virtue Lorenzetti on, 46–51, 52, 54, 55 temperance as, 53–55 See also morality war astronomy and, 94–96 Daylight Saving Time and, 155, 203–4 GPS clocks and, 199, 204, 207–9 nuclear missiles, 202–3 Osaka time capsule and, 217 political identity and power and, 190–92 postmodern, 205–6 rolling ball clocks and, 201–2 terrorism and, 206–7 wristwatches and, 203 war on terror, 206–7 wasting time, 40–41 watches invention of, 40 Puritanism and, 40–41 war and, 203 water clocks ancient Greece, 12 ancient Rome, 12 Baghdad, Iraq, 29 castle clock, Diyār Bakr, 26–29, 27, 43 Damascus, Syria, 29 earliest use of, 15 Fez, Morocco, 29 Goths, 14 hourglasses and, 51 monastery use, 30, 32 Tlemcen, Algeria, 29 Watt, James, 130 Wealth of Nations, The (Adam Smith), 100 Webb, Sidney, 151 Wedgwood, Josiah, 130, 164 Whitehurst, John, 164 Willett, William, 153–55, 156 Williams, Laura, 222 Winne, St. Andrew St. John, 155 wireless time signals, 116–17, 147 Woodcock, George, 161 working hours, 151–53, 162–64 world-time clocks, 114–16, 115 World War I, 155, 203, 204 World War II, 38, 204, 217 Worshipful Company of Clockmakers, 7 wristwatches, 203 Wu Hung, 25 Wysocka, Lidia, 183 Yun Yu, 194 Zohar, 31 Copyright © 2021 by David Rooney The credits on pp. 259–260 constitute an extension of this copyright page.

The Capitalist Manifesto
by Johan Norberg
Published 14 Jun 2023

Michael Hicks & Srikant Devaraj, ‘The myth and reality of manufacturing in America’, Center for Business and Economic Research, Ball State University, 2015. 4. ‘China’s future economic potential hinges on its productivity’, The Economist, 14 August 2021. 5. Philippe Aghion, Céline Antonin & Simon Bunel, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations, Belknap Press, 2021, p.51f. 6. S. L. Price, Playing Through the Whistle, First Grove Atlantic, 2016, chap.11. 7. J. D. Vance, Hillbilly Elegy: A Memoir of a Family and Culture in Crisis, William Collins, 2016, p.55. 8. Daniel Clark, ‘Detroit autoworkers’ elusive post-war boom’, The Metropol Blog. 9.

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US Bureau of Labor Statistics, ‘Quarterly census of employment and wages: Employment and wages, annual averages 2019’, Table 4, www.bls.gov/cew/publications/employment-and-wages-annual-averages/2019/home.htm. 4. Autor et al 2017. 5. Philippe Aghion, Céline Antonin & Simon Bunel, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations, Belknap Press, 2021, p.66f. 6. Esteban Rossi-Hansberg and Chang-Tai Hsieh, ‘The industrial revolution in services’, NBER Working Paper no.25968, June 2019. See also Ryan Bourne, ‘Does rising industry concentration signify monopoly power?’, Economic Policy Brief, no.2, 13 February 2020, Cato Institute. 7.

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This was ‘crossing the river by touching the stones’ as Deng put it, and it was the Chinese people who had put the stones in the right place. The economist Weiying Zhang says the reform process was about ‘becoming good at using spontaneous forces and turning spontaneous forces into conscious policy.’ The process was not planned, controlled or even foreseen. It was, Weiying writes in an explicit reference to Adam Smith, as if it was controlled by an ‘invisible hand’.11 Everything that took China out of poverty happened outside the five-year plans. By the mid-1990s, the last four five-year plans had been abandoned before they reached halfway, and the plans thereafter were more about vague objectives than governance and commands.

Why Information Grows: The Evolution of Order, From Atoms to Economies
by Cesar Hidalgo
Published 1 Jun 2015

Hidalgo, “The Network Structure of Economic Output,” Journal of Economic Growth 16, 4 [2011]: 309–342) as well as the dynamics of these variables over time (I am doing work with Cristian Figueroa on this topic). CHAPTER 10: THE SIXTH SUBSTANCE 1. The definition of physical capital is technically broader than machinery, however, since it is used to indicate all past production. For example, physical capital can also refer to the stock of grain owned by a flour mill. 2. Adam Smith, The Wealth of Nations (London: T. Nelson and Sons, 1887), 116. 3. Ibid. 4. Kuznets originally generated the concept of gross national product (GNP), which was the official metric at the time. Gross domestic product (GDP) displaced GNP as the official metric in the 1990s. GDP considers the production of goods and services within a country.

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The idea of scale economies is that the per-unit cost of items decreases as we make more of them. In simple words, it is the difference between cooking dinner for one and cooking for a family of five. Certainly, cooking for five does not take five times the effort or ingredients than cooking for one. Adam Smith’s division of labor, on the other hand, is one of the mechanisms that can help explain scale economies. The division of labor implies that it is more efficient to have each worker focus on a small part of the construction of a pin or a car than to have each worker attempt to build that pin or car from start to finish.

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That extra factor is the knowhow and knowledge accumulated at the collective level, which gives rise to the diversity and sophistication of economic activities that I call economic complexity. Describing nature in terms of factors of production, such as capital and labor, has a long tradition in economics. Adam Smith decomposed the economy into land, labor, and machinery—the last being a mixture of what modern economists refer to as physical capital and technology.1 Smith equated machinery, or fixed capital, with an increase in people’s ability to produce work, and hence he saw the accumulation of physical capital as a determinant of economic growth.

The First Tycoon
by T.J. Stiles
Published 14 Aug 2009

“So long as immense numbers of swine are allowed to traverse the streets,” wrote the travel-guide author, “so long will the inhabitants think themselves justified in throwing out their garbage to them for food; and so long will the streets of New-York remain proverbial for their filth.”23 The same tension between sophistication and simplicity—if not exactly squalor—could be felt off the streets as well, in the countinghouses, where clerks perched on high stools and scratched with quills in copy books, where porters lumbered in and out with sacks, crates, and barrels. A quarter of a century had passed since Adam Smith had explained the division of labor in The Wealth of Nations; yet this commercial community remained a city of the unspecialized. Apart from artisans who sold merely what they made, the economy belonged to general merchants. “Their activities,” writes historian George Rogers Taylor, “comprehended almost every aspect of business.”

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Though some on the committee grumbled about not getting everything they wanted, most agreed that the plan he presented was a reasonable compromise.3 Reasonable is a word that historians have rarely linked to the Commodore's name, but it defined his behavior as a railroad leader. He was especially reasonable in his attempts to cooperate with his fellow corporate titans. There was nothing new about that, of course. Adam Smith himself observed in The Wealth of Nations, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public.” As we have seen, formal and informal devices to control competition arose simultaneously with competition itself in American history.

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Horwitz, The Transformation of American Law, 1780–1860 (Cambridge, Mass.: Harvard University Press, 1977), xii–xv, 110–30. Also of interest is Pauline Maier, “The Revolutionary Origins of the American Corporation,” WMQ, 3rd ser., vol. 50, no. 1 (January 1993): 51–84. As she notes, Adam Smith criticized corporations as vehicles of mercantilist monopoly; see, for example, book 1, chap. X, part II of The Wealth of Nations. On monopolies in American tradition, see Herbert Hovenkamp, “Technology, Politics, and Regulated Monopoly: An American Historical Perspective,” Texas Law Review 62, no. 7 (April 1984): 1263–1312; Thomas P. Campbell Jr., “Chancellor Kent, Chief Justice Marshall, and the Steamboat Case,” Syracuse Law Review 25 (1974): 497–534; W.

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions
by Dan Ariely
Published 19 Feb 2007

Given our human fallibilities, quirks, and irrational tendencies, it seems to me that our models of behavior and, more important, our recommendations for new policies and practices should be based on what people actually do rather than what they are supposed to be doing under the assumption that they are completely rational. This seemingly radical idea is, in fact, a very old idea in economics. Before Adam Smith, the grandfather of modern economics, wrote his magnum opus, Inquiry into the Nature and Causes of the Wealth of Nations (1776), he wrote The Theory of Moral Sentiments (1759), a book that is equally important but much more psychologically oriented. In The Theory of Moral Sentiments, Smith notes that emotions, feelings, and morality are aspects of human behavior which the economist should not ignore (or, worse, deny) but instead treat as topics worthy of investigation.

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I wish I could tell you that I would often persuade my conversational partner to accept my point of view, but in almost all cases it would become very clear that neither of us was going to be converted to the other’s viewpoint. Of course, I ran into the biggest difficulties when arguing for irrationality with card-carrying rational economists, whose disregard of my experimental data was almost as intense as their nearly religious belief in rationality (if Adam Smith’s “invisible hand” doesn’t sound like God, I don’t know what does). This basic sentiment was expressed succinctly by two fabulous Chicago economists, Steven Levitt and John List, suggesting that the practical usefulness of behavioral economics has been shown to be marginal at best: Perhaps the greatest challenge facing behavioral economics is demonstrating its applicability in the real world.

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In conventional economics, the assumption that we are all rational implies that, in everyday life, we compute the value of all the options we face and then follow the best possible path of action. What if we make a mistake and do something irrational? Here, too, traditional economics has an answer: “market forces” will sweep down on us and swiftly set us back on the path of righteousness and rationality. On the basis of these assumptions, in fact, generations of economists since Adam Smith have been able to develop far-reaching conclusions about everything from taxation and health-care policies to the pricing of goods and services. But, as you will see in this book, we are really far less rational than standard economic theory assumes. Moreover, these irrational behaviors of ours are neither random nor senseless.

The Code of Capital: How the Law Creates Wealth and Inequality
by Katharina Pistor
Published 27 May 2019

See also Jonathan Nitzan and Shimshon Bichler, “New Imperialism or New Capitalism?,” Review (Fernand Braudel Center) 29, no. 1 (2006):1–86, esp. p. 26. 13. Piketty, Capital. 14. The title of chap. 3 of his book. 15. Bernard Rudden, “Things as Things and Things as Wealth,” Oxford Journal of Legal Studies 14, no. 1 (1994):81–97, pp. 82–83. 16. Adam Smith, The Wealth of Nations (Chicago: University of Chicago Press, 1776), book IV, chapter 2, p. 477. 17. Ibid., p. 475. 18. Ibid. Emphasis added. The second force behind the invisible hand is more familiar. Individuals in pursuit of their self-interest, Smith argues, will choose from many projects the one with the greatest value “either of money or of other goods” and will do so more effectively than a king, council, or senator. 19.

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(New York: Norton, 1981), highlighting the role of property rights allocation in America’s Wild West; and Robert Cooter and Hans-Bernd Schäfer, Solomon’s Knot: How Law Can End the Poverty of Nations (Princeton, NJ: Princeton University Press, 2011) suggesting that property rights help resolve the “double trust” problem by offering legal protection to the party most exposed to this problem. 76. Ronald H. Coase, “The Problem of Social Cost,” Journal of Law and Economics 3 (1960):1–44. 77. Adam Smith et al., Lectures on Jurisprudence, The Glasgow Edition of the Works and Correspondence of Adam Smith; 5 (Indianapolis: Liberty Classics, 1982); Part I: Of Justice, p. 8. 78. William Blackstone, Commentaries on the Laws of England, vol. 1 (Oxford: Clarendon Press, 1765), Facsimile Vol. 1, Chapter 1, “Of the Absolute Rights of Individuals” (emphasis added); available online at https://lonang.com/library/reference/blackstone-commentaries-law-england/. 79.

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For each of these assets, the legal coding ultimately determines their capacity to bestow wealth on their holders. It also provides them with a powerful defense against challengers: “But it’s legal.” Law’s Guiding Hand The legal code of capital may be invisible to the casual observer, but that does not make it less real. Some may find it easier to believe in the market’s “invisible hand” immortalized by Adam Smith, than to spend their time decoding capital’s legal structures.16 And yet, changes in the legal structure have fundamentally altered the conditions for Smith’s invisible hand to do its work. As is well known, Smith argued that the pursuit of individual self-interest will inevitably benefit society.

The Retreat of Western Liberalism
by Edward Luce
Published 20 Apr 2017

‘I believe that the rising intolerance and incivility and the eroding generosity and openness that have marked important aspects of American society in the recent past have been, in significant part, a consequence of the stagnation of American middle-class living standards,’ writes Ben Friedman, in the The Moral Consequences of Economic Growth.22 De Tocqueville talked admiringly of America’s ‘restlessness of temper’. Today, in a society where Americans are increasingly ‘bowling alone’, as Robert Putnam put it, the great French chronicler might be moved to talk about America’s shortness of temper. Adam Smith, the great theorist of free trade economics, is revered for his The Wealth of Nations. His companion work, The Theory of Moral Sentiments, is mostly forgotten. Yet it is the more important of the two. In it, Smith sets out why capitalism works best in societies where there are high levels of trust between its participants. When social trust falls, the cost of doing business rises.

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Summers. 19 Financial Times, 20 June 2016, <https://www.ft.com/content/ a5d5a8fe-36f5-11e6-a780-b48ed7b6126f>, and Edward Luce, ‘US workforce dropouts explain Donald Trump’s rise’, Financial Times, 21 June 2016, <https://www.ft.com/content/ 5c8d0758-37c4-11e6-9a05-82a9b15a8ee7>. 20 Edward Luce, ‘Drugs, painkillers and the New Hampshire primary’, Financial Times, 7 February 2016, <https://www.ft.com/content/78d5ba76-cbff-11e5-a8ef-ea66e967dd44>. 21 Anne Case and Angus Deaton, ‘Rising Morbidity and Mortality in Midlife among White Non-Hispanic Americans in the 21st Century’, Proceedings of the National Academy of Sciences of the United States of America, 112:49 (2015), <http://www.pnas.org/content/112/49/15078.full>. 22 Benjamin M. Friedman, The Moral Consequences of Economic Growth (Vintage, New York, 2006 (ebook)). 23 Adam Smith, The Wealth of Nations, Book 1 (1776). 24 Central Intelligence Agency, The World Fact Book 2016 (Central Intelligence Agency, Washington DC, 2016), <https://www.cia.gov/library/publications/the-world-factbook/fields/2177.html>. 25 Tyler Cowen, The Complacent Class: The Self-Defeating Quest for the American Dream (St Martin’s Press, New York, 2017), p. 82. 26 Ibid., p. 12. 27 Milanovic, Global Inequality. 28 Stephen S.

The Euro: How a Common Currency Threatens the Future of Europe
by Joseph E. Stiglitz and Alex Hyde-White
Published 24 Oct 2016

There is, of course, the notion that economic interdependence increases the costs of war, and therefore makes war less likely. The EU brought about extensive economic integration. The question is, whether the additional economic integration (if any) resulting from a monetary union would have any significant incremental effect. 7 Adam Smith’s classic work was The Wealth of Nations (1776). 8 Ricardo (1772–1823) was the father of the theory of comparative advantage. 9 The existence of which can actually strengthen arguments for economic integration. 10 Joseph E. Stiglitz, “Devolution, Independence, and the Optimal Provision of Public Goods,” Economics of Transportation 4, nos. 1–2 (March–June 2015): 82–94. 11 See my book with Bruce C.

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Will having a monetary union move Europe closer to attaining those conditions? Is having a monetary union necessary for achieving such a goal? And how important is it for Europe to play that role? The counterargument In earlier centuries, the ability to exercise “power” on the global scene mattered a great deal. The wealth of nations depended to a large extent on military power. The conquest of colonies was how a relatively small island, Great Britain, became a dominant global power. Fortunately, we have a new balance of power that greatly circumscribes the exercise of military power. Even when a country wins a war, its ability to receive the spoils of war are limited.

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This, too, is a cross-cutting theme of our times: the neoliberal economic agenda may not have succeeded in increasing average growth rates, but of this we can be sure: it has succeeded in increasing inequality. The euro provides a detailed case study on how this has been accomplished. Two other themes relate more directly to work on economic systems in which I have long been engaged. It is now (finally) widely recognized that markets on their own are not efficient.14 Adam Smith’s invisible hand—by which individuals’ pursuit of self-interest is supposed to lead, in the aggregate, to the well-being of the entire society—is invisible because it is simply not there. And far too little attention has been paid to the instability of the market economy. Crises have been part of capitalism since the beginning.15 The standard model used by economists simply assumes that it is in equilibrium; in other words, if there is ever a dip in the economy, it quickly reverts to its normal path.16 The notion that the economy quickly converges to equilibrium after an upset is key in understanding the construction of the eurozone.

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy
by Francis Fukuyama
Published 29 Sep 2014

The Spanish government, however, imposed strict rules limiting economic exchange—a system known as mercantilism—under the mistaken belief that this would maximize its income from the colonies. Exports from the New World could go only to Spain, indeed, to a single port in Spain; they were required to travel in Spanish ships; and the colonies were not permitted to compete with Spanish producers of manufactured goods. Mercantilism, as Adam Smith was to demonstrate in The Wealth of Nations, created huge inefficiencies and was highly detrimental to economic growth. It also had very significant political consequences: access to markets and the right to make productive economic investments were limited to individuals or corporations favored by the state. This meant that the route to personal wealth lay through the state and through gaining political influence.

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To avoid this problem, some economists choose an absolute level of consumption, ranging from a low of US$5 a day, or $1,800 in parity purchasing power per year, up to a range of $6,000–$31,000 annual income in 2010 U.S. dollars. This fixes one problem but creates another, since an individual’s perception of class status is often relative rather than absolute. As Adam Smith noted in The Wealth of Nations, a pauper in eighteenth-century England might have lived like a king in Africa. Sociologists, in a tradition beginning with Karl Marx, tend not to look at measures of income but instead at how one’s income is earned—occupational status, level of education, and assets. For the purpose of understanding the political implications of a growing middle class, the sociological approach is vastly preferable.

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The Industrial Revolution in turn rested on the systematic application of the scientific method and its incorporation into an institutional structure of universities and research organizations, which could then be translated into technological innovations.4 FIGURE 2. Real Income per Person in England, 1200–2000 SOURCE: Gregory Clark, A Farewell to Alms The sudden shift to a higher level of growth had a huge effect on societies via an expanding division of labor. The third chapter of Adam Smith’s Wealth of Nations is titled “The Division of Labor is Limited by the Extent of the Market.” Smith began the book with his famous description of a pin factory. Instead of a single craftsman pulling, cutting, and sharpening individual pins, each task is given to a specialized worker, which vastly increases the factory’s productivity.

How to Fix Copyright
by William Patry
Published 3 Jan 2012

See Mira Rajan’s excellent new book, Moral Rights: Principles, Practice and New Technology (2011, Oxford University Press). See Ludwig von Mises, Bureaucracy 11 (1944, 2007 edition, Liberty Fund, Inc.): “A genius is always a teacher, never a pupil; he is always self-made. He does not owe anything to the favor of those in power.” Adam Smith, 1 The Wealth of Nations, Part 1, Chapter X, page 124, quoted in Ruth Towse, A Textbook of Cultural Economics 297 (2010, Cambridge University Press). Smith was, apparently, incensed at the exorbitant fees earned by castrati, id. at 13. See also the inappropriately named Classical Music Without Fear 31 (2003, Indiana University Press) (noting that in Italy alone at the end of the 16th century, four thousand boys were being castrated for musical careers, making a most peculiar kind of growth industry).

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Zorina Khan, Copyright Piracy and Development: United States Evidence in the Nineteenth Century, 10 Revista de Economia Institucional, Number 18, First Semester 2008; B. Zorina Khan, Does Copyright Piracy Pay? The Effects of U.S. International Copyright Laws on the Market for Books, 1790–1920, NBER Working Paper No. 10271(February 2004). 16. The passage in question is in the Wealth of Nations, and reads: “It is the great multiplication of the productions of all the different arts, in consequence of the division of labor, which occasions, in 316 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. NOTES TO PAGES 253–256 a well-governed society, that universal opulence which extends itself to the lowest ranks of the people.”

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Contrary to the belief that copyright laws lead to a diversity of offerings, the myth of the solitary genius and the superstar system support a choking off of diversity in favor of the winner-take-all approach that leaves the few with almost everything and the many with little. There is, of course, no shortage of individuals who are quite eager to be commoditized in this way because it promises them fame and fortune. Justin Bieber is just a product, and very happily so. The ability of distributors to charge monopoly prices for superstars was a phenomenon noted by Adam Smith way back in 1776: The exorbitant rewards of players, opera-singers, operadancers, &c are founded upon those two principles; the rarity and beauty of the talent, and the discredit of employing them in this manner.35 Whether the talent displayed by superstars is in fact rare is questionable (especially in the area of popular culture), but the purpose of proclaiming a superstar’s talent to be rare is easy enough to understand.

A Fine Mess
by T. R. Reid
Published 13 Mar 2017

A sin tax is the exception to the consensus view among economists that taxes should be “neutral”—that is, designed so that people base their decisions on business or personal grounds, not on tax considerations. But taxes imposed on what we don’t want people to do are specifically designed to influence our decisions and conduct. The father of modern economics, Adam Smith, strongly endorsed this kind of tax in his famous study The Wealth of Nations: “Sugar, rum, and tobacco, are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.” For Smith, taxes on sugar, rum, and tobacco had a double benefit: they discourage consumption of unhealthy products, thus reducing the cost of health care over time; they also bring in a steady flow of revenues, because those who smoke, drink, and eat candy generally do so even when the national economy is in a slump.

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Treasury Department, 5, 78, 159, 182 on lowering tax rates, 251–52 secretaries of, 65–66, 161, 211, 248, 250 and tax breaks, 71–72, 80–81 and tax-ducking inversions, 157, 161–62 and tax expenditures, 75, 87–88 and tax policy, 245–46 and tax reform, 65–66, 250 value-added tax (VAT), 10, 19, 25, 110, 194 explanation of, 228–38, 241–46 raising rates of, 41–42, 111, 114 standard rates of, 183–84, 238–40 and U.S., 11–12, 229–30, 241–48, 254–55 See also goods and services tax (GST) Vano, Vladimir, 106 Walgreens, 157–58 Wall Street, 10, 65, 70, 180–81, 184, 255 Wall Street Journal, 109, 119, 162–63, 169, 184, 190–91, 199, 205, 236–37 Wandell, Keith, 156 War of 1812, 34–35 Warren, Elizabeth, 117, 223, 253 Washington, D.C., 30, 69, 84–85, 120, 131, 136, 156, 169, 184, 198–99, 224 Washington Post, 116 water (safe, drinking), 39, 177–79 wealth, 110 wealth tax, 17, 124–25, 128–32, 173, 183, 192–93 See also gross domestic product (GDP); inequality, economic; rich, the; superrich, the Wealth of Nations, The (Smith), 37 Wegelin & Co. (Switzerland), 205–6 welfare state, 80 widow’s mite, 27–28, 135 Wilson, Woodrow, 1 World Bank, 16–17, 23–24, 50–52, 57, 77, 126, 182 World Health Organization, 49, 176 world wars, 1, 50, 106, 121, 228 Zolt, Eric, 12 * See the “Tax Computation Worksheet” on p. 89 of the IRS publication 1040 Instructions 2015.

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When the journal Addiction studied changes in alcohol taxes around the world, it concluded that a 10% increase in the tax on a drink reduces alcohol consumption by about 5%, which is enough to avoid tens of thousands of deaths and accidents each year.7 After British Columbia raised liquor taxes in 2002, deaths attributed to alcohol dropped by 32% over the next six years; the Canadian government attributes this to the higher price of booze. As obesity has become a bulging health problem in many wealthy countries, the so-called sugar tax has begun to spread as a way to cut the consumption of high-calorie cola, candy, and junk food. Adam Smith would presumably approve. France, Denmark, and Belgium have all imposed various versions of the “fat tax.” Mexico, where the problem of obesity is even greater than in the United States, imposed new taxes in 2014 on sugared soda pop and junk foods like potato chips, cookies, and cheese curls. The sugar tax makes a regular Coke cost about 25% more than a Diet Coke; it makes a candy bar significantly more expensive than an apple.

The Enigma of Capital: And the Crises of Capitalism
by David Harvey
Published 1 Jan 2010

Above all, ‘the unprecedented shift in relative wealth and economic power roughly from west to east now under way will continue’. This ‘unprecedented shift’ has reversed the long-standing drain of wealth from east, south-east and south Asia to Europe and North America that has been occurring since the eighteenth century – a drain that Adam Smith noted with regret in The Wealth of Nations. The rise of Japan in the 1960s, followed by South Korea, Taiwan, Singapore and Hong Kong in the 1970s, and then the rapid growth of China after 1980, later accompanied by industrialisation spurts in Indonesia, India, Vietnam, Thailand and Malaysia during the 1990s, has altered the centre of gravity of capitalist development, although it has not done so smoothly.

