This document provides a summary of Adam Smith and key concepts from his work, including:
- The Industrial Revolution led to increased factory production and specialization of labor.
- Smith introduced the concept of the "invisible hand" to describe how free markets reach equilibrium through individuals pursuing self-interest.
- He analyzed the division of labor and believed it increased productivity but could lead to negative effects like monotony.
- While self-interest drives markets, Smith believed morality and ethics were also important to a well-functioning society.
1. What is Creative Destruction?
a. Creative Destruction and Marxism
b. Creative Destruction and Schumpeter
c. Creative Destruction and Laissez-Faire Economics
2. Cases of Creative Destruction
3. Problems of Creative Destruction
4. Creative Destruction vs Economic Destruction
Definition of Economics, Scope of Economics, Microeconomics & Macroeconomics, Opportunity Cost, marginalise, Market Coordination, Goods and Service Protocol.
Evolution of Human Resource Management (HRM)Asim Qureshi
This presentation will take you through the journey of evolution of Human Resource Management (HRM). Proper chronological order of events has been followed which will give you a clear idea of the developments and the reason why these developments took place. American Labor History and effect of World War has been discussed in detail as these events had a considerable share in the evolution of HRM.
Lec x Economy as Social Institution - Imran Ahmad SajidDr. Imran A. Sajid
These are the Slides for MA (Final year) Students of the Department of Social Work, University of Peshawar.
Course Title: Social Institutions and Social System of Pakistani Society
Dr. Imran Ahmad Sajid
One fact is clear: society lives, more than ever, under the auspices under the auspices and domains of science and technology. Advertising that makes about science and technology is so intense that a significant portion of people believe that they only bring only benefits to society. For man, the technology makes life easier, cleaner and longer. Man cultivates a growing dependency in relation to science and technology in contemporary era. It is a usual behavior of much of society considers science and technology as liberators of humanity of labor burdens and threats posed by the forces of nature. Adding to all this, there is a widespread view that scientific and technological progress brings not only the advancement of knowledge, but also as a real improvement, inexorable and effective in all aspects of human life. Science is not only seen as liberating, but also as dehumanizing and enslaving of human life. Uncontrolled growth of technology has contributed to destroy the vital sources of our humanity to create a culture without a moral basis. The technology has shaped our lives because we are at the mercy of interconnected systems, which is serious because we are submissive to his authority, shaping us in its functioning. The omnipresence of technology in today's world, coupled with its increased complexity, gives rise to a very problematic situation.
1. What is Creative Destruction?
a. Creative Destruction and Marxism
b. Creative Destruction and Schumpeter
c. Creative Destruction and Laissez-Faire Economics
2. Cases of Creative Destruction
3. Problems of Creative Destruction
4. Creative Destruction vs Economic Destruction
Definition of Economics, Scope of Economics, Microeconomics & Macroeconomics, Opportunity Cost, marginalise, Market Coordination, Goods and Service Protocol.
Evolution of Human Resource Management (HRM)Asim Qureshi
This presentation will take you through the journey of evolution of Human Resource Management (HRM). Proper chronological order of events has been followed which will give you a clear idea of the developments and the reason why these developments took place. American Labor History and effect of World War has been discussed in detail as these events had a considerable share in the evolution of HRM.
Lec x Economy as Social Institution - Imran Ahmad SajidDr. Imran A. Sajid
These are the Slides for MA (Final year) Students of the Department of Social Work, University of Peshawar.
Course Title: Social Institutions and Social System of Pakistani Society
Dr. Imran Ahmad Sajid
One fact is clear: society lives, more than ever, under the auspices under the auspices and domains of science and technology. Advertising that makes about science and technology is so intense that a significant portion of people believe that they only bring only benefits to society. For man, the technology makes life easier, cleaner and longer. Man cultivates a growing dependency in relation to science and technology in contemporary era. It is a usual behavior of much of society considers science and technology as liberators of humanity of labor burdens and threats posed by the forces of nature. Adding to all this, there is a widespread view that scientific and technological progress brings not only the advancement of knowledge, but also as a real improvement, inexorable and effective in all aspects of human life. Science is not only seen as liberating, but also as dehumanizing and enslaving of human life. Uncontrolled growth of technology has contributed to destroy the vital sources of our humanity to create a culture without a moral basis. The technology has shaped our lives because we are at the mercy of interconnected systems, which is serious because we are submissive to his authority, shaping us in its functioning. The omnipresence of technology in today's world, coupled with its increased complexity, gives rise to a very problematic situation.
