Toynbee - Concepts

If we look for the fundamental ideas of Adam Smith, those which distinguish him most clearly
from earlier writers, we are first struck by his cosmopolitanism. He was the precursor of Cobden
in his belief that commerce is not of one nation, but that all the nations of the world should be
considered as one great community.
To understand the origin of the medieval system we must go back to a time when the State was
still conceived of as a religious institution with ends that embraced the whole of human life. In
an age when it was deemed the duty of the State to watch over the individual citizen in all his
relations, and provide not only for his protection from force and fraud, but for his eternal
welfare, it was but natural that it should attempt to insure a legal rate of interest, fair wages,
honest wares. Things of vital importance to man's life were not to be left to chance or selfinterest to settle
Equally prominent in Adam Smith is his individualism, his complete and unhesitating
trust in individual self-interest. He was the first to appeal to self-interest as a great bond of
society. As a keen observer, he could point to certain facts, which seemed to bear out his creed.
If we once grant the principle of the division of labour, then it follows that one man can live
only by finding out what other men want; it is on this fact, for instance, that the food supply of
London depends. This is the basis of the doctrine of laisser faire. It implies competition, which
would result, so Adam Smith believed, in men's wants being supplied at a minimum of cost. In
upholding competition he was radically opposed to the older writers, who thought it a hateful
thing; but his conclusion was quite true. Again it implies the best possible distribution of
industry; for
under a system of free competition, every man will carry on his trade in the locality most
suitable for it.
The prosperity of one country was thought to be incompatible with that of another. If
one profited by trade, it seemed to do so at the expense of its neighbours. This theory was the
foundation of the mercantile system. It had its origin in the spirit of Nationalism - the idea of
self-sustained and complete national life - which came in with the Renaissance and the
Reformation.