In the wealth of nations (1776), Scottish economist A

[JbhB682]

Source : GMATPrep

In the wealth of nations (1776), Scottish economist Adam Smith asserted that the propensity of “truck, barter and exchange” was both the foundation of commerce and a given quality of human nature, driven by individual desire. Smith’s view that self-interest dominated the business that emerged in early modern (sixteenth- and seventeenth century) England has had tremendous effects on how such relations have been perceived. Today it is typically assumed, for instance, that the development of business relations weakened the spirit of cooperation that characterized village communities and encouraged a spirit of individualism and self-betterment that ran counter to community interest.

However, such a view fails to account for the language that people in early modern England used to articulate their understanding of business relations, language that stressed credit, trust, obligations, and contracts, rather than self-interest. Throughout this period, most business transactions were conducted on credit – of plain dealing and of the keeping of promises – dominated the way in which business relations were conceived. Individual profit and solvency were important, but neither could be achieved without the trust and direct cooperation of one’s neighbours. As a result, buying and selling, far from breaking up communities, actually created numerous bonds that held villages together.

It can be inferred that the author of the passage believes that economic historians whose views have been influenced by Adam Smith have failed to examine which of the following?

(a) The power of business relations to shape moral values and beliefs
(b) The significance of human nature in shaping economic developments and social structure
(c) The importance of village communities in determining the economic well-being of larger society
(d) The consequence of individual communities of changes in a country’s economic structure
(e) The actual language used to by people in village communities to refer to their business dealings

The OA is E

Could you confirm

a) if i can re-phrase the q as : economists who are pro Adam Smith economics, have failed to examine one thing ...what is that one thing ?

b) I was looking at the blue for the response to this question (as i believe the blue is the only place that talks negatively about Adam Smith economics) but i could not find anything in the blue for me to arrive at option E

[Sage Pearce-Higgins]

a) No, you can't rephrase the question to be that. After all, there could be more than one thing that these economists have failed to examine. We have to remember that it's an inference question, i.e. we're looking for something that we can deduce based on what is stated in the passage.

b) There's a good deal of "matching" to be done in this problem. You need to connect 'economic historians whose views have been influenced by Adam Smith' to 'it is typically assumed', and 'failed to examine' to 'fails to account'. Both your blue and your red highlighted sections are significant.

The tricky bit of this logic is: Some economists believe X. However, belief X is inconsistent with fact Y. Therefore these economists can't have examined fact Y.

[JbhB682]

Hi Sage - you mention the logic is :

Some economists believe X. However, belief X is inconsistent with fact Y. Therefore these economists can't have examined fact Y.

I presume you mean, the X is the blue and the Y is the red ?

Hence economists cant have examined fact Y (Red) -- which is option E

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But the economists in the question dont believe in X ... the economists in the question believe fact Y

[Sage Pearce-Higgins]

Yes, in my analysis, X is the blue part and the Y is the red.

But the economists in the question dont believe in X ... the economists in the question believe fact Y

What's your reasoning for this? If something is a fact, then questions of belief aren't relevant.

Let me try to show my logic. When I read the question (...the author of the passage believes that economic historians whose views have been influenced by Adam Smith... ) I though 'who are these economic historians?'. Clearly they are not the author of the passage. I looked back to the passage and found the phrase Today it is typically assumed. Who is doing this assuming? From the context, these are some people influenced by Adam Smith, so these must be the economic historians referred to in the question.

[JbhB682]

Thanks Sage --- i can see why E is right but i can't see why A is wrong

It was b/w A and E and i could not eliminate A entirely ....

Doesn't the following sentence give credence to the power of business relations shaping moral values and beliefs (Which were overlooked)

Throughout this period, most business transactions were conducted on credit – of plain dealing and of the keeping of promises – dominated the way in which business relations were conceived.

[Sage Pearce-Higgins]

I can see two potential problems with that reasoning. First, in your bold quote it looks like 'moral values and beliefs' are shaping 'business relations', not the other way round.

