Objectivism VS Adam Smith
Several weeks ago I seeded a discussion ( http://www.galtsgulchonline.com/posts/14... ) about the early American Privatists of Philadelphia like Benjamin Franklin. I was impressed with the similarities and differences between them and Ayn Rand’s Objectivism. Today I have another ancestor of Objectivism, Adam Smith.
Here’s what I heard watching Biography of America (ep. 7) in my US History class ( http://www.learner.org/biographyofameric... ).
open quote…
The American Revolution broke the back of state-regulated mercantile capitalism and opened the way for a market revolution that produced the world's most dynamic economic system.
This was the kind of capitalism that Adam Smith, the Scottish economist, had called for in his masterwork, The Wealth of Nations, which was published, interestingly, in 1776. Smith argued that the production of wealth would increase dramatically if individuals were allowed to pursue their self-interest, with little interference from government. And in serving their own interests, individuals would serve the public interest, unconsciously, as if guided, as he said, by an "unseen hand." Better the unseen hand than the hand of the State.
Here were radically new ideas; but not to Americans. Smith's theory coincided with a long-developing American tradition of individualism and opposition to government interference. America, not Britain, would be the great testing ground of Adam Smith's ideas.
Almost everyone recognizes Smith as the founder of laissez-faire economics. Less well known are his ideas of about the division of labor. The division of labor, he insisted, would greatly improve the efficiency of workers.
To make his point, Smith described the workings of a pin factory. One person making a pin could make perhaps one in a day, maybe a few more. But if the job were divided into ten parts and given to ten workers, each performing a specialized function, a small factory could turn out 48,000 pins a day. This was the assembly line a century and a half before Henry Ford was credited with inventing it.
At the turn of the 19th century, America began to change almost in accordance with Smith's ideas. What we commonly call the American Industrial Revolution was actually two converging revolutions: a technological revolution based on the division of labor, and a commercial revolution powered by a deep faith in economic individualism and unrestrained competition.
...close quote
What do you see that looks familiar to Objectivism? What do you see that looks different? Please bring new information to the discussion.
Please don't forget to vote.
Here’s what I heard watching Biography of America (ep. 7) in my US History class ( http://www.learner.org/biographyofameric... ).
open quote…
The American Revolution broke the back of state-regulated mercantile capitalism and opened the way for a market revolution that produced the world's most dynamic economic system.
This was the kind of capitalism that Adam Smith, the Scottish economist, had called for in his masterwork, The Wealth of Nations, which was published, interestingly, in 1776. Smith argued that the production of wealth would increase dramatically if individuals were allowed to pursue their self-interest, with little interference from government. And in serving their own interests, individuals would serve the public interest, unconsciously, as if guided, as he said, by an "unseen hand." Better the unseen hand than the hand of the State.
Here were radically new ideas; but not to Americans. Smith's theory coincided with a long-developing American tradition of individualism and opposition to government interference. America, not Britain, would be the great testing ground of Adam Smith's ideas.
Almost everyone recognizes Smith as the founder of laissez-faire economics. Less well known are his ideas of about the division of labor. The division of labor, he insisted, would greatly improve the efficiency of workers.
To make his point, Smith described the workings of a pin factory. One person making a pin could make perhaps one in a day, maybe a few more. But if the job were divided into ten parts and given to ten workers, each performing a specialized function, a small factory could turn out 48,000 pins a day. This was the assembly line a century and a half before Henry Ford was credited with inventing it.
At the turn of the 19th century, America began to change almost in accordance with Smith's ideas. What we commonly call the American Industrial Revolution was actually two converging revolutions: a technological revolution based on the division of labor, and a commercial revolution powered by a deep faith in economic individualism and unrestrained competition.
...close quote
What do you see that looks familiar to Objectivism? What do you see that looks different? Please bring new information to the discussion.
Please don't forget to vote.
As to his pin factory, it is more of a statement of management theory than economics. At the least there are limits to the division of labor, which Smith himself acknowledged. I am convinced that division of labor is a result of a technologically advanced society and not the cause.
Smith’s ideas cannot be considered foundational to the US economy. The US was built on Locke’s ideas of Natural Rights. Not only were these incorporated into the Declaration of Independence, but into the common law through Sir William Blackstone’s Commentaries, which was the basis of US common law.
Personally, I am not convinced that Smith was a proponent of capitalism (the economic system that results from laws consistent with Natural Rights). I think Objectivists should be very careful in suggesting a link between Smith and Objectivism. I think there is a much stronger link between Objectivism and Locke than Objectivism and Smith.