Politics Notes International Political Economy Notes
Adam Smith; anti-mercantilism; the Invisible Hand; non-interventionism; Das Adam Smith Problem; The Theory of Moral Sentiments; anti-colonial liberalism; the marketization of higher education; Brexit David Ricardo; labor theory of value; absolute advantage; comparative advantage; the Ricardian Vice; unequal exchange; exploitation & Empire; global value chains; the containerization of supply chains Thorstein Veblen; conspicuous consumption; leisure class; business vs. industry; Adam Smith; environ...
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ADAM SMITH
QUESTIONS
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CONTEXT
Mercantilism was the dominant school of economic thought in Europe from the 16th-18th century. It asserts that wealth is finite and proposes a policy aimed at amassing stores of precious metals (gold, silver) by manipulating the balance of trade through protectionist policies and punitive tariffs. Wealth is accumulated for the sole purpose of augmenting state power at the expense of rival nations*. Economic actors perceived personal grandeur through national grandeur and thus felt obligated to endorse Empire (e.g. British East India Company).
The prevailing anxieties of 19th century Europe include:
Where does ‘value’ come from?
How does a society with no overarching ruler maintain some semblance of order? How can people, predisposed to egocentricity, nonetheless consider the good of others and cooperate in orderly, mutually productive ways?
MYTH VS. REALITY [Sagar]
If you’ve heard of one economist, it’s likely to be Adam Smith. In fact, few have been more maligned than the Scottish Enlightenment figure. In life, a somewhat reclusive professor of moral philosophy (encompassing ethics, politics, law and rhetoric) at the University of Glasgow. In death, the ‘Father of Modern Economics’ and ideologue for the political Right. ‘Adam Smith ties’ were flaunted as a badge of honor in the upper echelons of the Regan and Thatcher Administrations, and by global financial institutions like the Lehman Brothers.
If we dig below the surface, what unfolds most strikingly are the differences between Smith’s subtle, skeptical view of market processes and modern ‘Greed is Good’ caricatures depicting him as an early champion of private capitalist endeavor. Indeed, one suspects that those quickest to sing his praises have failed to understand the crux of his arguments.
Hence, it is imperative that one reclaims Smith’s legacy from selective quoting, glorification and assertions of clairvoyance – ‘Not only did Smith fail to predict the Industrial Revolution, but he did so while being friends with James Watt, the inventor of the steam engine’ [O’Rourke]
The Wealth of Nations, 1776
Anti-mercantilist stance (see: CONTEXT) |
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The ‘Invisible Hand’ |
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Non-interventionism |
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Buy the full version of these notes or essay plans and more in our International Political Economy Notes.
Adam Smith; anti-mercantilism; the Invisible Hand; non-interventionism; Das Adam Smith Problem; The Theory of Moral Sentiments; anti-colonial liberalism; the marketization of higher education; Brexit David Ricardo; labor theory of value; absolute advantage; comparative advantage; the Ricardian Vice; unequal exchange; exploitation & Empire; global value chains; the containerization of supply chains Thorstein Veblen; conspicuous consumption; leisure class; business vs. industry; Adam Smith; environ...
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