Adam Smith Wealth Of Nations

Adam Smith was an influential economist and philosopher who is notorious for writing the guideline to capitalism, “The Wealth of Nations” in 1776. Adam Smith grew up in Kirkcaldy, Scotland and studied at Oxford University. Adam Smith was the leading figure in the development of economic theory and once know as the “father of modern economics.” He strongly valued the new middle class and admired policies that allowed the Industrial Revolution to succeed. . His theories have influenced the way economic markets all over the world have functioned for plenty of years. “The Wealth of Nations” is the starting point of the modern study of the political economy. Smith is currently the first to present a comprehensive and systematic theory of economics.

He was a strong believer on the free market where he came up with the ideal of the invisible hand. The invisible hand was the tendency of free markets to regulate themselves by means of competition, supply and demand, and self interest. First, self interest is acting in the way that is most personally beneficial and it is the motivator of economic activity. The invisible hand symbolizes this idea of self interest as it increased production because the amount of competition in the country went up. In fact in his book “The Wealth of Nations he claimed "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." which shows that ideal of self interest to receive that personal gain. The system of the invisible hand is most often assumed to work is the free market. Adam Smith assumed that consumers choose for the lowest price, and that entrepreneurs choose for the highest rate of profit. He asserted that by thus making their excess or insufficient demand known through market prices, consumers "directed" entrepreneurs investment money to the most profitable

Referring back to his book “The Wealth of Nations”, Smith argued that the government should intervene as little as possible into business. Smith saw that when wealthy corporations, as commonly happened, wrested tax incentives, monopolies, and other unfair advantages from governments, this impeded free trade and competition. He seemed to consistently attack the idea of governmental intervention because he deemed it negative to our economy.Laissez-faire works minimize the role of government intervention and taxation in the free markets, and the idea that an "invisible hand" guides supply and demand are among the key ideas Smith's writing is responsible for promoting. He knew the state though was important because of the several infrastructures he brought to the country. He believed the economy depending on the individual and was run by self interests so it was only applicable in times of