Competing with Smith, Means Everyone Wins.
â€œ I see trees of green, red roses too, I see them bloom, for me and you, And I think to myself what a wonderful world.â€ This excerpt from a popular song by Louis Armstrong describes an environment of organic beauty. In which, surrounded by the simplistic splendor of nature, Armstrong sees a â€œwonderful worldâ€. For as long as history records, humankind has attempted to find some form of this â€œwonderful worldâ€ and while many seek it, few agree on what factors contribute to a fully wonderful world. Adam Smith, for example, envisioned a very different route to achieving his wonderful world. In Smithâ€™s conception of society: harmony, development, and beneficence could only be achieved through an unrestricted market. Smith, in perhaps one of his most famous worksâ€”Wealth of Nations, explained how the market works and argues that the market is the mechanism that establishes both the cohesion and improvement of society.
Adam Smith methodically describes how the market operates and the primary force responsible for itâ€™s perpetuationâ€”self interest. In Wealth of Nations, Smith describes how self-interest motivates suppliers to produce. Robert L. Heilbroner writes, â€œâ€¦Self interest acts as a driving power to guide men to whatever work society is willing to pay forâ€ (Pg 55). This excerpt makes sense when examining the nature of mankind. Generally people want to turn a profit and will engage in whatever industry will yield the most profit. Traditionally, people do not perform tasks out of some altruistic need to serve the public, but rather out of self-interest. Smith elaborates on this when he notes, â€œIt is not from benevolence of the butcher, or the baker that we expect our dinnerâ€¦but from their regard to their self interestâ€ (Pg 55). Therefore, a merchant will want to charge a higher amount for his product because this situation will maximize his revenues, which in-turn, will maximize his profits.