This is a assignment or presentation about Major Barriers of Industrialization. It's all about the Industrial Sociology and Industrialization. Follow our blog which all about sociology https://sociologyarticle.blogspot.com/
The Industrial Revolution has four major causes. Capitalism thoug.docxMARRY7
The Industrial Revolution has four major causes. Capitalism though is the most important cause of the Industrial Revolution. Capitalism allowed the new generation of people to gain money and become involved and interested in the idea of investment. The investments allowed inventors and entrepreneurs to build the inventions that rocked the world, such as the blast furnace, railroads, vaccinations and much more. The impact of the Industrial Revolution had profound effects on the Civil War and the history of the United States. If it wasn’t for the railroads that the north utilized to carry supplies and troops, the United States would be a different place.
Private investments, which are a form of capitalism, became a huge factor in allowing countries, such as Great Britain, to succeed in industrialization faster than other European countries, such as the Germanic states. Although some could attempt to argue that another major cause, such as the Agriculture Revolution, would be the most important, they would fail to take notice of Great Britain’s capitalist policies and their connections to how fast countries industrialized.
Civil War Era
The Industrial Revolution in the 1800’s had a major impact on the Civil War and by using the lessons learned through the revolution the United States was able to continue to increase its industrial potential and become the leading producer in the world in the early 1900’s. The history of United States development could never have happened if it was not from the industrialization of the country. The country was able to innovate and create new manufacturing methods and became the leader in manufacturing. The advent of different kinds of transport also aided in the growth. The import and export of core minerals was made possible through transportation and industrial revolution. The lives of the American charged dramatically after the revolution as new channels of work emerged. The invention of the steam engine made it possible for factors to migrate and travel .this enabled the shift of skill and mobility of invention to happen.
The growth of the largest transportation system which took place during the industrial revolution and was ably supported by the civil war was the birth of the rail road system. Northern transportation industries boomed during the conflict as well particularly railroads. The North's larger number of tracks and better ability to construct and move parts gave it a distinct advantage over the South. Union forces moving south or west to fight often rode to battle on trains traveling on freshly lain tracks. In fact, as Northern forces traveled further south to fight and occupy the Confederacy, the War Department created the United States Military Railroads, designed to build rails to carry troops and supplies as well as operating captured Southern rail lines and equipment. By war's end, it was the world's largest railroad system.
The American economy was caught in transition on the eve of ...
Industrialization
Jessica Gonzalez
Dr. Reeves
HIS 105
Industrialization
Introduction
Industrialization after the Civil War was a noteworthy segment in making the propelled world we live in today. The modern transformation associated America through transportation, prompting to less demanding correspondence. It moved how the procedure of business approached permitting profitability to soar. Industrialization changed how the normal individual carried on with their existence with their family and how they earned cash to accommodate that family. Political control was superseded by the well off. It moved the larger part of laborers from agrarian positions to modern ones. At last, it urbanized American culture, with the goal that we could in the long run turn into a super force of a country.
Discuss three (3) major aspects of industrialization between 1865 and 1920. In your response, consider society, the economy, and politics.
One of the major aspects of industrialization between 1865 and 1920 is that the business and industrialization focused mostly on the urban communities. There was the regular expansion of the number of the plants which extraordinarily increased the demand for labor. As a result of this, individuals were prompted to move from the rural areas to the cities so that they can secure job opportunities. In addition to this, more settlers from Europe were attracted to the United States. As a result of the increased mechanization and the rural urban migration, the United States reformed from an agrarian society to an urban country which thereby led to the drastically changed in the socioeconomics of the nation.
