Adam Smith

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Adam Smith : biography

N.S.]]) January 5 [[Old Style – 17 July 1790

These views ignore that Smith’s visit to France (1764–66) changed radically his former views and that The Wealth of Nations is an inhomogeneous convolute of his former lectures and of what Quesnay taught him.Cannan, Edwin (ed.), 1937, p. xxxix, Editor’s Introduction, pp. xxxviii–xli to: Adam Smith, "An Inquiry into the Nature and Causes of the Wealth of Nations", N. Y.: Random House; "These changes [to the earlier lectures by his visit to France] do not make so much real difference to Smith’s own work as might be supposed; the theory of distribution, though it appears in the title of Book I., is no essential part of the work and could easily be excised … But to subsequent [classical] economics they were of fundamental importance. They settled the form of economic treatises for a century at least." Before his voyage to France in The Theory of Moral Sentiments, Adam Smith refers to an "invisible hand" ("By preferring the support of domestic to that of foreign industry, [an individual] 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 eases, led by an invisible hand to promote an end which was no part of his intention.") Smith, A., 1982 [1759], "Theory of Moral Sentiment", pp. 184–5 in: The Glasgow edition of the Works and Correspondence of Adam Smith, vol. i", Oxford University Press. which ensures that the gluttony of the rich helps the poor, as the stomachs of rich are so limited that they have to spend their fortune on servants. After his visit to France, Smith considers in the Wealth of Nations (1776) the gluttony of the rich as unproductive labour. The micro-economical/psychological view in the tradition of Aristotle, Puffendorf and Hutcheson,"The learned will at once discern how much … is taken from the writings of others, from Cicero and Aristotle, and to name no other moderns, from Puffendorf’s … de officio hominis et civis" (Hutcheson, F., 1787, "A Short Introduction to Moral Philosophy", Dublin: McKenzie, p. vii.). In "System" (1755), Hutcheson’s begins stating: "The intention of moral philosophy is to direct men to that course of action which tends most effectually to promote their greatest happiness and perfection." (Hutcheson, F., 1755, "A system of moral philosophy", Glasgow: Foulis). In "Inquiry", Hutcheson (1729, 180) explains: "That action is best, which procures the greatest Happiness for the greatest Numbers" (Hutcheson, F., 1729, "An inquiry into the original of our ideas of beauty and virtue", London). Smith’s teacher—elements compatible with a neoclassical theory—changed to the macroeconomic view of the classical theory Smith learned in France.

The Wealth of Nations

There is a fundamental disagreement between classical and neoclassical economists about the central message of Smith’s most influential work: An Inquiry into the Nature and Causes of the Wealth of Nations. Neoclassical economists emphasise Smith’s invisible hand,Smith, A., 1976, The Wealth of Nations edited by R. H. Campbell and A. S. Skinner, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 2a, p. 456. a concept mentioned in the middle of his work—Book IV, Chapter II—and classical economists believe that Smith stated his programme for promoting the "wealth of nations" in the first sentences.

Smith used the term "the invisible hand" in "History of Astronomy"Smith, A., 1980, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 3, p. 49, edited by W. P. D. Wightman and J. C. Bryce, Oxford: Claredon Press. referring to "the invisible hand of Jupiter" and twice—each time with a different meaning—the term "an invisible hand": in The Theory of Moral SentimentsSmith, A., 1976, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 1, p. 184-5, edited by D. D. Raphael and A. L. Macfie, Oxford: Claredon Press. (1759) and in The Wealth of NationsSmith, A., 1976, The Glasgow edition of the Works and Correspondence of Adam Smith, vol. 2a, p. 456, edited by R. H. Cambell and A. S. Skinner, Oxford: Claredon Press. (1776). This last statement about "an invisible hand" has been interpreted as "the invisible hand" in numerous ways. It is therefore important to read the original: