History

The article is basically validating capitalism by showing that it contains some socialist elements which many critics of capitalism did not appreciate. Capitalism has been resisted by a section of economists on the belief that promotion of individual interest as proposed by capitalism would hurt the communal good. However, Smith puts it clearly and says that individuals involuntarily promote communal wellbeing in the process of promoting their own individual good. In this article, Smith shows that promoting ones own good is rational and is by default. He thus sees no reason to have a government interfering by showing people how to employ their capital for their benefit and that of the community.

In the same length, he is against protectionist government polices whereby he says that monopoly should not be given to any industry in the domestic market to produce and supply in the same market. To him, a competitive market allows without interference is more effective in promoting public interests than a regulated one. In essence, promoting ones individual good is more beneficial to the community or the domestic market rather seeking to promote the good of the market itself. For instance he chooses a very relevant and simple example of a tailor and shoemaker a shoemaker seeking to have clothes for his own use employs a tailor to do while the tailor seeks the services of a shoemaker to obtain shoes.

The analysis used by Smith differs to some extent with the modern capitalist market. He makes his argument about the necessity to have free market with minimal interference from the government using microeconomic units at the household level rather than the macroeconomics elements. Nevertheless, he scantly mentions this when discouraging monopoly of domestic industries through protection by government. He talks of shoemakers and tailors while in the modern world, there are shoe making factories and clothes and garments industry. This shows that at the writing of this paper, industrialization had not taken place fully hence the cottage industries he uses as examples. By saying that an individual would rather prefer to buy what would cost him more to make than buying, he is referring to what in the modern economics is called comparative advantage in international trade. This is applicable in the sense that countries that are better placed in agricultural production maximize on that while those endowed with natural resources such as oil prefer to relatively ignore agriculture and maximize on producing such minerals where they sell the same to other countries or exchange it for agricultural products for those countries producing surplus. This is what Smith addressed as the case of the shoemaker and the tailor.

The article is in aimed at validating capitalism which does not seem obvious from the fist few sentences. In fact, the paper contains no clearly stated thesis that informs the reader the purpose of writing the paper and what to expect by reading it. The message is also not very obvious in the first few sentences as he uses very complex language and long sentences that have the possibility of confusing the audience and even losing meaning. Ironically, the topic he is discussing is pretty simple but the very complex language he uses complicates the problem more so laymen. However, he succeeded in covering for the complex language by using very simplified examples of the tailor and shoemaker towards the end of the paper. This is actually tempts the reader to reread the article again in realization that the topic being addressed is simple so as to make sure that there was nothing worth noticing in the paper that was missed. While this may seem to be a clever trick, the paper should start on a high note by connecting the audience to the topic to arouse interest. Fortunately, the article is short and delivers the message though that might not be obvious to a layman until the examples are read out.