Adam Smith's Economic Philosophy:
Just as Smith's moral point-of-view was ahead of his time with respect to ideas that others would popularize later, Smith presented matter-of-fact observations on the nature of work and the relationship between working people and society at large. More than one hundred years before Henry Ford revolutionized modern industry with his production line, Smith had explained the mechanism that accounted for its success.
Using the example of manufacturing nails, Smith illustrated that dedication to a specific task -and, in general, the divvying up of component tasks within any larger endeavor enabled one individual to produce more than 2.300 units per day, compared with a competent, but less specialized worker, who could produce only 800 per day, at best.
Smith eschewed the value of acquisitive success, or the accumulation of material wealth for its own sake, or for its value as a measure of self-worth, or as a means to project power over others. He marveled, in particular, at the monetary worth of precious metals and stones, which are actually worth nothing, and the comparative lack of monetary worth of water, which has little monetary value despite being absolutely vital for so much (Mills, 1953).
Smith opposed the idea of flat taxes, and, more generally, viewed taxes as a means of withdrawing capital from the most productive components of society and channeling it to the least productive elements (Galbraith, 1958). Similarly, while Smith opposed any notion of state-awarded monopolies, he suggested that the state encourage the development of private monopolies, as a means of inspiring progress through natural competition,...
Ultimately, rather than being inconsistent, it is this underlying motivation for Smith's capitalist views that conferred consistency between the seemingly inconsistent concepts represented by his moral philosophy and economic theories. It should, therefore, come as no surprise that the extent of Smith's own extensive charitable contributions came to light only after his death, despite his efforts to keep the specific nature of his private acts of altruism secret (Magill, 1961).
References
Galbraith, J.K. (1958) the Affluent Society. Houghton Mifflin: Boston
Lerner, M. (1957) America as a Civilization: Life and Thought in the United States Today. Simon & Schuster: New York
Magill, F. (1961) Masterpieces of World Philosophy. Harper and Row: New York
Menand, L. (2001) the Metaphysical Club: A Story of Ideas in America. Farrar Strauss Giroux: New York
Mills, C.W. (1951) White Collar. Oxford University Press: New York
Smith, a. (1759) the Theory of the Moral Sentiments. Edinburgh. Accessed, October 3, 2007, at http://www.adamsmith.org/smith/tms-intro.htm
Smith, a. (1776) an Inquiry into the Nature and Causes of the Wealth of Nations. Methuen and Co., Ltd. 1904.
