I don't think Conservatives or Progressives correctly understand economics

The wealth of Nations was about how capitalism produces wealth and how mercantilism fascism socialism and statism do not

 

Does the liberal feel embarrassed yet?


Adam Smith Institute:
But the system is automatic only when there is free trade and competition. When governments grant subsidies or monopolies to favoured producers, or shelter them behind tariff walls, they can charge higher prices. The poor suffer most from this, facing higher costs for the necessities that they rely on.

A further theme of The Wealth Of Nations is that competition and free exchange are under threat from the monopolies, tax preferences, controls, and other privileges that producers extract from the government authorities.

For all these reasons, Smith believes that government itself must be limited. Its core functions are maintaining defence, keeping order, building infrastructure and promoting education. It should keep the market economy open and free, and not act in ways that distort it.

 

You copy and paste from a right wing site and think you have knowledge. Wow.

Adam Smith's contribution is focused on ethical analysis of capitalism. He'd find your right wing grunt quite abhorrent.

 

That isn't true. He used bastardised Keynesianism to peddle a monetarist myth, leading to the false notion of a natural rate of unemployment.

 

You mean he said govt spending or socialism stimulates an economy?????
Show us where he said this??

 

Adam Smith's contribution is widely acknowledged as first demonstration of the superiority of capitalism to mercantilist statism. Sorry to rock your world, an old world where statist ideology has genetically evolved to be part of your sadly corrupt souls.

 

I've already informed you of his contribution: creating a non-credible understanding of unemployment to peddle weak macroeconomic policy. That you don't know any of that, despite that fan boy status, is disheartening.

 

You don't know any of Smith's contribution. You are completely reliant on copy and pasting from right wing site. That Smith rejected hyper rationality and embraced egalitarianism would, if he lived today, lead you to call him "libcommie".

 

his contribution was to show that libcommie statism does not work and he was right. Ever heard of East /West Germany, North Korea/ South Korea, Cuba/Florida, USSR/USA, Red China/Taiwan??

 

if so he would not have embraced capitalism over libcommie mercantilist statism since the results of capitalism are inherently inequal owing to inequal intelligence, hard work, and luck. NOw do you understand?

 

What on earth are you going on about now? Do you support egalitarianism? If not, Smith would be your enemy. You'd see him as a radical.

 

Wrong.

You forget the present context - despite the fact that you've read it here a dozen times - that we are "changing ages". Just as the Industrial Age had a profound effect of enticing people off the land and into factories, so will the Information Age profoundly change the Industrial Age.

For which, we must put a renewed access upon Education to bring both our workforce and the general population up to a level that will allow them to obtain jobs worth working in. As I write, the US is enticing thousands of software experts out of India because companies cannot find sufficient talent here in the US!

And what is the US doing about implementing Bernie's plan (proposed also in Hillary's platform) of nearly-free education for all students in families with incomes of $50K or less? Thus preparing them for jobs that require enhanced skills besides that of pecking at a smartphone?

Nada, niente, rien, nichts, zip, tipota ...

PS: But a tax-break for the super-rich, oh yes! That's what the country really needed!!!

 

Again, you're wrong. His content wasn't particularly hardcore: e.g. focus on monetary policy, rather than fiscal policy.

Regarding the state, his impact was unintentionally spectacular. When monetarism was adopted, it engineered Britain's worst depression: Quadrupling unemployment and destroying much of the industrial base. The focus was indeed then on the state and taxation, with North Sea oil receipts paying for the increase in dole.

 

LafayetteBis, although your reasoning is plain and simple, and it's easy to understand what you're saying, it is also important to point out that "A" does not necessarily follow from "B".

Moving into a "new Information Age" does not necessarily mean most (or even many) people are going to be working in technology jobs. That's an unstated assumption you are making.

 

You need badly to take a course in Economics.

After all, this is an ECONOMICS forum ... !

 

Wrong of course! Friedman said that libcommie tax and spend fiscal policy will interfere with capitalism and thus reduce or eliminate growth. He also said libcommie monetary policy that produced inflation or deflation would interfere with capitalism and thus reduce or eliminate economic growth. Now do you understand?

 

you have learned 12 times now that this is not true. Britain's recession was caused by libcommieism which featured 25% inflation , for example. Shall we go for 13 times?

 

Since the companies need the engineers they should pay for them and their education!! If I need food should I force companies to pay for it? You pay for what you consume. That way there is no natural incentive to waste our resources. This is kindergarten capitalism.

 

this was not an issue at all for Smith who was mostly teaching about how capitalism would work better than libcommie statism. He of course didn't vaguely imagine the huge huge wealth his system would generate or how capitalism would distribute it. He was brilliant though so you assume he would look at modern China for example and conclude that the huge wealth and inequality that developed out of capitalism was a huge improvement over the libcommie statist equality and poverty that slowly starved 120 million to death.
Also, you assume he would look at poor people today in America making $70,000 on the dole and conclude that their financial inequality was not meaningful but that their spiritual inequality, caused by the dole, was meaningful. Do you understand?

