The Theory of Moral Sentiments (1759)
An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
He mentioned the term "Invisible hand" just once in each book, but it is what people first think about when you mention his name.
In Wealth of Nations Smith uses it in an argument about whether a local businessmen would be tempted to use foreign trade to enrich themselves at the expense of their nation.
The Freakonomics Podcase is doing a 3 part series on him. The first 2 are:
In "Was Adam Smith Really a Right-Winger?" Stephen Dubner talks to Eamonn Butler, director of the Adam Smith Institute and others.
Dennis Rasmussen, Professor of Political Science at Syracuse University's Maxwell School of Citizenship and Public Affairs, who wrote a book about David Hume and Smith, said "Theres a raging debate in Smith scholarship among people who are sometimes called left Smithians and right Smithians. "
Glory Liu, a political scientist and Smith scholar said 'Smith's first book "The Theory of Moral Sentiments" argued, that wealth does necessarily indicate moral virtue, nor does poverty preclude it.'
The book brought Smith a sterling reputation as a writer, philosopher, and public intellectual.
It got him a job as a tutor to british duke where he traveled around Europe.
At the University of Chicago, Nobel prize winners George Stigler and Milton Friedman transformed Smith into an original way of thinking about an individualistic, market-oriented society that was justifiable on social-scientific grounds.
Rasmussen says, "The different elements of Smiths thought that would push him in different directions, right? He shows this very deep and palpable concern for the lot of the poor, the wages, the conditions of the working poor are really his central measuring stick for the wealth of nations, for how wealthy an economy is. Its not, you know, the holdings of the affluent few, but the ease of everyday people to attain the necessities of life. On the other hand, you know, there are elements of his thought that push him toward the right of todays political spectrum. He really does distrust government. He distrusts politicians, both their abilities and often even their intentions. And so there are elements of his thought that push it in both directions. Its hard to know, to be honest, where he would stand on todays political spectrum with regard to a lot of these questions, because he saw the two as going hand-in-hand, right? A lot of the government programs that hes most worried about are there to benefit the rich and they unfortunately also harm the poor, right? Theyre rent-seeking things that companies have, as he says, extorted from the legislature for the support of their own absurd and oppressive monopolies. They make ordinary goods more expensive. He thinks that shrinking government, getting government less involved in the economy benefits the poor. What would he think today about a government program designed explicitly to help the poor? Its really hard to say. Is it his concern for the poor or his distrust of government that would win out at the end of the day? Thats hard to know. "
In her new book, Adam Smiths America, the political scientist Glory Liu, a lecturer in Social Studies at Harvard, argues that it was that University of Chicago economics department, especially Friedman and Stigler, who sort of cherry-picked Smiths writing and turned him into a patron saint of free-market capitalism in a way that a closer reading of Smith, especially The Theory of Moral Sentiments, wouldnt support. Can you untangle this for me? I mean, I dont mean to cast aspersions on Friedman and Stigler, both of whom were amazingly sharp and shrewd and powerful economists. But Im curious to know whether you think that they hijacked the reputation to the detriment of the field?
At the end Russ Roberts, who got his Ph.D. from the University of Chicago during the era when Milton Friedman was turning Adam Smith into the poster boy of free-market economics. Roberts went on to a long academic career at institutions including George Mason University and the Hoover Institution at Stanford, said ""Certainly there are things in Smith that have a progressive aspect to them. Often it sometimes requires quoting him out of context, but there are things in Smith that certainly conflict with standard free-market dogma.
The market economy doesnt solve every problem. It doesnt solve pollution. A lot of things require legislation, regulation, and so on. Smith was not an anarchist. His modern disciples, most of them are not anarchists. They understand that not all problems solve themselves, but the fact that any do is quite remarkable.""
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