The other aspect of industrialization between 1865 and 1920 is the free enterprise financial matters. This assisted the nation to industrialize at a great extent in that the supporters of the Laissez-faire system came in with the proposition that the economy should not be interfered with but it should be allowed to operate freely as a result of the forces of the demand and the supply. According to the supporters of the Laissez-faire system, the government or the administration should not meddle with the affairs of the economy and it should instead aim at securing the property rights and concentrate on the creation of a conducive environment for the economy to thrive in well (Rees, 2015).
The third aspect of industrialization between 1865 and 1920 is the development of the numerous innovative progressions. In this, industrialization assisted in the development of better means of transport which were faster, more secure, had a large capacity and they were also simpler to use and manage than the previously used means of transport. In addition to this, industrialization led to the development of the machines. These machines greatly assisted the laborers who used to make everything by their hands in that they could now use the newly made machines which greatly aided in increasing their speed, efficiency and also their l.
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June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
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The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
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unwillingness to rectify this violation through action requires accountability.
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students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
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1. Page | 1
The Founder of Modern Economics
“Smith”
Course Assignment
Course Title: Microeconomics
Course Code: ECO 1132
Section: 09(I)
Submitted To:
Sibat Masood
Lecturer
Depertment of Business Studies,
Southeast University .
Submitted By
Date of Submission: 26 December 2017.
Name ID Section
Rahul Roy 2017010000146 09(I)
Mohin uddin 2017010000302 09(I)
Anika Suhana 2015210000174 09(I)
2. Page | 2
Acknowledgement
At first, we would like to express our deepest gratitude to ourrespected course instructor Sibat
Masood for giving the opportunity to work on such an important and essential project. This
project has been a landmark in our study so far. It is a result of dedicated effort of our course
instructor. This project would not have been possible without the kind support and help of many
individuals. We would like to extend our sincere thanks to all of them. We would also like to
thank some of our course members who helped our this report with their suggestions and inputs.
3. Page | 3
Letter Of Transmittal
December 26th, 2017
Sibat Masood ,
Lecturer, School of Business Studies,
Southeast University.
Sub: Submission of Report The Founder of Modern Economics “Smith”.
.
Madam,
We, hereby submit our report on The Founder of Modern Economics “Smith”.
We believe the knowledge and information acquired during the assignment will be extremely
helpful in our future professional and academic life. We will be grateful if you accept the
assignment.
Obediently,
On behalf of the group.
Rahul Roy,
Sign: ……………………………………..
Date:………………………………………
ID: 2017010000146, batch : 45st
4. Page | 4
The Industrial Revolution
Description: The Industrial Revolution was a period of major industrialization that took place
during the late 1700s and early 1800s. The Industrial Revolution began in Great Britain and
quickly spread throughout the world; the American Industrial Revolution, commonly referred to
as the second Industrial Revolution, started sometime between 1820 and 1870. This time period
saw the mechanization of agriculture and textile manufacturing and a revolution in power,
including steam ships and railroads that effected social, cultural and economic conditions.
BREAKING DOWN 'Industrial Revolution'
Although the Industrial Revolution occurred approximately 200 years ago, it is a period in time
that left a profound impact on how people lived and the way businesses operated. Arguably,
factory systems developed during the Industrial Revolution are responsible for the creation of
capitalism and the modern cities of today. Production efficiency improved during the Industrial
Revolution with inventions such as the steam engine, which dramatically reduced the time it took
to manufacture products. More efficient production subsequently reduced prices for products,
primarily due to lower labor costs. Cheaper steel prices encouraged the development of
infrastructure such as railroads and bridges during the American Industrial Revolution.
Increased Employment and Innovation
The Industrial Revolution created an increase in employment opportunities. As factories became
more prolific, managers and employees were required to operate them; this had a flow-on effect
of new and innovative products emerging. Increased innovation led to higher levels of
motivation and education that resulted in several ground-breaking inventions that are still used
today such as the telephone, X-ray, light bulb, calculator and anesthesia. The Industrial
Revolution improved people’s lives. Due to Industrial Revolution advancements, there were
improvements in nutrition, health care and education.