 

Wrong again! His focus was on ethics within capitalism. He derived no libertarian guff, referring instead to how inefficient inequalities would develop (and this pre-dated the rent seeking inefficiency of the corporation).

 

Adam Smith's Main Beliefs
Smith’s ideas are a reflection on economics in light of the beginning of the Industrial Revolution, and he states that free-market economies (i.e., capitalist ones) are the most productive and beneficial to their societies. He goes on to argue for an economic system based on individual self-interest led by an “invisible hand,” which would achieve the greatest good for all.

In time, The Wealth of Nations won Smith a far-reaching reputation, and the work, considered a foundational work of classical economics, is one of the most influential books ever written.


Laissez-faire philosophies, such as minimizing the role of government intervention and taxation in the free markets, and the idea that an "invisible hand" guides supply and demand are among the key ideas Smith's writing is responsible for promoting.Apr 19, 2017
Adam Smith: The Father of Economics | Investopedia
https://www.investopedia.com/updates/adam-smith-economics/

 

A Summary Of Adam Smith - Ideas, Life & Legacy

1. ADAM SMITH Father of economics
2. LIFE Moral Philosopher Professor at Oxford University and University of Glasgow Published ‘The Theory Of Moral Sentiments’ and then ‘An Inquiry into the Nature and Causes of the Wealth of Nations'
3. THE MARKET Society can depend on unregulated capitalist markets rather than tradition or authoritarianism Self interest (guided by profit) motivates people to perform tasks required by society (what people are willing to pay for) Competition regulates greed i.e. over chargers lose to those that charge cheaper, even for wages Thus pursuit of self interest leads to communal prosperity Depends on freedom to pursue self interest and compete
4. THE INVISIBLE HAND Supply and demand always uses prices and profits to signal to producers that society required. Thus producers, in search of profits, produce what society requires - in the correct quantity and at a competitive price. Too little of a good produced for society - high demand for low supply leads to high profit from high prices so attracts more effort into production and vice versa until at ‘equilibrium’
5. GROWTH Division of labour (splitting up a task) allows workers to specialize in niches (leading to productivity, innovation etc.) Growth comes from the above Wealth = freedom + trade + division of labour Freedom - pursuit of self interest Trade - allows competition and global cooperation for division of labour; against mercantilism
6. MARKET IS PROSPERITY Market will work for societal good if left alone (‘laissez faire’ from French Physiocrats) Guided by laws of ‘invisible hand’ rather than iron fist Capitalism today is unlike his ideal model - with less competition from monopolies, large unions etc. Less freedom and trade leads to less prosperity
7. MORE LAWS OF PROGRESS Law of accumulation - profits will be spent for expansion until higher demands for wages makes profit margins thin and disappear Law of population - labour is subject to demand; as wages rise, more people will enter the workforce (e.g. through birth rates) and vice versa Increased population increases worker supply so lower wages and higher profit - laws counter balance for harmony Thus, progress inevitable and society will reach its reward
8. LEGACY Formalized economic thinking - presented both sides whilst giving evaluative factors, then argued for his opinion on the best means for prosperity Optimism in dynamic progression of society Long discussions and digressions on prominent economic themes of his day
9. TOP QUOTES 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. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. To feel much for others (is) human nature. All money is a matter of belief. On the road from the City of Skepticism, I had to pass through the Valley of Ambiguity.

 

Many fundamental economic principles found their first, or their most elegant, expression in Smith's The Wealth of Nations. This is by no means an exhaustive list, as Smith's work is very comprehensive, but below are a few of the main ideas of the work.

• Division of labor: Using the production of pins as a sort of thought experiment, Smith showed that the best way to maximize efficiency in production was to foster specialization by...

 

Best known for his classic treatise An Inquiry Into the Nature and Causes of the Wealth of Nations, he is credited with establishing the discipline of political economics. The ideas put forward in his work represented a radical departure from the then-dominant economic policy and philosophy of mercantilism, which had held sway in Europe for three centuries.

So profound was the impact of Wealth of Nations that it is generally considered the most important economic work ever written. Terms that are commonly used today, such as “invisible hand” and “division of labor,” had their genesis in Smith’s treatise.

 

Adam Smith has sometimes been caricatured as someone who saw no role for government in economic life. In fact, he believed that government had an important role to play. Like most modern believers in free markets, Smith believed that the government should enforce contracts and grant patents and copyrights to encourage inventions and new ideas. He also thought that the government should provide public works, such as roads and bridges, that, he assumed, would not be worthwhile for individuals to provide. Interestingly, though, he wanted the users of such public works to pay in proportion to their use.