Smith's Theory Of The Moral Sentiment

1. How does Smith use the above assertion to explain a market economy? Outline his argument.

Smith uses the above argument to explain a market economy by demonstrating how self-interest creates an underlying force in the economy that encourages trade and so regulates and creates a market.

The basis of Smith’s clam begins with his earlier work, Theory of the Moral Sentiment, which explores the theory of mind and how human beings have a genetic knack for understanding how other humans think and behave. We have the ability to understand each other so well because we have a similar rationale. It allows us to apprehend the meaning of each others body language, emotions, and most importantly, desires. So when Smith says, “from their regard for

He says, “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.” Thus, it is simply human nature to trade because we have the ability to understand one another. We are not animalistic. Additionally, he shows how we are dependent upon each other by explaining how mature animals become independent, but humans remain dependent because “man has almost constant occasion for the help of his brethren.” So, since we have the opportunity to live cohesively together, we have discovered that humans are better off when they work together. By working together, our ability to trade allows for specialization as people can focus on what they produce most efficiently and trade for what else they need. And so, with a constant trade of goods and services among people in a community a market economy is formed as everyone brings what they have to offer to the

Given that understanding, humans have the ability, unlike other animals, to exchange goods with each other. Since they have the ability to trade, humans traded and realized that exchanging goods with each other made them better off. So, humans continued to trade in order to fulfill their individual interests. That idea forms the driving force of a market economy that Smith calls the Invisible Hand. So, it is the self-interest of the butcher to exchange meat for the other goods or services he needs that encourages the exchange of goods.

2. How is Smiths claim different from the medieval conception of society? What would the reaction of Thomas Aquinas and/or Aristotle be to the above quotation from The Wealth of Nations?

The medieval conception of society differed from Smith’s claim due to the guilds, the lords and the views held by the Church. Smith’s claim focuses on how it is up to the individual to decide how they trade and within their own