Vera Smith on Central Banking and the Scottish System

Vera Smith, in her 1936 book, The Rationale of Central Banking and the Free Banking Alternative, not only discussed the historical and intellectual evolution of the idea of central banking in the economies of England, USA, France, and Germany, she also explored the alternatives. In her book, she proposes the idea of free banking as an alternative to the increasing centralization in banking in those countries. Furthermore, Smith highlighted the case of the Scottish banking system for good part of the eighteenth and nineteenth centuries (1716-1845) as an actual historical example of free banking:

John Calhoun on Unchecked Majorities

The most recognizable element of John Calhoun’s political theory is its anti-majoritarianism. But he did not simply articulate the obvious possibility of a majority dominating a minority. He also explained how unchecked majority rule disfigures political life.

Adam Smith on money as an instrument of commerce as well as a measure of value

The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Smith opens his discussion of the mercantile system, which takes up most of Book IV of Wealth of Nations, with the following paragraph:

Adam Smith on Religion and the Rules of Morality

The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). In The Theory of Moral Sentiments, Smith discusses the development of moral rules. In Smith’s account, moral rules result from a “habitual reverence” (III.5.2), a deep feeling of respect learned and strengthened over time by seeing and feeling the socially appropriate moral reactions to behaviour and misbehaviour in a given society.

Vera Smith on How the Civil War Changed the US Banking System

Vera Smith wrote her doctoral dissertation under the supervision of F.A. Hayek, at the London School of Economics, and that became the basis for her 1936 book on the rationale for central banking and the free banking alternative. Her work describes the historical and intellectual landmarks along the paths by which the banking systems of major economies (England, the USA, France, and Germany) evolved from the late eighteenth century on into the direction of greater centralization. She also discusses the path not taken, that is, the free banking alternative as evidenced by the Scottish experience. A common theme in her accounts of the event leading to greater centralization in finances is the relevance of fiscal necessities in order to explain that trend. A good example of that is the case of the United States during the Civil War:

Adam Smith on consumption as the only end and purpose of production

The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). In Book IV of Wealth of Nations, Smith explores two different systems of political economy, beginning with the mercantile system. Mercantilism was the reigning political ideology of Smith’s day, and the one against which he argues in this book. (When Smith refers to “the very violent attack I had made upon the whole commercial system of Great Britain” (26 October 1780, Letter from Adam Smith to Andreas Holt), the attack is Wealth of Nations and the commercial system in question is mercantilism.) In Smith’s conclusion of the Book IV discussion of the mercantile system, he explains why it is so wrongheaded:

Armen Alchian on Perpetuities

The focus of Armen Alchian’s intellectual contribution to the understanding of a free society is his studies on basic price theory. However, the price mechanism does not operate in a vacuum and an insistence on the relevance of property rights for the understanding of how the market operates was his great contribution for the economic way of thinking. Once accepted that the institutional setting determines the possibilities for efficient allocation of resources by the economic agents as they react to market signals, it becomes clear that certain institutional arrangements are more conductive than others to more efficient outcomes. Take for instance his discussion about perpetuities:

Aristotle and Virtue Ethics

Aristotle, besides being one of the most influential ethical theorists historically, is also the main historical source of what is today called “virtue ethics.” This passage comes from his discussion of the relationship of virtue to human nature.

John Calhoun on Concurrent Majorities

John C. Calhoun’s theory of the concurrent majority held that compromise was the “conservative principle” of constitutional government. This did not have an ideological meaning, but simply suggested that compromise is what held a society together under constitutional forms. A society that does not act together in the spirit of mutual concession will ultimately be torn apart by partisan politics. But can such compromise be had?

Adam Ferguson on Love, Self-Interest, and Pleasure

In Part 1, Sect. 2, of An Essay on the History of Civil Society (1767), Adam Ferguson reflects on how love leads us to a sort of satisfaction which goes beyond what mere self-interested pleasures can give us:

Edmund Burke on how the Majority Oppresses the Minority

Among the problems Edmund Burke identified in the French revolutionary ideology was the belief that “the people”—more precisely, a majority of the people—were the sole and unquestionable source of political power:

Mary Wollstonecraft on Women’s Education

Mary Wollstonecraft appended a letter to Tallyrand to the beginning of her A Vindication of the Rights of Women that outlines the fundamentals of the arguments that follow in the text. In it, she provides clear reasons for her focus on the importance of women’s education.

Adam Smith on who colleges and universities ACTUALLY benefit

The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). In Book V, Chapter 1, Part 3, Article 2 of Wealth of Nations, Smith discusses education. Smith believes that, in general, education should be capable of paying most of its expenses through fees paid by students to teachers. However, since public endowments were made to many schools, Smith discusses whether or not they improve the education of Britain’s youth.

