6. Trading and spending

Author(s):  
Christopher J. Berry

In Book IV of the Wealth of Nations, Smith identifies two faulty alternatives to his own explanation of the wealth of nations: the French Physiocrats, who argued that land is the sole source of wealth and revenue, and the mercantile system that aimed to achieve a favourable balance of trade by encouraging a surplus of exports over imports. ‘Trading and spending’ outlines the core of Smith’s system: free trade underlined by the principle of natural liberty. Smith believed that government in a commercial society has three duties: protection from external foes, maintenance of public works, and an ‘exact administration of justice’. How public expenses can be met through taxation and through borrowing is also explained.

2019 ◽  
Vol 6 (2) ◽  
Author(s):  
Christian Gerlach

Abstract This paper focuses on the diffusion of 無為/ wu-wei (an ancient Chinese concept of political economy) throughout Europe, between 1648 and 1848. It argues that at the core of this diffusion process were three significant developments; first, the importation and active transmission of wu-wei by the Low Countries during the seventeenth century. It is revealed that the details of Chinese expertise entered Europe via the textual diffusion of Jesuit texts and the visual diffusion of millions of so-called minben-images during the ceramic boom of the seventeenth and eighteenth centuries. Thus, the hypothesis is advanced that the diffusion of wu-wei, co-evolved with the inner-European laissez-faire principle, the Libaniusian model. In the second part, it is shown that the intellectual foundation of Europe’s first economic school, Physiocracy, is a direct replica of the imported Chinese economic, agrarian craftsmanship of wu-wei; subsequently, it is denied that the indigenous European Libaniusian ideology can be considered the intellectual master-model of Physiocracy and his founder Quesnay. Finally, we argue that Switzerland can be identified as the first European paradigm state of wu-wei. The crystallization process of wu-wei inside Europe ultimately ended with the economic-political reorganization of the newly formed Eidgenossenschaft in 1848. The Swiss succeeded in institutionally transforming traditional Chinese agrarian wu-wei into the modern version of European “commercial wu-wei”. In due course, this alpine paradigm enabled the endogenous Libaniusian model to verify and reflect upon its theory of commercial society. Additionally, this third focus also demonstrates that the later development of Europe’s laissez-faire doctrine has to be seen as a Eurasian co-production – without importing China’s wu-wei, Europe’s pro-commercial ideology might never have matured.


Author(s):  
Christopher J. Berry

This term refers to the intellectual movement in Scotland in roughly the second half of the eighteenth century. As a movement it included many theorists – the best known of whom are David Hume, Adam Smith and Thomas Reid – who maintained both institutional and personal links with each other. It was not narrowly philosophical, although in the Common Sense School it did develop its own distinctive body of argument. Its most characteristic feature was the development of a wide-ranging social theory that included pioneering ‘sociological’ works by Adam Ferguson and John Millar, socio-cultural history by Henry Home (Lord Kames) and William Robertson as well as Hume’s Essays (1777) and Smith’s classic ‘economics’ text The Wealth of Nations (1776). All these works shared a commitment to ‘scientific’ causal explanation and sought, from the premise of the uniformity of human nature, to establish a history of social institutions in which the notion of a mode of subsistence played a key organising role. Typically of the Enlightenment as a whole this explanatory endeavour was not divorced from explicit evaluation. Though not uncritical of their own commercial society, the Scots were in no doubt as to the superiority of their own age compared to what had gone before.


Author(s):  
James R. Otteson

Markets are often criticized for being amoral, if not immoral. The core of the “political economy” that arose in the eighteenth century, however, envisioned the exchanges that take place in commercial society as neither amoral nor immoral but indeed deeply humane. The claim of the early political economists was that transactions in markets fulfilled two separate but related moral mandates: they lead to increasing prosperity, which addressed their primary “economic” concern of raising the estates of the poor; and they model proper relations among people, which addressed their primary “moral” concern of granting a respect to all, including the least among us. They attempted to capture a vision of human dignity within political-economic institutions that enabled people to improve their stations. Their arguments thus did not bracket out judgments of value: they integrated judgments of value into their foundations and built their political economy on that basis.


1997 ◽  
Vol 19 (1) ◽  
pp. 127-140 ◽  
Author(s):  
Spencer J. Pack

It is now easy to see, in the light of Adam Smith's Lectures on Jurisprudence, that The Theory of Moral Sentiments and The Wealth of Nations were parts of a grand system. Nonetheless, TMS and WN are not tightly linked. This paper pursues the following strategy: knowing that Smith wrote both works, one can go back to westigate Smith's handling of the virtues, and see how that work implicitly defended the acquisitive, commercial society analyzed so thoroughly in WN. In doing so, it will be shown that Smith has a distinctive, key, narrow handling of the virtue justice which is based upon the passion resentment. Smith's treatment of justice explains why there can be no concept of just price in Smith's work. It serves to support market, flexible, or negotiated prices as ethically legitimate because it effectively removes market prices from the domain of government control or responsibility, at least insofar as government is enforcing justice.


1987 ◽  
Vol 92 (2) ◽  
pp. 378
Author(s):  
Vernard Foley ◽  
Richard F. Teichgraeber III

2014 ◽  
Vol 57 (1) ◽  
pp. 179-198 ◽  
Author(s):  
MARC-WILLIAM PALEN

ABSTRACTThis article examines howThe wealth of nations(1776) was transformed into an amorphous text regarding the imperial question throughout the late nineteenth and early twentieth century. Adam Smith had left behind an ambiguous legacy on the subject of empire: a legacy that left long-term effects upon subsequent British imperial debates. In his chapter on colonies, Smith had proposed both a scheme for the gradual devolution of the British empire and a theoretical scheme for imperial federation. In response to the growing global popularity of protectionism and imperial expansionism, the rapid development of new tools of globalization, and the frequent onset of economic downturns throughout the late Victorian and Edwardian eras, turn-of-the-century proponents of British imperial federation formed into a formidable opposition to England's prevailing free trade orthodoxy – Cobdenism – a free trade ideology which famously expanded upon the anti-imperial dimensions ofThe wealth of nations. Ironically, at the turn of the century many advocates for imperial federation also turned to Smith for their intellectual inspiration. Adam Smith thus became an advocate of empire, and his advocacy left an indelible intellectual mark upon the burgeoning British imperial crisis.


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