Response to Biography
Smith’s theory of “Moral Sentiments” suggests that morals come from the choices that people take in everyday life. While this may be true, it is up for discussion, since there are circumstances when people choose to do certain thing due to coercion or by being forced by certain circumstances. The fact that Smith suggests punishment for resentment does not give an incentive for a group of people to be interested in that particular area of work. Smith’s theory forces the worker in an economy to abide by certain rules. In my opinion for a worker to give the best to the work they are doing, they should be given something good that they look forward to upon a successful completion of the task.
The “Free Market Theory” suggests that this market is guided by self-interest. Smith’s claim of an invisible hand being a guiding factor in the sharing of scarce resources is fairly true. This is because the free market is guided by the principle of “how much you got” that is to say that the degree of one’s wealth guides one’s activities in the market (Smith, 2002).
Karl Marx’s general theory that “people are ever learning, ever evolving” is a true statement in all angles. The economy is an ever He also alleges, “The worker turns out to be poorer the more wealth he creates, the more his production becomes powerful and broad”. This is a true statement since when supply is increased, the work of the worker is lessened, and that means that the worker is now dispensable. The more any worker produces, the lesser important, he is in his place of work since even without his services the firm is able to continue its operations with the stock already produced (Marx, 1844).
However, Marx’s view that capitalism has to be rid in order for some good to be realized is farfetched. In any economy, the profit has to be made in order for growth to be realized. Nonetheless, I agree with him when he says that the workers have to be paid well, so that the process of production can run smoothly, the workers deserve some kind of motivation that will see their volume of output increase therefore enabling the company to make a profit.
Alan Greenspan had a way of dealing with the problems and mishaps in the economy. In my opinion, his calculated steps are the best when it comes to solving the problems in the economy. However, I feel that he was wrong to stick to the notion that the market would “correct itself” just because it had worked out for him at one time. The economy is a term that is growing both in its virtual and literal sense. Countries put a lot of focus on their economies now than before. It is therefore vital that Greenspan should have learned from experience and put in some new ways of fixing the economy instead of relying on the past.
Moreover, the fact that Greenspan did not leave no blueprints for his successors to follow or base their structures and model in is unforgivable. As an institution, one has to have all the data involving the institution so that activities can run well at any given time, even when the person in charge is absent (Greenspan, 2007).
In conclusion, the three economists cum philosophers were right in their assessment and opinions about the economy, but I cannot help but to say that they were wrong in not involving incentives to motivate those involved in the process of building of the economy. One thing is for sure, for people and hence the economy to be a success each worker should work in the department, they like and be motivated so that work can be done well (Dixit, 2008).
Dixit, A. K., & Nalebuff, B. (2008). The art of strategy: A game theorist’s guide to success in business & life. New York: W.W. Norton & Co.
Greenspan, A. (2007). The age of turbulence: adventures in a new world. New York: Penguin Press.
Marx, K. (1844). Wage-labour and capital & Value, price, and profit. New York: International Publishers.
Smith, A., & Haakonssen, K. (2002). The theory of moral sentiments. Cambridge, U.K.: Cambridge University Press.