Friday, August 16, 2013

In The Wealth of Nations, why does Smith think that pursuing one's personal interest is a more effective way to benefit society than trying to...

According to Smith, when people all pursue their personal
interests, society benefits through the "invisible hand."  This is, to Smith, much more
effective than efforts to consciously improve
society.


Smith believes that people, pursuing their
interests, will improve society.  As they pursue their interests, they will do things
that make money for them.  They will do things like starting businesses and pursuing
profit.  When they start businesses, they will eventually employ people.  As they pursue
profit, they make money that will be used to buy goods from other people, once again
benefitting society.


All of this is better than having
conscious efforts to improve society.  This is because no one person or small group of
people is intelligent enough to know how to improve society.  It is better if everyone
pursues their interest and allows the "invisible hand" of competition to improve the
society.

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