Pope Francis on the Economy and the Common Good
“The dignity of each human person and the pursuit of the common good are concerns which ought to shape all economic policies. At times, however, they seem to be a mere addendum imported from without in order to fill out a political discourse lacking in perspectives or plans or true and integral development. How many words prove irksome to this system! It is irksome when the question of ethics is raised, when global solidarity is invoked, when the distribution of goods is mentioned, when reference is made to protecting labor and defending the dignity of the powerless, when allusion is made to God who demands a commitment to justice. At other times these issues are exploited by a rhetoric which cheapens them. Casual indifference in the face of such questions empties our lives and our words of all meaning. Business is a vocation, and a noble vocation, provided that those engaged in it see themselves challenged by a greater meaning in life; this will enable them truly to serve the common good by striving to increase the goods of this world and make them more accessible to all.” (Pope Francis,Evangelii Gaudium, 203).
“The dignity of each human person and the pursuit of the common good are concerns which ought to shape all economic policies. At times, however, they seem to be a mere addendum imported from without in order to fill out a political discourse lacking in perspectives or plans or true and integral development. How many words prove irksome to this system! It is irksome when the question of ethics is raised, when global solidarity is invoked, when the distribution of goods is mentioned, when reference is made to protecting labor and defending the dignity of the powerless, when allusion is made to God who demands a commitment to justice. At other times these issues are exploited by a rhetoric which cheapens them. Casual indifference in the face of such questions empties our lives and our words of all meaning. Business is a vocation, and a noble vocation, provided that those engaged in it see themselves challenged by a greater meaning in life; this will enable them truly to serve the common good by striving to increase the goods of this world and make them more accessible to all.” (Pope Francis,Evangelii Gaudium, 203).
In God We Really Should Trust
ADAM SMITH’S VIEW OF AN IDEAL ECONOMIC
SYSTEM AND U.S. LIBERAL CAPITALISM
In God We Really Should Trust
ADAM SMITH’S VIEW OF AN IDEAL ECONOMIC
SYSTEM AND U.S. LIBERAL CAPITALISM
by James W. Connolly
Guest Contributor
Austin, Texas
Liberty can no more exist without virtue… than the body can live without a soul.” – John Adams
INTRODUCTION
It is commonly suggested by some economists today that the present U.S. liberal capitalistic economy can be justified based on Adam Smith’s view of an ideal economic system. However, there are major elements in a Smithian economic system that are incompatible with the principles of liberal capitalism in the United States today. Through an examination of the principles of Adam Smith’s economic theory this essay will demonstrate that the claim that the present-day U.S. liberal capitalistic economy is based upon Adam Smith’s view of capitalism is unsubstantiated and false.
Adam Smith’s analysis of his economic theory is found in his magnum opus, An Inquiry into the Nature and Cause of the Wealth of Nations, 1776, commonly known as The Wealth of Nations. The Wealth of Nations was enthusiastically received. It was understood as providing a philosophical justification for individual freedom in the areas of manufacture and trade. Individual freedom was favored in an economic market as opposed to government control. The book’s premise addressed the interaction between government and the economic order. At this time, the nations of Europe embraced a theory of economic organization called Mercantilism. Mercantilism was a planned economy. Trade was restricted by regulations. Thus, there was political control of all trade. This economy was the model of today’s totalitarian state. The government controls the economy.
The moral foundations of Smith’s economic theory can be found in his work, The Theory of Moral Sentiments, published in 1759. The Theory of Moral Sentiments, as its name implies, is Smith’s presentation of the type of moral philosophy necessary for a developing economic market to perform, not just perform, but perform in a manner that enables the common good. Smith’s notion of the common good unfortunately is almost always ignored. Moral Sentiments is Smith’s analysis of man’s temperament to, and fitness for, society. It seeks to reveal the minimum conditions which must be satisfied before society can exist together with the psychology employed in Smith’s economics. In The Theory of Moral Sentiments Smith also introduces the notion of the “invisible hand.” The “invisible hand” is a metaphor that defines how our own self-interest binds us with the public interest. “So that when we pursue our own economic interests, we unavoidably benefit society.” The notion of the common good and the “invisible hand” are essential to Adam Smith’s understanding of the economy. These two notions of the common good and the “invisible hand,” along with other elements of Smith’s economic theory, will be discussed in more detail in the body of this essay.
ESSAY CONTINUES BELOW:
INTRODUCTION
It is commonly suggested by some economists today that the present U.S. liberal capitalistic economy can be justified based on Adam Smith’s view of an ideal economic system. However, there are major elements in a Smithian economic system that are incompatible with the principles of liberal capitalism in the United States today. Through an examination of the principles of Adam Smith’s economic theory this essay will demonstrate that the claim that the present-day U.S. liberal capitalistic economy is based upon Adam Smith’s view of capitalism is unsubstantiated and false.
Adam Smith’s analysis of his economic theory is found in his magnum opus, An Inquiry into the Nature and Cause of the Wealth of Nations, 1776, commonly known as The Wealth of Nations. The Wealth of Nations was enthusiastically received. It was understood as providing a philosophical justification for individual freedom in the areas of manufacture and trade. Individual freedom was favored in an economic market as opposed to government control. The book’s premise addressed the interaction between government and the economic order. At this time, the nations of Europe embraced a theory of economic organization called Mercantilism. Mercantilism was a planned economy. Trade was restricted by regulations. Thus, there was political control of all trade. This economy was the model of today’s totalitarian state. The government controls the economy.
The moral foundations of Smith’s economic theory can be found in his work, The Theory of Moral Sentiments, published in 1759. The Theory of Moral Sentiments, as its name implies, is Smith’s presentation of the type of moral philosophy necessary for a developing economic market to perform, not just perform, but perform in a manner that enables the common good. Smith’s notion of the common good unfortunately is almost always ignored. Moral Sentiments is Smith’s analysis of man’s temperament to, and fitness for, society. It seeks to reveal the minimum conditions which must be satisfied before society can exist together with the psychology employed in Smith’s economics. In The Theory of Moral Sentiments Smith also introduces the notion of the “invisible hand.” The “invisible hand” is a metaphor that defines how our own self-interest binds us with the public interest. “So that when we pursue our own economic interests, we unavoidably benefit society.” The notion of the common good and the “invisible hand” are essential to Adam Smith’s understanding of the economy. These two notions of the common good and the “invisible hand,” along with other elements of Smith’s economic theory, will be discussed in more detail in the body of this essay.
ESSAY CONTINUES BELOW:
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