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.: Limits to Growth 72 meat-based diets 73, 74 Medicare 28–9, 224 Mellon, Andrew 11, 98 mercantilism 206 merchant capitalists 40 mergers 49, 50 forced 261 Merrill Lynch 12 Merton, Robert 100 methane gas 73 Mexico debt crisis (1982) 10, 19 northern Miexico’s proximity to the US market 36 peso rescue 261 privatisation of telecommunications 29 and remittances 38 standard of living 10 Mexico City 243 microcredit schemes 145–6 microeconomics 237 microenterprises 145–6 microfinance schemes 145–6 Middle East, and oil issue 77, 170, 210 militarisation 170 ‘military-industrial complex’ 91 minorities: colonisation of urban neighbourhoods 247, 248 Mitterrand, François 198 modelling of markets 262 modernism 171 monarchy 249 monetarism 237 monetisation 244 money centralised money power 49–50, 52 a form of social power 43, 44 limitlessness of 43, 47 loss of confidence in the symbols/quality of money 114 universality of 106 monoculture 186 Monopolies Commission 52 monopolisation 43, 68, 95, 113, 116, 221 Monsanto 186 Montreal Protocol (1989) 76, 187 Morgan Stanley 19 Morishima, Michio 70 Morris, William 160 mortgages annual rate of change in US mortgage debt 7 mortgage finance for housing 170 mortgage-backed bonds futures 262 mortgage-backed securities 4, 262 secondary mortgage market 173, 174 securitisation of local 42 securitisation of mortgage debt 85 subprime 49, 174 Moses, Robert 169, 171, 177 MST (Brazil) 257 multiculturalism 131, 176, 231, 238, 258 Mumbai, India anti-Muslim riots (early 1990s) 247 redevelopment 178–9 municipal budgets 5 Museum of Modern Art, New York 21 Myrdal, Gunnar 196 N Nandigram, West Bengal 180 Napoleon III, Emperor 167, 168 national debt 48 National Economic Council (US) 11, 236 national-origin quotas 14 nationalisation 2, 4, 8, 224 nationalism 55–6, 143, 194, 204 NATO 203 natural gas 188 ‘natural limits’ 47 natural resources 30, 71 natural scarcity 72, 73, 78, 80, 83, 84, 121 nature and capital 88 ‘first nature’ 184 relation to 121, 122 ‘the revenge of nature’ 185 ‘second nature’ 184, 185, 187 as a social product 188 neocolonialism 208, 212 neoliberal counter-revolution 113 neoliberalism 10, 11, 19, 66, 131, 132, 141, 172, 175, 197, 208, 218, 224, 225, 233, 237, 243, 255 Nepal: communist rule in 226 Nevada, foreclosure wave in 1 New Deal 71 ‘new economy’ (1990s) 97 New Labour 45, 255 ‘new urbanism’ movement 175 New York City 11 September 2001 attacks 41 fiscal crisis (1975) 10, 172, 261 investment banks 19, 28 New York metropolitan region 169, 196 Nicaragua 189 Niger delta 251 non-governmental organisations (NGOs) 35, 253–4 non-interventionism 10 North Africa, French import of labour from 14 North America, settlement in 145 North American Free Trade Association (NAFTA) 200 Northern Ireland emergency 247 Northern Rock 2 Norway: Nordic cris (1992) 8 nuclear power 188 O Obama, Barack 11, 27, 34, 210 Obama administration 78, 121 O’Connor, Jim 77, 78 offshoring 131 Ogoni people 251 oil cheap 76–7 differential rent on oil wells 83 futures 83, 84 a non-renewable resource 82 ‘peak oil’ 38, 73, 78, 79, 80 prices 77–8, 80, 82–3, 261 and raw materials prices 6 rents 83 United States and 76–7, 79, 121, 170, 210, 261 OPEC (Organisation of Oil-Producing Countries) 83, 84 options markets currency 262 equity values 262 unregulated 99, 100 Orange County, California bankruptcy 100, 261 Organisation for Economic Cooperation and Development (OECD) 51 organisational change 98, 101 organisational forms 47, 101, 121, 127, 134, 238 Ottoman Empire 194 ‘over the counter’ trading 24, 25 overaccumulation crises 45 ozone hole 74 ozone layer 187 P Pakistan: US involvement 210 Palley, Thomas 236 Paris ‘the city of light’ 168 epicentre of 1968 confrontations 177, 243 Haussmann’s rebuilding of 49, 167–8, 169, 171, 176 municipal budget crashes (1868) 54 Paris Commune (1871) 168, 171, 176, 225, 243, 244 Partnoy, Frank: Ubfectious Greed 25 patents 221 patent laws 95 patriarchy 104 pensions pension funds 4, 5, 245 reneging on obligations 49 Péreire brothers 49, 54, 98, 174 pesticides 185, 186, 187 petty bourgeois 56 pharmaceutical sector 129, 245 philanthropy 44 Philippines: excessive urban development 8 Phillips, Kevin 206 Pinochet, General Augusto 15, 64 plant 58 Poland, lending to 19 political parties, radical 255–6 politics capitalist 76 class 62 co-revolutionary 241 commodified 219 depoliticised 219 energy 77 identity 131 labour organizing 255 left 255 transformative 207 pollution air 77 oceanic 74 rights 21 ‘Ponts et Chaussées’ organisation 92 Ponzi schemes 21, 114, 245, 246 pop music 245–6 Pope, Alexander 156 population growth 59, 72, 74, 121, 167 and capital accumulation 144–7 populism 55–6 portfolio insurance 262 poverty and capitalism 72 criminalisation and incarceration of the poor 15 feminisation of 15, 258 ‘Great Society’ anti-poverty programmes 32 Prague 243 prices commodity 37, 73 energy 78 food grain 79–80 land 8, 9, 182–3 oil 8, 28, 37–8, 77–8, 80, 82–3, 261 property 4, 182–3 raw material 37 reserve price 81–2 rising 73 share 7 primitive accumulation 58, 63–4, 108, 249 private consortia 50 private equity groups 50 private property and radical egalitarianism 233, 234 see also property markets; property rights; property values privatisation 10, 28, 29, 49, 251, 256, 257 pro-natal policies 59 production expansion of 112, 113 inadequate means of 47 investment in 114 liberating the concept 87 low-profit 29 offshore 16 production of urbanisation 87 reorganisation and relocation of 33 revolutionising of 89 surplus 45 technologies 101 productivity agreements 14, 60, 96 agricultural 119 cotton industry 67 gains 88, 89 Japan and West Germany 33 rising 96, 186 products development 95 innovation 95 new lines 94, 95 niches 94 profit squeeze 65, 66, 116 profitability constrains 30 falling 94, 131 of the financial sector 51 and wages 60 profits easy 15 excess 81, 90 falling 29, 72, 94, 116, 117 privatising 10 rates 70, 94, 101 realisation of 108 proletarianisation 60, 62 property markets crash in US and UK (1973–75) 8, 171–2, 261 overextension in 85 property market-led Nordic and Japanese bank crises 261 property-led crises (2007–10) 10, 261 real estate bubble 261 recession in UK (after 1987) 261 property rights 69, 81–2, 90, 122, 179, 198, 233, 244, 245 Property Share Price Index (UK) 7 property values 171, 181, 197, 248 prostitution 15 protectionism 31, 33, 43, 211 punctuated equilibrium theory of natural evolution 130 Putin, Vladimir 29, 80 Q Q’ing dynasty 194 quotas 16 R R&D (research and development) 92, 95–6 race issues 104 racism 61, 258 radical egalitarianism 230–34 railroads 42, 49, 191 Railwan, rise of (1970s) 35 rare earth metals 188 raw materials 6, 16, 37, 58, 77, 101, 113, 140, 144, 234 RBS 20 Reagan, Ronald 15, 64, 131, 141 Reagan-Thatcher counter revolution (early 1980s) 71 Reagan administration 1, 19 Reagan recession (1980–82) 60, 261 Real Estate Investment Trusts (US) 7 recession 1970s 171–2 language of 27 Reagan (1980–82) 60, 261 Red Brigade 254 reforestation 184 refrigeration 74 reinvestment 43, 45, 66–7, 110–12, 116 religious fundamentalism 203 religious issues 104 remittances 38, 140, 147 rentiers 40 rents differential rent 81, 82, 83 on intellectual property rights 221 land 182 monetisation of 48, 109 monopoly 51, 81–2, 83 oil 83 on patents 221 rising 181 reproduction schemas 70 Republican Party (US) 11, 141 reserve price 81 resource values 234 Ricardo, David 72, 94 risks, socialising 10 robbery 44 Robinson, Joan 238 robotisation 14, 136 Rockefeller, John D. 98 Rockefeller brothers 131 Rockefeller foundation 44, 186 Roman Empire 194 Roosevelt, Franklin D. 71 Rothschild family 98, 163 Royal Society 91, 156 royalties 40 Rubin, Robert 98 ‘rule of experts’ 99, 100–101 Russia bankruptcy (1998) 246, 261 capital flight crisis 261 defaults on its debt (1998) 6 oil and natural gas flow to Ukraine 68 oil production 6 oligarchs 29 see also Soviet Union S Saddam Hussein 210 Saint-Simon, Claude Henri de Rouvroy, Comte de 49 Saint-Simonians 87, 168 Salomon Brothers 24 Samuelson, Robert 235, 239 Sandino, Augusto 189 Sanford, Charles 98 satellites 156 savings 140 Scholes, Myron 100 Schumer, Charles 11 Schumpeter, Joseph 46 Seattle battle of (1999) 38, 227 general strike (1918) 243 software development in 195 Second World War 32, 168–70, 214 sectarianism 252 securitisation 17, 36, 42 Sejong, South Korea 124–6 service industries 41 sexism 61 sexual preferences issues 104, 131, 176 Shanghai Commune (1967) 243 shark hunting 73, 76 Shell Oil 79, 251 Shenzhen, China 36 shop floor organisers (shop stewards) 103 Silicon Valley 162, 195, 216 Singapore follows Japanese model 92 industrialisation 68 rise of (1970s) 35 slavery 144 domestic 15 slums 16, 151–2, 176, 178–9 small operators, dispossession of 50 Smith, Adam 90, 164 The Wealth of Nations 35 social democracy 255 ‘social democratic’ consensus (1960s) 64 social inequality 224 social relations 101, 102, 104, 105, 119, 121, 122, 123, 126, 127, 135–9, 152, 240 loss of 246 social security 224 social services 256 social struggles 193 social welfarism 255 socialism 136, 223, 228, 242, 249 compared with communism 224 solidarity economy 151, 254 Soros, George 44, 98, 221 Soros foundation 44 South Korea Asian Currency Crisis 261 excessive urban development 8 falling exports 6 follows Japanese model 92 rise of (1970s) 35 south-east Asia: crash of 1997–8 6, 8, 49, 246 Soviet Union in alliance with US against fascism 169 break-up of 208, 217, 227 collapse of communism 16 collectivisation of agriculture 250 ‘space race’ (1960s and 1970s) 156 see also Russia space domination of 156–8, 207 fixed spaces 190 ‘space race’ (1960s and 1970s) 156 Spain property-led crisis (2007–10) 5–6, 261 unemployment 6 spatial monopoly 164–5 special drawing rights 32, 34 special economic zones 36 special investment vehicles 36, 262 special purpose entities 262 speculation 52–3 speculative binges 52 speed-up 41, 42 stagflation 113 stagnation 116 Stalin, Joseph 136, 250 Standard Oil 98 state formation 196, 197, 202 state-corporate nexus 204 ‘space race’ (1960s and 1970s) 156 state-finance nexus 204, 205, 237, 256 blind belief in its corrective powers 55 ‘central nervous system’ for capital accumulation 54 characteristics of a feudal institution 55 and the current crisis 118 defined 48 failure of 56–7 forms of 55 fusion of state and financial powers 115 innovation in 85 international version of 51 overwhelmed by centralised credit power 52 pressure on 54 radical reconstruction of 131 role of 51 and state-corporate research nexus 97 suburbanisation 171 tilts to favour particular interests 56 statistical arbitrage strategies 262 steam engine, invention of 78, 89 Stiglitz, Joseph 45 stimulus packages 261 stock markets crash (1929) 211, 217 crashes (2001–02) 261 massive liquidity injections (1987) 236, 261 Stockton, California 2 ’structural adjustment’ programmes vii, 19, 261 subcontracting 131 subprime loans 1 subprime mortgage crisis 2 substance abuse 151 suburbanisation 73, 74, 76–7, 106–7, 169, 170, 171, 181 Summers, Larry 11, 44–5, 236 supermarket chains 50 supply-side theory 237 surveillance 92, 204 swaps credit 21 Credit Default 24, 262 currency 262 equity index 262 interest rate 24, 262 Sweden banking system crash (1992) 8, 45 Nordic crisis 8 Yugoslav immigrants 14 Sweezey, Paul 52, 113 ‘switching crises’ 93 systematic ‘moral hazard’ 10 systemic risks vii T Taipei: computer chips and household technologies in 195 Taiwan falling exports 6 follows Japanese model 92 takeovers 49 Taliban 226 tariffs 16 taxation 244 favouring the rich 45 inheritance 44 progressive 44 and the state 48, 145 strong tax base 149 tax rebates 107 tax revenues 40 weak tax base 150 ‘Teamsters for Turtles’ logo 55 technological dynamism 134 technologies change/innovation/new 33, 34, 63, 67, 70, 96–7, 98, 101, 103, 121, 127, 134, 188, 193, 221, 249 electronic 131–2 ‘green’ 188, 221 inappropriate 47 labour fights new technologies 60 labour-saving 14–15, 60, 116 ‘rule of experts’ 99, 100–101 technological comparative edge 95 transport 62 tectonic movements 75 territorial associations 193–4, 195, 196 territorial logic 204–5 Thailand Asian Currency Crisis 261 excessive urban development 8 Thatcher, Margaret, Baroness 15, 38, 64, 131, 197, 255 Thatcherites 224 ‘Third Italy’, Bologna 162, 195 time-space compression 158 time-space configurations 190 Toys ‘R’ Us 17 trade barriers to 16 collapses in foreign trade (2007–10) 261 fall in global international trade 6 increase in volume of trading 262 trade wars 211 trade unions 63 productivity agreements 60 and US auto industry 56 trafficking human 44 illegal 43 training 59 transport costs 164 innovations 42, 93 systems 16, 67 technology 62 Treasury Bill futures 262 Treasury bond futures 262 Treasury instruments 262 TRIPS agreement 245 Tronti, Mario 102 Trotskyists 253, 255 Tucuman uprising (1969) 243 Turin: communal ‘houses of the people’ 243 Turin Workers Councils 243 U UBS 20 Ukraine, Russian oil and natural gas flow to 68 ultraviolet radiation 187 UN Declaration of Human Rights 234 UN development report (1996) 110 Un-American Activities Committee hearings 169 underconsumptionist traditions 116 unemployment 131, 150 benefits 60 creation of 15 in the European Union 140 job losses 93 lay-offs 60 mass 6, 66, 261 rising 15, 37, 113 and technological change 14, 60, 93 in US 5, 6, 60, 168, 215, 261 unionisation 103, 107 United Fruit Company 189 United Kingdom economy in serious difficulty 5 forced to nationalise Northern Rock 2 property market crash 261 real average earnings 13 train network 28 United Nations 31, 208 United States agricultural subsidies 79 in alliance with Soviet Union against fascism 169 anti-trust legislation 52 auto industry 56 blockbusting neighbourhoods 248 booming but debt-filled consumer markets 141 and capital surplus absorption 31–2 competition in labour markets 61 constraints to excessive concentration of money power 44–5 consumerism 109 conumer debt service ratio 18 cross-border leasing with Germany 142–3 debt 158, 206 debt bubble 18 fiscal crises of federal, state and local governments 261 health care 28–9 heavy losses in derivatives 261 home ownership 3 housing foreclosure crises 1–2, 4, 38, 166 industries dependent on trade seriously hit 141 interventionism in Iraq and Afghanistan 210 investment bankers rescued 261 investment failures in real estate 261 lack of belief in theory of evolution 129 land speculation scheme 187–8 oil issue 76–7, 79, 80, 121, 170, 210, 261 population growth 146 proletarianisation 60 property-led crisis (2007–10) 261 pursuit of science and technology 129 radical anti-authoritarianism 199 Reagan Recession 261 rescue of financial institutions 261 research universities 95 the reversing origins of US corporate profits (1950–2004) 22 the right to the city movement 257 ‘right to work’ states 65 savings and loan crisis (1984–92) 8 secondary mortgage market 173 ‘space race’ (1960s and 1970s) 156 suburbs 106–7, 149–50, 170 train network 28 unemployment 5, 6, 60, 168, 215, 261 unrestricted capitalist development 113 value of US stocks and homes, as a percentage of GDP 22 and Vietnam War 171 wages 13, 62 welfare provision 141 ‘urban crisis’ (1960s) 170 urban ‘heat islands’ 77 urban imagineering 193 urban social movements 180 urbanisation 74, 85, 87, 119, 131, 137, 166, 167, 172–3, 174, 240, 243 US Congress 5, 169, 187–8 US Declaration of Independence 199 US National Intelligence Council 34–5 US Senate 79 US Supreme Court 179 US Treasury and Goldman Sachs 11 rescue of Continental Illinois Bank 261 V Vanderbilt family 98 Vatican 44 Veblen, Thorstein 181–2 Venezuela 256 oil production 6 Vietnam War 32, 171 Volcker, Paul 2, 236 Volcker interest rate shock 261 W wage goods 70, 107, 112, 162 wages and living standards 89 a living wage 63 national minimum wage 63 rates 13, 14, 59–64, 66, 109 real 107 repression 12, 16, 21, 107, 110, 118, 131, 172 stagnation 15 wage bargaining 63 Wal-Mart 17, 29, 64, 89 Wall Street, New York 35, 162, 200, 219, 220 banking institutions 11 bonuses 2 ‘Party of Wall Street’ 11, 20, 200 ‘War on Terror’ 34, 92 warfare 202, 204 Wasserstein, Bruce 98 waste disposal 143 Watt, James 89 wealth accumulation by capitalist class interests 12 centralisation of 10 declining 131 flow of 35 wealth transfer 109–10 weather systems 153–4 Weather Underground 254 Weill, Sandy 98 Welch, Jack 98 Westphalia, Treaty of (1648) 91 Whitehead, Alfred North 75 Wilson, Harold 56 wind turbines 188 women domestic slavery 15 mobilisation of 59, 60 prostitution 15 rights 176, 251, 258 wages 62 workers’ collectives 234 working hours 59 World Bank 36, 51, 69, 192, 200, 251 ‘Fifty Years is Enough’ campaign 55 predicts negative growth in the global economy 6 World Bank Development Report (2009) 26 World Trade Organisation (WTO) 200, 227 agreements 69 street protests against (Seattle, 1999) 55 TRIPS agreement 245 and US agricultural subsidies 79 WorldCom 8, 100, 261 worldwide web 42 Wriston, Walter 19 X X-rays 99 Y Yugoslavia dissolution of 208 ethnic cleansings 247 Z Zapatista revolutionary movement 207, 226, 252 Zola, Émile 53 The Belly of Paris 168 The Ladies’ Paradise 168

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The kind of society that emerged was grounded in private property rights, juridical individualism, some version of free markets and free trade. The state increasingly saw its role as the management of this economy as a way to augment its wealth and power. None of this worked perfectly according to the rubrics of John Locke and Adam Smith, and one only has to read Charles Dickens’s Bleak House, with its interminable legal struggles in Chancery, to recognise that British society was and still is constituted as a perpetual power struggle between the old and the new social orders. But in Britain and its erstwhile colony the United States the coercive laws of competition that flowed from these new institutional arrangements were allowed broadly to do their work unhindered by class and status repressions.

The Connected Company
by Dave Gray and Thomas Vander Wal
Published 2 Dec 2014

For example, Amazon created a platform where people can make money by linking to Amazon products from their blogs and web pages. It’s easy to join—signing up as an Amazon affiliate takes only a few minutes. Shopping malls will offer very low rents to attract “anchor stores” that will help attract shoppers and other tenants to the mall. What’s the incentive to perform? As Adam Smith wrote in The Wealth of Nations, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Some platforms are only available to paid employees. Some are open to qualified parties like suppliers, partners, or franchisees. Others are open to anyone who wants to join.

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Information Rules: A Strategic Guide to the Network Economy By Carl Shapiro and Hal R. Varian, Harvard Business Review Press, 1998. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail By Clayton Christensen, Harvard Business Review Press, 1997. An Inquiry into the Nature and Causes of the Wealth of Nations By Adam Smith, 1776. Jack: Straight from the Gut By Jack Welch and John A. Byrne, Business Plus, 2001. Just in Time for Today and Tomorrow By Taiichi Ohno and Setsuo Mito, Productivity Press, 1988. The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation By Ikujiro Nonaka and Hirotaka Takeuchi, Oxford University Press, 1995.

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If your company is at or near peak effectiveness for a particular purpose, and the environment around you is shifting, you may need to undergo fundamental structural change in order to become adaptive. How Did We Get Here? Dividing labor and standardizing work is a good thing. Right? Dividing Work Division of labor, as Adam Smith pointed out in the 1700s, has the potential to increase productivity. But division of labor also leads to interdependency: every worker relies more heavily on others in order to be able to do the job, and as the number of handoffs increases, so does the potential for dropped balls. As the number of divisions grows, so grows the interdependence.

The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home
by Dan Ariely
Published 31 May 2010

Why did the nice people at MIT and SAP design the system this way? Why did they break tasks into so many components, put each person in charge of only small parts, and never show them the overall progress or completion of their tasks? I suspect it all has to do with the ideas of efficiency brought to us by Adam Smith. As Smith argued in 1776 in The Wealth of Nations, division of labor is an incredibly effective way to achieve higher efficiency in the production process. Consider, for example, his observations of a pin factory: . . . the division of labour has been very often taken notice of, the trade of the pin-maker; a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty.

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So in essence Stephen and I are academic relatives, and I feel as if he is my younger (but much taller) brother. He is smart and creative, and it has been a privilege to watch him advance in his academic adventures. Stephen is currently a doctoral student at Duke University, and if his advisers had any say in the matter, we would never let him leave. Notes 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1977), 44–45. 2. George Loewenstein, “Because It Is There: The Challenge of Mountaineering . . . for Utility Theory,” Kyklos 52, no. 3 (1999): 315–343. 3. Laura Shapiro, Something from the Oven: Reinventing Dinner in 1950s America (New York: Viking, 2004). 4. www.foodnetwork.com/recipes/sandra-lee/sensuous-chocolate-truffles-recipe/index.html. 5.

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In fact, I suspect that the idea of alienation was less relevant in Marx’s time, when, even if employees tried hard, it was difficult to find meaning at work. In today’s economy, as we move to jobs that require imagination, creativity, thinking, and round-the-clock engagement, Marx’s emphasis on alienation adds an important ingredient to the labor mix. I also suspect that Adam Smith’s emphasis on the efficiency in the division of labor was more relevant during his time, when the labor in question was based mostly on simple production, and is less relevant in today’s knowledge economy. From this perspective, division of labor, in my mind, is one of the dangers of work-based technology.

The Power of Gold: The History of an Obsession
by Peter L. Bernstein
Published 1 Jan 2000

King, 1925. Shaw, Bernard, 1928. The Intelligent Woman's Guide to Socialism and Capitalism. Reprinted by New Transaction Books, New Brunswick, NJ, 1984. Skousen, Mark, 1977. Economics of a Pure Gold Standard. Irvington-on-Hudson: The Foundation for Economic Education. Smith, Adam, 1776. The Wealth of Nations. Amherst, NY: Prometheus Press, 1991. Smith, Martin, 1996. Bookwatch: The General Strike. International Socialism, March (from www.google.com). Sraffa, P., The Works and Correspondence of David Ricardo. Cambridge: Cambridge University Press. Stein, Herbert, 1984. Presidential Economics: The Making of Economic Policy from Roosevelt to Reagan and Beyond.

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Evidence developed by modern economists indicates that average per capita wealth in Asia in the sixteenth and seventeenth centuries was close to average per capita wealth in Europe.35 Adam Smith himself pointed out that China was one of the richest and most fertile countries in the world.36 Averages can be dangerously deceptive when the dispersion around them is wide. The per capita figure for Europe is of some value as at least suggestive, but the per capita measure for China, or any part of Asia at that time, obscures the reality that a tiny number of people lived in an environment of luxury and indulgence while the masses existed at levels that were horrible even by the standards of the poorest people in Europe. Adam Smith was eloquent on the subject.

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Desperate, the Inca complied, accepting baptism with the name Juan de Atahualpa in honor of Saint John the Baptist, on whose day this unhappy event happened to fall. Then the executioner performed his gruesome task while the Spaniards muttered prayers for the salvation of the Inca's soul. The end of the story of the Conquerors reads like a morality tale. Adam Smith decried "the sacred thirst of gold" that drove the explorers and Conquerors into the New World, and he was right .16 The quenching of that thirst led most of these men to a bad end, beginning with Balboa himself. Pizarro's original company broke into factions that drowned the spirit of their great adventure in bloody internecine quarrels over leadership and spoils.

Human Frontiers: The Future of Big Ideas in an Age of Small Thinking
by Michael Bhaskar
Published 2 Nov 2021

While on the ground there seemed to be evidence that returns were increasing, in that big companies tended to get bigger, the mathematics of markets indicated that they should tend towards an equilibrium where profit evaporated in the face of sheer competitive force. The mystery also extended to answering a further fundamental question in economics: how does economic growth occur? As David Warsh records in his magnificent book, Knowledge and the Wealth of Nations, it wasn't until the 1980s that the puzzle was solved.34 This is the story of how ideas became central to economics. Understanding how ideas are formed and shared, where they come from, how they work, and crucially, the mechanisms, tools, incentives and costs in their creation, went from peripheral concern to the heartland of modern growth theory.

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, Growthecon, accessed 29 March 2021, available at https://growthecon.com/blog/BLS-TFP/ Vollset, Stein Emil et al. (2020), ‘Fertility, mortality, migration, and population scenarios for 195 countries and territories from 2017 to 2100’, The Lancet, Vol. 396 No. 10258, pp. 1285–1306 Wallace-Wells, David (2019), The Uninhabitable Earth: A Story of the Future, London: Penguin Warsh, David (2007), Knowledge and the Wealth of Nations: A Story of Economic Discovery, New York: W.W. Norton Watney, Caleb (2020), ‘Cracks in the Great Stagnation’, Agglomerations, accessed 7 January 2021, available at https:// www.agglomerations.tech/cracks-in-the-great-stagnation/ Watson, Peter (2001), The Modern Mind: An intellectual history of the 20th century, London: HarperCollins Watson, Peter (2006), Ideas: A History from Fire to Freud, London: Phoenix Watson, Peter (2017), Convergence: The Idea at the Heart of Science, London: Simon and Schuster Weightman, Gavin (2015), Eureka: How Invention Happens, New Haven, CT: Yale University Press Weiman, Carl (2017), Improving How Universities Teach Science: Lessons from the Science Education Initiative, Cambridge, MA: Harvard Business Review Press Weitzman, Martin (1996), ‘Hybridizing Growth Theory’, The American Economic Review, Vol. 86 No. 2, pp. 207–12 Wellcome Trust (2020), ‘What Researchers Think About the Culture They Work In’, Wellcome.org, accessed 21 January 2020, available at https://wellcome.org/reports/what-researchers-think-about-research-culture?

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Some changes were wrought by those without scientific backgrounds – think of George Stephenson and his Rocket – but science did still contribute to technology, as with Joseph Black or Alessandro Volta. New business forms, pioneered by technologists like James Watt or entrepreneurs like Arkwright, dovetailed with original theories from the likes of Adam Smith. They are all connected – ideas in science and philosophy, politics and technology, directed and undirected, lucky accidents and long programmes, all co-evolving and informing one another.8 Whether you were a grand philosophe at an aristocratic Parisian salon or a sooty-handed Derbyshire engineer, you could be part of a revolution in ideas, built from ideas.

The Second Curve: Thoughts on Reinventing Society
by Charles Handy
Published 12 Mar 2015

It was that clever device by which selfishness became justified, even if the maxim of ‘greed is good’ was going a bit too far. Adam Smith, the godfather of economics, said it, so it had become a hallowed truth, almost the foundation stone of capitalism. So how could it all have gone so wrong? Let us be clear from the start: Adam Smith did not say that the ‘invisible hand’ would allow self-interest to work for the good of all. He only mentioned that metaphor once in his book The Wealth of Nations, and that was to suggest that an invisible hand would incline a merchant to invest at home rather than in foreign lands.

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Will we dissolve into ghettos of religion and race or will we find something better than war or economic success to build a united country? Bigger than all these issues is that old philosophical conundrum – what are we striving for anyway, as individuals and as a society? Is selfishness necessary for economic growth, or could we find a better measure of success? Is altruism and a concern for others, what Adam Smith called sympathy, part of our nature or does it have to be learnt or acquired? New thinking is not the prerogative of those in authority. They are often too wedded to their accustomed ways, to that first curve, to conceive that another way might be possible. The thinking could and should start with ourselves.

The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities
by Mancur Olson

North, Structure and Change in Economic History (New York and London: W. W. Norton, 1981). 7. Braudel, Capitalism and Material Life, pp. 404-05. 8. Herbert Kisch, "Growth Deterrents of a Medieval Heritage: The Aachen Area Woolen Trades before 1790," Journal of Economic History 24 (December 1964):517-37. 9. Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, ed. R. H. Campbell. A. S. Skinner, and W. B. Todd (Oxford: Clarendon Press, 1976), p. 146. 10. See, for example, Christopher Hill, The Century of Revolution, 1603-1709 (New York: W. W. Norton, 1961), and J. H. Plumb, The Origins of Political Stability in England, 1675-1725 (Boston: Houghton Mifflin, 1967). 11. 1 am grateful to Jan De Vries for helpful conversations about the Dutch Republic as well as other matters.

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Far more than in Britain, continental business enterprise was a class activity, recruiting practitioners from a group limited by custom and law. In France, commercial enterprise had traditionally entailed derogation from noble status.' 5 It is not surprising that Napoleon once derided Britain as a "nation of shopkeepers" and that even Adam Smith found it expedient to use this phrase in his criticism of Britain's mercantilistic policies. 16 The ubiquitous observations suggesting that the Continent's class structures have by now become in some respects more flexible than Britain's would hint that we should look for processes that might have broken down class barriers more rapidly on the Continent than in Great Britain, or for processes that might have raised or erected more new class barriers in Britain than on the Continent, or for both.

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When jurisdictional integration occurs, new special-interest groups matching the scale of the larger jurisdiction will not immediately spring up, because, as we know from Implication 2, such coalitions emerge only gradually in stable situations. It will not, however, take small groups as long to organize as large ones (Implication 3). The great merchants involved in larger-scale trade, often over longer distances, were among the first groups to organize or collude on a national scale. They were often extremely successful; as Adam Smith pointed out, the influence of the "merchants" gave the great governments of Europe the policy of "mercantilism," which favored influential merchants and their allies at the expense of the rest of the nation. Often this involved severely protectionist policies that protected the influential merchants from foreign competitors-mercantilism is, to this day, nearly synonymous with protectionism.

Capitalism and Freedom
by Milton Friedman
Published 1 Jan 1962

Warren Nutter, The Extent of Enterprise Monopoly in the United States, 1899–1939 (Chicago: University of Chicago Press, 1951) and George J. Stigler, Five Lectures on Economic Problems (London; Longmans, Green and Co., 1949), pp. 46–65. 2 “Some Comments on the Significance of Labor Unions for Economic Policy,” in David McCord Wright (ed.), The Impact of the Union (New York: Harcourt, Brace, 1951), pp. 204–34. 3 The Wealth of Nations (1776), Bk. I, chap. x, Pt. II (Cannan ed. London, 1930), p. 130. 4 Ibid, Bk. IV, chapter ii, p. 421. Chapter IX Occupational Licensure THE OVERTHROW OF the medieval guild system was an indispensable early step in the rise of freedom in the Western world. It was a sign of the triumph of liberal ideas, and widely recognized as such, that by the mid-nineteenth century, in Britain, the United States, and to a lesser extent on the continent of Europe, men could pursue whatever trade or occupation they wished without the by-your-leave of any governmental or quasi-governmental authority.

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For evidence of that, it is enough to point to the call for contributions to the symposium Capitalism, Socialism and Democracy issued by the editors of Commentary in 1978, which went in part: “The idea that there may be an inescapable connection between capitalism and democracy has recently begun to seem plausible to a number of intellectuals who once would have regarded such a view not only as wrong but even as politically dangerous.” My contribution consisted of an extensive quotation from Capitalism and Freedom, a briefer one from Adam Smith, and a closing invitation: “Welcome aboard.”1 Even in 1978, of the 25 contributors to the symposium other than myself, only 9 expressed views that could be classified as sympathetic to the central message of Capitalism and Freedom. The change in the climate of opinion was produced by experience, not by theory or philosophy.

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If they commit the same acts in the course of labor dispute, they may well get off scot free. Union actions involving actual or potential physical violence or coercion could hardly take place if it were not for the unspoken acquiescence of the authorities. 3. Private Collusion The final source of monopoly is private collusion. As Adam Smith says, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”3 Such collusion or private cartel arrangements are therefore constantly arising. However, they are generally unstable and of brief duration unless they can call government to their assistance.

Rebel Cities: From the Right to the City to the Urban Revolution
by David Harvey
Published 3 Apr 2012

In effect, individuals maintain, extend, and socialize their private property right through value- creation and supposedly free and fair market exchange. This is h ow, says Adam Smith, the wealth of nations is most easily created and the common go od best served. He was not entirely wrong. The presumption is, however, that markets can be fair and free, and in classical political economy it was assumed that the state would intervene to make them so (at least that is what Adam Smith advises statesmen to do). But there is an ugly corollary to Locke's theory. Individuals who fail to pro duce value have n o claim to property. The dispossession of indigenous populations in North America by "productive" colonists was justified because indigenous populations did not produce value. 15 So how does Marx deal with all of this?

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The justification for private property rights in liberal theory, after all, is that they should serve to maximize the common good when socially integrated through th e institutions of fair and free market exchange. A commonwealth (said Hobbes) is produced through pr ivatizing competitive interests within a framework of strong state power. Th is opinion, articulated by liberal theorists such as John Locke and Adam Smith, continues to be preached. Th ese days, the trick, of course, is to downplay the need for strong state power while in fact deploying it-sometimes brutally. Th e solution to the problems of global poverty, the World B ank continues to assure us (lean ing heavily on the theories of de Soto), is private prop erty r ights for all slum-dwellers and access to m icro-finance (wh ich just h appens to yield the world's financi­ ers hefty rates of return while driving not a few participants to commit suicide in the face of debt peonage) Y Yet the myth prevails: once the inherent entrepreneurial instin cts of the poor are liberated as a force of nature, it is said, then all will be well and the problem of chronic poverty will be broken and the common wealth enhanced.

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They thereby realize far- reaching control over production and marketing, and hence stabilize their business environment to allow for rational calcula­ tion and long- term planning, the reduction of risk and uncertainty, and 94 REBEL CITIES more generally guarantee themselves a relatively peaceful and untrou­ bled existence. The visible hand of the corporation, as Alfred Chandler terms it, has consequently been of far greater importance to capitalist his­ torical geography than the invisible hand of the market made so much of by Adam Smith, and paraded ad nauseam before us in recent years as the guiding power in the neoliberal ideology of contemporary globalization.7 But it is here that the mirror image of the first contradiction comes most clearly into view: market processes crucially depend upon the indi­ vidual monopoly of capitalists (of all sorts) over ownership of the means of production, including finance and land.

