Division of labor theory

First, the theory of division of labor Adam Smith believes that the origin of division of labor is that there are natural differences in human talents, which is due to the unique tendency of human exchange and barter. Exchange and barter are selfish behaviors, and their interests depend on the division of labor. Assuming that individuals are willing to specialize and improve productivity, they will increase their wealth through the exchange of surplus products. These processes will expand social production, promote social prosperity and achieve harmony between self-interest and public welfare. He cited the needle-making industry to illustrate. "If they work independently and don't specialize in a special business, then no matter who they are, they can't do twenty stitches a day, maybe they can't even do one stitch a day. Not only can they not produce 1% of the amount produced by proper division of labor and cooperation today, I am afraid they can't even produce 1% of this amount. " There are three reasons for the division of labor to promote labor productivity: first, the skills of workers are improving day by day because of their majors; Secondly, it usually takes a lot of time to change from one job to another. With the division of labor, this loss can be avoided; Third, many mechanical inventions that simplify and reduce labor are only possible on the basis of division of labor.

Monetary theory

Second, the monetary theory The primary function of money is the means of circulation, and the holder holds money to buy other items. When barter develops to the exchange with money as the medium, the value of goods is measured by money. At this time, another function of money-the value scale came into being. Adam Smith also talked about the storage function and payment function of money. However, he particularly emphasized the circulation function of money.

axiology

Third, the theory of value refers to the problem of value. Adam Smith pointed out that value includes use value and exchange value. The former indicates the utility of a specific financial commodity, while the latter indicates the purchasing power of one financial commodity to another. It is further pointed out that wealth goods with the greatest use value often have no exchange value, and water and diamonds are famous examples. However, it was not until a hundred years later that the marginal utility school successfully solved this problem by comparing the values of water and diamonds.

distribution theory

Fourth, the distribution theory Adam Smith's distribution theory is the theory that determines the natural rate of labor wages, capital profits and land rent. Adam Smith pointed out that although employers have the power to suppress low wages, wages still have their lowest level. This minimum level is that workers must be able to maintain a basic life. Assuming that the demand of social workers increases or the salary fund increases, the salary will be higher than the minimum level. On the other hand, the increase of a country's wealth, capital or income will promote the increase of wages, which in turn will promote the increase of population. The level of capital profit, like labor wages, depends on the increase or decrease of social wealth. The increase of capital can promote the increase of wages, but the profit will decrease. Adam Smith pointed out that if businessmen invest in the same business, the profit rate will naturally decrease because they compete with each other. Land rent refers to the price paid for the use of land. Adam Smith believes that the level of land rent is related to the fertility of the land and the distance of the market.

Capital accumulation theory

Verb (abbreviation of verb) Capital accumulation theory Capital accumulation is another basic factor of a large number of division of labor. The expansion of division of labor and the improvement of production efficiency are directly proportional to the total capital. The accumulation of capital must be carried out before the division of labor, because the division of labor requires the use of many special equipment and machines, and now it needs to be purchased with capital. The finer the division of labor, the more tools are needed and the more important the capital is. Through the process of division of labor, we can increase labor production, raise national income and enhance the willingness and ability of national savings.

Tax theory

The tax theory of intransitive verbs Adam Smith put forward four tax principles, namely fairness, certainty, convenience and economy. Fairness: citizens of a country should support the government as much as possible according to their own abilities, that is, under the protection of the government, they should pay taxes in proportion to their profits. Determination: The tax payable by all citizens must be determined and cannot be changed at will. The time limit, payment method and tax payable shall be clearly declared to the taxpayer. Convenience: All taxes should be collected at the time and in the way most suitable for taxpayers. Economy: Every tax should be well designed so that citizens can get as little financial stimulus as possible besides paying the national treasury.

Edit the essence of this paragraph.

