Chapter34: World Trade Equilibrium
Section: Chapter Questions
Problem 1E
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Transcribed Image Text:3. Explain Adam Smith's claim about self-interest and its impact on society.
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Laissez, Faire
The invisible hand metaphor is connected to Smith's belief in a laissez faire economy. In a laissez fa
![Document 2
An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith (1776).
Book I, Chapter II: Of the Principle which gives Occasion to the Division of Labor
Book IV, Chapter 2: Of Systems of Political Economy: Of Restraints upon the Importation
"But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from
their benevolence [kindness] only. [...] Give me that which I want, and you shall have this which you want […..]
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. [...] But it is only for the sake of profit that any man [uses]
capital in the support of industry; […..] [H]e is in this, as in many other cases, led by an invisible hand to promote
an end which was no part of his intention.[...] By pursuing his own interest, he frequently promotes that of the
society more effectually than when he really intends to promote it."](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51cef628-a0ef-42a4-aff9-f513fbe498de%2F7f31eab1-84b1-4240-af10-686c5fd48c06%2Fh89c4w_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Document 2
An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith (1776).
Book I, Chapter II: Of the Principle which gives Occasion to the Division of Labor
Book IV, Chapter 2: Of Systems of Political Economy: Of Restraints upon the Importation
"But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from
their benevolence [kindness] only. [...] Give me that which I want, and you shall have this which you want […..]
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. [...] But it is only for the sake of profit that any man [uses]
capital in the support of industry; […..] [H]e is in this, as in many other cases, led by an invisible hand to promote
an end which was no part of his intention.[...] By pursuing his own interest, he frequently promotes that of the
society more effectually than when he really intends to promote it."
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