Cogs and Monsters: What Economics Is, and What It Should Be
by Diane Coyle
Published 11 Oct 2021

But most new goods and services, the source of the astonishing increase in prosperity for the past quarter of a millennium, would not have become available without market capitalism. It is important to underline the word ‘competitive’ in this statement. There is confusion between markets and business in public debate. As Adam Smith famously pointed out in The Wealth of Nations, businessmen will naturally be inclined to combine against the public interest to improve their profits. A ‘pro-business’ policy helping a large company or an oligopolistic sector of the economy make more money is not at all the same as a ‘pro-market’ or ‘pro-economy’ policy, although the distinction is often elided.

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We have in mind a concept of social welfare. Surely it is right to aim for the perspective of the impartial observer, to try to make an objective assessment of the welfare effects of a policy intervention. This is a constant theme of liberal theories of justice, such as John Rawls’s (1971) famous ‘veil of ignorance’ or Adam Smith’s ‘impartial spectator’. At the same time, we know that economists and policy advisers are only human, responding to incentives and maximising our own utility. This is exactly why public choice theory and the New Public Management (Lapuente and Van de Walle 2020) came to emphasise the personal incentives and interests of decision-makers.

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Although welfare economics—the study of the benefit to society of economic outcomes or choices—necessarily underpins policy evaluation, and is widely used in practical contexts (such as cost-benefit analysis or competition assessments), economists have paid little attention to it in recent times. Indeed, economics has insisted for more than eighty years on a strict separation between ‘is’ and ‘ought’, between ‘positive’ and ‘normative’. Pigou (1908) represented an older tradition, writing: ‘Ethics and economics are mutually dependent.’ Adam Smith made the same link. While realistic about human nature, he observed that everyone appreciates that ‘his own interest is connected with the prosperity of society’ (Smith 2000 [1759]; see also Rothschild 2001). But in a departure from this tradition, the positivist movement represented in economics by Lionel Robbins led the discipline to rule out inter-personal welfare comparisons.

Antifragile: Things That Gain From Disorder
by Nassim Nicholas Taleb
Published 27 Nov 2012

And in some countries such as Brazil, even today, top bankers are made unconditionally liable to the extent of their own assets. Which Adam Smith? Many right-wingers-in-love-with-large-corporations keep citing Adam Smith, famous patron saint of “capitalism,” a word he never uttered, without reading him, using his ideas in a self-serving selective manner—ideas that he most certainly did not endorse in the form they are presented.4 In Book IV of The Wealth of Nations, Smith was extremely chary of the idea of giving someone upside without downside and had doubts about the limited liability of joint-stock companies (the ancestor of the modern limited liability corporation).

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The fragilista mistakes the economy for a washing machine that needs monthly maintenance, or misconstrues the properties of your body for those of a compact disc player. Adam Smith himself made the analogy of the economy as a watch or a clock that once set in motion continues on its own. But I am certain that he did not quite think of matters in these terms, that he looked at the economy in terms of organisms but lacked a framework to express it. For Smith understood the opacity of complex systems as well as the interdependencies, since he developed the notion of the “invisible hand.” Click here for a larger image of this table. But alas, unlike Adam Smith, Plato did not quite get it. Promoting the well-known metaphor of the ship of state, he likens a state to a naval vessel, which, of course, requires the monitoring of a captain.

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Matt Ridley’s Anti-Teleological Argument The great medieval Arabic-language skeptic philosopher Algazel, aka Al-Ghazali, who tried to destroy the teleology of Averroes and his rationalism, came up with the famous metaphor of the pin—now falsely attributed to Adam Smith. The pin doesn’t have a single maker, but twenty-five persons involved; these are all collaborating in the absence of a central planner—a collaboration guided by an invisible hand. For not a single one knows how to produce it on his own. In the eyes of Algazel, a skeptic fideist (i.e., a skeptic with religious faith), knowledge was not in the hands of humans, but in those of God, while Adam Smith calls it the law of the market and some modern theorist presents it as self-organization. If the reader wonders why fideism is epistemologically equivalent to pure skepticism about human knowledge and embracing the hidden logics of things, just replace God with nature, fate, the Invisible, Opaque, and Inaccessible, and you mostly get the same result.

Philanthrocapitalism
by Matthew Bishop , Michael Green and Bill Clinton
Published 29 Sep 2008

At first, it was not clear if this unprecedented gift could actually be invested as Omidyar wanted but “we are finding more and more investment opportunities,” he says. Omidyar peppers his conversation with references to Adam Smith. He even has a bust of the eighteenth-century Scottish author of The Wealth of Nations in his office. A crucial point in the evolution of his thinking about philanthropy came, he says, when “I rediscovered Adam Smith, who said that in the right environment, the right kind of business model will inevitably lead to social benefit by pursuing traditional financial goals.” As Omidyar explains, “It can be very difficult to measure a nonprofit’s social impact.

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This system driven by self-interest is responsible for the great innovations that have improved the lives of billions.” In other words, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” as the great eighteenth-century economist Adam Smith put it in The Wealth of Nations. Indeed, one of the insights that the newly rich philanthropists are bringing to their giving is an appreciation of the virtues of business. People such as Mo Ibrahim and organizations such as the Shell Foundation understand that job-creating economic growth is a far better way to help the majority of poor people than aid handouts.

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Charity Rediscovered: A Study of Philanthropic Effort in Nineteenth-Century Liverpool. Liverpool, U.K.: Liverpool University Press, 1992. Simon, William E. A Time for Truth. Reader’s Digest Association, 1978. Slack, P. Poverty and Policy in Tudor and Stuart England. London: Longman, 1988. Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations 1776. A facsimile of the first edition with an introduction by Edwin Connor, Chicago: University of Chicago Press, 1977. Smith, A. The Theory of Moral Sentiments. Amherst, NY: Prometheus Books, 2000. Sobel, Dava. Longitude: The True Story of a Lone Genius Who Solved the Greatest Scientific Problem of His Time.

Liars and Outliers: How Security Holds Society Together
by Bruce Schneier
Published 14 Feb 2012

Stulz (2007), “The Economics of Conflicts of Interest in Financial Institutions,” Journal of Financial Economics, 85 (2007): 267–96. Chapter 13 result is price-fixing Robert Schuettinger and Eamonn F. Butler (1979), Forty Centuries of Wage and Price Controls: How Not to Fight Inflation, The Heritage Institute. Adam Smith Adam Smith (1776), The Wealth of Nations. global citric acid cartel John M. Connor (1998), “The Global Citric Acid Conspiracy,” Agribusiness, 14:435–52. computer-memory cartel U.S. Department of Justice (5 Oct 2005), “Samsung Agrees to Plead Guilty and to Pay $300 Million Criminal Fine for Role in Price Fixing Conspiracy: Korean Company Pays Second Largest Criminal Antitrust Fine in U.S.

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Zoe R. Donaldson and Larry J. Young (2008), “Oxytocin, Vasopressin, and the Neurogenetics of Sociality,” Science, 322:900–4. someone's oxytocin Michael Kosfield, Marcus Heinfichs, Paul J. Zak, Urs Fischbacher, and Ernst Fehr (2003), “Oxytocin Increases Trust in Humans,” Nature, 435:673–6. Adam Smith Adam Smith (1759), The Theory of Moral Sentiments. non-kin groups Martin A. Nowak (2006), “Five Rules for the Evolution of Cooperation,” Science, 314:1560–3. Martin A. Nowak and Roger Highfield (2011), SuperCooperators: Altruism, Evolution, and Why We Need Each Other to Succeed, Free Press. Indirect reciprocity Martin A.

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Nelson, and Uri Simonsohn (2011), “False Positive Psychology: Undisclosed Flexibility in Data Collection and Analaysis Allows Presenting Anything as Significant,” Psychological Science, 22:1359–66. narrow and unrepresentative Joseph Henrich, Steven J. Heine, and Ara Norenzayan (2010), “The Weirdest People in the World?” Behavioral & Brain Sciences, 33:61–83. Adam Smith Adam Smith (1759), The Theory of Moral Sentiments. Chapter 2 sticks as weapons Jill D. Pruetz and Paco Bertolani (2007), “Savanna Chimpanzees, Pan troglodytes verus, Hunt with Tools,” Current Biology, 17:412–17. using rocks Giacomo Bernardi (2011), “The Use of Tools by Wrasses (Labridae),” Coral Reefs, published online before print.

Open: The Story of Human Progress
by Johan Norberg
Published 14 Sep 2020

Ridley, The Rational Optimist: How Prosperity Evolves. London, Fourth Estate, 2010, p. 91. 3 C. Wheelan, Naked Economics: Undressing the Dismal Science. New York, W. W. Norton & Company, 2002, p. 187. 4 A. Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations in The Glasgow Edition of the Works and Correspondence of Adam Smith. Indianapolis, Liberty Fund, 1776/1981, p. 29. 5 A. S. Brooks et al., ‘Longdistance stone transport and pigment use in the earliest Middle Stone Age’, Science, 360(6384), 2018. 6 P. Farb, Man’s Rise to Civilization: As Shown by the Indians of North America From Primeval Times to the Coming of the Industrial State.

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It can be set up anywhere, and it runs on nothing but human imagination and on keeping protectionists (or parents) away. It’s not a foreign plot, it is the fastest way to prosper more from what you produce yourself, and the only way for poor countries to get rich and for rich countries to get richer. Mankind has, thought the Scottish philosopher and economist Adam Smith, ‘a disposition to truck, barter and exchange’.4 Wherever we look in history, people exchange – favours, ideas, goods and services. And the deeper archaeologists dig, the further back they push the evidence of human exchange. It goes thousands of years back in history and, according to some recent, astonishing findings, trade is as old as mankind itself.

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As the economist and politician William Beveridge pointed out in 1931, if other countries have bad harbours that are inaccessible to our ships it is bad, but it would be even worse if we responded by throwing rocks in our own harbours.62 The meaningless trade balance While these are serious concerns, ‘[n]othing, however, can be more absurd than this whole doctrine of the balance of trade’, as the founder of classical economics, Adam Smith, told his mercantilist contemporaries. They thought exports were good and imports bad, and that it was a problem if we bought more from a certain place than they bought from us. Smith’s point was that you derive the benefit of trade from the goods and services you receive, not the ones you produce, just like the material benefit from work is not the effort you exert, but the goods and services this work buys you.

Lying for Money: How Fraud Makes the World Go Round
by Daniel Davies
Published 14 Jul 2018

In other words, many things about the way the business world is organised make a lot more sense when you realise that they exist because of the constant drive for countries to become less like Greece and more like Canada. And as industrial society develops, it becomes easier to be a victim. In The Wealth of Nations, Adam Smith described how prosperity derived from the division of labour – the eighteen distinct operations that went into the manufacture of a pin, for example. While this was going on, the modern world also saw a growing division of trust. In previous eras when people set out across continents to discover new worlds, they had known that they were stepping out into the unknown, but Mr Gauger was at the cutting edge of a new reality.

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It had been recognised much earlier that collusion between business people tends to raise prices at the expense of the general public. Adam Smith’s Wealth of Nations has a famous passage that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’ These days, the intellectual battles of the Progressive Era have been so comprehensively won by the anti-cartel side that it’s hard to convince ourselves that there hasn’t always been a sense of moral odour hanging around the practice of price fixing. But it’s surprisingly recent. The famous passage from Adam Smith is immediately followed by one saying ‘It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice.’

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That’s how the majority of frauds happen, by number, and this model of ‘incidental’ fraud is one that fits pretty well into a normal risk management framework. Risk and quality Quality control is one of the ‘planning’ disciplines which look like they possibly ought to be part of economics, but which didn’t get scooped up into the big intellectual adventure that started with Adam Smith and have therefore remained largely free of ideological and psychological baggage. That’s useful, as it’s clearly related to the economic concept of risk and return, which has more baggage than a budget flight to a golfing resort. The advantage of a ‘quality control’ way of thinking over a ‘risk management’ way of thinking is that it is less dependent on making assumptions about the statistical properties of bad events, so you can apply it to things which are sui generis or which haven’t been seen before.

Green Swans: The Coming Boom in Regenerative Capitalism
by John Elkington
Published 6 Apr 2020

Interestingly, the tenth and final theme that O’Reilly flagged was the need to reinvent the discipline of economics, the master discipline of capitalism. Among the books he had been reading were Kate Raworth’s Doughnut Economics, Mariana Mazzucato’s The Value of Everything, and Russ Roberts’s How Adam Smith Can Change Your Life. Just in case his readers thought that the last book was another hymnal to Smith’s “invisible hand,” O’Reilly underscored the fact that the main point of reference in the book was not Smith’s 1776 book, The Wealth of Nations, but The Theory of Moral Sentiments, which Smith had published seventeen years earlier. The key argument in that work was that social norms play a crucial role in reining in self-interest.

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It’s an ideology whose credibility is fatally compromised because of the perverse outcomes it has engineered: runaway climate change, the biggest inter-generational crime ever committed, and gross inequality—a scar on the conscience of humanity. Capitalism needs to be reinvented for the 21st century. This means discarding the tired reflex that has driven economic development since Adam Smith first proclaimed its utility over two hundred years ago—self-interest—in favor of working for the common good. The famous “invisible hand” has reached its limitations and instead inclusive capitalism is needed to establish a new social contract that truly leaves no one behind. It also requires supercharging inventive models of cooperation, which recognize that you can only deliver real transformational change—at speed, at scale, and with maximum impact—provided you join forces in deep and purposeful collaboration with others.

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As blind both to Black and Gray Swan futures some of those crazy people are warning about as they are to possible Green Swan opportunities. We will explore how new forms of wealth are being created tomorrow by people previously seen as marginal, irrelevant even. Ultimately, the genius of capitalism links to Adam Smith’s “invisible hand,” with the individual self-interest of businesspeople driving the innovation and production that potentially serve the interests of the many. Ideas that start on the margins can push—or be sucked—into the mainstream. Failed experiments are allowed to die, with the most productive capitalist economies allowing for a certain amount of failure.

To Serve God and Wal-Mart: The Making of Christian Free Enterprise
by Bethany Moreton
Published 15 May 2009

The NEP, for example, helped publicize a Young Americas Foundation study blaming the Reagan recession on pervasive Keynesianism in college economics textbooks.100 American Studies regularly hosted supporters of the Austrian school of hard-Â�right economics from the Mont Pelerin Society and its American offshoot, the Foundation for Economic Education. The college celebrated the nation’s bicentennial with a program honoring the concurrent two hundredth anniversary of the publication of The Wealth of Nations.101 In 1979, Harding’s business department took the additional step of establishing the Belden Center for Private Enterprise Education, named in honor of an inÂ�deÂ�penÂ�dent Arkansas manufacturer. Its activities included the publication of an annual almanac of “mankind’s onward march through the centuries to economic freedom and greater material blessings” and a quarterly pamphlet, The Entrepreneur, written entirely by the center’s director and dedicated to articles on “capÂ�italism, personified so well by Wal-Â�Mart.”102 The Private Enterprise Center supported the student “Capitalism Corps” and the academic business club.

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Even at schools that taught economics as a theoretical discipline, SIFE invariably entered through the business departments. A small number of committed ideologues provided some of the fire in SIFE’s belly, but only at a remove from the core theories they represented. SIFE students read “I, Pencil,” not The Wealth of Nations nor even The Road to Serfdom. Sometimes, however, the students veered toward contradictions between their ideological models and conÂ�flicting economic values. In the midst of the intense focus on entrepreneurial heroism and government profligacy, Malone College’s 1987 projÂ�ect stood out for its explicit reference to the basis of the postindustrial economy.

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See Students in Free Enterprise Silent majority, 3, 41 Silicon Valley, 172 Siloam Springs, AR, 32–33 Small Business Administration, 149–150 Small Business Development Centers, 150 Small businesses, 150–151, 157, 160–161, 185–186, 210, 212 Small Business Institutes, 150, 167 Small farms/farmers, 8, 12–14, 16, 20, 23, 29–30, 37, 44, 50, 52–53, 55, 57, 270. See also Agriculture; Rural issues Small-town issues, 38, 40–42, 44, 46–47, 80, 84, 133, 153, 238 Smith, Adam, 126, 154, 175, 211, 220; The Wealth of Nations, 167 Social capÂ�ital, 54, 125 Socialism, 16, 26, 142, 146, 155, 170, 175, 194, 248 Social Security, 2, 10, 30, 54, 71, 330n42 Soderquist, Don, 89, 117–118, 132, 162–163, 208, 249; The Wal-Mart Way, 163 Southern Baptist Convention, 92, 95, 112, 120, 142, 156, 158, 188, 250, 259, 267 Southern Methodist University, 134, 156, 163 Southwest Baptist University, 186–189, 191, 212 Southwestern Life Insurance, 179–180 Soviet Â�Union, 156, 170–171, 196, 218, 220, 225–226, 233, 249 Spanish language, 55, 224, 234–237, 245 Sponsorship.

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek
by Rutger Bregman
Published 13 Sep 2014

Although this document enabled the king to take out a few more loans, it came too late to stop the Revolution in 1789. The meaning of the term “national income” has actually never been fixed, fluctuating with the latest intellectual currents and the imperatives of the moment. Every era has its own idiosyncratic ideas about what defines a country’s wealth. Take Adam Smith, father of modern economics, who believed that the wealth of nations was founded not only on agriculture, but also manufacturing. The entire service economy, by contrast – a sector that spans everything from entertainers to lawyers and constitutes roughly two-thirds of the modern economy – Smith argued “adds to the value of nothing.”18 Nevertheless, as cash flows shifted from farms to factories and then from production lines to office towers, figures for tabulating all this wealth kept pace.

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Juliet Schor, The Overworked American. The Unexpected Decline of Leisure (1992), p. 47. It’s worth noting that hunters and gathers probably worked even less. Archeologists estimate their workweek at no more than 20 hours. 30. Benjamin Kline Hunnicutt, Kellogg’s Six-Hour Day (1996), p. 35. 31. In his classic work The Wealth of Nations, Adam Smith wrote: “The man who works so moderately as to be able to work constantly, not only preserves his health the longest, but in the course of the year, executes the greatest quantity of works.” 32. Benjamin Kline Hunnicutt, Kellogg’s Six-Hour Day (1996), p. 62. 33. Kellogg’s workday was briefly back at eight hours during WWII, but after the war a large majority of his employees voted to resume the six-hour workday; it wasn’t until Kellogg’s cornflake factory managers were allowed to set hours themselves that, one by one, they ramped workdays up to eight hours again.

The People's Republic of Walmart: How the World's Biggest Corporations Are Laying the Foundation for Socialism
by Leigh Phillips and Michal Rozworski
Published 5 Mar 2019

Unlike the localized gift-exchange economy of prehistory, ancient Mesopotamia saw systems of centralized redistribution that mimic today’s welfare states: taxes and levies in, transfers of goods and services out. Alongside writing and mathematics, building blocks of civilization that developed in tandem with economic record keeping, the ancients also developed money—only not in the way some economists imagine. In an oft-repeated passage from The Wealth of Nations, Adam Smith wrote that “the propensity to truck, barter, and exchange one thing for another” led to the division of labor, the invention of money and greater economic complexity. This bit of make-believe has been passed down for centuries and can still be found in most introductory economics textbooks.

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In much of mainstream economics, the firm is just a mathematical equation that consumes inputs and produces outputs. How it does this is rarely asked; its internal workings are insufficiently interesting. Or sufficiently embarrassing. Willful disregard for the reality of planning is common enough. Adam Smith, the eighteenth-century Scot now considered the father of economics, is famous for introducing the “invisible hand” of the market. By this he meant no mystical force, but the idea that while individuals are making decisions whether to sell or to buy in the pursuit of self-interest, they are “led by an invisible hand to promote an end which was no part of [their] intention”—the welfare of society realized through a market system.

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In the years immediately following this overhaul, over 10 percent of total NHS spending already went to for-profit providers. Against the Market The story of the NHS since the 1990s is not just one of a conflict between planning and markets; it is also a reminder that markets need to be made and sustained, a point well understood by the neoliberals who set out to do just this. Markets are human creations; indeed, Adam Smith’s prehistory of plucky Neolithic humans getting by through “truck and barter” is as inaccurate as the creationist Eden where humans rode dinosaurs. Rather than being natural and inevitable, markets are a planned institution. The NHS is a perfect example of such conscious effort going into the creation of something that is ultimately antidemocratic—where the strength of your voice is the size of your wallet—not to mention anarchic and often irrational.

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives)
by David Birch
Published 14 Jun 2017

Since paying interest was forbidden by the church, selling tallies at a discount became a key means for the Crown to borrow money without God noticing what was going on. The discount on the tallies, being equivalent to the interest rate for government debt, varied just as one would expect. As economic circumstances changed, so did the discount rate. As Adam Smith notes in An Inquiry into the Nature and Causes of the Wealth of Nations (Book V, Chapter 3: ‘Of public debts’), in the time of William of Orange the discount reached 60 per cent when the Bank of England suspended transactions during a debasement of the coinage. Clearly, then, the tally system could be (and was) abused by the exchequer selling tallies that they would not redeem, but the Crown soon learned not to renege on tallies since doing so meant that the discount on future tallies would increase and the exchequer would be hit hard.

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Part II The Present: Money That We Think We Understand The judicious operations of banking, by substituting paper in the room of a great part of this gold and silver, enables the country to convert a great part of this dead stock into active and productive stock. — Adam Smith (1723–90) in An Inquiry into the Nature and Causes of the Wealth of Nations (Volume I, Book II, Chapter II) During Victorian times the combination of technology and regulation brought us to a vision of money and markets that we recognize. This vision is one of a central bank in control of nation state currency, money creation by fractional reserve banks and paper circulating in the place of commodities.

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The unbearable lightness of digital money. Journal of Payment Strategy and Systems 9(3), 229–241. IBSintelligence. 2013. In the fast lane. IBS Journal, 4 April, p. 22. Issing, O. 2000. New techologies in payments: a challenge to monetary policy. European Central Bank, 28 June. Jacobs, J. 1985. Cities and the Wealth of Nations. Toronto: Random House. Jacomb, M. 1998. The city to come. The Spectator, 8 November, p. 17. Jansen, M. 2013. Bitcoin: the political ‘virtual’ of an intangible material currency. International Journal of Community Currency Research 17(A), 8–18. Jay, P. 2000. Globalisation: boats not bytes.

Paper Promises
by Philip Coggan
Published 1 Dec 2011

But, except for the very rich who might want an apartment in central London, houses are not things that people from other economies tend to wish to buy. In general, economic welfare improves when we create tradable goods and services: pharmaceuticals, manufactured goods, video games or raw materials. Adam Smith worked all this out in The Wealth of Nations when he declared that, ‘Though a house . . . may yield a revenue to its proprietor but it cannot yield any to the public, nor serve in the function of a capital to it, and the revenue of the whole body of the people can never be in the smallest degree increased by it.’ In short, a belief that a nation can prosper from higher house prices makes one think of the mythical island where every household earned its living by taking in its neighbour’s washing.

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Then it might make sense for people to accept paper money issued by a stable regime, for the prosperity of the economy would allow it to redeem its paper promises. It is no accident, then, that the European experiments with paper money emerged in the eighteenth century, when the population and economic output of the continent began its long period of growth. The same era saw the development of the study of economics, led by Adam Smith, and the rejection of the earlier mercantilist approach. Wealth was not merely a matter of accumulating more bullion; it flowed from the rise of trade and industrial activity. That the Law experiment did not destroy the use of paper money was perhaps due to a fundamental problem with precious metals – they are easy to steal.

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However, that return should not be greater than the economic return on the asset against which it is lent. So if one lends money against the security of land, and the rental income on the land is 4 per cent, the interest rate should not be 5 per cent. Where rates do exceed this economic return, Belloc argued that the result is gradually to transfer all wealth into the hands of the investor class. Adam Smith had also made a distinction between productive and consumptive loans. It made sense, in his view, for someone to borrow money if they thought they could earn a higher return than the interest they paid; for example by starting a business. It did not make sense to borrow money to finance immediate consumption.

Superminds: The Surprising Power of People and Computers Thinking Together
by Thomas W. Malone
Published 14 May 2018

It is the “global mind”—the combination of all the people, computers, and other kinds of intelligence on the earth.14 We’ll see that, in some ways, the global mind already exists and is getting smarter all the time. And the book will conclude with some reflections on how we can use our global collective intelligence to make choices that are not just smart but also wise. Part I What Are Superminds? CHAPTER 1 Would You Recognize a Supermind If You Saw It on the Street? When Adam Smith wrote The Wealth of Nations, in 1776, he said that buyers and sellers in a market who do what’s best for themselves are often “led by [the] invisible hand” of the market to also do what’s best for society. For instance, if you can make more profit for yourself by selling mustard ice cream instead of mocha from your ice cream truck, then that’s also the way your business can contribute more economic value to society.1 Of course, there are certainly situations where maximizing your own profit isn’t what’s best for society.

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CHAPTER 13 How Can We Work Together in New Ways? In Adam Smith’s famous pin factory, dividing the work of a single pin maker into many smaller tasks done by different specialized workers led to vast increases in productivity. But even Smith, when he wrote about this in 1776, probably didn’t realize how important this division of labor would be in driving economic progress for centuries to come. Much of the prosperity we enjoy today—you might even say much of the collective intelligence of today’s organizations—results from this specialization of work. The early factories that Adam Smith described—in fact, the advances of the Industrial Revolution in general—depended on more than just new technologies.

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Industry Starting in the 1700s, division of labor and more complex kinds of coordination went much further as humans developed the factories and machines of the Industrial Age. New technologies coupled with new ways of organizing work allowed vastly increased productivity. For instance, the Scottish economist Adam Smith famously used the example of a pin factory to illustrate the power of division of labor. In this factory, what was formerly the task of a single pin maker was divided into 18 separate tasks, like cutting wires and sharpening points, each done by a different specialized worker. Dividing up the work in this way, among a larger group of people, led to a vast increase in productivity.

Winner-Take-All Politics: How Washington Made the Rich Richer-And Turned Its Back on the Middle Class
by Paul Pierson and Jacob S. Hacker
Published 14 Sep 2010

Efforts to address these inequities were blocked in legislatures highly attentive to business concerns. Where laws promoting social reform were passed, they were thrown out by the courts. Lest this critique be seen as deeply radical in spirit, it is worth quoting a little-noticed passage in Adam Smith’s 1776 The Wealth of Nations, now viewed as the bible of limited-government free-market economics. “Wherever there is great property,” Smith wrote, “there is great inequality… Civil government, so far as it is instituted for the security of property, is in reality, instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.”15 (Smith, a resolute skeptic about the rationality of unfettered financial markets, also authored the phrase “other people’s money,” which titled Brandeis’s famous work.)

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Bush (Naperville, IL: Sourcebooks, 2003), 72–73. 12 Melvin I. Urofsky, Louis D. Brandeis: A Life (New York: Pantheon Books, 2009), 326. 13 Quoted in Ibid., 320. 14 Cass Sunstein, The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever (New York: Basic Books, 2004), 20–25. 15 Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (Edinburgh: Thomas Nelson and Peter Brown, 1827), 277, 279. 16 Walter Lippmann, Drift and Mastery: An Attempt to Diagnose the Current Unrest (New York: Mitchell Kennerley, 1914), 36–37. 17 Ibid., 100. 18 Frances E. Lee and Bruce I. Oppenheimer, Sizing Up the Senate: The Unequal Consequences of Equal Representation (Chicago: University of Chicago Press, 1999); John D.

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During his tenure as CEO, Fuld made $490 million (before taxes) cashing in stock options and stock he received as compensation.”68 Friends in High Places The myth of America’s winner-take-all economy is that government does not have much to do with it. Skyrocketing gains at the top are simply the impersonal beneficence of Adam Smith’s “invisible hand,” the natural outcome of free-market forces. Listen to Sanford Weill, the former chairman of Citigroup: “People can look at the last twenty-five years and say this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built.”69 Weill may not have relied on “somebody else” during this “unique period.”

Against the Gods: The Remarkable Story of Risk
by Peter L. Bernstein
Published 23 Aug 1996

In the 1780s, he wrote a book on the American Revolution with the almost endless title of Observations on the Importance of the American Revolution and the Means of Making it a Benefit to the World in which he expressed his belief that the Revolution was ordained by God. At some personal risk, he cared for the American prisoners of war who had been transferred to camps in England. Benjamin Franklin was a good friend, and Adam Smith was an acquaintance. Price and Franklin read and criticized some of the draft chapters of The Wealth of Nations as Smith was writing it. One freedom bothered Price: the freedom to borrow. He was deeply concerned about the burgeoning national debt, swollen by the wars against France and by the war against the colonies in North America. He complained that the debt was "funding for eternity" and dubbed it the "Grand National Evil."18 But Price was not just a minister and a passionate defender of human freedom.

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It is for this reason that probability is to us the "guide of life," since to us, as Locke says, "in the greatest part of our concernment, God has afforded only the Twilight, as I may so say, of Probability, suitable, I presume, to that state of Mediocrity and Probationership He has been pleased to place us in here."10 INTRODUCTION 1. Quoted in Keynes, 1921, frontispiece to Chapter XXVIII. 2. Personal conversation. 3. Arrow, 1992, p. 46. CHAPTER 1 1. Quoted in Ignatin and Smith, 1976, p. 80. The quotation is from Book I, Chapter X, of The Wealth of Nations. 2. Keynes, 1936, p. 159. 3. Ibid., p. 150. 4. This entire paragraph is from Bolen, 1976. 5. Excellent background on all this may be found in David, 1962, pp. 2-21. 6. See David, 1962, p. 34. 7. Hayano, 1982. 8. Johnson, 1995. 9. See David, p. 2. 10. Sambursky, 1956, p. 36. 11. Ibid., p. 37. 12.

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Human beings have always been infatuated with gambling because it puts us head-to-head against the fates, with no holds barred. We enter this daunting battle because we are convinced that we have a powerful ally: Lady Luck will interpose herself between us and the fates (or the odds) to bring victory to our side. Adam Smith, a masterful student of human nature, defined the motivation: "The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune."' Although Smith was keenly aware that the human propensity to take risk propelled economic progress, he feared that society would suffer when that propensity ran amuck.

