By: tasha bull 1,214 words bull december 4, 2008 bull 833 views in 1759 adam smith, then a thirty six year old professor of moral philosophy at glasgow university, published his theory of moral sentiments. This work attracted the attention of the guardians of the immensely wealthy duke of buccleuch towards retaining its author as a tutor to the youthful duke whilst on a protracted, and hopefully educational, grand tour of continental europe. Whilst acting as tutor from 1763 smith found some of the time spent in the french provinces hard to fill and seems to have begun his masterpiece an inquiry into the nature and causes of the wealth of nations, as a way of taking up otherwise idle hours in the summer of 1764. Overall however he derived much personal philosophical benefit from these months of journeying on the continent. In paris he met amongst others, the physiocrat economic theorist and court physician quesnay and the french ministers, turgot and necker. French economic policy in these times was conducted in accordance with the mercantilism that had held sway in the economic thinking of europe for some three centuries.

Mercantilism expected that governmental control would be exercised over industry and trade in accordance with the theory that national strength i.e. The royal states treasury is increased by a preponderance of exports over imports. By nature, then, as now, france was fitted to be a great agricultural country, a great producer and exporter of corn and wine but her legislators for several generations had endeavoured to counteract the apparently natural bias of french economic life towards agriculture, and had tried to make her an exporter of manufactured goods. Like most legislators in those times, they had been prodigiously impressed by the ambitious position which the maritime powers, as they were then called the comparatively little powers of england and holland , were able to take in the politics of europe. They saw that this influence came from wealth, that this wealth was made in trade and manufacture, and therefore they determined that france should not be behindhand, but should have as much trade and manufacture as possible.

Accordingly, they imposed prohibitive or deterring duties on the importation of foreign manufacturers they gave bounties to the corresponding home manufactures. Smith found much that he admired in the physiocrats outlook but he did not share it completely. Amongst other things the physiocrats saw land as the primary source of wealth one seed sown might produce twenty at harvest! rather than manufacturing.

On the completion of his duties as tutor smith then returned, after some further months spent in london, to scotland where he stayed quietly with his mother at his native town of kirkcaldy and occupied himself in study and writing. It was to be in 1776, that adam smith finally saw his wealth of nations through the press. Adam smith apos s wealth of nations is regarded as having been the first great work of political economy. It is in some ways an enhancement of his theory of moral sentiments in that it focuses on the problems of how people express their self interest and their morality. Adam smith attempted to trace the immediate expression of human activity and to suggest how this would change society. It opens with a most dramatic recommendation of the adoption of practices which saw work being performed as a number of tasks that were each alloted, as specialisations, to individual workers. Smith suggested that a pin factory that had adopted such a division of labour might produce tens of thousands of pins a day whereas a pin factory in which each worker attempted to produce pins, from start to finish, by performing all the tasks associated with pin production would produce very few pins.

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How is this to be understood? how does he construct his argument? adam smith writes that individual freedom promotes social order. When people are free to make their own financial and business decisions, they generally choose what is of the greatest benefit to them. These decisions balance one another, distributing goods and services in the most efficient way possible, which creates social order.

What are the benefits of specialization and the division of labor? the division of labor creates an enormous increase in output and occasions technological specialization, which further increases productivity. The enormous supply which results from the division of labor drives down the cost of goods. A society in which the division of labor is highly developed also involves more of its members in production, giving more people access to wages. These two factors make more goods available to more people, and ensure that more people will be able to afford them.

What kind of society does adam smith 39 s observations most correspond to? a rural society, a small society, a large and diverse society? adam smith makes the point that the division of labor, which is the starting point for his entire work and all the observations that follow, is to be observed even in quite primitive societies. However, he also writes that the division of labor flourishes best when the market is very large, and that the industry of the city is reinforced by that of the country. For him, then, his observations are most true of a large, complex society composed of both rural and urban areas, where technological innovation is appreciated and practiced. How does adam smith account for value? what constitutes value? in accounting for the particular value of various products, smith argues that the value of a particular product reflects the labor that is invested in it. In an open exchange, one would not purchase a good that one could create oneself with less effort. One process of production might require more ingenuity, education, attention, or training and experience than another.