Classical Soc – September 21 – Lecture 1
- Biography (Adam Smith)
o Born in 1723, died 1790.
o From a firly well-to do Scottish family
o Studied moral philosophy in Glasgow University
o Very influenced/ a part of the Scottish Enlightenment.
o Suffered from nervousness
o Went back home to Scotland after Oxford, and began to hang out in elite circles.
o Became a full professor of moral philosophy at Glasgow at the age of 28 (which is
amazingly young). Built a good reputation there as a good lecturer. Gave his lectures in
English, but it was very unusual to do so at this time (latin was the language of scholars).
o 1759 wrote “The theory of moral sentiments”. Big hit.
A genral account of the moral forces that influence human action/interaction.
Got him a better job as the tutor of the children of a baron.
Got bored and decided to write the “wealth of economics”. Published at the
same time as the American revolution.
Symbolic/ revolutionary because it showcases the rise of the merchant,
versus aristocrats. Also symbolic because the Americans follow this
book the most closely.
- General Themes and Agenda
o “An Inquiry into the nature and causes of the wealth of a nation.”
o The book investigates the nature and causes of the wealth of nations.
What makes a country rich?
Natural resources (fertile soil, oil etc.)
o There’s a natural conception that the way to get rich is to get
the resources. You get the resources through military power.
“stored treasure” = cash.
o If wealth consists of stored treasure, how do you get it? You can
take it. Or, there’s a theory called mercantilism (exports = good,
imports = bad; imports reduce the amount of gold that you
have. Smith believes this theory makes countries poorer)
GNP per capita (all of the goods and services produced in that country,
divided by the whole population).
o It’s not about how much stuff you have. Wealth is created
through a social process in which the people in your country can
be as productive as possible. How the country arranges its labor
so that it’s productive. The social conditions that lead to an
increase in productivity, and thus an increase in wealth.
- Causes of Wealth
o Universal Causes
Increasing the productivity of labor (the division of labor) (BOOK 1)
Increase the proportion of the population that is doing something productive.
o Historical Causes
Manufacturing/commerce versus agriculture; ; looks at the relevant importance
of these activities throughout Europe at different times. (BOOK 3) Prevailing theories at different countries at different times. Theories are
powerful; they influence peoples behavior. A bad theory will not help a country.
o What makes the dominant people in a nation? The key was to get stuff for
yourself/family/friends? How can you make yourself wealthier? (patromonialism)
o Political economy (working to make the nation wealthier).
Work on defense
- Causes of Wealth
o Division of Labor
What is it?
What are the different forms/types?
2 classic types:
o Division of employments (division of occupations)
Different occupations that different people do, instead
of having someone do every occupation.
o Division of tasks
Why does the division of labor increase productivity?
Improves dexterity of worker
Time savings (by not having one person consistently switching tasks)