Building and Dwelling: Ethics for the City
by Richard Sennett
Published 9 Apr 2018

The eighteenth-century economist Jean-Baptiste Say answered this question in his loi des débouchés (law of the markets), which postulated that ‘increased supply creates its own demand’, the idea being that an increase, for example, in supplies of milk will spur consumption because the milk is plentiful and cheap. For cities like Delhi, Say’s law doesn’t work out so nicely: burgeoning population numbers create demand for services which the municipality can’t provide. A more forceful answer to ‘why grow big?’ appeared in the writings of Adam Smith. As formulated in The Wealth of Nations (1776), larger markets will trigger the division of labour in production; a modern example is that great demand for cheap automobiles replaced hand-built coachwork before the First World War, and throughout the 1920s fine-tuned different tasks on the assembly line. The urban analogue to Smith would be that if 10,000 people are targeted for an area which formerly housed 2,000, then the houses themselves will be made according to the division of labour, with apartments of different sizes and shapes, other spaces put to specialized uses, like parking garages dug out below gardens, and so on.

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sewers Shanghai Bund and cellular grid collective life in Communist Party Plan delinquency fast-track growth flash-flooding of highways to nowhere landscape projects parks project Plan Voisin and pollution Pudong district restoration in roads Shanghai Tower speed of development streetscape towers as trading post with West traffic transformation and urban explosion waterways World Expo (2010) Xintiandi Yanlord Garden see also shikumen shell form Shelley, Percy Bysshe ‘Ozymandias’ shikumen Shukhov, Vladimir sidewalks Siena Silicon Valley Silk Road Simmel, Georg ‘Die Großstädte und das Geistesleben’ ‘The Stranger’ ‘The Metropolis and Mental Life’ Sinclair, Iain Sixtus V, Pope skyscrapers Slamecka, Norman Smith, Adam, The Theory of Moral Sentiments The Wealth of Nations socialism cooperative non-Marxian sociality Solà-Morales, Manuel de solar energy Solnit, Rebecca Songdo, South Korea Soros, George sound, ambient flat-line intensity and intelligibility porous reverberation time warning South Korea Spain expulsion of Jews and Muslims Speer, Albert spotlighting Stadtluft macht frei (medieval saying) Stalin, Joseph start-ups Stein, Gertrude Stendhal (Marie-Henri Beyle) The Red and the Black storms Stradivarius (Antonio Stradivari) strangers, encounters with exclusion of integration of neighbours as protection from reading street furniture street-smarts limits on streetscapes Strogatz, Steven sublimity Sudhir, Mr, conversation with author and ‘eyes on the street’ at home imagined as urban designer and intimacy as marginal figure and open city as seller of dubious goods threats to Sullivan, Louis sustainability of safety Sweden ‘swerves’ (clinamens) Swift, Jonathan, Gulliver’s Travels synchronous spaces Syria tacit behaviour technology effects friction-free or user-friendly smart start-ups sustainable Terry, Quinlan Tessen Soki Thailand, clothing industry Thimphu, Bhutan Thomas, W.

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All the open forms discussed in this book invite active engagement, because none is stable or self-sufficing. If the open cité is a place of doing rather than being, what it does not do is arouse sympathy for others. Adam Smith, in The Theory of Moral Sentiments, provided one of the first physiological explanations of how sympathy works. When you see a man fall in the street you run to help him because you can imagine the pain as your own kneecap shattering. In Kantstrasse, passers-by following Adam Smith would have imagined themselves leaning against a wall in distress, and so asked me if they could help.8 The golden rule transforms this physiological response into an ethical command.

The-General-Theory-of-Employment-Interest-and-Money
by John Maynard Keynes
Published 13 Jul 2018

The Economist as Saviour As an intellectual achievement, The General Theory ranks with only a handful of other works in economics—the tiny set of books that transformed our perception of the world, so that once people became aware of what those books had to say they saw everything differently. Adam Smith did that in The Wealth of Nations: suddenly the economy was not just a collection of people getting and spending, it was a self-regulating system in which each individual “is led by an invisible hand to promote an end which was no part of his intention”. The General Theory is in the same league: suddenly the idea that mass unemployment is the result of inadequate demand, long a fringe heresy, became completely comprehensible, indeed obvious.

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Furthermore, he favoured a low rate of interest as increasing the chance of savings finding their outlet in new investment rather than in debts; and for this reason, in a passage for which he was severely taken to task by Bentham,23 he defended a moderate application of the usury laws.24 Moreover, Bentham’s criticisms were 23 24 In his Letter to Adam Smith appended to his Defence of Usury. Wealth of Nations, Book II, chap. 4. 314 J. M. Keynes mainly on the ground that Adam Smith’s Scotch caution was too severe on ‘projectors’ and that a maximum rate of interest would leave too little margin for the reward of legitimate and socially advisable risks. For Bentham understood by projectors ‘all such persons, as, in the pursuit of wealth, or even of any other object, endeavour, by the assistance of wealth, to strike into any channel of invention…upon all such persons as, in the line of any of their pursuits, aim at anything that can be called improvement…It falls, in short, upon every application of the human powers, in which ingenuity stands in need of wealth for its assistance.’

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I find it in the idea that it is the function of the rate of interest to preserve equilibrium, not between the demand and the supply of new capital goods, but between the demand and the supply of money, that is to say between the demand for liquidity and the means of satisfying this demand. I am here returning to the doctrine of the older, pre-nineteenth century ­economists. Montesquieu, for example, saw this truth with considerable clarity,1—Montesquieu who was the real French equivalent of Adam Smith, the greatest of your economists, head and shoulders above the physiocrats in penetration, clear-headedness and good sense (which are the qualities an economist should have). But I must leave it to the text of this book to show how in detail all this works out. I have called this book the General Theory of Employment, Interest and Money; and the third feature to which I may call attention is the treatment of money and prices.

The Price of Inequality: How Today's Divided Society Endangers Our Future
by Joseph E. Stiglitz
Published 10 Jun 2012

Basu uses the metaphor of a magic show to describe the way the discussion of economics on the political right draws attention to the conclusion of this theorem—that markets are efficient—and away from the very special and unrealistic conditions under which the conclusion holds—perfect markets. Like a good magician, a free-market economist succeeds by drawing spectators’ attention to what he wants them to see—the rabbit jumping out of the hat—while distracting their attention from other things—how the rabbit got into the hat in the first place. 6. Adam Smith, The Wealth of Nations (1776; New York: P. F. Collier, 1902), p. 207. 7. See Carmen Reinhart and Kenneth Rogoff, This Time Is Different: Eight Centuries of Financial Folly (Princeton: Princeton University Press, 2009). 8. A derivative is just a financial instrument the return to which is derived on the basis of something else, e.g., the performance of a stock or the price of oil or the value of a bond.

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For instance, in systems where representation in Congress (parliament) are proportional to the total vote garnered in a state. Some countries have a mix of “district” representatives (as we have) and proportional representation. 27. Adam Smith understood as much. See his The Theory of Moral Sentiments (1759), published in 2000 by Prometheus Books, in Amherst, NY. See also Emma Rothschild and Amartya Sen, “Adam Smith’s Economics,” The Cambridge Companion to Adam Smith (Cambridge: Campbridge University Press, 2006), pp. 319–65, especially the discussion of the commonwealth beginning on p. 347. INDEX Abed, Fazle Hasan, 196 Acacia Research Corporation, 203 Accenture, 360 advertising, 147, 335, 348, 354 see also marketing affirmative action, 282 Afghanistan, 143, 176, 209, 211, 218 Africa, 23, 40 African Americans: discrimination against, 68, 69, 70, 71, 129, 303, 305, 308, 328, 367, 369 disenfranchisement of, 345, 349 wealth of, 13, 70, 71, 329, 384 agriculture: government subsidies in, 51, 64, 179, 180, 320, 326, 379 in Great Depression, 56–57, 231, 233 AIG, 35, 49, 67, 180, 253, 369 airlines, deregulation of, 317 air traffic controllers, 65 Alien Torts Statute, 59 Ally, 374 Alperovitz, Gar, 78 alternative minimum tax, 394 American Airlines, 318 American Tobacco Company, 317 Andreessen, Marc, 318 Angelides, Phil, 372 antiglobalization movement, xiii, 277 Apple, 203, 360 Arab Spring, ix–xi, xiv, 287 Archer Daniels Midland (ADM), 51, 320 Arnall, Roland, 333 Asia, 64, 157 financial crisis in, 61, 231, 352, 353 AT&T, 44, 203, 317 Atkinson, Anthony B., xxiii auction theory, 50 austerity, 207, 220, 221, 230–36 Australia, 5, 14, 18, 22, 135, 286 autoworkers, 67 balanced-budget multiplier, 217–18, 379 Bangladesh, microcredit schemes in, 196, 197 bankers: bonuses for, x, xiv, xv, 21, 79, 141, 169, 245, 247, 270, 319, 333, 363 criminal prosecution of, xvi, 70, 119, 199, 205–6, 372, 373 economic influence of, xxii–xxiii, 79–80, 240 private incentives of, 33, 34, 87, 90, 96, 109–10 risky behavior by, xi, xxiii, 37, 90, 101, 109, 171, 198, 239–40, 246, 247, 269, 270, 336, 387 see also corporations; financial markets; financial sector Bank of America, 70, 374 bankruptcy: corporate, 313 derivatives claims in, 49, 271 government regulation of, 30 personal, 10, 275, 301 reform of, 58 student debt in, 58, 94, 195, 196, 265, 271, 323, 371 see also Chapter 11; foreclosures bankruptcy law, 193–97, 201, 202, 270, 271, 284 Bardeen, John, 41 Bartel, Larry, xxiv Basov, Nikolay, 315 Bear Stearns, 388 Belgium, 19, 22, 286 Berlusconi, Silvio, 349 Bernanke, Ben, 247, 248, 252, 257, 389 Berners-Lee, Tim, 41, 315 Bhutan, 122, 312 Bilmes, Linda, 176 Bipartisan Policy Center, 207 Bischoff, Kendra, 75 BlackBerry, 203 Blankfein, Lloyd, 124 Bloomberg, Michael, xiv bondholders, 168, 240, 261 bonds, municipal, 212, 378 Bowles, Erskine, 207 Bowles-Simpson Deficit Reduction Commission, 207, 221, 379, 380 Brattain, Walter, 41 Brazil, 5, 51, 249 economic growth in, 139, 298, 353 Bridgestone/Firestone, 104 British Petroleum (BP), xviii, 99, 189, 190, 367, 374 “Buffett rule,” 395 Buffett, Warren, 77, 180, 269, 333, 395, 396 Burnham, Walter Dean, 130 Bush, George W., 71, 73, 86, 87, 97, 101, 114, 169, 177, 208, 212, 221, 228, 330, 360, 383 Bush administration, xiv, 167, 168, 171, 178 business: anticompetitive behavior in, 44–46, 317, 318 corruption in, 176 government partnerships with, 174 government regulation of, 47 innovations in, 35, 46, 41, 78, 96, 178–79, 314, 315 political power of, 47, 50, 51, 62, 95, 99, 101, 111, 131–32, 135, 136, 285, 286, 319, 325, 350 teamwork in, 113, 343 trust in, 121–22 see also corporations; financial sector business, small, 61, 167, 225, 226, 241, 245, 395 California, electricity market liberalization in, 177–78 campaign finance, 37, 47, 131–32, 135, 136, 162, 196, 200, 206, 285–86, 319, 325, 350, 373, 397 Canada, 5, 18, 19 capital, 59, 323 social, 122–23, 125, 135 capital controls, 60, 181, 182, 277, 353 capital gains, 71–72, 87, 88, 115, 211, 274, 297, 298, 315, 330, 361, 378, 395 Cardoso, Enrique, 5 Carter, Jimmy, 71 Cayman Islands, 270 cell phones, 98, 203, 274 Census Bureau, U.S., 27, 305 Central Intelligence Agency (CIA), 209 Chait, Jonathan, 19, 116–17 Chapter 11, 284, 313, 363 see also bankruptcy Chavez, Hugo, 40 Cheney, Richard, 101 Chicago school, 44–45, 47, 256, 317, 391 child care, 10, 301 Chile, 141, 258 China, 19, 54, 64, 249, 280 economic strength of, 144, 175 inflation in, 259–60 Citibank, 204–5, 369, 387 cities, community segregation in, 75–76 Citizens United v.

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Of course, not all the inequality in our society is a result of rent seeking, or of government’s tilting the rules of the game in favor of those at the top. Markets matter, as do social forces (like discrimination). This chapter focuses on the myriad forms that rent seeking takes in our society, and the next turns to the other determinants of inequality. GENERAL PRINCIPLES Adam Smith’s invisible hand and inequality Adam Smith, the father of modern economics, argued that the private pursuit of self-interest would lead, as if by an invisible hand, to the well-being of all.5 In the aftermath of the financial crisis, no one today would argue that the bankers’ pursuit of their self-interest has led to the well-being of all.

The Social Animal: The Hidden Sources of Love, Character, and Achievement
by David Brooks
Published 8 Mar 2011

Both sides assumed there was a direct relationship between improving material conditions and solving problems. Both sides neglected matters of character, culture, and morality. In other words, they split Adam Smith down the middle. Smith wrote one book, The Wealth of Nations, in which he described economic activity and the invisible hand. But he wrote another book, The Theory of Moral Sentiments, in which he described how sympathy and the unconscious desire for esteem molded individuals. Smith believed that the economic activity described in The Wealth of Nations rested upon the bedrock described in The Theory of Moral Sentiments. But in recent decades, the former book became famous, while the latter was cited but never applied.

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Rationalists gain prestige and authority because they have supposedly mastered the science of human behavior. Once the science goes, all their prestige goes with it. This scientism has expressed itself most powerfully, over the last fifty years, in the field of economics. Economics did not start out as a purely rationalist enterprise. Adam Smith believed that human beings are driven by moral sentiments and their desire to seek and be worthy of the admiration of others. Thorstein Veblen, Joseph Schumpeter, and Friedrich Hayek expressed themselves through words not formulas. They stressed that economic activity was conducted amidst pervasive uncertainty.

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For some reason he never took on the really big figures—Napoleon, Lincoln, Washington, Franklin Roosevelt. But he focused on admirable, accomplished men and women, and in a quieter way gave his readers models of how to live. At the time Erica was struggling with Taggert, Harold was working on a book about the British Enlightenment. He was doing a group portrait of David Hume, Adam Smith, Edmund Burke, and some of the thinkers, politicians, economists, and conversationalists who had dominated eighteenth-century British thought. One evening he told Erica about the difference between the French and British Enlightenments, because he thought it might be useful to her at work. The French Enlightenment was led by thinkers like Descartes, Rousseau, Voltaire, and Condorcet.

Economic Dignity
by Gene Sperling
Published 14 Sep 2020

Monthly Labor Review, Bureau of Labor Statistics, United States Department of Labor, March 2019, https://www.bls.gov/opub/mlr/2019/article/is-the-us-labor-market-for-truck-drivers-broken.htm. CHAPTER ELEVEN: AN ECONOMIC DIGNITY WAGE 1. Dennis C. Rasmussen, “The Problem with Inequality according to Adam Smith,” Atlantic, June 9, 2016, https://www.theatlantic.com/business/archive/2016/06/the-problem-with-inequality-according-to-adam-smith/486071/. 2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776). 3. Theodore Roosevelt, address before the Convention of the National Progressive Party (Chicago, August 1912), Social Security Administration, accessed November 10, 2019, https://www.ssa.gov/history/trspeech.html. 4.

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If we want the dignity of work to be a reality and not an empty promise, work must pay enough to allow all workers to care for their families without economic deprivation or extreme hours blocking them from being there and enjoying the precious moments of loving relationships. This is hardly a new or radical concept. Even free-market champion Adam Smith said centuries ago, “They who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.”1 In The Wealth of Nations, he wrote that even for the lowest-skilled worker there must be a wage “consistent with common humanity” and that “a man must always live by his work, and his wages must at least be sufficient to maintain him . . . otherwise it would be impossible for him to bring up a family.”2 As noted earlier, in 1912, Teddy Roosevelt called for “a living wage” that was robust enough to ensure that workers have reasonable time off and enough resources to provide for young children, retirement, and periods of illness.3 Just over two decades later, FDR struck the same notes when he stated it is “plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”

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This can be seen in the Trump administration’s simplistic notion that any new regulation—no matter what its virtue—can be justified only if it is paired with the repeal of two others. This is not to say that some regulations are not oppressive, poorly constructed, out of date, and worthy of review or repeal. But that review should not start from the presumption that any new rule on market structure interferes with pure markets. Indeed, even Adam Smith, the father of market competition, based his famous argument—that the “invisible hand” of individual pursuit of self-interest in free competitive markets will benefit the common good—on the idea that competition would be structured by government policymakers to prevent government or private sector monopoly power.

Scots and Catalans: Union and Disunion
by J. H. Elliott
Published 20 Aug 2018

John Robertson, ‘An Elusive Sovereignty: The Course of the Union Debate in Scotland 1698–1707’, in John Robertson (ed.), A Union for Empire: Political Thought and the British Union of 1707 (Cambridge, 1995), pp. 198–227, at pp. 199–200. 102. For the Darien scheme see Douglas Watt, The Price of Scotland: Darien , Union and the Wealth of Nations (Edinburgh, 2007); David Armitage, ‘The Scottish Vision of Empire: Intellectual Origins of the Darien Venture’, in Robertson (ed.), Union for Empire , ch. 4; Whatley, Scots and the Union , pp. 166–73; Ferguson, Scotland’s Relations with England , pp. 176–9. 103. Whatley, Scots and the Union , p. 173; Watt, The Price of Scotland , p. 63; Sir Walter Scott, The Tales of a Grandfather (3 vols., 1827–30, repr.

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Estat, nació, socialisme. Estudis sobre el cas espanyol . Barcelona, 1982. Villanueva López, Jesús. Política y discurso histórico en la España del siglo XVII. Las polémicas sobre los orígines medievales de Cataluña . Alicante, 2004. Watt, Douglas. The Price of Scotland: Darien, Union and the Wealth of Nations . Edinburgh, 2007. Wedgwood, Cicely V. ‘Anglo-Scottish Relations, 1603–1640’, Transactions of the Royal Historical Society , 4, ser. 32 (1950), pp. 31–48. Whatley, Christopher A. The Scots and the Union . Edinburgh, 2006. Willson, D. H. King James VI and I . London, 1956. Withers, Charles W.

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Union expanded and facilitated the process of cultural and intellectual interchange between the two countries, introducing, where it had not already existed, a dash of emulation to the response of the Scots to an increasingly dominant English culture. 122 It also signalled new paths that were there for the taking. In particular, the notion of improvement so eagerly embraced by the Scots opened the way for them to develop the science of political economy that was to be central to their Enlightenment. David Hume and Adam Smith between them were to illustrate the dependence of modern society on material improvement, offering their own recipes for the continuation of social and economic progress. 123 There was, however, another way in which Union is likely to have encouraged the process of Enlightenment. The very fact of Scotland’s political relegation to provincial status provided an inducement not simply to emulate the English but to shine in alternative fields of endeavour.

Salt: A World History
by Mark Kurlansky
Published 28 Jan 2003

Salt A World History Mark Kurlansky To my parents, Roslyn Solomon and Philip Mendel Kurlansky, who taught me to love books and music and to Talia Feiga, who opened worlds while she slept in the crook of my arm. The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. —Adam Smith, The Wealth of Nations, 1776 All our invention and progress seem to result in endowing material forces with intellectual life, and in stultifying human life into a material force. —Karl Marx, speech, 1856 Dreams are not so different from deeds as some may think. All the deeds of men are only dreams at first.

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Caribbean salt merchants stockpiled it in the basements of their homes. The Chinese, the Romans, the French, the Venetians, the Hapsburgs, and numerous other governments taxed it to raise money for wars. Soldiers and sometimes workers were paid in salt. It was often used as money. In his 1776 treatise on capitalism, The Wealth of Nations, Adam Smith pointed out that almost anything of value could be used for money. He cited as examples tobacco, sugar, dried cod, and cattle and stated that “salt is said to be a common instrument of commerce and exchanges in Abyssinia.” But he offered the opinion that the best currency was made of metal because it was physically durable, even if its value was as ephemeral as other commodities.

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Turks Islands Landfall: A History of the Turks and Caicos Islands. Grand Turk: 1997. Sahagún, Fray Bernardino de. Historia general de las cosas de la Nueva España. Mexico City: Porrua, 1969. Schama, Simon. Citizens: A Chronicle of the French Revolution. New York: Alfred A. Knopf, 1989 Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Ed. Edwin Cannan. 1776. Reprint, New York: Modern Library, 1937. Tacitus. The Agricola and the Germania. Trans. H. Mattingly. New York: Penguin Books, 1970. Testart, Alain. Des mythes et des croyances: Esquisse d’une théorie générale. Paris: Editions de la Maison des Sciences de l’homme, 1991.

Social Life of Information
by John Seely Brown and Paul Duguid
Published 2 Feb 2000

Sitkin, Sim B., and Darryl Stickel. 1996. "The Road to Hell: The Dynamics of Distrust in an Era of Quality." In Trust in Organizations: Frontiers of Theory and Research, edited by Roderick M. Kramer and Tom R. Tyler, 196 215. Thousand Oaks, CA: Sage. Smith, Adam. 1937. An Inquiry into the Nature and Causes of the Wealth of Nations. New York: Modern Library. Smith, Douglas K., and Robert C. Alexander. 1988. Fumbling the Future: How Xerox Invented, Then Ignored, the First Personal Computer. New York: Morrow. Spender, J-C., and R. M. Grant. 1996. "Knowledge and the Firm: Overview." Strategic Management Journal 17 (1): 5 9.

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"There's potential for a lot of mayhem once bots are introduced on a wide scale," another researcher concluded. 25 The research suggests that frictionless markets, run by rationally calculating bots, may not be the efficient economic panacea some have hoped for. Social friction and "inertia" may usefully dampen volatility and increase stability. De Long and Froomkin even suggest that such frictionlessness might disable the "Invisible Hand." The great classical economist Adam Smith used the image of the invisible hand to describe forces that reconcile the pursuit of private interests through markets with the public good and with what we have called the social fabric. If not actually producing good, at least the invisible hand prevents the pursuit of private interests from doing harm.

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With this sharp distinction between value-adding and non-value-adding processes, reengineering insisted on sweeping away old practices. "Forget all you know," managers were told. "Don't automate, obliterate." Like all organizational fads, it also puffed itself up with some grandiose claims. Hammer and Champy, for instance, insisted they were transcending Adam Smith, one of the most enlightened thinkers of the eighteenth century and a pervasive influence on modern economics. Slogans aside, there was enough substance for reengineering to acquire an impressive following. Hewlett-Packard, AT&T, IBM, Xerox, Ford, NYNEX, Seagram, and a host of other corporations Page 93 great and small reengineered.

Democracy Incorporated
by Sheldon S. Wolin
Published 7 Apr 2008

See also Bernard Bailyn, Ideological Origins of the American Revolution (Cambridge: Harvard University Press, 1967), and Gordon Wood, The Creation of the American Republic, 1776–1787 (Chapel Hill: University of North Carolina Press, 1969), especially chaps. 2, 3. and 11. 15. Still suggestive is Harold Rosenberg’s The Tradition of the New, 2nd ed. (Boston: Da Capo, 2001). 16. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. W. B. Todd (Oxford: Clarendon Press, 1976), 1:454, 456. 17. I do not want to be understood as assuming that in the distant or recent past the United States was in possession of a more or less ideal system and that it has suddenly been hijacked by right-wing fanatics.

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It was pictured as a system but of decentralized powers working best when left alone (laissez-faire, laissez passer) so that “the market” operated freely. The market furnished the structure by which spontaneous economic activities would be coordinated, exchange values set, and demand and supply adjusted. It operated, as Adam Smith famously wrote, by an unseen hand that connected participants and directed their endeavors toward the common benefit of all, even though the actors were motivated primarily by their own selfish ends. One of Smith’s fundamental contentions was that while individuals were capable of making rational decisions on a small scale, no one possessed the powers required for rationally comprehending a whole society and directing its activities.

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An economy where power was dispersed among countless actors, and where markets supposedly were dominated by no one, rapidly gave way to forms of concentrated power—trusts, monopolies, holding companies, and cartels—able to set (or strongly influence) prices, wages, supplies of materials, and entry into the market itself. Adam Smith was now joined to Charles Darwin, the free market to the survival of the fittest. The emergence of the corporation marked the presence of private power on a scale and in numbers thitherto unknown, the concentration of private power unconnected to a citizen body. Despite the power of corporations over political processes and the economy, a determined political and economic opposition arose demanding curbs on corporate power and influence.

Finance and the Good Society
by Robert J. Shiller
Published 1 Jan 2012

“Sympathy and Callousness: The Impact of Deliberative Thought on Donations to Identi able and Statistical Victims.” Organizational Behavior and Human Decision Processes 102(2):143– 53. Smith, Adam. 1761. The Theory of Moral Sentiments, Second Edition. London: A. Millar in the Strand. ———. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations. London: Ward, Lock & Bowden & Co. Sprenkle, Case. 1964. “Warrant Prices as Indicators of Expectations and Preferences.” In Paul Cootner, ed., The Random Character of Stock Market Prices, 412–74. Cambridge, MA: MIT Press. Stanley, Thomas J. 1991. Selling to the Affluent. New York: McGraw-Hill.

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And the best way to do this is to build good moral behavior into the culture of Wall Street through the creation and observance of best practices in its various professions—CEOs, traders, accountants, investment bankers, lawyers, philanthropists. When Adam Smith wrote his classic Wealth of Nations in 1776, a book long acclaimed as marking the beginning of modern economics, the pressing issue for thinkers and critics of the day was tariffs.4 Private interests lobbied governments to put their interests ahead of public interests and push tari s up so high as to make it impossible for lowercost foreign producers to compete. But Adam Smith and other economists who followed him were successful in clarifying the importance of trade for the widespread wealth of nations. Since Adam Smith, lobbyists for special interests have found it much harder to push up tari s, and trade is substantially free today—a vital institution in creating the remarkable growth and widespread prosperity we have seen since the revolutions of the eighteenth century. 

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One can buy the nest wine, but in truth it is only incrementally di erent from other wines produced for the multitudes. Certainly some wealthy people do strive to own multiple large homes, expensive cars, and other luxury items, but we must assume there is diminishing satisfaction in amassing such possessions. This fact was noted by Adam Smith in his Theory of Moral Sentiments: It is to no purpose, that the proud and unfeeling landlord views his extensive elds, without a thought for the wants of his brethren, in imagination consumes himself the whole harvest that grows upon them. The homely and vulgar proverb, that the eye is larger than the belly, never was more fully veri ed than with regard to him.

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety
by Dalton Conley
Published 27 Dec 2008

American Express presaged Ronald Reagan’s “Morning in America” 1984 campaign message by promising that for every purchase made with the charge card, the company would donate one penny to the fund supporting the restoration of the Statue of Liberty (never mind the implications of the fact that we needed to go begging in the private sector to take care of something that was government property—this was the Reagan administration, after all). The effort raised $1.7 million of the $62 million cost of the project.61∗ Any economy is a moral system. That was something that Adam Smith recognized almost three hundred years ago. (He was, actually a moral philosopher by training and the author of A Theory of Moral Sentiments, a book that was almost as important to philosophers as The Wealth of Nations was to economists.) And with the Amex-Lady Liberty campaign, our moral economy took a new turn. We must remember that in a post-materialist society we don’t really need most of what we charge on our plastic cards in any meaningful sense of the word.

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Never mind that women of varying economic means faced starkly different calculations: If we don’t like inequality the solution is not to constrain choices, it’s to have a more progressive tax policy. And never mind that many of the women in the audience mumbled that the economist should have studied testicular cancer. All these phenomena are a result of commensurability: the fact that money is a universal medium that can price anything. It was wonderful in the time of Adam Smith. After all, with barter, how could you trade a cow for salt? You would be entitled to so much salt that you’d have to organize multiple trades to make the transaction happen. But with money, it’s magic. Now every sale doesn’t have to be a purchase at the same time. Money is freedom. Freedom to make our worldly goods disappear in a poof of green only to reappear later when we need them.

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The basic paradox back in this pastoral yesteryear was pretty much the same as it is today: Everyone acting in their own interest leads to failure, or “the tragedy of the commons,” since, without formal or informal restrictions, the land will become overgrazed to the point of desertification. The same is true for a wide range of common pool resources today: peace and quiet, a drive free from advertisements, clean air, spam-free Internet arteries, and even darkness so we can see the stars at night. One individual’s freedom to “truck and barter” (as Adam Smith famously termed economic activity) increasingly impinges on many others’ rights to be left alone (think junk mail). Likewise, an enormous amount of the costs of doing business are not born by the players involved but rather by the rest of us (think junk mail again, or plastic water bottles and landfill).

The Techno-Human Condition
by Braden R. Allenby and Daniel R. Sarewitz
Published 15 Feb 2011

Harper Torchbooks. Hill, J., J. Lines, and M. Rowland. 2006. Insecticide-treated nets. Advances in Parasitology 61: 77-126. Hirsch, F. 1976. Social Limits to Growth. iUniverse. Hughes, J. 2004. Citizen Cyborg. Westview. Hutchins, E. 1995. Cognition in the Wild. MIT Press. Jacobs, J. 1984. Cities and the Wealth of Nations. Vintage Books. Johnson, M. 1993. Moral Imagination: Implications of Cognitive Science for Ethics. University of Chicago Press. Johnsson-Latham, G. 2007. A study in gender equality as a prerequisite for sustainable development: What we know about the extent to which women globally live in a more sustainable way than men, leave a smaller ecological footprint, and cause less climate damage.

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Meanwhile, the underlying science and technology necessary to feed the consumption compulsion will be driven by the ongoing quest by technologically advanced states for military and economic advantage. So let us dispose here of a tempting analogy between transhumanist claims (rooted as they are in defense of individual liberty) and Adam Smith's famous "invisible hand." Just as innovation and productivity are optimized as individuals, driven by self-interest, strive for economic benefit, won't society be made better by individuals striving after various enhancements? The analogy would be false. The "invisible hand" is just a recognition of an information-processing mechanism; it integrates decisions made on the basis of individual preference into supply and demand curves that describe the efficient distribution of scarce resources.

