Adam Smith - 5

Topics: Adam Smith, Economics, Capitalism Pages: 16 (6175 words) Published: January 3, 2013
Hanoi University
Faculty of International Studies


The father of modern economics

Course: World history
Instructors : Loic Diels
Teaching assistance: Ta Thi Huong Ly Group 19: Nguyen Cam Anh
Nguyen Hoai Nam
Phan Thi Kim Ngan
Nguyen Thi Thu Huong
Date: Nov 16, 2012
I/ Introduction:
In the 18th century, with the aim of justifying human society by using reasons, intellectual interchange and advanced knowledge of science rather than merely basing on traditions, faiths, beliefs or superstition there was an emergence of the Age of Enlightenment (or simply called the Enlightenment or Age of Reason), which was known as a cultural movement of intellectuals and scholars appearing first in Europe and later in the colonies of America. No longer than the same time of The Age of Reason, the Scottish Enlightenment which inherited shared the humanism and rationalism outlook with the European Enlightenment (David Daiches, 1986) occurred in Scotland, England. Also according to Daiches (1986), by 1750, Scots were viewed among the most literate citizens of Europe, with an estimated 75% level of literacy. The culture was oriented to books, and intense discussions took place daily at such intellectual gathering places in Edinburgh as The Select Society and, later, as Glasgow, Edinburgh and Aberdeen. Therefore, it was strongly believed that this movement was characterized by outstanding intellectual and scientific achievements. At this reforming period of human history, there were appearance of great thinkers such as Francis Hutcheson, David Hume and Adam Smith, who were the pioneers opening the path for the modernization of Scotland and the entire Atlantic world. And if Hutcheson - the father of the Scottish Enlightenment explored political liberty and the right of popular rebellion against tyranny, Smith advocated liberty in the sphere of commerce and the global political economy. "All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man or order of men. The sovereign [politician] is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient: the duty of superintending the industry of private people." The above quotes cited from his monumental work, “The Wealth of Nations”(Smith, 1776b), mentions that when government tried to take action into free market but in vain, free market would therefore navigate itself. As long as no violation of justice was made each citizen has his own right to pursue his interested business in competiveness with others. Then government only played the role of supreme supervisor over activities in free market, meaning that government should and need to restrain its interventions to free market as much as possible. In other words this statement - “laissez faire” is one of the most well-known theories elaborated by Adam Smith who is considered the father of the modern economics and capitalism. With few above words of going around the...

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