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Laissez Faire in The Wealth of Nations by Adam Smith

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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phone in that series is out, an exact clone of the orginal with the most moderate changes, and suddenly Tommy’s phone is obsolete.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.

Adam Smith theorized that the economy could be run entirely by consumer interest in his book The Wealth of Nations. Smith has become labeled by many as “the father of modern economics,” however his policy is quite simple, there should be a hands off policy by the government. This means no government interference so that the marketplace will involve only private businesses and consumers. In this way the businesses will be dependent upon the consumers and will be forced to appeal to them by offering incentive in the form of competitive prices or a better product to beat their competition. In this type of economy consumers contain all the power, businesses pass or fail by their own merit and quality. Since businesses are now completely dependent upon the customers, these businesses now have incentive to offer high quality products at the lower prices. It is...

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...to short sightedness and greed. I believe, however, that these crashes can be avoided so long as the citizens do not let greed control them. My solution is to have an educated and informed population before allowing the consumers total control of the marketplace. While the CEOs profit of the hardships and shortsightedness of many, we, as a society, must take control. Only when the masses are able to make educated decisions can we ever have the possibility to prosper.

Works Cited

"Chapter 24: Business." What Citizens Need to Know About Government. 2009: n.pag. SIRS

Interactive Citizenship. Web. 24 Mar. 2014.

Mallaby, Sebastian. "The place of government: setting the terms to promote competition." Policy

Review (2003): 21+. General OneFile. Web. 30 Mar. 2014.

Hodak, Marc. “Adam Smith’s Folly.” Forbes.com. Forbes, 25 Nov. 2007. Web. 30 Mar. 2014
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