Adam Smith

Jacob Rees-Mogg MP

BRLSI 10^th July 2015

Notes by William Gaskell

Adam Smith (1723-1790)

Born in Kircaldy, which was former PM Gordon Brown’s seat in parliament. He was friends with Hume and had dinner with him on Hume’s death bed.

He was a Humanist as it is generally acknowledged that people don’t learn anything at Oxford University, his alma mater.

Dr Johnson – English pioneer – was Adam Smith’s rival and so Smith suffered his rudeness.

At Edinburgh University lectures, Smith’s Humanist point was thus:

·         Empathy is basis of virtue

·         Extraordinary increase in productivity thought the division of labour

Example given was the quality of industry collapses with the fall of the Roman Empire as people no longer are treated properly by a central governing authority as money is no longer respected.

Smith was fundamentally opposed to artificial limits of wages and productivity. He thought it wrong to oppress through regulation. A free market situation brought about by sensible rules is the ideal.

Adam Smith didn’t understand the situation where fishermen would be paid a subsidy for the tonnage of their ships when they were being built rather than on the size of each catch of fish.

GDP is the total value of transactions in an economy not the supply of money. If the gold is hoarded then cannot make a profit from future endeavours. For example Jacob Rees-Mogg feels that China is hoarding gold and so losing its influence in the world.

“No society can be flourishing and happy if the majority of people are poor and miserable.” – Adam Smith

Competition rather than communism gives better prices.

Wonga is a more legitimate way of lending money to those who need it than loan sharks, though it is still disreputable in Jacob Rees-Mogg’s world view.

Adam Smith did not think about corporate culture as it did not exist in his day but it is something that Jacob now has to think about as it is a current hot topic in industry.