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Pitfalls of the Industrial Revolution
Several major pitfalls developed as the Industrial Revolution progressed. There was a reduction
in agriculture as people were abandoning their farms to work in city factories where they could
earn a higher income. This led to a shortage a food produced on farms. Increased pollution was a
pitfall of the Industrial Revolution. Before the sharp increase in factory numbers, there was a
limited amount of pollution generated in the world as production was predominantly manual.
The Industrial Revolution provided an incentive to increase profits, and as a result, working
conditions in factories deteriorated. Long hours, inadequate remuneration and minimal breaks
became the norm. This subsequently led to health issues for many factory workers. Labor
movements in the United States developed momentum from the late 19th century in response to
poor working conditions that developed during the Industrial Revolution.
The Division of Labour
Meaning of Division of Labour: Division of Labour means that the main process of production
is split up into many simple parts and each part is taken by different workers who are specialized
in the production of that specific part.
Description: Division of labour is the term first used in Adam Smith’s the Wealth of Nations to
describe the separation of manufacturing process into distinct and simple operations which are
then delegated to specific hands or machines to perform. Smith thought that the quality and
quantity of work carried out by a workforce organized along the division of labour principle was
so superior compared to work done by non-divided labour that he said:
“The greatest improvement in the productive powers of labour, and the greater part of the skill,
dexterity, and judgment with which it is anywhere directed, seem to have been the effects of
division of labour.
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Five Types of Division of Labour:
(a) Division into trades and professions (e.g., division of social work into four groups for four
castes as in the ancient Hindu Society or shoe making by shoe-makers, furniture making by
carpenters, etc.)
(b) Division of labour into complete processes (e.g., spinning of cotton by spinners, weaving of
threads by weavers)
(c) Division of labour into incomplete processes specialization of labour in a modern factory in
working a process which remains incomplete — turning of screws constantly by a labour, or
making a part of shoe laces, etc.)
(d) Territorial division of labour or localization of industry (e.g., concen-tration of jute mills in
West Bengal, Cotton textiles mills in Maharashtra and Gujarat, etc.)
(e) International division of labour. Nowadays, we also find that coun-tries specialize. Different
countries specialize in the production of different commodities in which they enjoy certain
advantages. And international trade is based on international division of labour and
specialization.
Some advantages of division of labour:
1. Increase in output
2. Increase in productivity
3. Increase in skill and dexterity
4. Time saving
5. More use of machinery
6. Cheaper goods and higher wages
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There are also some disadvantages of division of labour:
1. Monotony and boredom
2. Loss of craftsmanship
3. Danger of unemployment
4. Interdependence
5. Cooperation among labour
6. Continuity in production
7. Extent of the market
8. Sectionalism
9. Dislocation of production
10. Loss of motivation
11. Disadvantages to consumers
12. Physical limitations Exchange
13. Lack of transport facility
14. Consumer preference
15. Service
Invisible Hand
Definition: The unobservable market force that helps the demand and supply of goods in a free
market to reach equilibrium automatically is the invisible hand.
Description: The phrase invisible hand was introduced by Adam Smith in his book The Wealth
of Nations. He assumed that an economy can work well in a free market scenario where
everyone will work for his/her own interest.
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He explained that an economy will comparatively work and function well if the government will
leave people alone to buy and sell freely among themselves. He suggested that if people were
allowed to trade freely, self interested traders present in the market would compete with each
other, leading markets towards the positive output with the help of an invisible hand.
In a free market scenario where there are no regulations or restrictions imposed by the
government, if someone charges less, the customer will buy from him. Therefore, you have to
lower your price or offer something better than your competitor. Whenever enough people
demand something, it will be supplied by the market and everyone will be happy. The seller end
up getting the price and the buyer will get better goods at the desired price.
The principle of Laissez fair
Economics is a broad social science that studies factors that drive the supply and demand of
limited resources. Economic resources are commonly defined as land, labor and capital. Two
basic types of economies exist: command and free market. Command economies usually have a
central authority responsible for allocating and distributing economic resources. Free market
economies represent a laissez-faire system, in which individuals and businesses are free to
allocate economic resources according to their needs and wants.
