Adam Smith’s The Wealth of Nations argues for a system of political economy that separates economy – the creation and distribution of wealth – from governmental interference. In Smith’s view, the economy of a nation grows as a direct consequence of private business ventures in the interest of each individual owner. Regulation by the government hurts the economy, and the progress of society is derived from the flow of the market. Things should be left in their natural states, thus maintaining a “natural order” of society. The basis of Smith’s thesis is that this natural order is driven by Man’s self-interest.
Smith presents the first and arguably most important aspect of social organization based upon self-interest as the division of labor. He asserts that the division of labor occurs naturally in society as “the consequence of a certain propensity in human nature … the propensity to truck, barter, and exchange one thing for another” (21). This propensity arises from man’s “almost constant occasion for the help of his brethren,” (21) an idea illustrated by the fact that in both Smith’s and modern times, the number of truly self-sufficient individuals are few. This “trucking disposition gives occasion to the division of labor,” and Smith makes the example of a hunter who, in trading arrows with others, can acquire whatever he needs and will be encouraged to “apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent … he may possess for that … business” (23). At this point, Smith is making an assumption: that men will always choose to do something that will provide them with more over something that would provide them with less, and it is directly from this assumption of self-interest that Smith derives his principles of division of labor.
The next aspect of the ...
Smith, Adam. Wealth of Nations.