Adam Smith is undoubtedly one of the most celebrated scholars of all time since his revolutionary theories on trade changed the way people engaged in commerce and ultimately the role of government in regulating trade within and without. Adam Smith was infuriated by the mercantile policies that sought to promote the accumulation of gold and silver and which emphasized strict government control on trade and the flow of resources and labor. In addition he did not view agriculture as the only means for society to satisfy its means and in his view such singular thoughts limited growth of all sectors.
We will write a custom essay sample
on Adam Smith or any similar
topic specifically for you
Smith believed in a system of natural liberty whose end he believed would be effective trade and significant expansion of trade through growth of sectors. He believed that human beings should be allowed to pursue their individual interest since in his own opinion this personal interest always ends up benefiting the whole of society. This system also has the capacity to correct imbalances that might result out of free trade. This is because a reduction in the supply of a commodity would result into increased demand for that commodity resulting into an increased cost of the commodity leading to increased production of the same in order to reap the increased profit.
This would in turn lead to an increase in competition among the suppliers lowering the price of the commodity. This competition among traders prevents monopolistic behavior that would lead to exploitation of consumers. Smith explained that for great productivity to be achieved, self interest would lead to division of labor giving rise to specialization to particular tasks. This in turn leads to great skill in the specialized tasks, saving of important time and much needed innovations. Smith felt that wealth of nations was influenced by the amount of trade that existed between the inhabitants of towns and those in farms.
He saw it as being vital for such trade to exist to provide market for both their commodities. On those who felt that lack of government interference might lead some to other countries wherelabor is cheaper, he felt that they would be stopped from doing so due to their nationalistic feelings and this will be ultimately for the good of the countries.
Page 2 Adam Smith Essay
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, vol. 39. Chicago,Ill.: Encyclopaedia Britannica, Inc., 195See More on Кeduction, Ыystem