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Friday, June 27, 2008

Adam Smith Quotes

Adam Smith is known as one of the greatest philosophers in history. Until the 1930’s, the economy of the United States was almost entirely based on his book, “The Wealth of Nations,” which by no coincidence, was published months before the U.S. Declared independence in 1776. Today his insights have seen much abuse, as political leaders have cherry picked the parts they liked and ignored certain essentials. Even the principles that China has employed since 1977 in order to grow, can be traced back to Smith's insights. Many of the problems we face can be traced to where these politicians have departed from his advise, and as history as always shown, the “invisible hand” will always correct the politician’s deviations.

Smith teaches us that, rather than have an economy where exchanges are controlled by a centralized, (supposedly) benevolent authority, the government should allow us to make our own economic choices. This is because all people inevitably act in their own “self-interest” (exchanging personal gain with others, for agreed upon mutual benefit). This principle which will naturally lead to an outcome agreed upon by the people within the exchange itself, regardless of whether people outside of that exchange think it is somehow "unfair." This is preferable (to advocates of a free society) to an outcome with the arbitrary consequences of blanket mandates enforced by politically motivated bureaucrats. This insight stands in stark contrast to Marxism, which tells us that there is constant struggle between classes because of unfairness, a central government should actively correct this unfairness, and that people should subordinate their own interest to the larger society, which will be guided by people of the better working class, toward a utopia of equality.

We should not be confused by false dichotomies of “conservative vs. liberal” or “Republican vs. Democrat.” The inconsistencies in their politics reveals the hypocrisy that Smith himself warned us of. As Thomas Jefferson, Ronald Reagan and others have said, each generation must fight to restore it’s own freedom, it is not something that you are born with.

These are some of my favorite quotes by Smith.


"It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will."

"The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an author-ity which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a many who had folly and presump-tion enough to fancy himself fit to exercise it."

"According to the system of natural liberty, the sovereign has only three duties to attend to ... first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, so far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice, and thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain..."

"[The man of system] seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single pieces has a principle of motion of its own, altogether different from that which the legislator might choose to impress upon it."

"To judge whether a workman is fit to be employed, may surely be trusted to the discretion of the employers whose interest it so much concerns. The affected anxiety of the law-giver lest they should employ and improper person, is evidently as impertinent as it is oppressive."

"Public services are never better performed than when their reward comes in consequence of their being performed, and is proportioned to the diligence employed in performing them."

"It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy...What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage."

1 comment:

Larry said...

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