Adam Smith

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Adam Smith had some particular views that helped shape the economy today. He believed in an environment with free competition that functioned in unity with the common natural laws. All of Smith’s work in the “Wealth of Nations” became an ideal lead for the economic world hundreds of years ago. It is still today looked at by numerous scholars and taught by many. Even though many people believe that Smith thought that no government was the best government, however he did have a few areas where he believed there should be government intervention. Smith believed that the government should not intervene with the economy, but he had a few exceptions. One of which is that he thought the government should be in charge of building public infrastructures, such as roads and bridges. The building of public works is something that Smith believed the government should do. This is because it is not worth a single individual’s time to create something for so many people. He did believe however, that the users of such public works should pay for their use. When the Economy is hurting, it is because of Market Failure. Market Failure is “a situation where free markets fail to allocate resources efficiently” (Economics Online, 1). According to the textbook “ Principles of …show more content…

Generally no one can be excluded form enjoying his or her benefits. The classic example is national defense”(262, Principles of Economics). Public goods are a source of market failure because of private producers that will not want to produce everything for all members of society. This is because they will not be able to charge people for the goods. Public goods are a specific market failure that justifies state intervention. Since private producers won’t make public goods, someone else needs to. “A completely laissez-faire market system will not produce everything that all members of a society might want” (263, Principles of

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