Second, answer A is a very wide-ranging claim. Although there's some evidence to support the idea that these economists haven't investigated the relationship between 'moral values and beliefs' and 'business relations' in early modern England, we have no reason to believe that they haven't engaged with the issue at all. Remember that inferences, to be safe, are much more likely to be conservative, small claims than bold, wide-ranging ones.

[JbhB682]

The author of the passage refers to “truck, barter and exchange” most likely in order to

(A) lend authority to the argument that commerce is characterized by self-interest
(B) identify activities that embody essential qualities of human relationships
(C) indicate the terms Adam Smith used to define business relations
(D) represent the everyday speech used in village communities in England
(E) introduces key terms used in credit transactions in early England

OA : C

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I however eliminated C because, it never is implied that Adam Smith uses these terms to define business relations specifically. It's quite possible he used these terms to perhaps describe what a "Transaction" between two individuals looks like ?

[Sage Pearce-Higgins]

I would argue that 'transaction' is more-or-less the same as 'business relation' or 'commerce'. Remember that, on verbal, we have to take a reasonable interpretation of the words that we're given. Unlike mathematical symbols, words don't have perfect definitions, so that there's always the possibility of grey areas of meaning.

Also, the question clearly says 'most likely', indicating that we might need to compare answer choices and choose the best fit (but not a perfect one).

[Gui]

The author of the passage refers to “truck, barter and exchange” most likely in order to

(A) lend authority to the argument that commerce is characterized by self-interest
(B) identify activities that embody essential qualities of human relationships
(C) indicate the terms Adam Smith used to define business relations
(D) represent the everyday speech used in village communities in England
(E) introduces key terms used in credit transactions in early England

OA : C

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I however eliminated C because, it never is implied that Adam Smith uses these terms to define business relations specifically. It's quite possible he used these terms to perhaps describe what a "Transaction" between two individuals looks like ?

Why A is wrong? Tks!

[Sage Pearce-Higgins]

To understand why A is wrong, we need to understand the passage as a whole. The first paragraph outlines Adam Smith's position: "Smith’s view that self-interest dominated the business that emerged in early modern (sixteenth- and seventeenth century) England". However, the author disagrees with Smith in the second paragraph: "such a view fails to account for the language that people in early modern England". The author's opinion is against the argument that commerce is characterized by self-interest. Hence answer A is what I'd call an opposite trap.

[JbhB682]

Yes, in my analysis, X is the blue part and the Y is the red.

But the economists in the question dont believe in X ... the economists in the question believe fact Y

What's your reasoning for this? If something is a fact, then questions of belief aren't relevant.

Let me try to show my logic. When I read the question (...the author of the passage believes that economic historians whose views have been influenced by Adam Smith... ) I though 'who are these economic historians?'. Clearly they are not the author of the passage. I looked back to the passage and found the phrase Today it is typically assumed. Who is doing this assuming? From the context, these are some people influenced by Adam Smith, so these must be the economic historians referred to in the question.

Hi Sage - I tried re-doing this problem and i made the following assumption (incorrectly it seems like)

When i read the passage " Today it is typically assumed.... I said - Okay -- who is doing this assuming today ?
Either
a) Economic historians influenced by Adam Smith OR
b) Economic historians NOT influenced by Adam Smith.

I chose Economic historians NOT influenced by Adam Smith.

It seems strange that if Someone IS influenced by Adam Smith -- that person then believes that Adam Smith's style of economics created individualism , not community | Adam Smith's style of economics created a weakening of the co-operative spirit (all the points mentioned in the blue above)

It would be Adam's Smith critics who believed all the negative points mentioned in the blue

[Sage Pearce-Higgins]

Code: Select All Code

It seems strange that if Someone IS influenced by Adam Smith -- that person then believes that Adam Smith's style of economics created individualism , not community

No. It's quite possible to be influenced by Adam Smith - i.e. agree with his understanding of economic history - but acknowledge that his theory had some negative consequences. In any case, your division of points into 'negative' and 'positive' is primitive: any complicated situation will create a mixture of results that cannot be so easily categorized.