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Unlike central planning, the "invisible hand" is effective with complex adaptive systems (i.e., the economy), in part because it decentralizes decision making across active agents and in part because the only outcome it aims to deliver is efficient allocation of information, prices, and stuff. But-and this is the critical part-the market enables efficient use of resources, not a fair, or even stable, distribution of resources across society-it does not guarantee that the world will get better, and Adam Smith well understood this fact. The early history of capitalism was one of violence and poverty alongside great wealth, huge social dislocation, and oligarchic monopolies, as documented in the novels of Dickens, Dreiser, and many others. A more socially stable and, yes, advanced (if 98 Chapter 5 still highly imperfect) capitalism evolved only when dampers on rampant market freedom, such as unions, anti-monopolistic policies, and unemployment insurance, were adopted-almost always after bruising political battles and occasional paroxysms of civil unrest.

The Right Side of History
by Ben Shapiro
Published 11 Feb 2019

Thomas Hobbes, Leviathan (Oxford, UK: Clarendon Press, 1947; reprinted from the 1651 ed.), 47. 23. Laurence Berns, “Thomas Hobbes,” in History of Political Philosophy, 396–419. 24. John Locke, Two Treatises of Government, 3rd ed. (New York: Cambridge University Press, 1988), Book 1, Sec. 30. 25. Ibid., Book 2, Sec. 57. 26. Ibid., Book 2, Sec. 222. 27. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: Methuen, 1776), Book IV, Chapter 9, Sec. 50. 28. Thomas Jefferson, “To Henry Lee,” May 8, 1825, in The Works of Thomas Jefferson, ed. Paul Leicester Ford, vol. 10, Federal Edition (New York: G. P. Putnam’s Sons, 1904–1905), 342–43. 29. Michael Pakaluk, “Aristotle, Natural Law, and the Founders,” NLNRAC.org, http://www.nlnrac.org/classical/aristotle#_ednref3. 30.

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This book is filled with old ideas—ideas from people we may dimly remember from our days in high school and college and Sunday school, but whose central importance we’ve essentially forgotten. Those ideas, I’ll argue, are crucial. We must learn them anew. This doesn’t mean that I believe philosophers changed history on their own. I don’t think Adam Smith invented capitalism any more than Immanuel Kant invented morality. But these philosophers and thinkers offer a window into the most important ideas of their time. Tolstoy famously asks in War and Peace what moves history, and concludes that history is merely the progression of all of the various forces at play in the universe, channeled into action in a particular moment.

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Any government doing so would allow citizens to revert to a state of nature, in which the citizens could set up a new government: “whenever the legislators endeavor to take away, and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any farther obedience, and are left to the common refuge, which God hath provided for all men, against force and violence . . . [power] devolves to the people, who have a right to resume their original liberty.”26 Locke’s philosophy would not merely influence the Founding Fathers of the United States, as we will see—it would shape the foundations of free market enterprise. The vision of Adam Smith (1723–1790) of natural liberty almost precisely mirrors Locke’s vision of natural right: The obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.

Money: The True Story of a Made-Up Thing
by Jacob Goldstein
Published 14 Aug 2020

Tariffs and quotas, Hume wrote, “serve to no purpose but to check industry, and rob ourselves and our neighbors of the common benefits of art and nature.” Hume published this argument in a book called Political Discourses. It was wildly popular. Also, not trivially, Hume seems to have influenced his best friend, Adam Smith, who called Hume’s work on money and trade “ingenious.” In 1776, Smith published An Inquiry Into the Nature and Causes of the Wealth of Nations. It was the birth of modern economics. Also, it was a pretty Humey book. A nation doesn’t get wealthy by piling on tariffs to “increase… the quantity of gold and silver,” Smith wrote. “In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.”

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Not only did the islanders have to want what Mademoiselle Zélie offered (a concert); Zélie had to want what the islanders offered (pigs, chickens, coconuts). Human societies solved that problem, Jevons said, by agreeing on some relatively durable, relatively scarce thing to use as a token of value. We solved the problem of barter by inventing money. Adam Smith had said the same thing a hundred years earlier, and Aristotle had said something similar a few thousand years before that. This theory—that money emerged from barter—is elegant and powerful and intuitive, but it suffers from one key weakness: there’s no evidence that it’s true. “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money,” the anthropologist Caroline Humphrey wrote in 1985, summarizing what anthropologists and historians had been pointing out for decades.

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The economic historian Joel Mokyr provided useful details about the Luddites in an interview. Chapter 10 Hume’s Political Discourses was published in 1752. The chapter on trade is “Of the Balance of Trade.” The Infidel and the Professor, by Dennis C. Rasmussen, helped me understand Hume’s work and, especially, Hume’s influence on Adam Smith. Britain’s unintentional creation of the gold standard is described in Davies. Galbraith is good on the rise of the free silver movement in the United States. Details on William Jennings Bryan come from A Godly Hero: The Life of William Jennings Bryan, by Michael Kazin. The rock critic Greil Marcus used the phrases “anxiety and success” and “terror and deliverance” in Bob Dylan by Greil Marcus.

Time Paradox
by Philip G. Zimbardo and John Boyd
Published 1 Jan 2008

Schor, The Overspent American: Why We Want What We Don’t Need (New York: Perennial, 1999); and P. L. Wachtel, Poverty of Affluence: A Psychological Portrait of the American Way of Life (New York: Free Press, 1983). 12. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776), book 1 (New York: Modern Library, 1994). 13. Adam Smith, The Theory of Moral Sentiments (1759; Cambridge: Cambridge University Press, 2002). 14. N. Ashraf, C. Camerer, and G. Loewenstein, “Adam Smith, Behavorial Economist,” Journal of Economic Perspectives 19: 131–45 (2005). 15. Smith, The Theory of Moral Sentiments. 16. Some theorists have argued that societies exhibit a cyclic pattern in which people do come to realize that money doesn’t buy happiness but then forget this lesson a generation later.

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Once we’ve eaten our fill of pancakes, more pancakes are not rewarding, hence we stop trying to procure and consume them. But not so, it seems, with money. As Adam Smith, the father of modern economics, wrote in 1776: “The desire for food is limited in every man by the narrow capacity of the human stomach; but the desire of the conveniences and ornaments of building, dress, equipage, and household furniture, seems to have no limit or certain boundary.”12 If food and money both stop pleasing us once we’ve had enough of them, then why do we continue to stuff our pockets when we would not continue to stuff our faces? Adam Smith had an answer. He began by acknowledging what most of us suspect anyway, which is that the production of wealth is not necessarily a source of personal happiness.

Winners Take All: The Elite Charade of Changing the World
by Anand Giridharadas
Published 27 Aug 2018

For more of the Economic Policy Institute’s work on wage stagnation and rising productivity, see “Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay,” by Josh Bivens and Lawrence Mishel (EPI Briefing Paper No. 406, September 2015). The first Adam Smith quote comes from The Wealth of Nations, book I, chapter 2; the second, from The Theory of Moral Sentiments, part IV, chapter 1. Michael Porter’s quote on the power of business to solve problems comes from his essay “Creating Shared Value,” coauthored with Mark R. Kramer (Harvard Business Review, January–February 2011).

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* * * — Behind Asher’s Portfolios with Purpose, Rosenstein’s Asana, and countless other similarly minded initiatives, there stands a radical theory. It is a new twist on an old idea about the beneficial side effects of self-interest. The long-standing idea took root in the emerging commercial societies of urban Europe a few centuries ago. Its most famous statement is Adam Smith’s declaration about the social benefits of human selfishness: It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

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The winners of commerce were no longer told to ignore the social good and keep their contribution to it indirect and unintentional. They were to focus on social improvement directly and intentionally. Rosenstein shouldn’t just start a software company, but one he thought most likely to improve the condition of humankind. In the journey from Adam Smith’s theory to that of the win-win, the entrepreneur is transformed from an incidental booster of the common good into a unique figure specially capable of tending to it. Business goes from being a sector with positive social benefits to being the principal vessel for human betterment. “Businesses acting as business, not as charitable donors, are the most powerful force [my italics] for addressing the pressing issues we face,” the Harvard Business School professor Michael Porter declared in one formulation of the idea.

Origin Story: A Big History of Everything
by David Christian
Published 21 May 2018

By uniting in some measure the most distant parts of the world, by enabling them to relieve one another’s wants, to increase one another’s enjoyments, and to encourage one another’s industry, their general tendency would seem to be beneficial. To the natives, however, both of the East and West Indies, all the commercial benefits which can have resulted from those events have been sunk and lost in the dreadful misfortunes which they have occasioned. —ADAM SMITH, AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS I sell here, sir, what all the world desires to have—POWER. —MATTHEW BOULTON, THE MAJOR INVESTOR IN JAMES WATT’S IMPROVED STEAM ENGINE When describing previous thresholds of increasing complexity, we have offered some educated guesses about the Goldilocks conditions that made them possible.

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By 1800, it seemed that most farmable land was already being farmed. Adam Smith, the founder of modern economics, argued that societies would soon be using all available energy. Then growth would stall; wages would fall, and so, too, would populations as farming societies came face to face with the limits on energy flows that all other organisms do when they have filled up their niche.13 Some societies, such as the Netherlands and England, already seemed to be pushing at these limits. In the Netherlands, farmers had to gouge farmland from the sea, while England faced growing shortages of timber for heating, housing, and shipbuilding. By Adam Smith’s time, as Alfred Crosby puts it: “Humanity had hit a ceiling in its utilization of sun energy.”14 Pressure to find new sources of energy would eventually conjure up the mega-innovations that we describe today as the fossil-fuels revolution.

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In this way, there emerged a close symbiotic relationship between European traders and rulers. Rulers protected and supported commerce, and in return they got the right to tax and profit from commercial wealth. This was the earliest and crudest form of capitalism, a system admired by European economists from Adam Smith to Karl Marx. The emerging partnership between European governments and entrepreneurs took many forms. The Russian trade in vodka is a case in point.12 Distilling appeared in sixteenth-century Russia. Almost immediately, officials in the government of Ivan the Terrible (whose nickname refers to his brutal treatment of his own nobles) realized that if they could stop peasants from distilling at home (which wasn’t hard to do, because distilling required a great deal of skill and equipment), they could make a lot of money, as liquor would be one of the few goods that peasants had to buy from others.

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It
by Richard Florida
Published 9 May 2016

Later, David Ricardo developed his own “law of rent” to describe the economic windfall that accrues to landlords simply by virtue of their owning land, or, as he put it, “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil.” In The Wealth of Nations, Adam Smith decried the selfish “indolence” of landlords. Today’s urban rentiers have more to gain from increasing the scarcity of usable land than from maximizing its productive and economically beneficial uses. The end result is the rise of what The Economist’s Ryan Avent has dubbed the “parasitic city,” in which wealthy homeowners and landlords capture a disproportionate share of economic output and wealth.

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Hans Brems, “Cantillon Versus Marx: The Land Theory and the Labor Theory of Value,” History of Political Economy 10, no. 4 (1978): 669–678; Anthony Brewer, “Cantillon and the Land Theory of Value,” History of Political Economy 20, no. 1 (1988): 1–14; David Ricardo, “On Rent,” in On the Principles of Political Economy and Taxation (London: John Murray, 1821), chap. 2, available at www.econlib.org/library/Ricardo/ricP.html; Adam Smith, The Wealth of Nations, Bantam Classics Reprint (New York: Bantam, 2003 [1776]). 22. Ryan Avent, “The Parasitic City,” The Economist, June 3, 2013, www.economist.com/blogs/freeexchange/2013/06/london-house-prices; Noah Smith, “Piketty’s Three Big Mistakes,” Bloomberg View, March 27, 2015, www.bloombergview.com/articles/2015-03-27/piketty-s-three-big-mistakes-in-inequality-analysis.

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See United States Vancouver, 143 (fig.), 144 Veblen, Thorstein, 40 venture capital investment correlations for, 222 (table) in San Francisco, 9, 43, 44 (table), 45 in startup cities, 43–45, 44 (table), 49 variable of, 221 Vernon, Raymond, 128 Vienna, 16 (table), 17 wage inequality defined, 218 in economic inequality, xvi, 49–50, 85–90, 112, 114, 186, 218 wages of creative class, 31–32 minimum, increase in, 204–205 pay gap in, 14–15 of service class, 31–32 variable of, 220 of working class, 31–32 Wagner Act of 1935, 204 walk to work, variable of, 221 walkability, 137 Washington, DC, 41, 155 in Amtrak Corridor, 197–198 creativity in, 54 gentrification in, 59–60, 67 housing costs in, 29, 29 (fig.), 31, 31 (table), 157 as Patchwork Metropolis, 136–137, 136 (fig.) ranking of, 16 (table), 17 venture capital in, 44 (table), 45 The Wealth of Nations (Smith, A.), 26 wealthy segregation of, 102–103, 102 (table), 219 in suburbs, 161–163, 161 (table), 162 (table) See also global super-rich West Chelsea, 37 Whole Foods, 205–206 Wilson, Fred, 46 Wilson, William Julius, 102 winner-take-all economics, 14–15 winner-take-all urbanism clustering force in, 13–14 results of, 186 rise of, xx, 6, 11, 216 social safety net and, 209–210 superstar cities in, 13–20, 20 (fig.), 171 working class defined, 217 disadvantages of, xiv–xv, xviii, 6–7 gentrification and, 56 in Patchwork Metropolis, 122–123, 130–135, 138–139, 142–146, 148–149 segregation of, 104–108, 107 (table), 219 shrinking of, 202–203 wages of, 31–32 youthification, 62–63 zoning inclusionary, 201–202 New Urban Luddism and, 27–28, 191 reform, 11, 28, 191–192 Zurich, 16 (table), 17

Fully Automated Luxury Communism
by Aaron Bastani
Published 10 Jun 2019

Kevin Kelly When Capital Becomes Labour In 2011 the Economist, in circulation since 1843, posed its readers a question: ‘What happens when … machines are smart enough to become workers? In other words, when capital becomes labour?’ While early giants of classical political economy, such as Adam Smith and David Ricardo, did not view capitalist society as defined by conflict between classes, they did presume that labour would always remain distinct from ‘capital stock’, and that workers could never equate to human-made goods used in production such as machinery, tools and buildings. Yet nearly 250 years after Smith wrote The Wealth of Nations, the publication most committed to defending his legacy was now uncertain whether one of the central premises of his thinking would endure for much longer.

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See also luxury populism Post, Mark, 170–2, 175, 176 post-capitalism information and, 59–60 without communism, 56–9 poverty, 24–5 Preston Model, 208–11, 213 private space industry, 120–1 privatisation, 202–4, 207, 209–10 production, mode of, 195 productivity paradox, 233 productivity revolution, 60–3 progressive procurement, 207 property-owning democracy, 25 prototype politics, 198 PV (photovoltaic) cells, 47, 102–5 radical politics, revival of, 27–8 railway lines, 33–4 realism, capitalist, 17–9 red politics, 188–92 Rees-Mogg, Jacob, 206–7 Reformation, 240, 241 regeneration, 207 Reither, Walter, 70–1 Relativity Space, 123, 124 renewable energy about, 104, 108 financing, 219–20 generating and storing, 218–19 green movement and, 238–9 transitioning to, 218–19 renewables, 106 ‘Reopening the American Frontier: Exploring How the Outer Space Treaty Will Impact American Commerce and Settlement in Space’, 129 Resolution Foundation, 58 resources asteroid mining, 119–20 globalism and, 197 post-scarcity in, 117–37 private space industry, 120–1 space, 119–37 Ricardo, David, 69, 233 rice production, 161–2 Richards, Bob, 124 Rifkin, Jeremy, 79 Rio Earth Summit, 98, 197 robots about, 78, 133 Atlas, 82–3, 132 da Vinci surgery robot, 90 information technology and robotics, 76 ‘KIVA’, 89 rise of, 80–2 Rocket Lab, 121, 122, 123 Romer, Paul, 63–5, 199–200 Roosevelt, Franklin, 194 Rutter, Brad, 80 Sanders, Bernie, 29, 30 Saturn V, 120, 122 Saudi Arabia, 220–1 Schumpeter, Joseph, 36 Scottish National Party, 28 Second Disruption, 11, 32–6, 72–4, 79, 94, 96, 106, 134, 139, 141, 163, 188, 190, 192, 198, 201, 208, 217, 232–3, 236, 238, 241 Selden, Mike, 172, 173 self-regulation, consequences of, 206 ‘Sermon on Indulgences and Grace’ (Luther), 241 Silicon Valley, 196 ‘Six Laws of Technology’ (Kranzberg), 237 Skelton, Noel, 25 Smith, Adam, 69, 233 ‘Social Prosperity for the Future’, 214 socialised capital market, 230–2 socialism, 191 society, electoralism and, 194–6 soil fertility, 118 ‘solar home’, 113–14 solar power/energy about, 101–5, 107 Global South and, 106–11 in Saudi Arabia, 220–1 Solow, Robert, 233 Sondergaard, Peter, 87 space asteroid mining, 133–4 falling costs of, 122–4 mineral wealth in, 134–7 Moon Express, 125–6 near-Earth asteroids (NEAs), 130–1 Outer Space Treaty (1967), 127 as private industry, 120–1 private sector, 132–3 SPACE Act (2015), 2, 9 Space Launch System, 120 Space Shuttle programme, 122 SpaceX, 119–21, 122, 133–4, 156 speculative economy, repressing the, 229–30 Sputnik, 137, 153 state socialism, 213 steam engine, 93, 95, 149, 164, 201, 238 steam power, 33 Summers, Larry, 64–5, 116, 199–200 Supplemental Nutrition Assistance Program, 24 surplus, food, disruptions and, 159–60 sustenance about, 178–9 cultured meat, 170–5 egg whites, 177–9 food, surplus and disruptions, 159–60 meat from vegetables, 175–7 milk, 177–9 planetary limits, 160–4 post-scarcity in, 159–81 synthetic meat, 168–70 wine, 177–81 synthetic meat, 168–70 Syriza, 28, 30 TALEN (transcription activator-like effector-based nucleases), 150 Taylor, Frederick, 60–3, 85 Taylorism, 60–3 technological unemployment, 86–8 technology Marx on, 237 relationship between politics and, 237 Technology and Unemployment report, 53 Terran 1 rocket, 124 Tesla, 84, 85, 106 Thatcher, Margaret, 206–7 Third Disruption, 11, 37–48, 70, 79, 82, 92, 116, 143–4, 148, 156, 171, 185–8, 192–6, 201, 212–4, 217, 221, 226, 232, 234, 236, 238, 241–3 3-D Magnetic Recording technology, 45–6 3-D printing, 122–4, 127 Tithebarn project, 208 transatlantic telegraph cable, 34 transcription activator-like effector-based nucleases (TALEN), 150 transportation, in UK, 215 travel, exponential, 39–40 Trump, Donald, 21, 24, 29, 30 Trussell Trust, 24 Turnspit dog, 72–3 Uber, 84, 85 UBI (Universal Basic Income), 224–6 UBS (Universal Basic Services), 207–8, 213–17, 224, 226, 236 UK ageing in Britain, 141–4 healthcare in, 215–16 transportation in, 215 UKIP, 28 unemployment, 26 unfreedom, 214 unions, in Britain, 211–12 Universal Basic Income (UBI), 224–6 Universal Basic Services (UBS), 207–8, 213–17, 224, 226, 236 University College London, 90 US Department of Agriculture, 178 US Food and Drug Administration, 153 US National Institute of Health, 147 US National Space Council, 129 US Senate Committee on Commerce, Science and Transportation, 129 utopia, from crisis to, 48–9 V2, 137 Valeti, Uma, 173 vegetables, meat from, 175–7 Verne, Jules Around the World in Eighty Days, 33 von Braun, Wernher, 120, 128 voting, 195 wage-labour, 35 Wagner, Erika, 135 Wales, 114 Watson (computer), 80 Watson, James, 144, 149 Watt, James, 33 Watt’s steam engine, 93, 95, 149, 201, 238 The Wealth of Nations (Smith), 69–70 wheat production, 161–2, 165 Whole Foods Market, 88 Wikipedia, 235 wind power/energy, 111–13 windfall tax, 230 wine, cellular agriculture and, 177–81 work, future of, 92–3 worker-owned cooperatives, 209–10 worker-owned economy, 207–8, 211–12, 219 World Bank, 221, 222 Wycliffe, John, 239–41 Xplorer, 132 Yang (factory worker), 1–2 ZFNs (zinc finger nucleases), 150 zinc, 118 zinc finger nucleases (ZFNs), 150 Žižek, Slavoj, 17n

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The information it expresses is the value of all economic transactions within a fixed period of time, usually a year. That is, all the goods and services that are produced, sold and purchased. Given its centrality in any discussion of what kind of economic model is preferable, it’s easy to presume that the idea of GDP is as old as capitalism itself – that it was perhaps contrived by the likes of Adam Smith or David Ricardo. Yet to the contrary, it is a relatively recent development, devised by the economist Simon Kuznets in the 1930s in response to the Great Depression. It turns out that the central imperative of modern societies – that economic growth should be pursued as an end in itself – only started to reign supreme a century and a half after the Second Disruption began.

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant
by W. Chan Kim and Renée A. Mauborgne
Published 20 Jan 2014

Blue Ocean Strategy has won numerous awards including “The Best Business Book of 2005” Prize at the Frankfurt Book Fair. It was also selected as a “Top Ten Business Book of 2005” by Amazon.com, and as one of the forty most influential books in the History of the People’s Republic of China (1949–2009), along with Adam Smith’s The Wealth of Nations and Milton Friedman’s Free to Choose. Kim is ranked number two in The Thinkers50 listing of the World’s Top Management Gurus. In 2014, Kim, along with his colleague Renée Mauborgne, received the Carl S. Sloane Award for Excellence from the Association of Management Consulting Firms due to the impact their management research has made on the global consulting industry.

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Blue Ocean Strategy has won numerous awards including “The Best Business Book of 2005” Prize at the Frankfurt Book Fair. It was also selected as a “Top Ten Business Book of 2005” by Amazon.com, and as one of the forty most influential books in the History of the People’s Republic of China (1949–2009) along with Adam Smith’s The Wealth of Nations and Milton Friedman’s Free to Choose. Mauborgne is ranked number two in The Thinkers50 listing of the World’s Top Management Gurus. She is the highest-placed woman ever on Thinkers50. In 2014, Mauborgne, along with her colleague W. Chan Kim, received the Carl S. Sloane Award for Excellence from the Association of Management Consulting Firms due to the impact their management research has made on the global consulting industry.

Life Inc.: How the World Became a Corporation and How to Take It Back
by Douglas Rushkoff
Published 1 Jun 2009

Conner, A People’s History of Science (New York: Nation Books, 2005), 190-95, and Peter Russell, Prince Henry “the Navigator”: A Life (New Haven: Yale University Press, 2001), 372-74. 30 Reductionism promoted a fragmented view Clive Ponting, A Green History of the World (New York: Penguin, 1991), 154. 31 By selling their lands Fernand Braudel, Afterthoughts on Material Civilization and Capitalism (Baltimore: Johns Hopkins Press, 1977), 60. 33 In Bengal, for example Arnold Pacey, Technology in World Civilization: A Thousand-Year History (Cambridge, Mass.: MIT Press, 1991), 102. 34 “By preferring the support of domestic” Adam Smith, The Wealth of Nations, Books IV-V, Penguin Classics Edition (New York: Penguin Classics, 1999), 32. 35 For one, the economic globalization David Korten, When Corporations Rule the World, 2nd ed. (San Francisco: Berrett-Koehler Publishers, 2001), 39. 37 As a result, debt payments Ibid., 64. 42 In the 1970s, for example Dean Foust and Maria Mallory, “The Boom Belt: There’s No Speed Limit on Growth along the South’s I-85,” BusinessWeek, September 27, 1993: 98-104, and Korten, When Corporations Rule, 132. 42 In 1993, South Carolina Foust and Mallory, “The Boom Belt,” 98–104, and Korten, When Corporations Rule, 132. 44 As of 2000, by utilizing Wal-Mart Watch, http://walmartwatch.com/ (accessed March 20, 2008). 44 After peaking at more Anne D’Innocenzio, “Wal-Mart Scales Back Expansion in Tough Economy,” USA Today, October 28, 2008.

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Corporations were also required to demonstrate that they had a specific beneficial purpose other than making money—such as getting a bridge built or a waterway opened. Having fought against a foreign megacorporation, the founders understood the dangers inherent in the kind of centralized economic authority demanded by corporatism. Just like Adam Smith, they hated big government and big corporations alike, envisioning the ideal business landscape characterized by locally scaled firms and farmers, unencumbered by large, dehumanizing monopolies. Thomas Jefferson considered “freedom from monopolies” one of the fundamental human rights. James Madison praised self-sufficiency and appropriately scaled enterprises: “The class of citizens who provide at once their own food and their own raiment, may be viewed as the most truly independent and happy.

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Charters gave corporations the exclusive right to vertically integrate anything they needed onto the credit side of the balance sheet, no matter the cost to the territory. The only thing they had to fear was revolution—but to attack a chartered corporation meant facing the army of the empire that underwrote it. It was these seventeenth-and eighteenth-century equivalents of no-bid contracts to Halliburton that led Adam Smith to write Wealth of Nations. While celebrated today by corporate libertarians as philosophical justification for free-trade policies, the book was meant as an attack on the scale and effects of chartered monopoly. By arguing—now famously—that “self-interest” might promote a more just society, he was speaking in the context of an economy already heavily tilted against individual human agency.

Making Globalization Work
by Joseph E. Stiglitz
Published 16 Sep 2006

ABN Amro, a major Dutch bank, not only talks about sustainability in its lending practices but has projects helping development in a number of countries. Many companies have gone to what is called the triple bottom line, focusing not only on profits but on impacts on the environment and broader issues of social responsibility. 15.The Wealth of Nations (New York: Modern Library, 1937), p. 128. 16.An additional level of complexity is added by international agreements that are supposed to deal with anti-competitive behavior. While the WTO allows countries to use dumping duties, as we saw in chapter 3, dumping, as traditionally defined, has little to do with anti-competitive behavior.

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I hope that this book, like its predecessor, will help transform the globalization debate—and, ultimately, the political processes which shape globalization. Globalization is the field on which some of our major societal conflicts—including those over basic values—play out. Among the most important of those conflicts is that over the role of government and markets. It used to be that conservatives could appeal to Adam Smith’s “invisible hand”—the notion that markets and the pursuit of self-interest would lead, as if by an invisible hand, to economic efficiency. Even if they could admit that markets, by themselves, might not engender a socially acceptable distribution of income, they argued that issues of efficiency and equity should be separated.

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Mexico’s public expenditures of around 19 percent of GDP—more than a third financed by oil revenues—are markedly lower than those of Brazil or the United States, and are insufficient to finance needed public investment in education, research, and infrastructure. TRADE LIBERALIZATION: THEORY AND PRACTICE The British economist Adam Smith, the founder of modern economics, was a strong champion of both free markets and free trade, and his arguments are compelling: free trade allows countries to take advantage of their comparative advantage, with all nations benefiting as each one specializes in the areas in which it excels. Large trading areas allow firms and individuals to specialize further and become even better at what they do.

The Lonely Century: How Isolation Imperils Our Future
by Noreena Hertz
Published 13 May 2020

The political objective of making citizens feel that someone is watching their back is not irreconcilable with capitalism. Indeed, it is a fundamental misunderstanding of capitalism to assume that its neoliberal ‘dog eat dog’, ‘every man for himself’ variant is its only form. Even Adam Smith, the father of capitalism, whilst best known as an eloquent advocate of free markets and individual freedom, wrote extensively in The Theory of Moral Sentiment (the precursor to The Wealth of Nations) about the importance of empathy, community and pluralism.5 He understood that the state has a clear role to play in providing the infrastructure of community – and that when the markets need to be reined in to protect society, reined in they should be.6 Elsewhere, Asian, Scandinavian and indeed continental European forms of capitalism through much of the twentieth century were distinct from the neoliberal tradition in terms of the greater role they accorded the state and the emphasis they placed on communitarian values.

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On gender and neoliberalism see for example Andrea Cornwall, Jasmine Gideon and Kalpana Wilson, ‘Reclaiming Feminism: Gender and Neoliberalism’, Institute of Development Studies Bulletin 39, no. 6 (December 2008), https://doi.org/10.1111/j.1759-5436.2008.tb00505.x; or more comprehensively, Nancy Fraser, Fortunes of Feminism: From State-Managed Capitalism to Neoliberal Crisis (Verso, 2013). 5 Adam Smith, The Theory of Moral Sentiments, ed. Ryan Patrick Hanley (Penguin Random House, 2010). 6 David J. Davis, ‘Adam Smith, Communitarian’, The American Conservative, 19 December 2013, https://www.theamericanconservative.com/articles/adam-smith-communitarian/; Jack Russell Weinstein, Adam Smith’s Pluralism, (Yale University Press, 2013); Jesse Norman, ‘How Adam Smith Would Fix Capitalism’, Financial Times, 21 June 2018, https://www.ft.com/content/6795a1a0-7476-11e8-b6ad-3823e4384287. 7 This would amount to roughly $287 billion given the size of the US economy.

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In a formal academic setting, participants wouldn’t know which questions are reverse-scored. 36 Rhitu Chatterjee, ‘Americans Are A Lonely Lot, And Young People Bear The Heaviest Burden’, NPR, 1 May 2018, https://www.npr.org/sections/health-shots/2018/05/01/606588504/americans-are-a-lonely-lot-and-young-people-bear-the-heaviest-burden; ‘Loneliness and the Workplace: 2020 U.S. Report’, Cigna, January 2020, 3, https://www.multivu.com/players/English/8670451-cigna-2020-loneliness-index/docs/CignaReport_1579728920153-379831100.pdf. 37 See for example E.G. West, ‘The Political Economy of Alienation: Karl Marx and Adam Smith’, Oxford Economic Papers 21, no. 2 (March 1969), 1–23, https://www.jstor.org/stable/2662349?seq=1; Fay Bound Alberti, ‘Stop medicalising loneliness – history reveals it’s society that needs mending’, The Conversation, 19 November 2019, https://theconversation.com/stop-medicalising-loneliness-history-reveals-its-society-that-needs-mending-127056; Bill Callanan, ‘Loneliness as a Theme in the Life and Writings of C.G.

