A Quote by George Stigler
Adam Smith had one overwhelmingly important triumph: he put into the center of economics the systematic analysis of the behavior of individuals pursuing their self-interest under conditions of competition.
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In an ideal world, Adam Smith-like, individuals would recognize what they need to do in their own self-interest, and they will make changes happen and look after themselves.
Modern sociology is virtually an attempt to take up the larger program of social analysis and interpretation which was implicit in Adam Smith's moral philosophy, but which was suppressed for a century by prevailing interest in the technique of the production of wealth.
I've been a faithful reader of the great classical documents of economics, or tried to be. The first book in the field that I ever read was Principles of Economics by Alfred Marshall. I suppose subsequently I would have to pick out Keynes, Adam Smith, Marx.
If you go back to Adam Smith, you find the idea that markets and market forces operate as an invisible hand. This is the traditional laissez-faire market idea. But today, when economics is increasingly defined as the science of incentive, it becomes clear that the use of incentives involves quite active intervention, either by an economist or a policy maker, in using financial inducements to motivate behavior. In fact, so much though that we now almost take for granted that incentives are central to the subject of economics.
Adam Smith pointed out that there were three things that make us more prosperous, in a general sort of way: freedom to pursue our own self-interest; specialization, which he called division of labor; and freedom of trade.
Still, intuitive assumptions about behavior is only the starting point of systematic analysis, for alone they do not yield many interesting implications.
Being Adam Parrish was a complicated thing, a wonder of muscles and organs, synapses and nerves. He was a miracle of moving parts, a study in survival. The most important thing to Adam Parrish, though, had always been free will, the ability to be his own master. This was the important thing. It had always been the important thing. This was what it was to be Adam.
Individuals motivated by self-interest, self-indulgence, and a false sense of self-sufficiency pursue selfish ambition for the purpose of self-glorification.
Gandhi rejects the Adam Smith notion of human nature as motivated by self-interest and brute needs and returns us to our spiritual dimension with its impulses for nonviolence, justice and equality. He exposes the fallacy of the claim that everyone can be rich and successful provided they work hard. He points to the millions who work themselves to the bone and still remain hungry.
Neoclassical economics ... has uncovered important truths about the nature of money and markets because its fundamental model of rational self-interested human behavior is correct about 80% of the time.
Tastes and behavior are important in economics. Nobody denies that. But the question is: How much of behavior is irrational, and how much of the irrational behavior really affects prices? It turns out that's very difficult to answer.
The kind of society which we still have is maybe, in some cases, getting worse. Competition is becoming a virtue. Intense competition drives people to go more and more into self-interest. Even to see other folks as competition.
The amount of resources we put in are disparate. We put billions of dollars into fuel-efficient technologies. How much are we putting into energy behavior change in a credible, systematic, testing way?
It is possible to know when, at least basically, we please God. In fact, Joseph Smith taught that one of the conditions of genuine faith is to have "an actual knowledge that the course of life which [one] is pursuing is according to [God's] will."
During the two centuries since the publication of 'The Wealth of Nations,' the main activity of economists, it seems to me, has been to fill the gaps in Adam Smith's system, to correct his errors and to make his analysis vastly more exact.
From the equilibrium and spontaneous order of Adam Smith and his heirs, from invisible-handed markets and perfect competition, supply and demand, and rewards and punishments, I was pushed to theories of disequilibrium and disorder, and information and noise, as the keys to understanding economic progress.
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