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The Relation Between Economics And Wealth

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Wealth is an abundance of valuable possessions or money. In other means such as the plentiful supplies of a particular resource. When one asks themselves ‘what is wealth,’ people immediately think of money. They think of nice cars and big houses. People think of power and the ability to have control over others, and Money is not the only wealth that can be obtained in life. The one percent are the small percentage of people who are the people who have money and lots of it. The one percent tends to have riches, fame, and luxury. According to the definition of Adam Smith, economics is only concerned with wealth earning activities. Every human living in society needs wealth to fulfil their basic requirements. All human beings living in society or concern to earn more and more wealth. It means economics deals with production, distribution fusion, exchange and consumption of wealth.

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Adam Smith is known as one of the fathers of economics. He is most known for his profound ideas and theories on capitalism presented in his book The Wealth of Nations. Adam Smith defined economics as follows “Economics is the science of wealth” In the Wealth of Nations the ideal capitalist government and society relies on man being prudent and those assumptions and descriptions of the prudent man are seen throughout the Wealth of Nations. The prudent man is what Smith assumes makes a capitalist government successful and have a path of steady, but not rapid growth. The prudent man is content with what he has, he is a hard worker, and he is honest. The prudent man is guarded but maintains friendships.

Theory of Moral sentiments is Smith’s look inside man’s thoughts and is more of a psychological thesis than an economic one. Smith claims man is self-interested and partakes in self-interested sympathy. The word sympathy often brings thoughts of altruism and compassion, but for Smith sympathy is about one wanting to maintain their levels of happiness, Smith writes:

Upon these two different efforts, upon that of the spectator to enter into the sentiments of the person principally concerned, to bring down his emotion to what the spectator can go along with, are founded two different sets of virtues. The soft, the gentle, the amiable virtues, the virtues of candid condescension and indulgent humanity, are founded upon one: the great, the awful and respectable, the virtues of self-denial, of self-government, of that command of passions which subject all the movements of our nature to what our own dignity and honour, and propriety of our own conduct require, take their origin from the other.

Sympathy occurs when man sees a fellow man happy, which brings oneself happiness too. Sympathy also occurs when man sees another hurting or desolate because witnessing this pain brings man’s mood down. Smith also discusses a more abstract concept in regards to sympathy in the Theory of Moral Sentiments, the impartial spectator. The impartial spectator acts a third party judging a person’s behavior. Although Smith’s two books were written years apart, they have multiple connections between the two.

The assumptions and claims he makes about a man in the Theory of Moral Sentiments seem to hold in the Wealth of Nations. Benefits from trade and globalization. In a protectionist society, profits fall while rents rise; to Ricardo, this was a catastrophe. In ‘A World of Ideas: Essential Readings for College Writers. 10th ed. ,’ Adam Smith says, “Upon Equal, or nearly equal profits, most men will choose to employ their capitals rather in the improvement and cultivation of land, than either in manufactures or in foreign trade”. The wars that England fought affected its food imports and the price of grains. This forced Capitalists to pay higher wages, and British goods became more efficient on the International level. During the Corn Laws era, the Capitalists dominated the economy while the landlords controlled the parliament. Ricardo’s iron law of wages states that wages must remain at a constant level of labour’s natural price, Capitalists had to pay high wages to their workers; therefore, they found out that it was easier to start importing grains. On the other hand, landlords resented imports because they depressed the prices and profits of their grains.

Wealth is an abundance of valuable possessions or money. In other means such as the plentiful supplies of a particular resource. This topic is focused on the middle class, which he views as the most virtuous and therefore the most admirable. He finds it to be a huge flaw to admire the super wealthy because although it is good to have wealth, they often do not have virtue, which is morally important. Humans often feel sympathy for the super poor, however Smith advises on not admiring the poor even if they are virtuou. However, there are exceptions to all of these cases they are just recommendations on achieving wealth and virtue.

31 October 2020

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