The Coke Machine: The Dirty Truth Behind the World's Favorite Soft Drink
by Michael Blanding
Published 14 Jun 2010

The Coca-Cola Com­ pany’s practice continues to be one of engagement in conversations with all stakeholders—including supporters and critics—as long those discussions can be fair and objective.” 22 THE COKE MACHINE did succeed in transplanting the survival of the corporation itself. After dozens of British families lost their fortunes from the collapse of the no­ torious South Seas Company in 1720, Parliament banned the risky prop­ ositions. When the father of capitalism himself, Adam Smith, wrote The Wealth of Nations in 1776, he spoke out against corporations, arguing that the “directors of such companies . . . being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the part­ ners in a private copartnery.”

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Page 21 wasn’t entirely removed: Graham and Roberts, 19. NOTES 299 Page 21 needed to raise at least $50,000: Allen, 38. Page 21 One of the very first corporations: Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (New York: Simon & Schuster, 2004), 8. Page 22 “directors of such companies”: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: T. Nelson & Sons, 1895), 311. Page 22 The corporation took off: Bakan, 7. Page 22 more than three hundred: Jack Beatty, ed., Colossus: How the Corporation Changed America (New York: Broadway Books, 2001), 5. Page 22 And unlike their British counterparts . . . beginning in the 1830s: Beatty, 45–46.

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New York: Jeremy P. Tarcher, 2000. Singer, Peter. One World: The Ethics of Globalization. New Haven, CT: Yale University Press, 2002. Sivulka, Juliann. Soap, Sex, and Cigarettes: A Cultural History of American Advertising. Belmont, CA: Wadsworth, 1998. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. London: T. Nel­ son & Sons, 1895 (orig. pub. 1776). Snitow, Alan, and Deborah Kaufman, with Michael Fox. Thirst: Fighting the Corporate Theft of Our Water. San Francisco: John Wiley & Sons, 2007. Solnit, David, and Rebecca Solnit. The Battle of the Story of the Battle of Seattle. Edinburgh, Scotland: AK Press, 2009.

Straight Talk on Trade: Ideas for a Sane World Economy
by Dani Rodrik
Published 8 Oct 2017

Today, mercantilism is typically dismissed as an archaic and blatantly erroneous set of ideas about economic policy. And, in their heyday, mercantilists certainly did defend some very odd notions, chief among which was the view that national policy ought to be guided by the accumulation of precious metals—gold and silver. Adam Smith’s 1776 treatise The Wealth of Nations masterfully demolished many of these ideas. Smith showed, in particular, that money should not be confused for wealth. As he put it, “the wealth of a country consists, not in its gold and silver only, but in its lands, houses, and consumable goods of all different kinds.” But it is more accurate to think of mercantilism as a different way to organize the relationship between the state and the economy—a vision that holds no less relevance today than it did in the eighteenth century.

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They have consistently minimized distributional concerns, even though it is now clear that the distributional impact of, say, the North American Free Trade Agreement or China’s entry into the World Trade Organization was significant for the most directly affected communities in the United States. They have overstated the magnitude of aggregate gains from trade deals, though such gains have been relatively small since at least the 1990s. They have endorsed the propaganda portraying today’s trade deals as “free trade agreements,” even though Adam Smith and David Ricardo would turn over in their graves if they read the details of, say, the Trans-Pacific Partnership on intellectual property rules or investment regulations. This reluctance to be honest about trade has cost economists their credibility with the public. Worse still, it has fed their opponents’ narrative.

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Remove constraints on what politicians can do, he implied, and all you will get are silly interventions that throttle markets and stall the engine of economic growth. This criticism reflects a serious misunderstanding of how markets really function. Raised on textbooks that obscure the role of institutions, economists often imagine that markets arise on their own, with no help from purposeful, collective action. Adam Smith may have been right that “the propensity to truck, barter, and exchange” is innate to humans, but a wide array of nonmarket institutions is needed to capitalize on this propensity. Consider all that is required. Modern markets need an infrastructure of transport, logistics, and communication, much of it the result of public investments.

Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to U.S. Empire
by Noam Chomsky and David Barsamian
Published 1 Nov 2012

Daniel Kruger, “Japan Overtakes China as Largest Holder of Treasuries,” Bloomberg News, 16 February 2010. 16. For data, see the regular report of the Federal Reserve Board, Department of the Treasury, “Major Foreign Holders of Treasury Securities.” Available at http://www.treasury.gov. 17. Adam Smith, The Wealth of Nations: Books IV–V (New York: Penguin Books, 1999), p. 247. 18. Ibid., p. 25. 19. Francisco Rodriguez and Arjun Jayadev, The Declining Labor Share of Income, United Nations Development Programme, Human Development Research Paper 2010/36 (November 2010). See also Eva Cheng, “China: Wage Share Plunges,” Green Left Weekly, 19 October 2007. 20.

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Part of the doctrinal system in the United States is the pretense that we’re all a happy family, there are no class divisions, and everybody is working together in harmony. But that’s radically false. Furthermore, it’s known to be false. At least, it has been for a long time. Take a dangerous radical like, say, Adam Smith, whom people worship but don’t read. He said that in England the people who own the society make policy. The people who own the place are the “merchants and manufacturers.” They’re “the principal architects” of policy, and they carry it out in their own interests, no matter how harmful the effects on the people of England, which is not their business.17 Of course, he was an old-fashioned conservative, so he had moral values.

The Asian Financial Crisis 1995–98: Birth of the Age of Debt
by Russell Napier
Published 19 Jul 2021

The forces behind the global economy are also those that deepen liberty, the free flow of ideas and information, open borders and easy travel, the rule of law, fair and even-handed enforcement, protection for consumers, a skilled and educated work force. Each of these things matters not only to the wealth of nations, but to the health of nations. If citizens tire of waiting for democracy and free markets to deliver a better life for themselves and their children, there is a risk that democracy and free markets, instead of continuing to thrive together, will shrivel together. Nothing was done. Greenspan’s reduction in interest rates sparked a much more rapid economic improvement than the policy makers at the IMF in their ‘the world is coming to an end’ mode could have expected.

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Author’s opinion That was an opinion I proffered in March 1997 and the boom ended in July! Given the likely ultimate denouement for this boom it was a recommendation based upon the greater fool theory. There was a clear lesson from the red chip boom that it just wasn’t possible to work out when the world would run out of greater fools. According to Adam Smith: The really old generation, the greybeards, they’re the ones with General Motors, AT&T, Texaco, Du Pont, Union Carbide, all those stocks nobody has heard of for years. The middle-aged generation has IBM, Polaroid and Xerox, and can listen to rock and roll music without getting angry. But life belongs to the swingers today.

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Think back to the fires of youth my boy.” It was true I could hear the old 1961 Glee Club singing the nostalgic Alumni Song. “I loved 1961,” I said. “I love stocks selling at a hundred times earnings. The only problem is that after 1961 came 1962, and everybody papered the playroom with the stock certificates.” Adam Smith, The Money Game, 1967 Perhaps the advice I gave in June 1997 was more accurate: The greybeards survived and made it to retirement with their GMs and AT&Ts. The middle-aged generation ended up owning what became the Nifty-50, but presumably sold too early as they were transformed into greybeards by the early 1970s.

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated)
by Charles Wheelan
Published 18 Apr 2010

Incentives matter. When we are paid on commission, we work harder; if the price of gasoline goes up, we drive less; if my three-year-old daughter learns that she will get an Oreo if she cries while I’m talking on the phone, then she will cry while I am talking on the phone. This was one of Adam Smith’s insights in The Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Bill Gates did not drop out of Harvard to join the Peace Corps; he dropped out to found Microsoft, which made him one of the richest men on the planet and launched the personal computer revolution in the process—making all of us better off, too.

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First, many intellectually curious people are missing a subject that is provocative, powerful, and highly relevant to almost every aspect of our lives. Economics offers insight into policy problems ranging from organ donation to affirmative action. The discipline is intuitive at times and delightfully counterintuitive at others. It is peppered with great thinkers. Some, such as Adam Smith and Milton Friedman, have captured mainstream attention. But others, such as Gary Becker and George Akerlof, have not gotten the recognition outside of academe that they deserve. Too many people who would gladly curl up with a book on the Civil War or a biography of Samuel Johnson have been scared away from a subject that should be accessible and fascinating.

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It was a money-losing proposition in the short run; the East German currency was still worthless—scraps of paper to the rest of the world. But it was a brilliant business decision made faster than any government body could ever hope to act. By 1995, per capita consumption of Coca-Cola in the former East Germany had risen to the level in West Germany, which was already a strong market. In a sense, it was Adam Smith’s invisible hand passing Coca-Cola through the Berlin Wall. Coke representatives weren’t undertaking any great humanitarian gesture as they passed beverages to the newly liberated East Germans. Nor were they making a bold statement about the future of communism. They were looking after business—expanding their global market, boosting profits, and making shareholders happy.

The Ripple Effect: The Fate of Fresh Water in the Twenty-First Century
by Alex Prud'Homme
Published 6 Jun 2011

See also Edythe Jensen, “Intel water recycling stinking up Chandler subdivision,” AZCentral.com, July 9, 2008. 342 “135,000 gallons of water to produce one ton of alfalfa”: Robert Glennon, Unquenchable (Washington, DC: Island Press, 2009), p. 201. 342 “water neutral”: Ling Woo Liu, “Water Pressure,” Time, June 12, 2008. CONCLUSION: THE RIPPLE EFFECT 343 Adam Smith wrote of the diamond-water paradox: “Adam Smith,” Wikipedia: http://en.wikipedia.org/wiki/Paradox_of_value; Adam Smith: “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776), Library of Economics and Liberty: http://www.econlib.org/library/Smith/smWN.html. 343 Alan Moores: Alan Moores, “ ‘Water: The Epic Struggle for Wealth, Power, and Civilization’: Water as the new oil,” Seattle Times, January 2, 2010. 343 the Dust Bowl drove 2.5 million people: “Dust Bowl,” History.com: http://www.history.com/topics/dust-bowl. 344 by providing irrigators with federal subsidies: Environmental Working Group: http://reports.ewg.org/content/research/10. 344 “a blood sport”: Peter Rogers and Susan Leal, Running Out of Water (New York: Palgrave Macmillan, 2010), p. 20. 345 Pat Mulroy: Mulroy interview.

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We pollute it unthinkingly, price it too cheaply, and take too much of it from the environment too quickly—usually in the service of short-term gains. Consequently, freshwater is the earth’s most undervalued resource. Since Copernicus, economists and philosophers have observed that while no substance is more precious than water, none is more likely to be free. In The Wealth of Nations, Adam Smith famously labeled this the “diamond-water paradox” (aka “the paradox of value”): while water is essential for survival, diamonds—which have only aesthetic value—command a far higher price in the marketplace. Until, that is, water runs out and panic sets in. At that point, humans will do almost anything to get their hands on H2O.

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As Cooper put it, “Lots of little, constant improvements eventually add up to big improvements.” And in this drying century, every drop counts. CONCLUSION The Ripple Effect Till taught by pain Men really know not what good water’s worth. —Lord Byron, Don Juan VALUING WATER In 1776, the Scottish economist Adam Smith wrote of the diamond-water paradox, “Nothing is more useful than water; but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any use-value; but a very great quantity of other goods may frequently be had in exchange for it.” Two and a half centuries later, it should be obvious that this valuation is imbalanced.

After the New Economy: The Binge . . . And the Hangover That Won't Go Away
by Doug Henwood
Published 9 May 2005

Trikteralism (Boston: South End Press). Slocum,Tyson (2001). "Blind Faith: How Deregulation and Enron's Influence Over Government Looted Billions fix)m Americans," Public Citizen, December <www.citizen.org/ docvmients/Blind_Faith.pdf^. Smith, Adam (1976). An Inquiry Into the Nature and Causes of the Wealth of Nations, edited by R.H. CampbeU and A.S. Skirmer (Oxford:The Clarendon Press) <socserv2.mcmaster.ca/ ~econ/ugcm/3113/smith/wealth/index.html>. Smith, Paul (1996). Millennial Dreams (London and New York: Verso). Smith, Roy, and Ingo Walter (2000). "The Death of Universal Banks," Financial Times, March 14, p. 17.

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The problems multiply over the long term: there were noVCRs or Palm Pilots in 1965; what does their development mean to the changed cost of Hving thirty-five years later? A relative measure avoids all these problems. And second, relative measures comport much more closely with the way people perceive themselves. As no less revered an authority than Adam Smith (1976, bk.V, chap. 2, pt. 2, art. 4) defined it in 1776, poverty was characterized by the want of "necessaries," which he in turn defined no After the New Economy as "not only the commodities which are indispensably necessary for the support of Hfe, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without

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He went to Stanford, got an MBA and a PhD; and taught at the Harvard Business School, which he left for the Ford Foundation and then the U.S. Agency for International Development (AID). Korten shares these details "to es-tabHsh the depth of [his] conservative roots"—a theme that recurs in his hymns to Adam Smith. While with AID, Korten had an epiphany—AID was too big, too bureaucratic, and too centraHzed, stifling local autonomy and initiative. He left AID for the NGO world, where people were "asking basic questions about the nature and process of development." Korten exhibits an American distaste of big government, apparently without noticing that the U.S. has one of the most decentralized systems of governance on earth, with an array of states, locaHties, and special-purpose districts overlapping and competing for responsibility.

Why the West Rules--For Now: The Patterns of History, and What They Reveal About the Future
by Ian Morris
Published 11 Oct 2010

To the horror of conservatives, tradesmen were spending hours in coffee shops, the poor were calling tea a “necessary,” and farmers’ wives were buying pianos. The British were beginning to feel they were not like other people. In 1776 the Scottish sage Adam Smith had called them “a nation of shopkeepers” in his Inquiry into the Nature and Causes of the Wealth of Nations, but he had meant it as a compliment; Britons’ regard for their own well-being, Smith insisted, was making everyone richer. Just think, he said, of the contrast between Britain and China. China had been “long one of the richest, that is, one of the most fertile, best cultivated, most industrious, and most populous, countries of the world,” but had already “acquired that full complement of riches which the measure of its laws and institutions permits it to acquire.”

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S., 522–23 Gilgamesh, King, 188 Glasgow University, 494 global warming, 96, 119, 291, 598–601, 603 at end of Ice Age, 81–85, 561; see also Medieval Warm Period; Roman Warm Period Glorious Revolution, 567 Göbekli Tepe (Turkey), 96 Goethe, Johann Wolfgang von, 531 gold, 185, 188, 190, 200, 275, 294, 348, 414, 460, 462, 512 Goldman Sachs, 582 Goldstone, Jack, 19–20 Gong Zizhen, 506 Gorbachev, Mikhail, 549–50 Gorbachev, Raisa, 549 Goths, 307, 310, 312–16, 328, 345, 576 Gould, Stephen Jay, 45 Grand Canal, Chinese, 6, 337, 368, 380, 465, 493, 506, 517, 563 Grand Concordance system, 478 Grant, Ulysses S., 521 Gray, Elisha, 567–68 Great Chain of Being, 83 Great Chain of Energy, 83–86, 108, 143, 156, 381 Great Cloud Sutra, 340 Great Divergence, The (Pomeranz), 20, 40–41, 168 Great Leap Forward, 62n, 544, 546, 547 Great Proletarian Cultural Revolution, 545–46, 548 Great Pyramid, 187–88, 370 Great Wall, 279, 441, 442 Greece, 159, 310, 367 archaeological sites in, 219, 291, 395 Christianity in, 325 classical, see Greeks, ancient Greeks, ancient, 22, 137, 193, 197, 198, 216–20, 429n, 474 agriculture of, 107 in Anatolia, 199 Axial thought of, 259–63 in Bactria, 271 in China, 275 cities of, 23, 142, 268, 289, 317 colonies of, 234, 239–40, 242, 244, 365, 368, 465 historical texts of, 30, 249–50 living standards of, 250 Macedon and, 268–69 metallurgy of, 233 mythology of, 241, 277 philosophy of, 14, 93, 255, 327 Romans and, 269–70, 280, 286, 289 social development of, 225 trade of, 200, 239 Greenland, 371, 398, 421 Green Party, 106 Gregory VII, Pope, 369 Guangdong (China), 588 Guangwu, Emperor, 299 Guangxu, Emperor, 523 Guangzhou (China), 432–33, 484, 501n, 515, 517 Gui people, 221 Gujarat, 431 Gu Kaizhi, 321 guns, 143, 407, 482, 499, 521, 573, 577, 591 in China, 15, 396, 407, 457–59, 576 European, 143, 159, 402–404, 419, 430, 431, 433, 465, 484 in Japan, 440, 443, 483, 517, 520 Guns, Germs, and Steel (Diamond), 17, 117 Gutians, 191 Gu Yanwu, 473–74, 481 Habsburgs, 445–49, 460–62, 466, 486, 526, 528, 551, 567, 573, 574 Habuba Kabira (Syria), 184 Hadrian, 307 Hagia Sophia (Constantinople), 343, 403 Haiti, 34, 460 Hamlet (Shakespeare), 62, 436 Han Chinese, 169 Han dynasty, 285, 317, 334, 338, 341, 354, 355, 457, 474, 546 collapse of, 300–304, 309, 563, 569, 576, 587 Confucianism during, 262, 320–21, 420 energy consumption during, 380–81 founding of, 283, 284 Roman Empire compared with, 285, 289, 291, 298, 207, 319 Xiongnu and, 293–95, 298, 299, 310 Hangzhou (China), 153, 384, 387 Hann (China), 265n Hannibal, 270 Han Yu, 375, 376 Hard Times (Dickens), 503 Hardy, Thomas, 468 Hargreaves, James, 496 Harris, Robert, 579 Harvard University, 47, 58n, 59n, 124, 542 Heart of Darkness (Conrad), 519, 520 “Heaven-Man Teaching,” 322 Hebrew Bible, 137, 182, 191, 234, 235, 247, 249, 255, 276, 324, 351 Ecclesiasticus, 365 Judges, 219 Psalms, 261–62 Heidelberg Man, 54–56 Heinlein, Robert, 27–28, 89, 559 Héloïse, 370–71 Hemudu (China), 122 Henry, Prince (“the Navigator”), 414, 416 Henry IV, Emperor, 369 Henry V (Shakespeare), 436 Henry VII, King, 416, 417 Heraclitus, 93 Heraclius, Emperor, 343, 348, 349, 352, 354n Herodotus, 30, 32, 249–50, 277–78 Heyerdahl, Thor, 421n Hezbollah, 605 Hezekiah, King, 247 Hideyoshi, Toyotomi, 440–41, 443, 444, 448, 449, 457, 483, 567 Hilly Flanks, 86, 87, 89, 96–105, 113, 121, 177, 179–81, 189, 200 archaeological sites in, 90, 96, 97, 101–105, 124 culture of, 120, 129 family groups in, 101–104 farming in, 31, 34, 97–101, 107, 114, 117–19, 159, 179, 184, 367, 561, 562, 577 languages of, 110 migration from, 111, 116 pottery from, 122 religion in, 102, 123, 125–27 Younger Dryas period in, 92, 93, 96 Hindus, 431 Hiroshima (Japan), 532, 534, 610, 614, 617 History of the Decline and Fall of the Roman Empire, The (Gibbon), 307, 326, 490 Hitler, Adolf, 532, 551, 578–79, 595 Hitler Youth, 106 Hittites, 197–99, 214–21, 225 Hobbes, Thomas, 131 Hoelun, 388 Hohenzollerns, 528 Hohle Fels (Germany), 79 Hokkaido (Japan), 129 Holland, see Netherlands Holy Roman Empire, 403n, 445, 446, 448, 454 Holy Sepulcher, Church of (Jerusalem), 372 Homer, 137, 199, 217, 239, 286 Homo antecessor, 54–55 Homo erectus, 50–55, 60, 68, 70, 72, 80, 154 Homo ergaster, 50, 51, 54n, 68 Homo habilis, 43, 45–46, 48, 54n, 63, 150, 617 Homo sapiens, 60–61, 63, 66–68, 70, 71n, 72, 80, 88, 114, 183, 380, 593, 517, 618 H1N1 influenza, 603 Hong Kong, 6, 127, 548 Hong Liangji, 506 Hong Xiuquan, 9–10 Honshu (Japan), 129 Hongwu, Emperor, 405–406, 441, 575 Hormuz (Iran), 393, 429 Hoshea, King, 247 Huan, Marquis, 244 Huang Sheng, 424, 425 Huizong, Emperor, 386, 389, 575 Human Immunodeficiency Virus (HIV), 603 Human Relations Area Files, 139 Hume, David, 474, 475 Hungary, 276, 312, 368, 391, 402, 442, 446, 549 Academy of Sciences of, 65 Huns, 312–16, 345 hunter-gatherers, 100–101, 105–106, 109, 121, 127, 277, 368, 430, 597 energy consumption of, 154, 381 Ice Age, 85, 86, 491 modern, 76, 104, 140; see also foraging Huntington, Ellsworth, 30 Hurrians, 196–97, 220, 221 Husayn, 357–58 Hussein, Saddam, 90, 180 Hyksos, 197, 198 Ibrahim, Sultan (“the Crazy”), 452 Ice Age, 35, 67, 79–80, 100, 149, 270, 617, 620 effects of warming following, 77, 81–86, 88, 91 end of, 14, 31, 32, 89, 116, 140, 154, 158, 160, 167, 263, 271, 558, 559, 561, 562, 590, 619, 626 human survival strategies during, 76–77, 92, 132, 381, 491 Neanderthal adaptation to, 56 Iceland, 371, 398, 421 Iliad (Homer), 199 Incas, 460, 515 India, 16, 23, 32, 297, 365, 416, 520, 605, 620n; ancient, 268, 292 Britain and, 273–74, 339n, 495 Buddhism in, 263, 329, 340–42, 437 environmental impacts of, 609 industrial development in, 522 Mongol invasion of, 574 opium in, 7, 515 Portugal and, 430–32 prehistoric, 49, 50, 97 Romans in, 273–75 Indochina, 306, 535 Indonesia, 535 industrial revolution, 11, 13, 19–21, 100, 380, 413, 491, 503, 510, 542, 565, 572–77, 585, 608, 611 British, 13, 19–21, 40, 379, 382, 494–98, 500, 501–507, 510, 511, 572, 596, 620 social development and, 32, 36, 167, 169, 228, 383, 385, 392, 449, 498, 500, 501, 515, 559, 593, 597, 611, 616–17 information technology, 149, 157, 268, 395, 542, 583, 591–93, 596 Inquiry into the Nature and Causes of the Wealth of Nations (Smith), 39–40, 490, 501 Intel, 592 International Age, 197, 198, 234, 236 International Association of Athletic Federations, 594 International Astronomical Union, 613n International Business Machines (IBM), 542, 596, 597 International Congress of Anthropology and Prehistoric Archaeology (Lisbon, 1880), 74 International Energy Agency, 612 International Institute for Strategic Studies, 151 International Monetary Fund (IMF), 547–48, 586 Internet, 151, 592, 595 IQ tests, 570 Iran, 23, 99, 138, 312, 342, 360, 366, 367, 392, 605 ancient, 179, 184, 191, 196, 197, 203, 225, 248, 254n, 292, 323, 328, 335 Islamic Revolution in, 180 Iraq, 90, 138, 159, 358–61, 366, 392, 398, 551, 605 ancient, 93, 107 (see also Mesopotamia) Inquisition in, 358 invasion of Kuwait by, 180 plague in, 397 Ireland, 371, 450, 451, 472n famine in, 505 Irene, Empress, 363 iron, 233, 380–82, 388, 521, 524, 604 industrialization and, 495, 497, 498, 506, 510 for tools, 233, 251, 395 for weapons, 128, 276, 380, 386, 403 irrigation, 155, 181, 192, 196, 200, 250, 265, 286, 315, 319, 360–61, 389, 499, 561 Isabella, Queen, 416, 430 Ishmael, 351 Isis, 323 Islam, 354, 361, 414, 446, 563 Christian attacks on, 362, 372–73 extremist, 180, 551, 603 holiest shrines of, 408 origins of, 349–52, 357 plague and, 398 scholarship of, 370, 571; see also Muslims Isma’ili Shiites, 364n Israel, 90, 97, 197, 535, 605 ancient, 233, 235, 246–48, 262 archaeological sites in, 86, 88, 240 Lost Tribes of, 391 Israelites, 200, 218, 219, 234–35, 247 Italy, 159, 215, 225, 270, 346–47, 371, 392, 404, 410, 467, 567 archaeological sites in, 59, 198, 200, 289–90 Goth invasion of, 314, 317 Habsburgs and, 446, 461 literacy in, 379 Renaissance, 416–20, 569, 575, 589 social development in, 268 trade of, 275, 315, 316, 365 tribesmen of, 240 Ivan, Tsar (“the Terrible”), 457, 458, 460 Jackson, Peter, 53 Jacob, 191, 199, 276 Jacobinism, 504 Jacques, Martin, 11, 589 Jade Cong, Age of, 205 Jainism, 254n, 255 Jamaica, 485 Jamestown Colony, 465, 502 Jamuka, 388 Janissaries, 444, 452 Japan, 32, 33, 136, 160, 400, 421, 440–43, 450, 480, 483–84, 494, 567, 633 ancient, 127–29 Buddhism in, 342 China and, 15, 52, 211, 306, 360, 361, 411, 441–43, 475, 531, 533 closing of, 483–84, 530 during Cold War, 534, 535 deforestation in, 451 economy of, 11, 12, 360, 406, 531, 535, 543, 551, 570, 584 energy consumption in, 150, 153, 630 health in, 538 labor costs in, 501, 502 opening to West of, 10, 14, 483, 517–18, 520–21 Portugal and, 435, 440, 442 prehistoric, 68 Russian war with, 17, 525–26, 528 social development in, 144, 150–51, 153, 158, 522–25, 643 technology in, 597, 617 in World War II, 17, 52, 531–34, 578, 579 Jaspers, Karl, 254–55 Java, 47, 60n Jerf al-Ahmar (Syria), 96, 101, 123 Jericho (Palestine), 102, 104–105, 129 Jerusalem, 234, 249, 348, 372–73 Christian Kingdom of, 373 Jesuits, 477–79 Jesus, 255, 256, 324–26, 348, 351, 352, 372, 398, 513 Jews, 365, 370, 427, 472, 513, 532 ancient, 249, 256 (see also Israelites) persecution and slaughter of, 372, 391, 399, 513, 579 Jiahu (China), 122–24, 129, 204, 212 Jiangzhai (China), 122 Jiankang (China), 305, 306, 319, 321, 329, 334–37; see also Nanjing Jin (China), 244, 245, 251–53, 262, 265n, 279 Jin dynasty, 304–306, 311, 317, 318 Jingdi, Emperor, 284–85 Jinsha (China), 214, 215 Jobs, Steve, 542 Jocelyn, Lord Robert, 143 John, King, 416 John the Baptist, 372 John of Ephesus, Bishop, 346, 347 Johnson, Lyndon Baines, 141 Johnson, Samuel, 32, 39, 40 Jordan, 197 archaeological sites in, 100, 102, 124 Joseph, 191–93, 224 Journal of the Plague Year (Defoe), 455 Journey to the West, 436–37 Judah, 234, 235, 247, 248 Judaism, 324, 327, 351–52; see also Hebrew Bible Julius Caesar (Shakespeare), 436 Jurchen Empire, 386–87, 389, 392, 575, 576 Justinian, Emperor, 343–49, 353, 616 Ka’ba (Mecca), 351 Kadesh (Syria), 199, 214 Kaifeng (China), 153, 155, 380–83, 386–87, 389, 392, 419, 422, 451, 482, 493, 575 Kangxi, Emperor, 477, 479–81 Kant, Immanuel, 472, 474, 475, 532 kaozheng (evidential research), 473, 477 Karakhanid Empire, 366 Karakorum (Mongolia), 393 Karluk Turks, 366 Kassites, 197 Katanda (Congo), 64 Kazakhstan, 196, 220, 249, 277, 312, 606n Keightley, David, 212, 213 Kennedy, John F., 434, 580, 616 Kennedy, Paul, 248 Kenyon, Kathleen, 102, 105 Kepler, Johannes, 113 Keynes, John Maynard, 529–30 Khaldun, Ibn, 396 Khitans, 374, 376, 386, 389 Khmers, 360 Khrushchev, Nikita, 541, 542, 544, 580, 616 Khubilai Khan, 392, 575 Khufu, King, 187 Khusrau II, King, 343, 347–49, 352, 353, 616 Kidd, Captain William, 485 Kim Il Sung, 16 Kim Jong Il, 16, 194 Kipling, Rudyard, 620–21 Kissinger, Henry, 266 Kizzuwatna, 198 Klein, Richard, 59n Koguryo, 354 Kon-Tiki (Heyerdahl), 421n Koran, 255, 351, 353, 358, 574 Korea, 159, 290, 342, 354, 360, 406, 441, 443, 483, 524 prehistoric, 127–28 Korean War, 534–35, 543, 590 Koukounaries (Greece), 219 Kubrick, Stanley, 63 Kuropatkin, Aleksei Nikolaevich, 526 Kurosawa, Akira, 440n Kurzweil, Ray, 592–96, 614, 617, 618 Kuwait, Iraqi invasion of, 180 Kynge, James, 553 Kyoto protocol, 609 Kyrgyzstan, 459, 606n Kyushu (Japan), 129 Lagos (Nigeria), 149 Lake Agassiz (North America), 91–93 Lamentation over Ur, The (Sumerian poem), 194 Landes, David, 17 Laws, The (Plato), 260 League of Nations, 610 Leakey, Louis, 43 Leakey, Mary, 43 Lebanon, ancient, 190, 200, 239 Le Clerc, Peg-Leg, 462 Lee, James, 18n Legalist Tradition, 257, 259, 265 Leibniz, Gottfried, 470n, 481 Lenin, V.