Edmund Burke on the Levelling Spirit

One of the pervasive themes of Edmund Burke’s writing and career was the dangers of a levelling spirit—the desire to destroy, rather than reform, any institutions which seem responsible for injustice. This was certainly characteristic of the French Revolutionaries, who targeted nearly every social and political institution for destruction. In his Reflections, Burke argued that such a tendency comes from a false and simplistic assessment of history, which draws basic lessons from the surface level of human experience, failing to see the deeper causes of so much human misery. The past shows us that “pride, ambition, avarice, revenge,” and other vices infect human understanding, inflame political passions, and give rise to calamities, civil strife, and a host of wrongs. Says Burke:

Buddha and his “Ten Commandments”

This passage is an excerpt from The Gospel of Buddha, a 1915 work by Paul Carus. The work as a whole, and this passage in particular, is a reflection of Carus’ goal of making Buddhism more familiar and accessible, and thus sympathetic, to a Western audience.

Adam Smith, Patriotism, and the Welfare of Our Fellow Citizens

The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). In Part VI, Section 2, Chapter 2 of The Theory of Moral Sentiments, Smith discusses the moral tendencies that underlie the organization of society. In this chapter, Smith observes that most people tend to feel warmly towards communities in which they are members and want them to succeed. People often feel both stronger sympathy and its associated feelings of closeness with the community and cooler sentiments towards neighbouring communities against which theirs might be compared. The most obvious community into which each of us falls is our country. But we also exist in communities within that country, “orders and societies”, which have their own interests and identities. The established powers and privileges of the national government and the orders and societies that fall underneath it make up the constitution of the country. Smith says that although we want to defend and promote the powers, privileges, and immunities of the orders and societies in which we are members, we must also understand that the existence and flourishing of these orders and societies depend upon the success of the country as a whole. Love for our country seems not to be related to our natural love for humanity, since we will prefer the well-being of our country to that of others even if the other country has far more people who could be made happy. Rather,

John Milton on Satan’s Reign in Hell

The poet William Blake famously argued that, in Paradise Lost, John Milton was “of the Devil’s party without knowing it.” Satan gets most of the best lines in the poem, is arguably a more exciting character than any of the heavenly occupants or newly created humans, and he had a strong appeal to the idealistic Romanticism ushered in by Blake and brought to a peak by poets like Byron and Shelly. For them, Satan’s arguments for independence and freedom held a great attraction. This passage from one of Satan’s speeches in Paradise Lost contains two of the poem’s most quoted lines, and neatly sums up the kind of bold argumentation that attracted readers like Blake.

John Calhoun on Executive Power and Constitutional Order

About a year into the presidency of John Tyler, Henry Clay proposed a constitutional amendment allowing a presidential veto to be overridden by a simple majority of both houses of Congress. Opposition to executive power was one of the most consistent themes of John Calhoun’s career, but he saw in this amendment a dangerous threat to the constitutional order. His resulting 1842 “Speech on the Veto Power” was long considered to be one of the most articulate descriptions of the character of that constitutional order. A good constitution required a broad concurrence so as to make the government, as much as practicable, one “of the whole people.”

John Adams on Religion and the Constitution

This quote is from John Adams (1734-1826), a signatory of the Declaration of Independence, one of the framers of the Constitution, and the second president of the United States of America. This quote, and especially its famous last line, expresses a sentiment widely held among the statesmen of the Founding Generation that no matter how well a constitution is constructed, It will not insure freedom and prosperity unless it is supported by a moral, virtuous population.

David Hume on the Perception of Beauty

David Hume (1711-1776) was a moral philosopher, historian, and leading member of the Scottish Enlightenment. In an essay entitled, “Of the Standard of Taste,” included at the end of Part I of the Liberty Fund collection of his essays, Hume outlines his perception-and-contemplation-driven account of judgements concerning taste and beauty:

Frederick Douglass on Religion and Slavery

In the debate over slavery leading up to the Civil War, religious arguments were presented by both proslavery and antislavery spokesmen. In some instances, the same biblical passages were used as evidence in defense of their position, as was the case with The Epistle of Paul to Philemon, as referenced here by Frederick Douglass.

John Calhoun on the Nature and Purpose of Constitutions

John Calhoun’s Disquisition on Government is one of the only theoretical treatises on government written by a prominent American statesman. In it, Calhoun offered some of his more lasting insights on the nature and purpose of constitutionalism.

John Milton’s Advice to Kings

The epic poems of John Milton (1608-1674)–Paradise Lost, Paradise Regained, and Samson Agonistes–unite erudite recountings of their biblical subjects with explorations of the complex political landscape of 17th century England. In Paradise Regained, for example, Satan’s temptations lead Jesus to this meditation on the true virtue of kings.

Adam Smith on Good Wine and Free Trade

The Scottish moral philosopher Adam Smith (1723–1790) was the author of two books, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). He is best known today for his economic arguments, especially arguments in favour of free trade between nations. In Book IV, Chapter 2 of Wealth of Nations, Smith writes:

John Calhoun on Slavery as a Positive Good

Despite possessing a penetrating mind on matters relating to liberty and constitutional government, John Calhoun’s reputation will always bear the stain of his unflinching defense of the Southern slave society. Sharing the belief, almost as ubiquitous as it was wrong-headed, that white and black could not live freely together, he subscribed to the increasingly widespread view among slaveholders that slavery in the South was a neo-feudal, beneficent institution. This paternalism came out on the Senate floor in 1837.