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What did Adam Smith teach you, Economist?
#18 – Present photography meets future economics
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P: Good morning, Economist.
E: Good morning, Photographer.
P: Recent newspapers were full of articles about an economist even I had heard of before: Adam Smith. It was his birthday these days. Smith was born 300 years ago and is considered the father of economics. But I guess you know that.
E: I visited his grave in Scotland a few years ago.
P: So you think he was great?
E: I think so.
E: He taught, among others, something important about human coexistence.
E: A famous quote from his most famous book called 'An Inquiry into the Nature and Causes of the Wealth of Nations' describes this best. It goes, 'It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.'
E: The quote says that pursuing your goals can be good for others as well. More economically: There are always two sides benefitting from a deal – buyer and seller. Otherwise, the deal would never go through. Suppose we organize our society in such a way that only transactions come about where at least two people benefit, and third parties are not disadvantaged, in that case, every economic activity is beneficial for society.
P: In such a society, there is nothing wrong with following your own desires and interests, they are good not only for oneself but also for others. Is that what Smith said?
< silence >
P: You could also call such behaviour selfish, couldn't you?
E: The sentence that follows Smith’s quote in his book goes like this: 'We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.' So it's not about selfishness for Smith but self-love.
P: What's the difference?
E: The egoist lives at the expense of others. But self-love does not come at the expense of others per se. But what’s crucial is, that a well-organized society ensures that one's own advancement also serves others. You can follow your interests without harming others.
P: On occasion, we need to talk about what it takes for such a society to emerge.
E: Gladly. Have a nice day, Photographer.
P: You too, Economist.
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