The Wealth of Nations
Adam Smith
Smith used the term "the invisible hand" in "History of Astronomy"[84] referring to "the invisible hand of Jupiter", and once in each of his The Theory of Moral Sentiments[85] (1759) and The Wealth of
Nations[86] (1776). This last statement about "an invisible hand" has been interpreted in numerous ways.Those who regard that statement as Smith's central message also quote frequently Smith's dictum:[87]
However, in The Theory of Moral Sentiments he had a more sceptical approach to self-interest as driver of behaviour:
Smith's statement about the benefits of "an invisible hand" may be meant to answer[citation needed] Mandeville's contention that "Private Vices ... may be turned into Public Benefits".[88] It shows Smith's belief that when an individual pursues his self-interest under conditions of justice, he unintentionally promotes the good of society. Self-interested competition in the free market, he argued, would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and warned of their "conspiracy against the public or in some other contrivance to raise prices".[89] Again and again, Smith warned of the collusive nature of business interests, which may form cabals or monopolies, fixing the highest price "which can be squeezed out of the buyers".[90] Smith also warned that a business-dominated political system would allow a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. Smith states that the interest of manufacturers and merchants "in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public ... 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 be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention."[91] Thus Smith's chief worry seems to be when business is given special protections or privileges from government; by contrast, in the absence of such special political favours, he believed that business activities were generally beneficial to the whole society:
The neoclassical interest in Smith's statement about "an invisible hand" originates in the possibility of seeing it as a precursor of neoclassical economics and its concept of general equilibrium – Samuelson's "Economics" refers six times to Smith's "invisible hand". To emphasise this connection, Samuelson[92] quotes Smith's "invisible hand" statement substituting "general interest" for "public interest". Samuelson[93] concludes: "Smith was unable to prove the essence of his invisible-hand doctrine. Indeed, until the 1940s, no one knew how to prove, even to state properly, the kernel of truth in this proposition about perfectly competitive market."
Very differently, classical economists see in Smith's first sentences his programme to promote "The Wealth of Nations". Using the physiocratical concept of the economy as a circular process, to secure growth the inputs of Period 2 must exceed the inputs of Period 1. Therefore, those outputs of Period 1 which are not used or usable as inputs of Period 2 are regarded as unproductive labour, as they do not contribute to growth. This is what Smith had heard in France from, among others, François Quesnay, whose ideas Smith was so impressed by that he might have dedicated The Wealth of Nations to him had he not died beforehand.[94][95] To this French insight that unproductive labour should be reduced to use labour more productively, Smith added his own proposal, that productive labour should be made even more productive by deepening the division of labour. Smith argued that deepening the division of labour under competition leads to greater productivity, which leads to lower prices and thus an increasing standard of living—"general plenty" and "universal opulence"—for all. Extended markets and increased production lead to the continuous reorganisation of production and the invention of new ways of producing, which in turn lead to further increased production, lower prices, and improved standards of living. Smith's central message is, therefore, that under dynamic competition, a growth machine secures "The Wealth of Nations". Smith's argument predicted Britain's evolution as the workshop of the world, underselling and outproducing all its competitors. The opening sentences of the "Wealth of Nations" summarise this policy:
However, Smith added that the "abundance or scantiness of this supply too seems to depend more upon the former of those two circumstances than upon the latter
No comments:
Post a Comment