Author: Ian Vásquez**el Comercio (Peru) Reading cured me of mental exhaustion Date: June 13, 2023We don't know what day he was born, but Adam Smith was baptized on this day 300 years ago. Since then, the ideas of the man widely regarded as the father of modern economics have changed the world and are as relevant as ever.
As a central figure in the Scottish Enlightenment, Smith is best known for The Wealth of Nations, in which he challenged the world's current economic system. Smith opposes privileges imposed by law, including protectionism. He further weighed mercantilism – a doctrine that states that in order to accumulate wealth, the state must export more than it imports – as "absurd."
As a keen observer of reality, Smith explains: "There is caution in the conduct of every private family, and it is rarely foolish in the conduct of a great power." If foreign countries can offer us cheaper goods than we make ourselves, then it is better to buy from them with a part of our own industrial products, used in a way that we have some advantages. For example, Smith asserted that Scotland could produce good wine, but he calculated that its cost was 30 times that of importing good wine from other countries.
Smith is pessimistic not only about protectionism, but also about most attempts by the authorities to steer the economy. The true ** of wealth is explained by a counter-intuitive conception based on another of Smith's observations: the pursuit of one's own interests in the marketplace, not merely a benevolent or ruler-imposed scheme, ultimately leads to prosperity and improves the welfare of others.
But Smith, a professor of moral philosophy, understands that people are complex, not just materialists.
No matter how selfish one may think of himself, there are clearly in his nature principles that make him interested in the fate of others and make their happiness necessary for him, although he gets nothing from it except the pleasure of seeing it. ”
So he wrote in his first book, The Theory of Moral Sentiments. Smith argues that empathy stems from social interactions, which also make people want to be loved and want to be loved. Experience, rather than intellectual reasoning, produces moral sentiments and attitudes, such as benevolence.
How do we reconcile our own interests with compassion for others? For Smith, this is not a contradiction. In a free market, one can only put the interests of others first, because trading is voluntary.
As Smith tells us in his "Lectures on Law," this exchange is based on "the natural inclination that every man must persuade." He added that "offering a shilling, which seems to us to have such a simple and clear meaning, is in fact providing an argument to persuade a man to do so, as it is in his interest." ”
Smith believed that justice was an indispensable pillar of the functioning of society. Where justice exists, even impersonal communication in an ever-expanding market is characterized by cooperation and respect for the other. These exchanges also encourage charity; According to Professor Smith, even beggars who receive handouts of money ultimately depend on the market.
In his writings, Smith was concerned with the well-being of the poor, who at that time included almost the entire population of Scotland and the world. He spoke out against empire, slavery and the mistreatment of indigenous peoples abroad. Since his death, as the world has liberalized, global poverty rates have plummeted, wealth has skyrocketed, empires have declined, chattel slavery has been officially abolished, and human rights have expanded to a growing number of people around the globe.
As long as humanity celebrates moral and material progress, they should celebrate Adam Smith.