Notes on Ball & Dagger reader
Selections from Adam Smith (1776)
The Wealth of Nations
"Private Profit, Public Good"
- individualistic conservatism: human nature as essentially
selfish and/or greedy
- the parallel logics of political
and economic classical liberalism
- economic liberty as the economic leg of classical liberalism
"Private selfishness is natural but not necessarily bad, since it leads
to public good" [It does so in two ways; only one is given
by the reading. One is the division of labor & specialization; the
other is the incentive to work hard and innovate.]
Political vs. economic realms [This distinction is questionable; Marx
will attack it soon.] Commonalities:
- contract: give to get (We give up some rights to government so
as to secure a better total package of rights; we agree to compete
economically in order to reap the collective benefits of wealth)
- liberty & a resulting wealth (although of different natures)
Problem: discomfort with selfishness. [Recall it's the basis of
liberalism's picture of human nature.]
Lockean liberalism: political selfishness —» contract —» public
benefits, clearly benefiting all, even if not precisely equally
Smith: economic selfishness. Trade, division of labor yields
greater efficiency (and thus a collective benefit). The contract is
that we don't
steal from or interfere with each other.
But Smith's idea goes deeper than that (although the reader's short selection
doesn't indicate this). There's
a further contract: keep
the system fair. At root, this means, fundamentally, no
monopolies. So: why
are monopolies bad?
- Not bad because "it isn't fair that the price is so high". Well,
maybe that's a good reason, but you have to say why it isn't
fair. Why is any price fair, after all?
- Not bad because "it takes money from some people and gives
it to others",
because it's still just a transfer of goods: you get some product,
I get some money. Maybe I'm richer and you're poorer than otherwise,
but why isn't that fair? You would do the same thing to me if you
had a monopoly; why shouldn't I charge what the market will bear?
- Bad because monopolies deny us the collective benefits
of a free market, to wit, the increased wealth that comes when producers
are competing with each other by improving their technologies and production
system, and consumers are competing with each other to get the best deal
So once again we have a contract where we mutually give up some
of our [economic] liberty in order to obtain a greater
collective value that each of us expects to benefit from individually.
Potential quiz questions:
- What is Smith's main point?
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