Thursday, August 2, 2018

Self-Interest and National Wealth

Smith recognizes a potential inconsistency between exclusive attention to the pursuit of personal wealth, and the promotion of the wealth of one's nation.  He resolves it by subordinating the latter to the former, despite the title of the book, by arguing that living in a wealthy nation is personally beneficial to any of its citizens.  However, that resolution is unsatisfactory in two respects.  First, he rejects a similar argument when applied to Sympathy, and second, it still entails the possibility of a constraint, in the name of national Wealth, on Self-Interest, that could be actualized as either a government regulation or even a Hobbesian Leviathan.  But, the more fundamental problem is that the concept of Nation is extrinsic to that of a society of self-interested individuals, i. e. of all people, with respect to which a nation is a subset.  Rather, Smith's concept of Nation, and the reason why Wealth of Nations is the title of the book, is that he conceives it primarily as a Laissez-Faire response to the Protectionist Mercantilism that dominates Economic theory in the prior centuries.  Accordingly, the Foreign dimension of his system precedes its Domestic dimension, which is that of the behavior of citizens.  As a result, the two dimensions lack systematization, which he tries to compensate for with an inadequate ad hoc concept of the relation between Self-Interest and National Wealth.

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