History
Laissez-faire is a French term commonly defined as “let do,” although other definitions include
“let it be” or “leave it alone.” Adam Smith, author of “The Theory of Moral Sentiments” and
“The Wealth of Nations,” often is called the father of modern economics. Smith believed in a
strong laissez-faire economic system in which individuals could make decisions based on their
own self interests. Smith also was a proponent of economic theories regarding free trade and
capitalism.
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Facts
A laissez-faire economy seeks to limit the amount of government intervention in a nation’s
economy. Adam Smith wrote about a concept he called “the invisible hand.” Rather than
requiring governments to move or allocate resources according to economic needs, the invisible
hand was seen when individuals made their own economic decisions. The invisible hand moves
goods through a nation’s economy when suppliers take natural resources and produce consumer
goods. Once consumers purchase these goods, companies will continue producing them as long
as it remains profitable.
Features
Comparative advantage is another unique feature of laissez-faire economics. Countries often
have the ability to produce an item better or more efficiently than another. Additionally,countries
may have more natural resources to produce consumer goods. A comparative advantage in
laissez-faire economics allows countries to engage in a free market, where they can buy or sell
goods without fear of government intervention. The efficient use of economic resources ensures
that countries can make significant gains for their domestic and international economies.
Expert Insight
The Austrian school of economic theory relies heavily on the concept of laissez-faire economics.
Carl Menger, Ludwig Von Mises, Murray Rothbard and Friedrich Hayek are just a few of the
most noted Austrian school economists. These individuals have developed theories relating to
monetary policy, entrepreneurship, supply and demand, price controls, and individuals. Rather
than supporting the economic fallacy of engaging only in short-term economics, the Austrian
school of economic theory relates more to long-term economic principles free from government
intervention.
Misconceptions
A laissez-faire economic policy does not promote a free-for-all society, in which individuals can
abuse fellow citizens to gain an economic advantage. Laissez-faire economics relies heavily on
10. Page | 10
the protection of private property and allowing individuals to operate without duress or pressure
from the government or other individuals. Court systems or other well-served judicial laws aid
laissez-faire economic policies, since individuals are free to keep their wealth gained in this
economic environment.
Relevance for Today
Over past few years, due to the economic crisis, the western capitalist system has come under a
protracted and brutal attack in public debates on a grand scale. Suffering caused by the recent
economic crisis has led scholars to believe that it is important for the overall health and survival
of capitalism to review the model of the capitalist economy and its miraculous powers
intended by its original author. Otherwise capitalism will be discredited or destroyed by internal
failures or external pressures. According to Lewis (1977), Adam Smith enjoys a unique position
in economic thought. Being a moral philosopher, he was a part of an intellectual structure, based
on a broader moral foundation of natural rights. However, the main thrust in economic thought
hasdivorced Smith’s analysis of the free market from its moral foundation. Lewis argued that
although Smith advocated the removal Filosofía de la Economía, 2014, Vol. 3, pp. 71-8577of
market restriction, increased productivity and growth, he had a broader and more subtle purpose
of the market system in mind.Smith saw the market as crucial mechanism to save civil society
through the way in which it forced men to recognize natural rights. That there has been little
concern
with these normative and political aspects of Smith’s basic economic concepts has a far reaching
effect on economic theory and policy. According to Lewis (1977
Sen (2010) has also argued that, though not so widely acknowledged, the relevance of Smith’s
ideas in the theory of moral sentiments is far reaching and has insights to offer to the world
today. Smith’s analysis is, in fact, deeply relevant today in understanding what has just happened
in the financial world. Smith did not take the market mechanism and profit motive
as sole performer of excellence in the market exchange. Along with the self-motivated behavior
of individuals at the moment of market exchange, Smith was also concerned with the other wider
11. Page | 11
moral motivations for economic activities. In his theory of moral sentiments Smith discussed
more refined motivation other than just the pursuit of one’s own gain or even prudence. Smith
argues that,
Smith believed society can benefit through the pursuit of enlightened self-interest. Smith
proposed a very democratic notion of the purpose of the market. He believed that capitalism will
favor consumers rather than producers. He also conceived capitalism as a system that
will promote the wealth of society without jeopardizing the interest of society at large and it will
bring discipline, moderation and order throughout society. He believed that every individual in a
society has a strong desire for approval from his fellow beings and this desire is a leverage of
control that guides fundamentally self-interested individuals toward sympathy and benevolence
in a well-functioning society (Henry Jackson Initiative, 2012). However, virtues of capitalism,
advocated by the father of capitalism, could not be fully materialized in the modern capitalist
system and capitalism has been exposed to erious challenges in the modern world.
