Capitalism In A Nutshell From Its Founder, Adam Smith

Below I paraphrase Adam Smith’s words about the famous “Benevolent Butcher”.

We all need each other to survive. But it’s folly to think that people help others simply out of the goodness of their hearts. For this reason we all do much better if we can enlist our fellow man’s own self-interest in helping us; that is we must show our fellow man that his helping us is to his own advantage. We say to our fellow man “Give me what I want and in doing so you will get what you want”. This is the basis for every transaction we make from day to day. We eat food grown by a farmer we’ve never met. We live in houses, the builders of which we’ve never met. We have food and shelter, not because someone thinks we’re special, but rather because they got something they wanted out of the bargain. It is not because of the benevolence of the butcher that we expect to get our meat, but from the butcher’s regard for his own interests. And we don’t live our lives wondering if the butcher has what he needs. We assume the butcher loves himself enough to give us what we want because we have something he wants.

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Here is his original work.

[M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages”.

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2 Comments

Filed under Economic Science, Economics, Harsh Reality, Human Nature, Morality, Worldview

2 responses to “Capitalism In A Nutshell From Its Founder, Adam Smith

  1. Reblogged this on Sifting Reality and commented:
    I get the impression that capitalism only serves nefarious ends. That somehow capitalists somehow get wealthy by somehow draining the wealth of someone else. But this is only so if you count the dollars in each’s hand at the end of the transaction. Often times we don’t consider the good or service received in exchange for the finacial transaction.

  2. Pingback: The Egalitarian Pipe Dream, Social Justice part 5 | Economics For Morons

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