Adam Smith Wealth Of Nations

Adam Smith expanded his ideas upon the already existing laissez-faire (free trade) ideology. Laissez-faire, a product of the Enlightenment, was conceived to free the commerce of government al restrictions. This doctrine opposes state interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights. Thus, markets become more efficient and society becomes more prosperous when governments “let it be” (deregulation).

In his 1776 work entitled “Wealth of Nations,” Adam Smith rejected the interference of government in business because tariffs hampered the growth of world trade. Given that societies should run on liberty, so should the economy. Before proceeding to the commentary of Smith’s theory, it

Man acquires riches through trade, which means that each action taken will always imply a reciprocation; Human nature demands exchange because man is, essentially, a self-serving being. To Smith, this is an explanation of the origins of money – money is a trading item of payment (it used to be precious rocks). This is, above all, a natural law and it should not be interfered by the government. If this is, indeed a natural law, he argues, the government should let society run itself and be at the mercy of the “invisible hand” because all of the outcomes will be solved “naturally”. Interestingly, Smith’s deism gives him faith that nature possessed an inherent order. He describes humanity's role in this natural order as similar to that of an audience in an opera house, in which a spectacle unfolds and is beheld. He believed that humans are rational creatures, but prone to weakness and flaws. Then, our reason imposes certain flaws into the “machine” of human society, disturbing the natural harmony that prevails in nature. This ontological perspective is important because it determined Smith’s entire view on economy. By believing that society could regulate itself as if it were a spectacle, so could the economy; the freedom to let thing occur as they will is the central aim of his

Smith is certain this will work because a self-regulating market will always seek to offer what the public demands – it will, therefore, satisfy itself. Smith exemplified with the English Corn Laws: the state should not interfere in the prices, otherwise people will reject it for it is not in their best interest and it would lead to a monopoly over the domestic market and drive the prices up, which would dive society into poverty. According to Smith, it was more beneficial to import than to struggle to produce certain goods at home - cooperation through international trade would eventually lead to