The Wealth of Nations

The nature of community, the location of power, the stratification of wealth and privilege, the role of the individual in emerging mass society, the reconciliation of sacred values with political and economic realities, the direction of Western society-all of these are rich themes emerged in the nineteenth-century due to the science of man. The French Revolution and The Industrial Revolution has affected nearly every stature of modern life as we know it, a cataclysmic change was caused due to the scale of effect by the revolutions. Learning from Smith, the conception of ideas with moral evaluation and a sense of political judgment is imperative while evaluating societal imprisonment. 

The enticing persona of the man who created the system which we currently reside in is Adam Smith. Known as the father of economics, he was one of the first people to justify a capitalistic world which runs based on self interest. Although Smith’s philosophy of living is founded on a synthesis of action and reflection or a synthesis of wisdom and virtue. “The respect which we feel for wisdom and virtue is, no doubt, different from that which we conceive for wealth and greatness” 1 . The wealth of nations and theory of moral sentiments were two in-scriptures which were written to compose the essentials of a system. Smith wanted to intervene in the most prominent debate of political economy which was the debate over free trade. Specifically the system of trade protection over mercantilism. The only problem towards this is that Smith founded the system on the belief in the efficiency of the “system of natural liberty” The Theory of Moral Sentiments was a book which Smith wrote in coherence to the wealth of nations. The cornerstone of understanding what others feel, think and perceive with the realisation and help of sympathy. This moral judgment is what Smith thought to be inherent in human nature. “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.” 2

The core of Smith's thesis was that humans' natural tendency toward self-interest results in prosperity. Smith argued that by giving everyone freedom to produce and exchange goods as they pleased, opening the markets up to domestic and foreign competition; people's natural self-interest would promote greater prosperity than with stringent government regulations. Smith wanted people to practice thrift, hard work, and enlightened self-interest. He thought the practice of enlightened self-interest was natural for the majority of people. Although in the current world, we look at self-interest as a virtue, Smith perceived it to occur out of natural tendency. As we see, self interest created this sustaining economic world allowing us to be able to create what we want to create and capitalise it on our terms. As Marx elaborated this concept into the a communist nature, it enabled the bourgeois to exploit the proletariat which was being fuelled by self interest. The lack of sympathy which comes with the adrenalin rush of power was not taken into account by Adam Smith. 

One of the reasons I feel the system showed negative signs was because of what people understood by the aspect of self-interest. “Every man is, no doubt, by nature, first and principally recommended to his own care; as he is fitter to take care of himself than of any other person, it is fit and right that it should be so”. Theory of Moral Sentiments  Firstly we have to understand that self interest drives capitalism, if you ask a capitalistic person why capitalism is favourable than socialism, you’ll be told that it is our natural behaviour to be self interested and we should live in a system that rewards what is natural to us. Ask a critic of capitalism who prefers socialism and you’ll be told that capitalism rewards our lowest and most selfish and phases out the goods such as justice and equality. Self Interest in Smith’s point of view comes across more towards the aspect of self care rather than Gekko defined “greed”. The creation of ‘personal’ no strings attached type of self interest allows for the rich to exploit the poor, creating a system on questionable morals. The country as well needs to act on a basis of self interest, with the increase in trade people were able to gather various kinds of goods at different possible locations; this causes various exporters to take income away from people who reside in the location. Making it hard for them to sustain a life with such competition around them. As Adam Smith notices this, he talks about the aspect of limitations and laws in the exchange of goods, this will help define a system which now functions globally through trade laws; helping various countries earn from their resources and have access to what the world has to offer. The economic system was created with the thought of people coherently working together to create high functioning capitalistic markets which benefit the economy as well as improve the lifestyles of people. 

Learning from Adam Smith, Marx was able to redefine the current economic stature. For the Industrial Revolution, if Marx hadn’t conceptualised the aspects of the bourgeois and the proletariat; there wouldn’t have been an intellectual and social movement. On the other hand, the vast and existing effect of the French Revolution was almost like an act of god. The period comprised by the last quarter of the eighteenth and the first half of the nineteenth century is, from the point of view of social thought, one of the richest periods of word-formation in history. Consider the following which were either invented during this period or which is the same thing modified to their present meanings: industry, industrialist, democracy, class, middle class, ideology, intellectual, rationalism, humanitarian, atomistic, masses, commercialism, proletariat, collectivism, equalitarian, liberal, conservative, scientist, utilitarian, bureaucracy, capitalism, crisis. The creation of these words allowed social intellect and societal norms to form through the various evolutions of them; as we see in our modern society, these words play a large role. Starting off as linguistic barbarism, these words came into the world through passion driven ideologies which in turn now dictate the direction we all are heading towards.

Keynesianism came due to the crash of the capitalistic market in 1929, it was also the only method which allowed the economy to recover from economic depression. The main difference between the Smith and Keynes was the increase and decrease in taxes, Smith wanted to limit the amount of taxes and contain government intervention.  Personally, I lean towards Smith as his idea is more central towards individuals and allows self reliance to a good amount of extent. Self reliance is something which is lacking in this modern world, the aspect of you leaning on someone or the government distributes massive power to the ones who already have that power, hence it just takes away from the individual. On the other hand, the Keynes method allowed for an economy to recover, and one of the most efficient ways to do this to equally provide for everyone is increasing taxes. I can imagine that people struggling in the economy would find it hard to pay increased taxes but in terms of future, it matters more if the countries economy comes back to its original state for the people of the country. Keynes did save the economy from introducing this method at the given time, it allowed for the economy to bounce back and is currently the primary economic theory taught in various education systems. I feel a balance is required between the two systems for the world we currently live in, there has to be aspects of both systems which play a role in the economy. Adam Smith’s ideation almost seems utopian to some sort of extent now, in terms of minimal government intervention and the abolishing of taxes, leading to more of a Neoliberal state. One of the downfalls of this capitalistic system is that it enables the rich to help the poor but only to a point where the rich emit sympathy for the poor. This system is built on honour and respect which is a rarity in our current world. 

The political and economic structures are a balance between the two factors of civilisation; money and power. Neoliberalism is a structure which allows the market to give you only what you deserve. It sees competition as the defining characteristic of human relations. It redefines people as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve. It is truly a utopian method to live by that is extremely volatile in nature. One of the reasons this system is considered to be related to some of our biggest mistakes is due to the fact that it enables the rich to be able to hoard more and more power as there is no sense of limitation. 

To conclude I feel the world has a new wave of thought, it’s very hard to predict what the dominant economic system would be in 20 years but I think hat there is a level of intolerance that grows due to every economic system which in-turn makes place for a different strategy to be implemented. Personally, I feel it's not something that can be impulsively changed if wanted to, the overall system above the economic system is an aspect of civilisation which means it is a sense of community. I do believe that the aspect of communities will play a big role in distributing commodities but also with that level of individualism. I feel the power will turn from organisations and governing bodies to more individual perspectives, examples like Elon Musk, Jaggi Vasudev (Sadguru), Kamal Harris, etc. People who are currently in power and will be for the foreseeable future will play a big role in shaping the economic structure of the world. The world in a manner describes what structure it would be okay to pertain to for a little while until new generation of thinkers feel like it's time to make a change. The change I feel is coming is a power more to individuals than to governing authorities.