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Long-term lock-in theories of Western rule often start from this fact: the West’s lead, they argue, was a cause rather than a consequence of the industrial revolution, and we need to look back further in time—perhaps much further—to explain it. Or do we? The historian Kenneth Pomeranz, whose book The Great Divergence I mentioned in the introduction, insists that Adam Smith and all the cheerleaders for the West who followed him were actually comparing the wrong things. China is as big and as varied, Pomeranz points out, as the whole continent of Europe. We should not be too surprised, then, that if we single out England, which was Europe’s most developed region in Smith’s day, and compare it with the average level of development in the whole of China, England scores higher.

The Myth of Meritocracy: Why Working-Class Kids Still Get Working-Class Jobs (Provocations Series)
by James Bloodworth
Published 18 May 2016

It would lead them to despise their lot in life instead of making them good servants in agriculture and other work to which their rank in society had destined them …’9 Even among those seeking reform, educating the poor was typically framed in terms of how it would benefit capitalists, rather than how it might improve the lot of workers. Introducing his own policy, William Forster warned that if the British workforce remained unskilled, ‘they will become overmatched in the competition of the world’.10 In the eighteenth century, Adam Smith, champion of the free market and author of the influential The Wealth of Nations, argued along similar lines in favour of educating the poor. For proponents of the free market, nepotism and Britain’s rigid social order were impediments to an efficient economy. The best jobs invariably went not to those in possession of the most brilliant minds but to the well-connected or to the progeny of the wealthiest families.

The Scandal of Money
by George Gilder
Published 23 Feb 2016

Nordhaus, “Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not,” Cowles Foundation for Research in Economics at Yale University, 1998. This epochal paper was delivered first to the National Bureau of Economic Research in 1993. I first encountered it in David Warsh’s definitive Knowledge and the Wealth of Nations (New York, NY: W. W. Norton, 2007), 336. 5.Nicholas Eberstadt, “How the World Is Becoming More Equal,” Wall Street Journal, August 26, 2014. Eberstadt documents that globally life spans have never been so long and evenly distributed, with even China now reaching an average of longer than seventy years. 6.Thomas Sowell, “Income Distribution,” The Thomas Sowell Reader (New York, NY: Basic Books, 2011), 98–107. 7.Charles Gave, “Of Wicksell and Fed Fallacies,” Gavekal Research, September 4, 2014, p. 4.

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Since Homo economicus or Homo sumptuarius could never build that new computer architecture, find that biotech peptide, or design that wireless network, we tell the entrepreneur who did that in fact he “didn’t build that.” Surprisingly, Homo economicus is not a notion of the Left. Many conservatives sport Adam Smith neckties as emblems of their reverence for the founder of the science of economics. Yet Adam Smith was the source of the idea—inspired by the Industrial Revolution’s steam engines, pin factories, and other mechanical apparatus—that the economy is itself a “great machine.” Every cog and gear, he said, is precisely adapted to its role and purpose.

Big Capital: Who Is London For?
by Anna Minton
Published 31 May 2017

This tax would siphon off the profits of soaring land values for local benefits. In keeping with the postwar ethos, the language of the report was shot through with the need to foster the public good, but the idea of a land tax is not limited to the left and has been promoted by such figures as Adam Smith, the eighteenth-century father of classical economic theory. Writing in The Wealth of Nations in 1776, Smith argued that a tax on ‘ground rent’ would prevent landowners from gaining monopolies. It took until 1909 for reforming Prime Minister Lloyd George to make the first attempt to introduce such a tax, with the backing of Churchill, who famously said: ‘Roads are made … electric light turns night into day … and all the while the landlord sits still … To not one of these improvements does the land monopolist … contribute, and yet by every one of them the value of his land is enhanced.’

…

While this would require the same shift in political culture needed to rewrite the social contract with regard to planning, there is some comfort to be drawn from the growing and unlikely alliance of policymakers and campaigners beginning to make common cause around these issues. Top of the list is the need for a development land tax to recoup rising land values and keep markets under control, championed by luminaries from Adam Smith and Lloyd George to Churchill. This has been investigated and recommended by government inquiry after government inquiry.fn3 It is part of the system in countries including Denmark, Singapore, Hong Kong and parts of the US and Australia, which are hardly bastions of socialism but which are prepared to intervene in property markets to safeguard decent housing.

Where We Are: The State of Britain Now
by Roger Scruton
Published 16 Nov 2017

Lawrence, London, 1907. 8Ernest Gellner, Nations and Nationalism, Oxford, 1983; Benedict Anderson, Imagined Communities, 2nd edn, London, 1991; Eric Hobsbawm, Nations and Nationalism since 1780, Cambridge, 1990; Elie Kedourie, Nationalism, London, 1960; Kenneth Minogue, Nationalism, London, 1967. 9See Adam Smith, Inquiry into the Nature and the Causes of the Wealth of Nations, 1776, and the discussion of ‘invisible hand’ explanations in Robert Nozick, Anarchy, State and Utopia, Oxford, 1974. The invisible-hand theory was generalized by F. A. Hayek to produce a comprehensive account of legal and institutional development, in Law, Legislation and Liberty, 2 vols, London, 1976. 10F.

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There you have a brief summary of American history: people settling together, solving their conflicts by law, making that law for themselves, and in the course of this process defining themselves as a ‘we’, whose shared assets are the land and its law. The ‘invisible hand’ process, which was so illuminatingly discussed by Adam Smith, depends upon, and is secretly guided by, a legal and institutional framework.9 Under a rule of law, for example, the free interaction of individuals will result in a market economy. In the legal vacuum of post-communist Russia, by contrast, this free interaction of individuals has produced a command economy in the hands of gangsters.

The Price of Everything: And the Hidden Logic of Value
by Eduardo Porter
Published 4 Jan 2011

It based its analysis on the fact that it would save about four hundred lives a year—which added up to a benefit of some 250 million Australian dollars a year—at an annual cost of about 130 million Australian dollars in lost excise taxes because Australians would smoke less. These techniques provide a new measure of the wealth of nations. Economists at the University of Chicago added up the value to Americans of their increased life expectancy to conclude that increases in longevity between 1970 and 2000 added $3.2 trillion per year to the national wealth of the United States. DO WE KNOW HOW MUCH WE ARE WORTH? Despite its democratic appeal, this metric too is troubling.

…

The data on the impact on happiness of your neighbors’ wealth are in Erzo Luttmer, “Neighbors as Negatives: Relative Earnings and Well-Being,” Quarterly Journal of Economics, Vol. 120, No. 3, August 2005, pp. 963-1002; and Mary Daly and Dan Wilson, “Keeping Up with the Joneses and Staying Ahead of the Smiths: Evidence from Suicide Data,” Federal Reserve Bank of San Francisco Working Paper, April 2006. The thesis about how stagnant happiness may confer evolutionary advantages is in Luis Rayo and Gary Becker, “Evolutionary Efficiency and Happiness,” Journal of Political Economy, Vol. 115, No. 2, 2007. Adam Smith’s quote about happiness as deception is in Adam Smith, The Theory of Moral Sentiments, 11th edition (Edinburgh: printed for Cadell and Davies et al., 1812), p. 317. Easterlin’s views about the pointlessness of growth are in Richard Easterlin, “Feeding the Illusion of Growth and Happiness: A Reply to Hagerty and Venhoven,” Social Indicators Research, Vol. 74, No. 3, 2005, pp. 429-443. 73-77 The American Trade-Off: Data on Americans’ stagnant happiness are found in Bruno Frey and Alois Stutzer, “What Can Economists Learn from Happiness Research?”

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The Church gradually lost its grip on society as trade and private enterprise expanded throughout Europe. Religious dogma lost its appeal as an analytical tool. Still, the penchant to view prices through the lens of justice survived the development of capitalism, thriving well into the eighteenth century. Adam Smith and David Ricardo, the two foremost thinkers of the classical age of economics, struggled with the notion of inherent value, which they viewed as a function of the labor content of products, distinct from the market price set by the vagaries of supply and demand. Smith, for instance, argued that the labor value of products amounted to whatever it cost to feed, clothe, house, and educate workers to make them—with a little extra to allow them to reproduce.

The Pineapple: King of Fruits
by Francesca Beauman
Published 22 Feb 2011

Surviving records of shopkeepers, such as Abraham Dent of the village of Kirkby Stephen near Manchester, show that even in the depths of the countryside customers had access to produce from all over the world – ginger, quinine, cinnamon and the like. Evidently, Britain was becoming more and more dependent on trade with its colonies, a state of affairs upheld by Adam Smith’s influential opinion piece The Wealth of Nations (1776) in which he put forward the proposition that ‘Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.’51 As the force of British imperialism penetrated territories to the West, the potency of the pineapple as a symbol of the power of the empire increased accordingly.

…

Yet the man who really deserves our respect, for it was he who was the first to cultivate the pineapple on a grand scale in Europe, is a wealthy Dutch cloth merchant named Pieter de la Court, the son of the Dutch politician, economist and philosopher Pieter de la Court van der Voort.16 One of the latter’s most influential works was The True Interest of Holland (1662) in which he advocates not only the principle of free trade, but also, in a precursor to the writings of men like Adam Smith, the idea that the pursuit of pleasure is a prerequisite to the wealth of a nation. This soon found practical expression on the family estate Allemansgeest at Voorschoten, near Leiden, where his son oversaw the cultivation of many foreign fruits, including the pineapple, by his gardener, William de Vinck.

…

Grafting, Budding, Inoculating and the Management of an orchard and Fruit Trees . . . under Indenture . . . for four or five pounds a year.’ The other prerequisite was that he be over thirty, ‘as they are more Likely to be Riotous and Troublesome if young’. But the candidate who turned up on the doorstep of Mount Clare later the same year by the name of John Adam Smith only partially fulfilled these credentials.54 Smith’s brilliance is undeniable from the evidence at hand – even with Hale’s instructions to help him, the construction of a pinery was an enormously challenging task. However, Smith was also a convict. This was not unusual – by 1770, over 10,000 felons had landed in the colony under Britain’s transportation policy.55 With Smith apparently rather difficult to keep track of, an advertisement placed by a disgruntled Carroll in the Maryland Gazette in May 1773 ran thus: TEN POUNDS REWARD.

Cities: The First 6,000 Years
by Monica L. Smith
Published 31 Mar 2019

But sometimes people from cities migrate outward for agricultural work, as has been documented in places as diverse as ancient Mesopotamia and India as well as very recent Europe (Margaret Grieco, in a wonderful study of low-income London neighborhoods in the early twentieth century, showed how women were the driving force of negotiating work picking hops and peas and set up entire temporary neighborhoods out in the countryside). Cities’ many different entrepreneurial niches gave people more ways to acquire goods as well as more goods to acquire. Thousands of years before Adam Smith wrote The Wealth of Nations and extolled the virtues of the division of labor in factories, managers already knew that production costs could be reduced if workers each made only part of an object and combined their efforts rather than making items from start to finish on their own. In cities, artisans also reduced costs by making goods that looked the same as high-end products but were composed of less-expensive materials, such as copying costly stone beads in clay or substituting glass for laboriously hand-carved stone bowls and chalices.

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Alisdair Rogers and Steven Vertovec (Oxford: Berg, 1995), 189–212. For India, see Monica L. Smith and Rabindra Kumar Mohanty, “Monsoons, Rice Production, and Urban Growth: The Microscale Management of Water Abundance,” Holocene (2018), 28(8): 1325–1333. Producers also sought efficiencies: The classic text of Western economics is Adam Smith’s The Wealth of Nations, interestingly published in the same year as the United States’ declaration of independence from Britain in 1776. For an archaeological perspective on manufacturing efficiencies, see Monica L. Smith, “The Concept of Copies: An Archaeological View of the Terracotta Ornaments from Sisupalgarh, India,” West 86th: A Journal of Decorative Arts, Design History, and Material Culture 22, no. 1 (2015): 23–43.

Wall Street: How It Works And for Whom
by Doug Henwood
Published 30 Aug 1998

"Pension Reform, the Stock Market, Capital Formation, and Economic Growth; A Critical Commentary on the World Bank's Proposals," mimeo, Cambridge University, Economics Department (December). Sloan, Allan (1994). "KKR Deal Makes a Silk Purse Out of a Cow's Ear," New York Newsday, September 18, p. A86. Smith, Adam (1976). An Inquiry Into the Nature and Causes of the Wealth of Nations, edited by R.H. Campbell and A.S. Skinner (Oxford: The Clarendon Press). Southern Finance Project (1993). "The Wages of Banking" (Charlotte, N.C.: Southern Finance Project, October 1). Spencer, Herbert (1972). "Joint-Stock Companies," excerpts from Principles of Sociology (1896), vol. 3, part 8, and "Railway Morals and Public Policy" (1854), from Essays, vol. 2 (1868) reprinted inJ.D.Y.

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'"^ the marketeers defend themselves Many of the architects of financial theory continued to defend their progeny's real world effects in the 1980s. In a speech reprinted in the Wall Street Journal, Harry Markowitz (1991), one of the creators of modern portfolio theory and CAPM, predictably summoned Adam Smith to defend program trading, Salomon Brothers' mortgage-backed bond depart- WALL STREET merit, and junk bond finance: "My own view is that the invisible hand could work its magic through mere humans is an essential part of Adam Smith's insight. Not many thousands of years ago, men like this would have clubbed each other over hunting rights. A few hundreds of years ago they would have hacked each other with axes and swords.

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Stiglitz and his collaborators (Greenwald and Stiglitz 1984; 1987; Stiglitz 1988) argue that informational problems explain credit rationing, which in turn can explain both the business cycle and unemployment.^^ Though economists treat the lemons problem as if it were a recent discovery, it's really as old as the classics. Adam Smith (1976, Book II, Chapter 4), in recommending a legal ceiling on the rate of interest, observed: If the legal rate of interest in Great Britain, for example, was fixed so high as eight or ten percent, the greater part of the money which was to be lent would be lent to prodigals and projectors, who alone would be willing to give this high interest.

The State and the Stork: The Population Debate and Policy Making in US History
by Derek S. Hoff
Published 30 May 2012

Smith anticipated Malthus in assuming that fertility moves in tandem with the level of subsistence, but his system was more happily self-regulating. He wrote, “It is in this manner [through market forces] that the demand for men, like that for any other commodity, necessarily regulates the production of men; quickens it when it goes on too slowly, and stops it when it advances too fast” (Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations [1776; reprint, New York: P. F. Collier and Son, 1909], 84). Smith also intimated that China’s large population produced its wealth (Onuf and Onuf, Nations, Markets, and War, 96). 66. Smith, Wealth of Nations, 86. 67. Bernard Semmel, “Malthus: ‘Physiocracy’ and the Commercial System,” Economic History Review, n.s. 17, no. 3 (1965): 522–35. 68.

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These celebrants included the common farmers who moved westward and the railroad boosters who recruited them and promoted new towns in the name of democratic settlement. Some American intellectuals, too, looked favorably upon population growth. Drawing on the “classical liberalism” of Enlightenment theorists John Locke and Adam Smith, these optimists assumed that maximizing human freedom and choice, especially in the realm of the market, would unleash societal changes and technological innovations that would outpace resource pressures stemming from demographic expansion. Yet many learned Americans harbored deep reservations about growth.

…

Its proponents not only viewed people as the building blocks of national power and wealth but also assumed that an export-driven economy could thrive only by preserving a pool of surplus (and hence poorly paid) workers, so as to keep production costs low.13 Republican ideology postulated that societies pass through several phases, progressing from the primitive to the commercialized, usually the four stages envisioned by Scottish theorist Adam Smith: hunting, pasturage, agriculture, and commerce.14 Population growth propels progress from one stage to the next because the need to increase food production necessitates social changes. Smith and classical liberals writing in his tradition welcomed the final stage because they believed that market-based societies enhance individual freedom and social peace.

The Empire Project: The Rise and Fall of the British World-System, 1830–1970
by John Darwin
Published 23 Sep 2009

By 1960, it was only a question of how to preserve as much influence as possible in a superpower world. But why begin the history of Britain's world-system in the 1830s and 1840s? After all, Adam Smith, from whose sceptical phrase this book takes its main title, saw the discovery of America and the rounding of the Cape as decisive moments in the history of the world. By the 1770s, when The Wealth of Nations was published, the British had won a great North American empire, and were in the process of seizing a second vast empire on the Indian sub-continent. If they had lost much of the first by the mid-1780s, they had certainly gained a good deal of the second.

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And, amid the huge general crisis that embroiled most of Eurasia after 1917, the appeal of British ‘modernity’ on which the Victorians had relied first came under siege and then faded away. When Whitehall rolled up the map of the world in the late 1960s, the substance of world power had already shrivelled up, leaving only the ghost of the British world-system. It only remained to acknowledge its passing. Notes Preface and acknowledgments 1. A. Smith, The Wealth of Nations [1776] (Everyman edn, 1910), p. 430. 2. J. A. Gallagher, The Decline, Revival and Fall of the British Empire (Cambridge, 1982), p. 73. 3. J. Gallagher and R. Robinson, ‘The Imperialism of Free Trade’, Economic History Review New Series, 6, 1 (1953), pp. 1–15. 4. P. Cain and A. G. Hopkins, British Imperialism 1688–2000 (new edn, 2002); J.

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Marshall on ‘Britain and the World in the Eighteenth Century’, Transactions of the Royal Historical Society, 1998, 1999, 2000. For a longer perspective, see B. Simms, Three Victories and a Defeat: The Rise and Fall of the First British Empire, 1714–1783 (2007). 20. B. R. Mitchell, Abstract of British Historical Statistics (Cambridge, 1971), p. 130. 21. The closing lines of the Wealth of Nations. Chapter 1 1. C. W. Dilke, Greater Britain (1869). 2. For Naoroji's views, see chapter 5. 3. PP 1867–8 (197) VI.789, Select Committee on Duties Performed by the British Army in India and the Colonies: Report, Proceedings. 4. Reflected in the appointment of the Royal (Carnarvon) Commission on Colonial Defence 1879–82.

The Communist Manifesto
by Karl Marx and Friedrich Engels
Published 1 Aug 2002

Somerset Maugham, 0-553-21392-X THE BALLAD OF THE SAD CAFE AND OTHER STORIES, Carson McCullers, 0-553-27254-3 THE HEART IS A LONELY HUNTER, Carson McCullers, 0-553-26963-1 THE MEMBER OF THE WEDDING, Carson McCullers, 0-553-25051-5 BILLY BUDD, SAILOR AND OTHER STORIES, Herman Melville, 0-553-21274-5 MOBY-DICK, Herman Melville, 0-553-21311-3 ON LIBERTY and UTILITARIANISM, John Stuart Mill, 0-553-21414-4 THE ANNOTATED MILTON, John Milton, 0-553-58110-4 THE SCARLET PIMPERNEL, Baroness Emmuska Orczy, 0-553-21402-0 COMMON SENSE, Thomas Paine, 0-553-21465-9 THE DIALOGUES OF PLATO, Plato, 0-553-21371-7 THE TELL-TALE HEART AND OTHER WRITINGS, Edgar Allan Poe, 0-553-21228-1 CYRANO DE BERGERAC, Edmond Rostand, 0-553-21360-1 IVANHOE, Sir Walter Scott, 0-553-21326-1 THE COMPLETE WORKS OF SHAKESPEARE (25 vols.), William Shakespeare PYGMALION and MAJOR BARBARA, George Bernard Shaw, 0-553-21408-X FRANKENSTEIN, Mary Shelley, 0-553-21247-8 THE JUNGLE, Upton Sinclair, 0-553-21245-1 THE WEALTH OF NATIONS, Adam Smith, 0-553-58597-5 ONE DAY IN THE LIFE OF IVAN DENISOVICH, Alexander Solzhenitsyn, 0-553-24777-8 THE COMPLETE PLAYS OF SOPHOCLES, Sophocles, 0-553-21354-7 DR. JEKYLL AND MR. HYDE, Robert Louis Stevenson, 0-553-21277-X KIDNAPPED, Robert Louis Stevenson, 0-553-21260-5 TREASURE ISLAND, Robert Louis Stevenson, 0-553-21249-4 DRACULA, Bram Stoker, 0-553-21271-0 UNCLE TOM'S CABIN, Harriet Beecher Stowe, 0-553-21218-4 GULLIVER'S TRAVELS AND OTHER WRITINGS, Jonathan Swift, 0-553-21232-X VANITY FAIR, William Makepeace Thackeray, 0-553-21462-4 WALDEN AND OTHER WRITINGS, Henry David Thoreau, 0-553-21246-X DEMOCRACY IN AMERICA, Alexis de Tocqueville, 0-553-21464-0 ANNA KARENINA, Leo Tolstoy, 0-553-21346-6 THE DEATH OF IVAN ILYICH, Leo Tolstoy, 0-553-21035-1 THE ADVENTURES OF HUCKLEBERRY FINN, Mark Twain, 0-553-21079-3 THE ADVENTURES OF TOM SAWYER, Mark Twain, 0-553-21128-5 THE COMPLETE SHORT STORIES OF MARK TWAIN, Mark Twain, 0-553-21195-1 A CONNECTICUT YANKEE IN KING ARTHUR'S COURT, Mark Twain, 0-553-21143-9 LIFE ON THE MISSISSIPPI, Mark Twain, 0-553-21349-0 THE PRINCE AND THE PAUPER, Mark Twain, 0-553-21256-7 PUDD'NHEAD WILSON, Mark Twain, 0-553-21158-7 20,000 LEAGUES UNDER THE SEA, Jules Verne, 0-553-21252-4 AROUND THE WORLD IN EIGHTY DAYS, Jules Verne, 0-553-21356-3 FROM THE EARTH TO THE MOON, Jules Verne, 0-553-21420-9 THE AENEID OF VIRGIL, Virgil, 0-553-21041-6 CANDIDE, Voltaire, 0-553-21166-8 THE INVISIBLE MAN, H.

Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization
by Jeff Rubin
Published 19 May 2009

If you were rich enough, you just set up a laboratory wherever you could find the space (perhaps at your country home) and got to work classifying frogs. Money is generally more difficult to come by than frogs, so it was probably not a coincidence that the preeminent nineteenth-century economic theorist was a millionaire (in today’s dollars). David Ricardo had already made his fortune on the London Stock Exchange when he read Adam Smith’s The Wealth of Nations and became interested in the study of where wealth comes from. Ricardo’s idea of comparative advantage is very simple, and very persuasive. It goes something like this: if everybody does what they are best at, rather than what they are just good at, and does only that, everybody will be better off.

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Recessions don’t diminish our dependence on oil; they just cut back a little on our appetite for it. When we start to feel a little better, we will be guzzling it again, and we may well be left wanting more. Because unlike after past oil shocks, there is no post-shock boost in oil supply to look forward to any more. If we wait for Adam Smith’s invisible hand to pull abundant sources of new cheap oil out of the ground, we are going to be waiting for Godot. Governments around the world may be thrusting bailout money into the hands of businesses and taxpayers, but you can count on one thing. There will be no energy bailout. Just as I had good news and bad news for the oilmen, part 2 of this book will have good news and bad news for you too.

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And of course this record increase in oil prices, with the aid of a world financial crisis to boot, has also brought the economy to its knees, but not before oil demand defied the laws of economic gravity for the better part of a decade. In fact, for most of that decade, world oil demand was growing faster than it did at the turn of the millennium, when oil was only a fraction of the price. That’s not the way a demand curve is supposed to behave. Somehow, Adam Smith’s invisible hand had been misled or misguided into consuming more oil just when it was expected to burn less. Why did oil have to skyrocket all the way to nearly $150 per barrel before the world economy stopped growing? Prices half that amount should have stopped global oil demand in its tracks long before the recession hit in late 2008.

We-Think: Mass Innovation, Not Mass Production
by Charles Leadbeater
Published 9 Dec 2010

F. 45 Small Is Beautiful 45 Schwartz, Jonathan 202 Schwarz, Michiel xi science 53–4, 60 open and collaborative approaches to 195 research 132 shared 154–7, 158, 159–65 search engines 36, 212 Second Life 5, 45, 70 self-confidence 72 self-control 236 self-governance 59, 79, 80, 97, 104, 174, 194, 232, 239 self-help 44–5, 146, 152, 200, 205, 206 self-management 89 self-organising networks 8, 168 self-regulation 49, 79, 165 Sen, Amartya: Development as Freedom 194–5 Sennett, Richard 215–16 Seoul, South Korea 203, 204 service sectors 129, 130 Shanda 106–7 Shanwei, Guandong province, China 192 shareholder ownership 121, 122, 123, 125 sharing 223 enabled by the web 6, 7, 26 shared use of common resources 27 the We-Think ethos 23, 24 see also idea-sharing Shi Tao 190–91 Shuttleworth, Mark 80, 118 Sibelius Software Ltd xi, 219 Siemens 135 Silicon Valley, California 133, 136 Silver, Jeremy xi, 219 Sims, The (computer game) 105–6, 149, 226, 228 simulation technologies 227 Situationist International 45, 46 SixDegrees.com 34 Skoll, Jeff 217 Slashdot 33, 34, 70 Smales, Andrew 33 Smith, Adam 224 The Theory of Moral Sentiments 229 The Wealth of Nations 224 SMS (Short Message Service) messaging 101–2 social justice 194 social surveillance 211 SocialText 36 Society for Sustainable Mobility 135 software 60, 61, 129 BASIC 46 blogging 36, 74 bugs 70, 72, 165 and changes on web pages 31 created by groups on the web 7, 23 distributed testing 72, 74 free 7 hacking 104 open-source 47, 56, 65, 66, 68, 69, 74, 75, 78, 108, 128, 134, 155, 200–203, 228 patents 97 social-networking 177 stealing of 47, 51 Sokol, Dan 46–7 Sony 140 Sopranos, The (television series) 182 source code 66, 197, 200, 229 SourceForge.net 45, 68 South America: access to the web 5 South Korea 203, 204, 215, 231 Ministry of Information and Communications 203 Soviet Union, former 189, 190, 210 Spallek, Heiko xi–xii Spanish elections (March 2004) 186–7 Spreadshirt 135 Squid Labs 134 stalkers 3 Stanford Research Institute, Palo Alto, California 39 Star Trek series 103 Star Wars (film) 137 Starbucks 109–10 Stony Brook University, New York State 165 Sullivan, Tim xi Sun Microsystems 202 supply and demand 100 Swarm of Angles (open-source film-making project) xi Swiki 36 synthetic biology 164–5 System/360 computer 77, 78 T Taylor, Charles 215 Technorati 33, 86 teenagers, on-line 213–16 television 2, 30, 34, 57, 129, 147, 171, 172, 173, 176, 183, 233 Teragrid 155 terror, terrorists 1, 3, 168, 169, 232, 235, 237 thinking barefoot 205–6 collaborative 20 creative 87 Descartes on 19–20 diverse 79 group-think 23, 210–11 individual 20, 21, 23 lateral 113 shared thoughts 81 Thurmond, Senator Strom 181–2 Tiananmen Square demonstrations (1989) 191 Time magazine 56 Tomcat 68 tools available to amateurs 103, 231–2 creating computer games 74 for creativity 218, 219 distribution of 84 education 148, 149 for genetic engineering 235 and groups 76–7 healthcare 151 idea-sharing 222 in science 154, 155, 161, 162–3, 197 search 227 social tagging 86 and Web 2.0 success stories 75 Torvalds, Linus 65, 66, 68, 96, 227 Toshiba 140 Toyota 135, 219 Trackback 33 trade unions 188 ‘tragedy of the commons’ argument 51, 124 transparency 184, 236, 237 Trekkies 103 Trevithick, Richard 55 Tribe, The (avant garde publication) 42 Trippi, Joe 177–8 Tropicalismo 202 Turkle, Sherry 211 Turner, Fred 38, 46 Tuxphone 136 Txtpower.org 186 U Ubuntu 80, 82, 118 Uganda 206 Ukraine: ’colour revolution’ 187 UN World Development Report (2003) 196 University of California 160, 213 University of Michigan 193 Library 144 Unix operating system 74 urbanisation 150, 188 US National Human Genome Research Institute 160 US National Institute of Health 159 US Office of the Director of National Intelligence 152 US Super Bowl (2007) 104–5 Usmanov, Alisher 30 V value chains 98 values collaborative 90, 112 community 91 diverse 79 van Neumann, John 137 Venezuela 202–3 Ventura, Jesse 180 videos 142, 216, 218 amateurism 105 by performance artists 2 and human-rights groups 206 political 182 real 57 self-expression 1 sharing online 75 social-networking sites 20 video-sharing sites 7, 34, 86 YouTube xiii, 46, 57 Vietnam 189–90, 191 virtual worlds 4–5, 7, 21 viruses computer 3, 4, 233–4 genomes of 165 visionaries 48 Vista operating system 47 Vodafone 207 voluntarism 128, 145 W Wal-Mart 218 Wales, Jimmy 13, 14–15, 18, 21 Wandsworth, Jeffrey 154 Warhol, Andy 105 Waterston, Bob 63 Watson, James D. 52, 62, 76 Watt, James 54–5 Watt engine 54–5, 56 Watts, Duncan 212 Wayprecht, Karl 156 We-Think approach to work 111–12, 114 collective self-help 44–5 combining ideas 77 common pools of resources 49 conditions necessary for 84, 86 corporate models of 97 culture 28, 59, 62, 169, 194, 230, 232–3, 238 defined 19 and democracy 170, 221, 239 design and research 166 and the developing world 204 and eBay rating system 217 in education 148, 149 entrepreneurs 91 and equality 208 examples of 19 file-sharing 58 and freedom 213, 221 Full 85, 86–7 and healthcare 150 impact on culture and economy 129–32 and innovation 89, 93, 95, 125, 126 leadership 117, 118–19 Linux community 65, 66 Low 85 making sense of web content 32, 34, 36, 59 Medium 85, 86 No 85, 86 organisational recipe 21, 87, 89 and ownership 121 potency of 59 and public services 145, 146, 149, 150 rise of 88 and service sectors 130 social justice 194 successful projects’ basis collaborate 67, 79–80, 81, 82 connect 67, 75–9 contribute 67, 70, 71, 72, 73, 74–5 core 67, 68–9 create 67, 82–3 vital ingredients of 61–2 ways it could go wrong 23–4, 84 working for free 23 worm project as a recipe for 64–5 Web 2.0 27, 30, 31–2, 40, 42, 45, 51, 70, 75, 179 web, the bloggers’ ability to act as a public watchdog 181–2 censorship 190–91 and civic organisations 189 collaborative 200 connectedness: pros and cons 3–4, 5 and creative conversations 95 creativity 1–2, 3, 5, 19, 26, 218–21, 222, 227 criminal use of 3, 168–9 decentralisation 7, 13 democracy 1, 3, 5, 6, 7, 170, 173–4, 176, 178, 184, 189, 191, 192 destroying as much as it creates 2–3 development of 5 electronic trail 210 enters mainstream politics 176 and equality 2, 192–3 fears of loss of freedom 208, 210 hypertext 35, 39 impact on the developing world 166 innovation 2, 5, 7, 225 knowledge 2, 3 MoveOn network 188–9 openness 3, 13 origins of 5, 6, 47–8 and political journalists 170–71 power of 24–5, 185, 233 and privacy 210 sharing ideas 6, 7, 26 social vs. individualistic thinking 19–20 surveillance 2 underlying culture of 7 Weber, Steven 69 weblogs 33, 142 websites author’s website ix–xiv political 176 sharing ideas 68 Wellcome Trust 160 Wheal Prosper mine, Cornwall 55 Whole Earth Catalog 40, 63 Whole Earth ’Lectronic Link 40 wiki farms 36 wiki-economy 90 Wikimedia Foundation 15 Wikipedia 1, 4, 12–21, 23, 36, 84, 85, 86, 97, 126, 127, 141, 148, 152, 161, 191, 195, 226, 228, 231, 235 wikis 31, 59, 77, 165 defined 13, 35 history of 35–6 internal 152 openness and decentralisation 13 role of 36 scientists 159 Ubuntu 80 wiki culture 14 wiki version of part of We-Think ix, xiii Wilson, E.

