Outline of the article:
1. The ways to organize the society.
In this chapter, the author firstly presented us an eternal trade-off for human being, the trade-off between self-centered-ness and cooperation: on the one hand, human beings are self-centered so make sure the maximum of individual share of interests; on the other hand, under stringent environment, people need to secure their own existence by cooperating with each other. Hence, gradually, human society spawned three ways to balance this trade-off:
i. Organizing the society around tradition, handing down the tasks according to custom and usage.
ii. Using the whip of authoritarian rule to see that its tasks get done.
iii. Market System: an astonishing arrangement in which society assured its own continuance by allowing each individual to do exactly as he saw fit.
2. Why economics was totally unnecessary in the past
By illustrating stories of the bygone worlds, the author argued the reason why economics had not yet appeared in the past for 2 reasons:
i. The idea of the propriety of a system organized on the basis of personal gain has not yet taken root.
ii. A separate, self-contained economic world has not yet lifted from its social context.
Then he explained these two reasons by declaring:
i. The idea of gain is a relatively modern one, and the social sanction of gain is an even more modern and restricted development.
ii. Markets, as a mechanism for sustaining and maintaining an entire society, have not been generally realized by the public in medieval world：The salability of land, capital, and labor.
3. The born of market system:
After illustrating the revolution inspired by Adam Smith in France and England, the author summarized the forces could have been sufficiently powerful to smash a comfortable and established world and institute in its place this new unwanted society:
i. There was the gradual emergence of national political units in Europe
ii. The slow decay of the religious spirit under the impact of the skeptical, inquiring, humanist views of the Italian Renaissance.
iii. The material changes that eventually make the market system possible.
iv. A rise in scientific curiosity.
4. The idea needed a philosophy:
*The human animal, it is repeatedly said, is distinguished above all by his self-consciousness. Hence every age breed its philosophers, apologists, critics and reformers: the importance of the wealth of nation by Adam Smith
What’s interesting: The most interesting part in this article is the argument that the idea of gain is a modern one. For a long time, I believe that the pursuit of self-interests is embed in the instinct of all human. However, as argued by that author, it seems that people in the past don’t have these kinds of ideas. WHY? From my perspective, this vagary existed for two reasons: the lack of education and the absence of incentives. Without education, farmers, worker, handicraftsman have no idea what to do with extra money, all they know, or they could know, is to maintain their pure subsistence; without incentive, since they were all working for the lords and the products they produced doesn’t even belong to themselves, people, especially farmers, have no incentives to expand their production since they gain noting from extra efforts.
Questions:
Suppose that, a modern economist returns to the medieval world with a time machine. Will his knowledge of market system promote the transformation of society? Or will he find himself totally unnecessary and thus died miserably?
Annotation: The most remarkable element connecting the courses in this article is its illustration of the development of economic society. Here, the author illustrated why economists, or economics, are totally unnecessary in the past, the born of market system, and the vary linkage between them, presenting us a whole picture of how the world has evolved to its modern style.
Great! Keep up the good work!
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