Tuesday, August 12, 2014

The Wealth of Nations

The Wealth of Nations, by Adam Smith, often considered to be the one of the most, if not the most influential book on economics in history, written during the time of the founding fathers, begins with a chapter, famously, on the division of labor.

Smith speaks of a pin factory, where everyone has their own specific job. He goes on to say that it is only through specialization that any nation can be made rich. He takes a glance at the American Indian, where, he says, every man makes his own house, his own weapons, does his own hunting, and cooks his own food. As opposed to Western Nations such as England, which are of course much more wealthy. One man makes houses, another makes guns, and so on.
Smith worked off of and in a way began the systematic train of thought for capitalism as a system of economics. His opposite number, Carl Marx, had the exact opposite idea of economics. Marx, rather than in believing in nice orderly, and neat ways of doing things, with everyone specializing in something they were good at, and enjoyed, he wanted, according to the famous Manifesto, riots, smashing of the machines and property of the rich, and constant battles between the rich and poor.
Marx and Smith’s ideas were both experimented with in the best of laboratories, the real world. Marx lost badly. His legacy is the now fallen Soviet Union, the country so weak they couldn’t even win a Cold War. Smith has for his legacy the thriving Western World, the inventors of iPads, cars, light bulbs and baseball.
So if there is any question now, in the Great Game between Barak Obama, the Leader of the Free World, and Vladimir Putin, the Strong Man of Russia, about whose side has the moral high ground, and the better ideas, there should not be. The West read The Wealth of Nations, the East seems to have all read Marx’s Capital. One side is rich and getting richer, the other side can’t even pretend to keep up.

Andrew C. Abbott

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