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Cherished institutions and familiar ways of working will be threatened along with the privileged role of professional, authoritative sources of knowledge. The idea that sharing might become the economy’s motive force is deeply unsettling to some because it turns conventional wisdom on its head. From Adam Smith’s Wealth of Nations written in 1749 through to Hernando de Soto’s recent The Mystery of Capital, economists have argued that private property provides the basis for capital – the elixir at the heart of capitalism, which propels its constant growth and renewal. Karl Marx called capital ‘the hen that lays the golden eggs’ – that part of a nation’s assets that allows new ventures to be initiated and productivity increased.

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De Soto’s thesis has attracted its share of criticism from those who point out, on the one hand, that property rights cannot be created without law and good government and, on the other, that property rights are not worth that much unless the owners have the capacity to do something with their land. My own reservation is more basic still. De Soto, following in Adam Smith’s footsteps, might be right in contending that private property animates the industrial and agricultural economy of land and things. But in an economy of ideas, much – and perhaps most – of the animating capital is shared. The web’s significance is that it makes sharing central to the dynamism of economies that have hitherto been built on private ownership.

SuperFreakonomics
by Steven D. Levitt and Stephen J. Dubner
Published 19 Oct 2009

Keith Chen and Laurie Santos, “The Evolution of Rational and Irrational Economic Behavior: Evidence and Insight from a Non-Human Primate Species,” chapter from Neuroeconomics: Decision Making and the Brain, ed. Paul Glimcher, Colin Camerer, Ernst Fehr, and Russell Poldrack (Academic Press, Elsevier, 2009). / 212 “Nobody ever saw a dog”: see Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannon (University of Chicago Press, 1976; originally published in 1776). / 214 Day traders are also loss-averse: see Terrance Odean, “Are Investors Reluctant to Realize Their Losses?” Journal of Finance 53, no. 5 (October 1998). SEARCHABLE TERMS Note: Entries in this index, carried over verbatim from the print edition of this title, are unlikely to correspond to the pagination of any given e-book reader.

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Keith Chen, the son of Chinese immigrants, is a hyper-verbal, sharp-dressing thirty-three-year-old with spiky hair. After an itinerant upbringing in the rural Midwest, Chen attended Stanford, where after a brief infatuation with Marxism, he made an about-face and took up economics. Now he is an associate professor of economics at Yale. His research agenda was inspired by something written long ago by Adam Smith, the founder of classical economics: “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that.” In other words, Smith was certain that humankind alone had a knack for monetary exchange.

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Honore and Adriana Lleras-Muney, “Bounds in Competing Risks Models and the War on Cancer,” Econometrica 76, no. 6 (November 2006). WAR: NOT AS DANGEROUS AS YOU THINK?: Derived from “U.S. Active Duty Military Deaths 1980 through 2008 (as of April 22, 2009),” prepared by the Defense Manpower Data Center for Department of Defense; thanks to a reader named Adam Smith (seriously) for alerting us to these data. HOW TO CATCH A TERRORIST: This section is drawn from “Identifying Terrorists Using Banking Data,” Steven D. Levitt and A. Danger Powers, working paper; and from author interviews with Ian Horsley (a pseudonym), primarily in London. / 89 Bank fraud in the U.K.: gleaned from the Association for Payment Clearing Services (APACS). / 92 False positives in cancer screening: see Jennifer Miller Croswell et al., “Cumulative Incidence of False-Positive Results in Repeated, Multimodal Cancer Screening,” Annals of Family Medicine 7 (2009). / 92 Mike Lowell: see Jimmy Golen, “Lowell: Baseball Held to Higher Standard,” The Associated Press, January 18, 2008. / 92 Release of terror suspects: see Alan Travis, “Two-Thirds of U.K.

Happy City: Transforming Our Lives Through Urban Design
by Charles Montgomery
Published 12 Nov 2013

The architect believed that highways—and, apparently, new flying machines—would set urbanites free to inhabit and work on their own autonomous plots in the countryside. (Courtesy of the Frank Lloyd Wright Foundation Archives [The Museum of Modern Art|Avery Architectural & Fine Arts Library, Columbia University, New York], © Frank Lloyd Wright Foundation, Scottsdale, AZ) In his Inquiry into the Nature and Causes of the Wealth of Nations, Bentham’s contemporary Adam Smith warned that it was a deception to believe that wealth and comfort alone would bring happiness. But this didn’t stop his followers or the governments they advised from relying on the crude measures of income when measuring human progress over the next two centuries. As long as economic numbers grew, economists insisted that life was getting better and people were getting happier.

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There Is No Such Thing as an Externality Even before widespread acknowledgment of human-caused climate change, Jane Jacobs warned that the city is a fantastically complex organism that can be thrown into an unhealthy imbalance by attempts to simplify it in form or function. In Cities and the Wealth of Nations she warned specifically about the tendency for designers and planners to overscale: the larger an organism or economy, the more unstable it would become in changing times, and the less the likelihood that the system would be able to self-correct. Most city builders paid no attention. They pursued greater integration with global systems, relied more heavily on national and multinational industries and retailers to fuel their economies, and altered their cities’ very bone structure to accommodate extreme dispersal.

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You are unlikely to say you are happy when you cannot offer food, shelter, and security to your children. But in the world’s rich countries, working harder to earn more money gets less effective once you’ve passed the average income mark. After that, each extra dollar delivers proportionately less satisfaction. If money isn’t everything, what is the full recipe for happiness? Adam Smith’s followers in classical economics have never produced a plausible answer, but the surveys offer a few. People who are well educated rate their happiness higher than those who aren’t. Employed people are happier than unemployed people—even in European states where generous welfare policies insulate citizens from the most destructive effects of unemployment.

The Journey of Humanity: The Origins of Wealth and Inequality
by Oded Galor
Published 22 Mar 2022

Might the forces that governed both the protracted economic ice age and our escape from it foster our understanding of why current living conditions are so unequal across the globe? Fuelled by the conviction, and the evidence, that in order to understand the causes of the vast inequality in the wealth of nations we would have to identify the principal driving forces behind the process of development as a whole, I have developed a unified theory that seeks to encompass the journey of humanity in its entirety.[4] In shedding light on the forces that governed the transition from an epoch of stagnation to an era of sustained growth in living standards, it reveals the fingerprints of the distant past in the fate of nations.

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Uncovering the deep-rooted factors behind this global disparity leads us to reverse the course of our journey and to take major sequential steps far back in history, ultimately reverting to the place where it all began – the exodus of Homo sapiens from Africa tens of thousands of years ago. We shall consider institutional, cultural, geographical and societal factors that emerged in the ancient past and propelled societies on their distinct historical trajectories, influencing the timing of their escape from the epoch of stagnation, and inducing the gap in the wealth of nations. Institutional reforms, at random critical junctures in the course of history, occasionally placed countries on different paths and contributed to their divergence over time. Likewise, the proliferation of distinct cultural norms contributed to the variation in the movement of the great cogs of history across the globe.[6] Figure 2.

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Suffice to say, the modern era of sustained improvement in living standards is hardly equivalent to a Garden of Eden, where social and political strife are absent. Massive inequities and injustices persist. Instead, in order to understand and help mitigate the ultimate causes of the immeasurable inequality in the wealth of nations, this book is designed to faithfully present an interdisciplinary, scientifically based narrative of the evolution of societies since the emergence of Homo sapiens. In accordance with the cultural tradition that views technological development as progress,[9] the outlook derived from this exploration can be described as fundamentally hopeful, in terms of the overarching trajectory of societies across the globe.

Republic, Lost: How Money Corrupts Congress--And a Plan to Stop It
by Lawrence Lessig
Published 4 Oct 2011

The $150 million is calculated as follows: $1 per thousand page views, an estimated fourteen billion page views per month, times twelve months is at least $150 million. 30. Interview with author, May 4, 2007. 31. “Therefore I Travel, Company Profile of Lonely Planet,” Tony Wheeler, Lonely Planet, available at link #16. 32. Adam Smith, The Wealth of Nations, vol. 1, ed. Edwin Cannan (Chicago: University of Chicago Press, 1976), 477 (book IV, chapter II: “Of Restraints upon the Importation from foreign Countries of such Goods as can be produced at Home”). Chapter 3. 1 + 1 = 1. Paul Krugman, “Boiling the Frog,” New York Times, July 13, 2009, at A19.

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In none of these cases was government regulation necessary. In none of the cases did some professional body, such as the Bar Association or the AMA, need to intervene to force the companies to do what was “right.” “What was right” coincided perfectly with what was in the best interest of these entities. As Adam Smith famously said, they were “in this, as in many other cases, led by an invisible hand to promote an end which was no part of [their] intention.”32 That’s not always true of course. Indeed, as we’ll see, pursuing self-interest alone, without the proper regulatory structure, is often fatal to the public interest.

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As Rajan and Zingales describe: “Capitalism’s biggest political enemies are not the firebrand trade unionists spewing vitriol against the system but the executives in pin-striped suits extolling the virtues of competitive markets with every breath while attempting to extinguish them with every action.”40 The perpetual danger is that this competition will be “distorted by incumbents,”41 because of an obvious fact not about markets, but about humans: “Those in power… prefer to stay in power. They feel threatened by free markets”42—even if it was free markets that gave them their power! This is not a new point. Adam Smith, founding father of the modern free-market movement (even if, like most founding fathers, his work is only indirectly and partially understood by those who follow him most vigorously), famously condemned the very heroes of free-market wealth: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”hatрsly), f43 It was from this recognition that Smith offered his rule for interpreting any proposal by successful incumbents for regulating the market.

Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown
by Detlev S. Schlichter
Published 21 Sep 2011

It also provided from the start a topic of research and debate for the young science of economics. One of the most remarkable and colorful of the early economists was Richard Cantillon. His treatise Essai sur la Nature du Commerce en General,15 posthumously published in 1755 and thus a quarter of a century before Adam Smith’s The Wealth of Nations (1776), already dealt with, among many other things, some of the effects on the economy of an expanding money supply through banking.16 Cantillon already showed that the new money would not simply lift all prices and certainly not lift them proportionally to the money inflow. The early recipients of new money gain at the expense of later participants.

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Russia, default S safekeeping, gold savings voluntary savings glut theory secular deflation silver Smith, Adam Southern Song Dynasty specie stability, decreased state-bank alliance state, paper money and stimulus, benefit myth T Theorie des Geldes und der Umlaufinittel Tracy, Count Antoine Destutt de U U.S. inflation, China and underconsumption, myth of United States, paper money and use-value V Veblen, Thorstein Volcker, Paul Vreeland, Edward B. W Walras, Leon warehouse receipt Washington, George wealth demand, money demand versus The Wealth of Nations wire transfers World Bank WorldCom Y Yuan Dynasty

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Richard Cantillon, Essay on the Nature of Commerce in General/Essai sur la Nature du Commerce en General (New Brunswick, NJ: Transaction Publishers; 2001), translated by Henry Higgs, pp. 5–130. 16. Friedrich August von Hayek, “Richard Cantillon (c. 1680–1734)” in idem., The Trend of Economic Thinking, Volume 3 of The Collected Works of F. A. Hayek, edited by W. W. Bartley III and Stephen Kresge (London: Routledge, 1991), pp. 245–294; Murray N. Rothbard, Economic Thought before Adam Smith (Cheltenham, UK: Edward Elgar, 1995), pp. 343–362. 17. Niall Ferguson, The Ascent of Money: A Financial History of the World (London: Penguin Books, 2009), p. 139. 18. Mark Skousen, The 100 Percent Gold Standard: Economics of a Pure Money Commodity (Lanham, MD: University Press of America, 1980), p. 45. 19.

The Internationalists: How a Radical Plan to Outlaw War Remade the World
by Oona A. Hathaway and Scott J. Shapiro
Published 11 Sep 2017

In his 1776 classic work, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith demonstrated that specialization in production allows for economies of scale, improving efficiency and growth.20 In 1817, David Ricardo showed that countries could gain from trade even if one was more efficient at producing all traded goods—what mattered was their comparative advantage.21 These revolutionary ideas swept the Western world. And yet growth in global trade was sluggish. From the end of the eighteenth century, when Adam Smith first launched his famous critique of mercantilism, until the early twentieth, global trade rose from just under 10 percent of global GDP to just over 20 percent.22 This tepid response is puzzling.

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Our claim that weak states were no longer threatened with conquest is consistent not only with the data in the previous chapter but also with the argument and findings of Tanisha Fazal, who documents the decline of state death in the second half of the twentieth century. Tanisha Fazal, State Death: The Politics and Geography of Conquest, Occupation, and Annexation (Princeton, NJ: Princeton University Press, 2007). 20. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: W. Strahan and T. Cadell, 1776). 21. David Ricardo, On the Principles of Political Economy and Taxation (London: John Murray, Albermarle-Street, 1817). 22. Mohamed Nagdy and Max Roser, “International Trade (2016),” OurWorldInData.org, accessed January 17, 2016, http://ourworldindata.org/data/global-interconnections/international-trade/. 23.

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They worried that Germany was not yet prepared for these wars of expansion. Hitler had a starkly different vision for Germany than did Stresemann. Instead of integration into the global economy, Hitler planned to use war in order to accumulate as much territory as possible. Lebensraum was based on a pre-modern, almost feudal, conception of economics: the wealth of nations as determined by area of farmland rather than volume of trade. But Hitler’s plan was built on a crackpot racial theory as well. On his demented worldview, the German people were entitled to Eastern lands because they were superior to Slavs. Just as humans used animals for their own purposes, Aryans have conquered inferior races to achieve their cultural greatness.

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier
by Edward L. Glaeser
Published 1 Jan 2011

“Sources of Welfare Disparities Across and Within Regions of Brazil: Evidence from the 2002-03 Household Budget Survey.” World Bank Poverty Reduction Group, Policy Research Working Paper 4803, Dec. 2008. Small, Kenneth, and Erik Verhoef. The Economics of Urban Transportation. New York: Routledge, 2007. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, 3d ed. Basel: J. J. Tourneisen and J. L. LeGrand, 1791; New York: Cosimo, 2007. Smith, Lewis. “Traffic Still Light in London Charge Zone.” Times (London), Mar. 1, 2003. Smith, Russell A. “The Taft-Hartley Act and State Jurisdiction over Labor Relations.” Michigan Law Review 46, no. 5 (Mar. 1948): 593-624.

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In 1908, Ford introduced his Model T at the bargain price of $825 (about $19,000 in 2010 currency). Five years later, Ford started producing the Model T on a moving assembly line, which increased his factory’s speed and efficiency. Of course, the process of mass industrialization—dividing complicated manufacturing processes into small, straightforward tasks—long predated Ford. In 1776, Adam Smith was extolling the efficiencies created by the division of labor in a pin factory. Ford simply took this process one step further, using machines to move parts along and making sure that his workers’ actions meshed perfectly. The last chapter discussed Jevons’s complementarity corollary, according to which more efficient information technology makes information learned face-to-face more valuable, but not all new technologies increase the returns from knowledge.

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But in New York, that ratio is more than reversed; in Manhattan there are 4.7 times more people working in restaurants than in groceries, and between 1998 and 2008, employment in Manhattan restaurants increased by 55 percent. While theaters illustrate the urban edge in paying for fixed costs, restaurants show the benefits that come because cities allow for the division of labor and specialization. Adam Smith noted that the division of labor is limited by the extent of the market and wrote that “In the lone houses and very small villages which are scattered about in so desert a country as the Highlands of Scotland, every farmer must be butcher, baker and brewer for his own family.” Isolation meant that each family had to produce its own food.

Sapiens: A Brief History of Humankind
by Yuval Noah Harari
Published 1 Jan 2011

Today, there is so much credit in the world that governments, business corporations and private individuals easily obtain large, long-term and low-interest loans that far exceed current income. The Economic History of the World in a Nutshell The belief in the growing global pie eventually turned revolutionary. In 1776 the Scottish economist Adam Smith published The Wealth of Nations, probably the most important economics manifesto of all time. In the eighth chapter of its first volume, Smith made the following novel argument: when a landlord, a weaver, or a shoemaker has greater profits than he needs to maintain his own family, he uses the surplus to employ more assistants, in order to further increase his profits.

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You always insist that the order sustaining society is an objective reality created by the great gods or by the laws of nature. People are unequal, not because Hammurabi said so, but because Enlil and Marduk decreed it. People are equal, not because Thomas Jefferson said so, but because God created them that way. Free markets are the best economic system, not because Adam Smith said so, but because these are the immutable laws of nature. You also educate people thoroughly. From the moment they are born, you constantly remind them of the principles of the imagined order, which are incorporated into anything and everything. They are incorporated into fairy tales, dramas, paintings, songs, etiquette, political propaganda, architecture, recipes and fashions.

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Beginning in the eighteenth century, religions and ideologies such as liberalism, socialism and feminism lost all interest in the afterlife. What, exactly, happens to a Communist after he or she dies? What happens to a capitalist? What happens to a feminist? It is pointless to look for the answer in the writings of Marx, Adam Smith or Simone de Beauvoir. The only modern ideology that still awards death a central role is nationalism. In its more poetic and desperate moments, nationalism promises that whoever dies for the nation will forever live in its collective memory. Yet this promise is so fuzzy that even most nationalists do not really know what to make of it.

The Irrational Bundle
by Dan Ariely
Published 3 Apr 2013

Why did the nice people at MIT and SAP design the system this way? Why did they break tasks into so many components, put each person in charge of only small parts, and never show them the overall progress or completion of their tasks? I suspect it all has to do with the ideas of efficiency brought to us by Adam Smith. As Smith argued in 1776 in The Wealth of Nations, division of labor is an incredibly effective way to achieve higher efficiency in the production process. Consider, for example, his observations of a pin factory: . . . the division of labour has been very often taken notice of, the trade of the pin-maker; a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty.

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So in essence Stephen and I are academic relatives, and I feel as if he is my younger (but much taller) brother. He is smart and creative, and it has been a privilege to watch him advance in his academic adventures. Stephen is currently a doctoral student at Duke University, and if his advisers had any say in the matter, we would never let him leave. Notes 1. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Chicago: University of Chicago Press, 1977), 44–45. 2. George Loewenstein, “Because It Is There: The Challenge of Mountaineering . . . for Utility Theory,” Kyklos 52, no. 3 (1999): 315–343. 3. Laura Shapiro, Something from the Oven: Reinventing Dinner in 1950s America (New York: Viking, 2004). 4. www.foodnetwork.com/recipes/sandra-lee/sensuous-chocolate-truffles-recipe/index.html. 5.

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In conventional economics, the assumption that we are all rational implies that, in everyday life, we compute the value of all the options we face and then follow the best possible path of action. What if we make a mistake and do something irrational? Here, too, traditional economics has an answer: “market forces” will sweep down on us and swiftly set us back on the path of righteousness and rationality. On the basis of these assumptions, in fact, generations of economists since Adam Smith have been able to develop far-reaching conclusions about everything from taxation and health-care policies to the pricing of goods and services. But, as you will see in this book, we are really far less rational than standard economic theory assumes. Moreover, these irrational behaviors of ours are neither random nor senseless.

Money for Nothing
by Thomas Levenson
Published 18 Aug 2020

The elaborate and complex web of financial abstractions produced by securitization and its derivatives had created a mathematically opaque tower of numbers and interdependent promises that obscured just how much risk supposedly prudent investors had accepted.* * * * — AS IN THE South Sea Bubble, there was nothing abstract about the Great Recession. It caused terrible pain to untold numbers of individuals and families, lives wounded by lost homes and drained savings. It slashed the wealth of nations: the US economy fell by over 4 percent in the immediate aftermath of Lehman’s failure and didn’t get back to precrisis levels of employment and production for years. Millions lost jobs, and, as always, such widespread misery cost lives: suicide rates rose in parallel with the unemployment rate in the US and through much of Europe.

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Journal of Modern History 88 no. 2 (June 2016): 275–305. Simmel, Georg. The Philosophy of Money. Oxford: Routledge and Kegan Paul, 2011. Sinclair, John. The History of the Public Revenue of the British Empire. 3rd ed. London: A. Strahan, 1803. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. 1776. Electronic ed.: Amsterdam: MetaLibri, 2007. Smythe, William J. Map-making, Landscapes and Memory: A Geography of Colonial and Early Modern Ireland c. 1530–1750. Notre Dame, IN: University of Notre Dame Press, 2006. Spang, Rebecca L. Stuff and Money in the Time of the French Revolution.

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He sent to London for new surveying tools, to be produced by modern methods—“The said Petty, consideringe the vastnesse of the worke, thought of dividinge both the art of makinge instruments, as also using them into many parts.” That is: he set it up so that one craftsman would make measuring chains, another compass needles; woodworkers would concentrate on building cases; and so on. This isn’t quite Adam Smith on the manufacture of pins, but Petty’s idea is recognizably kin to that vision of rationalizing human behavior to some greater (and more interchangeable) end. Armed with these standardized kits, teams of surveyors and assistants set out, guarded by soldiers, and working with designated “bounders”—men who could confirm local property lines set out across Ireland.

Masters of Management: How the Business Gurus and Their Ideas Have Changed the World—for Better and for Worse
by Adrian Wooldridge
Published 29 Nov 2011

Senior managers are as familiar with the business lounge of their local airports as with their own sitting room. Web surfers can communicate with people almost anywhere in the world at the press of a button. The world’s ever-growing army of investors has its savings tied up with the global markets. (Remember Adam Smith’s observation, in The Wealth of Nations, that, while “the proprietor of land is necessarily a citizen of the particular country in which his estate lies . . . the proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country.”) Shoppers expect to be able to buy fresh kiwi fruit in the depths of winter, regardless of environmental crisis or recession.

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News & World Report, 60 USS Enterprise, 174 Valenti, Jack, 403 Van Reneen, John, 12 Venture capitalists, 196 Vernon, Raymond, 272 Vertical integration, 166 Viadeo, 359 Virgin Airlines, 155, 320 Vivendi, 159, 298 Vodafone, 310 Volkswagen, 53 Von Karajan, Herbert, 257 Wadhwa, Vivek, 175, 370 Waiting for Superman, 332 Walgreens, 264 Wall Street Journal, 60, 112, 114, 264, 316, 364, 383 Walmart, 36, 39, 118, 151, 155, 173, 241, 376 Wang, Charles, 185 The War for Talent, 10, 365 Warren, Rick, 76 Washington Monthly, 364 Washington Post, 118–119 Wasnik, Mukul, 53 Wasserman, Noam, 302 Waterman, Robert, 4, 10, 54, 65, 95, 99–102, 257, 319 Watkins, Michael, 308 Watson, Thomas, 310–311 The Wealth of Nations (A. Smith), 270 Weill, Sandy, 402 Welbourne, Edward, 386–387 Welch, Jack, 4–5, 18, 65–66, 75–76, 154, 160, 197, 292–298, 302, 306, 320, 376, 380 Welch, Suzy, 65–66, 306 Wells, Frank, 302 Wenger, Ekkehard, 296–297 Westinghouse, 302 Wharton Business School, 41, 57, 78 What I Didn’t Learn in Business School: How Strategy Works in the Real World (Barney and Clifford), 55 What Would Google Do?

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The discipline still awaits its Joseph Schumpeter or John Maynard Keynes. It lacks rules of debate, so the discipline remains open to anybody with an axe to grind—much as economics was open to the likes of Karl Marx. However, just as anybody wanting to know about economics a hundred years ago could draw on writers such as Alfred Marshall, Adam Smith, and David Ricardo, management theory already has its founding fathers—among them, Alfred Sloan and Peter Drucker. Management theory has also generated debates on such momentous subjects as globalization, the nature of work, and the changing structure of companies. Despite its adolescent excesses, the discipline has generated ideas that work.

Doppelganger: A Trip Into the Mirror World
by Naomi Klein
Published 11 Sep 2023

But Bannon and Trump co-opted it to describe any form of power—economic, judicial, journalistic, intelligence—that posed a barrier to their unfettered and often unconstitutional exercise of power, while simultaneously deploying it as an easy scapegoat for their failures. Nothing was ever their responsibility; it was always the fault of the “deep state.” In The Wealth of Nations, published in 1776, Adam Smith wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The English writer and publisher Mark Fisher went further, remarking in 2013 that much of what is packaged as conspiracies today is “the ruling class showing class solidarity”—by which he meant that it’s mostly just ultrarich people, in business and government, having one another’s back.

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“If Covid was really serious”: Nikou Asgari, “‘A Form of Brainwashing’: Why Trump Voters Are Refusing to Have a Vaccine,” Financial Times, July 20 2021. “sovereign citizens”: “Sovereign Citizens Movement,” Southern Poverty Law Center, accessed November 8, 2022. popularized by leftists in Turkey: Ryan Gingeras, “How the Deep State Came to America,” War on the Rocks, February 4, 2019. “People of the same trade”: Adam Smith, The Wealth of Nations (1776; repr. London: David Campbell Publishers, 1991), 116. “the ruling class showing class solidarity”: Mark Fisher, “Exiting the Vampire Castle,” Open Democracy, November 24, 2013. Republished with permission from The North Star (original publication date November 22, 2013). “Abuse of power begets conspiracy”: Marcus Gilroy-Ware, After the Fact?

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Seventeen sex Seymour, Richard “Shadow, The” (Andersen) Shadow Lands Shakespeare, William Sheffer, Edith shock, shock doctrine; Covid and Shock Doctrine, The (Klein) shootings, mass Siebenkās (Jean Paul) Silberman, Steve Silicon Valley; see also tech companies Simmons, Russell Simpson, Leanne Betasamosake Sinclair, Murray Singh, Lilly Sister Outsider (Lorde) 60 Minutes Slate slavery “slavery forever” video Slobodian, Quinn smallpox Smalls, Chris smart cities Smith, Adam Smith, Zadie Snowden, Edward social credit systems Social Democrats socialism; Jewish attraction to social media; avatars on; content moderators and; Covid and; digital doubles on; enclosure process and; Facebook; hacking of accounts on; influencers on; Instagram; Twitter, see Twitter; vaccine-autism myth on; YouTube, see YouTube social networks Social Security societies Son, John Sonalker, Anuja Soros, George souls South Africa South Korea Soviet Union Spain Spanish Inquisition Spartacus League Spectator, The speechlessness spyware Stalin, Joseph Starbucks State Department Status Update (Marwick) Steer Tech Stepford Wives, The sterilization, forced Stevenson, Robert Louis Stone, I.

Why Stock Markets Crash: Critical Events in Complex Financial Systems
by Didier Sornette
Published 18 Nov 2002

Indeed, the general equilibrium theory is nothing but a formalization of the idea that “everything in the economy affects everything else” [244]. The historical root and best pictorial synthesis of this idea is found in the work of 18th-century Scotsman Adam Smith. Smith’s masterpiece [384], An Inquiry into the Nature and Causes of the Wealth of Nations, introduced the then-radical notion that selfish, greedy individuals, if allowed to pursue their interests largely unchecked, would interact to produce a wealthier society as if guided by an “invisible hand.” Smith never worked out a proof that this invisible hand existed.

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Confidence in beliefs about social groups as an outcome of message exposure and its role in belief change persistence, Communication Research 19, 597–617. 383. Small, P. (2000). The Entrepreneurial Web (Addison-Wesley, Reading, MA). 384. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations (Printed for W. Strahan and T. Cadell, London); (1805) 11th ed. with notes, supplementary chapters, and a life of Dr. Smith, by William Playfair (Printed for T. Cadell and W. Davies, London). r efe rences 415 385. Smith, J. Q., Harrison, P. J., and Zeeman, E. C. (1981). The analysis of some discontinuous decision processes, European Journal of Operational Research 7, 30–43. 386.

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Karl Marx thought capitalists would be so greedy they would 84 chapter 4 bring down the system. But they all shared Smith’s view of economics as the study of people trying to maximize their material well being. In 1954, K. Arrow and G. Debreu [16] published an article that in essence mathematically proved the existence of Adam Smith’s invisible hand. This “general equilibrium” proof, which relies on a set of very restricted assumptions of an idealized world, has been a mainstay of graduate-level economics training ever since. The most important tool in this analysis was game theory: the study of situations, like poker or chess games, in which players have to make their decisions based on guesses about what the other player is going to do next.

Wealth, Poverty and Politics
by Thomas Sowell
Published 31 Aug 2015