Therefore it is worthwhile to re-examine Smith’s model of the capitalist economy in order to
generate the highest long term returns from the capitalist system. According to Evensky (2011),
one of the more subtle points made by Smith that has been widely missed by many advocates of
the modern capitalist system while celebrating his vision of the free market,
is that self-interest can be a source of magical transformation, which drives each individual to
better his condition, only in a situation where trust prevails under conditions of perfect liberty. In
the monopolized markets entrepreneurs limit their productivity voluntarily in order to create
artificial stock shortages in the market. This situation demands for some corrective
mechanism for the efficient functioning of the market (Salvadori and Signorino, 2013). Thus, in
Smith’s analysis, the establishmentof a system of positive laws and the institutions to implement
these laws along with the individual ethics provide a potentially constructive solution for
establishing trust. This brings trust as an important driving force motivating the self-
interested actors in the hope of bettering their condition, to the center of debate (Evensky, 2011)
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Adam Smith and the Ethics of Capitalism
TMS (1759) and WN (1776) are thought by many scholarsto be incompatible, since the former
deals with the moral sentiments, whereas the latter presents a picture of an individual driven
purely by his self-interest. However, this tension can be easily resolved when we appreciate the
differing but not necessarily competing purposes of these classical works: one has to do with the
science of human conduct, the other with the science of wealth creation. The impulse of self-
interest is not in itself immoral, but rather, when it is translated into the highly commen dable
virtue of prudence, it brings good for society as well. Smith wanted to construct a
system in which he attempted to show that commerce is consistent with morality and both these
attributes of economizing and moralizing are natural to man (Barry, 1990).
Smith presented a system of naturalistic ethics in which each part is connected to the whole
through a complex chain of reasoning. Every individual has a perception of right and wrong that
sometimes can be tainted by excessive self-love. However, in a moral equilibration potentially
harmful self-love is checked against the less self-interested standards by an impartial spectator.
Thus, Smith had a foundation for ethical judgments which was independent of utility. His moral
foundation is grounded in the community, which provides a meaningful conception of morality
to the individual. This ethical foundation also bears relevance for individual conduct in the
commercial order. According to Barry (1990)
Apart from utilitarian considerations, capitalism seems to be characterised by the natural fact that
people are constantly engaged in the struggle to better themselves; and their actions in this regard
will meet with the approval of others (and the spectator) as long as they do not involve a breach
of a rule of justice. Of course, the approval of others may not always be a consequence of an
exercise of unadulterated self–interest in the conventional capitalistic sense; indeed the desire to
be well–thought of may well promote other–regarding virtues.
Smith was convinced on utilitarian grounds that government regulation cannot improve morality
or economics. In many parts of his analysis Smith regarded capitalism as a morally
sparsedoctrine having no place for the non–obligatory virtues of benevolence and charity.
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It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner,
but from their regardto their own interest. We address ourselves not to their humanitybut to their
self–love.
He was always a realist about human nature. He was convinced that benevolence was only
possible in very small, face–to–face relationships. Non cooperative self-interest and other
regarding sympathy are the major pillars of Smith’s model of market economy in impersonal and
personal exchange respectively (Smith, 1998). Therefore, in market relationships, where we are
often dealing with strangers, only self–interest can motivate people to produce a general
beneficial outcome since the satisfaction of personal desire depends upon the capacity to satisfy
the desires of others. The most relevant moral virtues for commercial society are justice, honesty,
reliability and frugality, which are essential features of the market system.For Smith, a greater
penetration of society by business attitudes would on the whole lead to a rise in moral standards,
because without the expectation that agreements will be honored, property respected and
individual integrity respected, the capitalist system cannot flourish. Thus, rules of justice need to
be enforced in commercial societies.