The philosophical basis in The Wealth of Nations shows that to get help, we should not only rely on others' sympathy or altruism, but also arouse others' egoism. "Please give me what I want, and at the same time, you can get what you want." In other words, in economic life, the motivation of all behaviors is mainly egoism rather than compassion or altruism. Egoism, as an economic motive force, is also the basis of economic exchange. To get what you need from others, you must give others what they need. Thus, there is division of labor, exchange, value, currency and so on. People do all kinds of labor under the domination of self-interest, which constitutes the source of private wealth and social wealth. Taking egoism as human nature and economic activities as the result of egoism actually reflects that all economic phenomena exist objectively and obey some natural laws. Since egoism is human nature and endowed by nature, the pursuit of personal interests has become a natural principle, and the activities of pursuing personal interests should not be restricted. Adam Smith believes that self-interest and public welfare seem to be guided by "an invisible hand" and tend to be harmonious and balanced step by step, which is the essence of natural order.

The influence of editing this paragraph

The Wealth of Nations became the first book to try to explain the history of industrial growth and commercial development in Europe, and also became a pioneer in developing modern economics. It also provided an important basis for discussing capitalism and free trade, which greatly influenced later economists. Cover picture of wealth of nations

The original version of The Wealth of Nations is controversial. Some people think that the content of the book has been tampered with moderately to conform to the established theories of some thinkers at that time, such as Hume and Montesquieu. In fact, many Smith's theories only describe that the historical trend will shift from mercantilism to free trade, which has developed for decades and has had a great impact on government policies. In any case, Smith's works widely organize their theories, so it is still one of the most important and influential books in economics.

Edit this social evaluation

From Adam Smith's economic thought, it can be found that scholars used to study economic phenomena, and the so-called economics is just the economic policy in a specific era and place. Adam Smith took "humanity" as the starting point and brought universality into the field of economics, making it a social science. In the past, scholars regarded increasing people's wealth as a means to enrich the country, while Adam Smith established an economic concept focusing on improving people's lives. The standard of "national wealth" is introduced from agriculture that never produces "money" and only produces "pure products" to the increase of the total amount of "goods" produced by citizens every year, that is, the standard of the increase of the total exchange value owned by the state. Adam Smith actively advocated "laissez-faire" to exclude government intervention in economic affairs, so as to promote the realization of British free trade policy; 1846 and 1860, the Grain Regulations (the law of imposing heavy taxes on imported grains was implemented in 1436, and was abolished by British Prime Minister Robert Peel in 1846) and the Protection Tariff were abolished one after another. As an advocate of "economic liberalism", Adam Smith greatly appreciates the work of industrialists and businessmen, but has doubts about their motives. He criticized manufacturers and traders for trying to hold patents, saying that their interests "have never been coordinated with the public's interests" ..... and they usually cheat and oppress the public. "Any new laws or regulations proposed by businessmen should be treated with special caution and should not be adopted without long-term and careful consideration." At the same time, Adam Smith has never forgotten the efforts of this group of people to unite to avoid competition with each other. He once said: "People in the same trade seldom get together, even for entertainment. But as long as they get together to talk, what will eventually happen is a conspiracy against the public, or an activity to drive up prices. " He is very concerned about the interests of farmers, workers and the masses, sympathizes with workers, and thinks that reasonable wages are necessary for workers who account for the majority of society. "... different kinds of workers, who account for the majority in the whole political society ... anything that can improve the lives of most people can never be regarded as harmful to the whole society. ..... When the largest part of society is poor and helpless, that society will certainly not be prosperous and happy. Therefore, for those who grow grain to support people, sew clothes to support people and build houses to support people, it is the fairest thing to get some products from their own labor to support themselves and support themselves. For Adam Smith, "government non-interference" is just a general principle, not an absolute principle. In addition to the government's three tasks (1), consolidate national defense and prevent foreign aggression. Second, establish a judicial organization to maintain social order and justice. Third, create a public project system to make up for the shortcomings of private enterprises. ), he is also in favor of the government's management of postal services, legal restrictions on interest rates, compulsory national education, and all free or credit industry license examinations. He also agreed to use public regulations to protect citizens' personal safety, such as taking health measures to prevent the spread of infectious diseases. Adam Smith's idea of government is not inaction. Freedom in his mind is not unconditional. He once made it clear: "If a few people infringe on natural freedom, … enough to put the whole society in danger, we can and use government laws to curb it. This has nothing to do with whether the government is a free government or an authoritarian government. "