Tommy Jones begged, pleaded, and hoped beyond hope for that new touch screen phone that would immediately move him up the social ranks at his school. His wish was granted on Christmas morning. He was rewarded with that sleek, black phone with 4G capabilities. Two months later the next phone in that series is out, an exact clone of the orginal with the most moderate changes, and suddenly Tommy’s phone is obsolete. There was no great improvement when compared to the old model, no; the corporation knows that it will sell, no matter how small the improvement. This model of constant obsolescence has become the norm in the economy today; companies reap profits with mediocre products, completely uncaring of the consumers. To put the economy back in the hands of the consumers, a system of deregulation must be enacted to allow the marketplace to be run once again by consumer interest.
The power of reasoning allows limitless inquiry into the nature of all things. Adam Smith an “enlightened” thinker utilizes reasoning to examine the wealth of nations, but in acting on this reasoning is he forcing his own sentiments into his argument, or is the reasoning creating the sentiments? Smith offers an exposition for his vision of a laissez faire economy, that is, capitalism in the modern sense. In a wider scope, Smith's account reveals his views on the nature of the human condition, and not a single theme is surveyed without an observation being made upon human tendencies and decisions. Arguably, these observations are shaped by his own sentiments.
The pivotal second chapter of Adam Smith's Wealth of Nations, "Of the Principle which gives occasion to the Division of Labour," opens with the oft-cited claim that the foundation of modern political economy is the human "propensity to truck, barter, and exchange one thing for another."1 This formulation plays both an analytical and normative role. It offers an anthropological microfoundation for Smith's understanding of how modern commercial societies function as social organizations, which, in turn, provide a venue for the expression and operation of these human proclivities. Together with the equally famous concept of the invisible hand, this sentence defines the central axis of a new science of political economy designed to come to terms with the emergence of a novel object of investigation: economic production and exchange as a distinct, separate, independent sphere of human action. Moreover, it is this domain, the source of wealth, which had become the main organizational principle of modern societies, displacing the once-ascendant positions of theology, morality, and political philosophy.
Adam Smith was an economist who lived in the 1700s. He summarized his view of how his market run economy worked in The Wealth of Nations, published in 1776. Among other things, he addresses two major facets of this economic system, the first being how the market is driven on the level of individual people, known now as “micro order.” He believed that individuals in will always try to make as much profit as possible, regardless of the people around them. His solution to this greedy self-interest was competition, one of the most important factors to his system. Through competition, greedy self-interested people confronted with other, equally greedy and self-interested people. This would force each person in the system to meet the prices and quality of the others, ensuring only the cheapest and best quality goods and services are successful. Smith also pioneered what he called “The Invisible Hand.” The basis of this idea being that the market will always align with the wants of society. As public interest in one area goes up, so will the quality due to the increase in profit to that are...
Adam smith believed that one of the most powerful forces promoting economic progress was self-interest directed by market prices. His invisible hand theory suggested that market prices organized the actions of self-interested individuals and directs them toward activities that promote the general welfare. From his book, The Wealth of Nations, he states "Every individual is continually exerting himself to find out the most advantageous employment for whatever income he can command. It is his own advantage, indeed, and not that of the society which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society...He intends only his own gain, and he is in this, as in many other places, led by an invisible hand to promote an end which was not part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it"(Lowe).
Adam Smith is widely regarded as the father of modern economics and one of the greatest economists throughout the course of history. He is mainly famous for a two books that he wrote, these two books are considered thee base and infrastructure of the world of economics. The two books he wrote were, “The Theory of Moral Sentimental” and “The Wealth of Nations”. But although Adam Smith was such a great economic philosopher, he wasn’t a very good foreteller or future predictor. The economic scenario now is very different from the economic landscape of the 1700’s. Giant super-corporations can now govern the flow of the market, unlike Smith’s time’s. Even though elements of Smith’s ideas have changed over time, some of his beliefs remain important factors in economics to this day. One of those truly unique philosophies is the “Invisible Hand”.
Adam Smith advocated a truncated state, limited in its functions to defending its citizens against foreign and internal aggression, and creating and maintaining certain necessary public works and institutions "which it can never be in the interest of any small number of individuals to maintain" because the profit would not repay the expense.8 Of course, the inclusion of this "public works" category of permissible state intrusions nullifies the claim that Smith was a laissez-faire purist, or a consistent advocate of natural harmony of interests. But its inclusion was a harbinger of things to come, and that is its greatest significance.
The term “mercantile system”, coined by Adam Smith, refers to a system of political economy that seeks to enrich a country by decreasing imports and increasing exports. From the 16th to 18th centuries this was the prevailing way of thinking, however in the 19th and early 20th centuries a more laissez-faire approach was taken that served to benefit merchants and producers.
Adam Smith’s The Wealth of Nations - The Natural Order is Driven by Man’s Self-interest
Adam Smith, a Scottish philosopher is best known as the author of one of the most, well known books ever written. He is most commonly known as the “Father of Economics.” Smith contributed to the development of Modern Economics, created the invisible hand theory, which is an invisible force that is used to guide the free market and capitalist system. Ultimately, this is aided by “says that an individual's self-interest is ultimately economically beneficial to society as a whole” (ecocommerce101). Smith contributions have changed the old way of thinking that mercantilism that stated the only way to create wealth was to hoard gold and other commodities and place tariffs on other nations, in disregard for Smiths new free trade principle. Smith not only changed the way of thinking in regards to trading he helped create a world where free trade and capitalism has flourished.