Economics Study: Adam Smith's View of the Exchange Value Theory System – Adam Smith's doctrine of the national and international situation is merely a continuation of the heavy agricultural system. Like the physiculture, the doctrine ignores the nature of the state, attempts to exclude political science and state power altogether, assumes lasting peace and world unity in the world, underestimates the value of the productive capacity of the state, underestimates the importance of the means needed to acquire such power, and demands absolute freedom of trade.
Adam Smith, in exactly the same way as the physiocrats before him, fell into a fundamental error and could not extricate himself, that is, he regarded the absolute freedom of international trade as a norm based on common sense, not after careful study and understanding of the extent to which history supported this view.
Stewart tells us that twenty-one years before Adam Smith's book was published in 1776 (i.e., in 1755), he attended an academic seminar at which he declared that the practice of universal freedom of trade should be given priority:
Politicians and designers often use people as raw materials to make some kind of political handicraft. These designers disrupt the state of nature when dealing with human problems. In order for nature to achieve its purpose, people only need to let it go and let it play. The precondition for a country to emerge from its most barbaric state and to achieve maximum prosperity is peace, modest taxation and a sound judicial system, and everything else will behave in the natural process. Any government that, in order to maintain its position, takes an act contrary to this spirit and contrary to the laws of nature, tries to divert capital for other purposes or restricts the self-development of human society in the natural process, it will become a tyrannical and authoritarian government.
This basic idea of Adam Smith was constantly proved and interpreted as the sole goal of all his subsequent writings. This idea of his was further confirmed by Quesnai, Durgo, and other important members of the Physiocrats, whom he had met during a visit to France in 1765.
Clearly, Smith saw the idea of trade freedom as an academic discovery that could be the basis of his academic prestige. Therefore, in his writings, he spares no effort to reject or refute any point of view that does not support this idea, and regards himself as a dedicated advocate of absolute freedom of trade, and how logical it is for him to think and write in this state of mind!
With such preconceived notions, how can he be expected to evaluate people and things, history and statistics, and political measures and the framers of these measures, not on the basis that they are consistent with or contradict his fundamental principles, but by other criteria?
As can be seen from stewart's passage quoted earlier, Adam Smith's whole system is confined to a small scale. He argues that state power can and should not do anything other than enforce the law and tax as little as possible. In his view, any politician who tries to establish manufacturing, promote shipping, expand foreign trade, use naval power to protect foreign trade, open up or occupy colonies, is a designer and will only hinder social progress. In his view, the state does not exist, it is only a collective, that is, a collective in which many individuals live together. These individuals themselves know best which professions are most beneficial to them, and they are the best at choosing for themselves the means to promote their own development.
It seems reasonable only when the principal object of investigation and study is the affected objective thing, material wealth, i.e., the exchange value of things, rather than the forces that affect them, that the argument of eliminating the power of the state from the state, elevating the status of individualism, and making it the creator of all effective forces seems to make sense. Materialism must support individualism in order to hide the growth of the great power that the individual derives from the state, the unity of the state, the national union of productive forces, and so on.
Since the state, which produces value only by the individual and incapable of creating it, must limit its scope of action and can only play a role in arousing, protecting and promoting the productive forces of the individual, a single theory of value must be created that will prevail as a national economics. According to this theory, the essence of political economy can be summed up as follows: wealth exists in the pair of goods that have exchange value; individual labor works together with natural forces and capital to produce goods with exchange value. Through the division of labour, the productive capacity of labour is enhanced; the accumulation of capital is realized through savings and production beyond consumption. The larger the total amount of capital, the finer the division of labor, and the greater the productive capacity.
Individual interests are the most effective stimulus to work and economy. The wisest way to govern the country, therefore, is not to create any obstacles to the development of private industry, but to focus on a good judicial system. And the measure of passing national legislation to induce the state to produce for itself products that can be bought cheaper from abroad is very stupid. Thus, a complete system that identifies the constituent elements of wealth, dissects the process of wealth production in detail, and thoroughly exposes the errors of the previous schools of thought is not recognized because of the absence of other systems.
Its mistakes are clear at a glance, and the system is really nothing more than a private economy about all individuals of a country or all individuals of all mankind, which forms and develops itself in its natural state, without obvious distinctions of national, national and national interests, without distinctly different political systems or levels of civilization, without war between them, without hostility. The system is nothing more than a theory of value, the theory of an individual shopkeeper or merchant, not a science, and it does not indicate how the productive capacity of an entire nation can be produced, enhanced, maintained and protected for the sake of its special interests of civilization, well-being, strength and independence.
The system considers everything from the owner's point of view. According to the system, the value of anything is wealth, and therefore the only purpose of man is to acquire it; the productive capacity is established by chance, nature, or the will of God (whatever it may be), and the state has nothing to do with it, nor can political forces intervene in the accumulation of exchange value. According to the system, where goods are cheapest, they should be bought, even if imports destroy the country's manufacturing industry. If foreign countries subsidize the export of manufactured goods, it is more beneficial, because it is cheaper to buy. In this system's view, no other class is productive except those who actually produce goods of exchange value. While the system is well aware of how the division of labor can contribute to the success of specific causes, there is a lack of awareness of the impact of the division of labor on the country as a whole. This system understands that only the individual economy can increase the capital of the state, and that it is only after the growth of capital that the trade of individuals can achieve the same proportion of growth.
However, it does not cherish the enhancement of productive capacity brought about by the establishment of domestic manufacturing, or the enhancement of foreign trade power or national power brought about by this enhancement. For this system, as long as individuals can acquire wealth, the state is indifferent to whatever it will become in the future. It pays attention only to the rent collected by the land and ignores the value of the property, and it fails to recognize that the wealth of the vast majority of countries is composed of the value of land and the value of fixed assets. It doesn't care what impact foreign trade has on property values and prices, as well as the volatility and disasters that come with it. In short, the system is the most rigorous and coherent "mercantilism", and how such a name is used within the Colbert system is indeed inexplicable, because the main tendency of the Colbert system is the "industrial system", which only considers the establishment of national industry and state trade, and does not pay attention to the temporary gain and loss of exchange value.
Still, we don't deny Adam Smith's great exploits. He was the first scholar to successfully apply analytics to political economy. With this method and his foresight, he made some of the obscure and important concepts of this science clearly visible. Before Adam Smith, there was only practice and no theory, and his writings made political economy a science possible, and the amount of material he contributed to this science was enormous, unprecedented and unprecedented.
But the uniqueness of his mind, though it has made him handy and fruitful in his analysis of the constituent elements of political economy, is also the cause of these problems: he has not considered society as a whole, he has failed to combine individual interests into a harmonious whole, he has not been willing to think too much of the state but has focused on the individual, he is eager for the freedom of action of the various producers, while ignoring the interests of the state as a whole. He was well aware of the benefits of the division of labour for each factory, but he failed to realize that the same principles could be applied effectively to all provinces and to the country as a whole.
Stewart fully agreed with him. Smith's judgment of the character characteristics of man is unusually accurate, but when one needs a view of the characteristics of humanity as a whole or of a book as a whole, one is surprised to find that his views are biased and obscure. Not only that, but he lacks the ability to correctly evaluate the personality traits of those who have been intimate with him for several years. His biographer put it this way: "If one compares his image with his own archetype from a single point of view, one will find that his image is vivid and emotical, resembling the archetype himself." But if one observes in all its aspects in all situations, his image will never show its authenticity and perfection. ”