What is an economist's perspective on this statement by Adam Smith in The Wealth of Nations? "It is not from the benevolence of the butcher, brewer or the baker that we expect our dinner, but from...

What is an economist's perspective on this statement by Adam Smith in The Wealth of Nations

"It is not from the benevolence of the butcher, brewer or the baker that we expect our dinner, but from their regard to their own interest."

Asked on by helena619

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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An economist’s perspective on this statement is that it lays out the basis of how a market economy works.  This statement expresses the basic attitudes that underlie the concepts of supply and demand which are so central to economics.

What this statement is saying is that people basically act selfishly.  They want to do things that are in their own self-interest.  Unlike what Marx thinks, people do not work simply because they should and because they enjoy it.  Instead, they want material benefits.  This insight lays the foundation for economics in a market economy.

The laws of supply and demand are based on this idea.  The law of supply says that the more we can sell a product for, the more we will want to make that product.  The law of demand says that we will want to buy more of a product when we can buy it cheaply.  In both cases, we are acting in our self-interest.  We are acting because we want more material goods or wealth, not because of philanthropic reasons.  This is what Smith is saying in the passage that you cite.

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