A history of economic doctrines : $b from the time of the physiocrats to the present dayGide, Charles
History
A history of economic doctrines : $b from the time of the physiocrats to the present day
Gide, Charles
Economics -- History
Criticism has been freely levelled at this extravagant importance
which capital is made to assume. It is certainly somewhat curious that
labour should now be treated as altogether subordinate to capital,
whereas earlier in the volume labour alone was regarded as the great
wealth-producing agent. But we are not here concerned with the revival
of these threadbare controversies.[167] We merely wish to note that Smith
finds in this accumulation of capital a new illustration of spontaneity.
The saving of capital is not the result of any foresight on the part of
society, but is solely due to the simultaneous and concurrent actions
of thousands of individuals. These individuals, urged on by a desire to
better their situation, are spontaneously urged to save their earnings
and to employ those savings productively.
“The principle which prompts to save, is the desire of bettering our
condition, a desire which, though generally calm and dispassionate, comes
with us from the womb, and never leaves us till we go into the grave.…
An augmentation of fortune is the means by which the greater part of men
propose and wish to better their condition. It is the means the most
vulgar and the most obvious; and the most likely way of augmenting their
fortune, is to save and accumulate some part of what they acquire.” This
desire is so powerful that even the greatest follies perpetrated by
Governments have never succeeded in annulling its beneficial effects.
“The uniform, constant, and uninterrupted effort of every man to better
his condition, the principle from which public and national as well as
private opulence is originally derived, is frequently powerful enough
to maintain the natural progress of things toward improvement, in spite
both of the extravagance of government, and of the greatest errors of
administration. Like the unknown principle of animal life, it frequently
restores health and vigour to the constitution, in spite, not only of the
disease, but of the absurd prescriptions of the doctor.”[168]
But the idea of the spontaneity of economic institutions finds its most
interesting illustration in the theory of demand and supply, upon which
we must dwell a little.
Public-domain text, read in full here on John Shaqi.
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