Social and Political Philosophy
Kim Slawson
16 November 2000
Adam Smith's radical (for his time) ideas about political economy have influenced virtually all of today's governments' economic theories. The laissez faire model for capitalism (libertarian capitalism, perhaps) owes much to Smith's treatise. Smith's intent, however, was not only to put forth his unconventional ideas on economics, but also to address the social issues of the day which troubled him; namely, unequal distribution of power (resulting in some cases in monopolies), and the degree to which personal liberty was devalued in favor of distribution of labor and capital to provide maximum benefit to the socio-economic hegemony of the day.
In The Wealth of Nations, Adam Smith asserts the following: "Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society." Smith goes on to say " . . . every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry that its produce may be of the greatest possible value." To wit, that each individual employs his capital to his own ends, which, unbeknownst to the individual, acts as an "invisible hand" to best shape the market to the ends of all individuals in society.
In making these points, however, Smith makes some hefty assumptions. Namely, he is optimistic when he states that everyone seeks the employ that will provide them with maximum advantage. There are, and have always been, those who do not work as hard as they could, whether due to laziness or apathy. Smith also makes a large assumption in thinking that the occupation a person chooses is necessarily of the greatest possible benefit to society at large. He does little to support this assertion, and less to explain the career choices of those not truly in a position to choose. Smith's model fails to acknowledge either of these classes of individuals, and as such, is incomplete.