Adam Smith

Only available on StudyMode
  • Download(s) : 25
  • Published : March 22, 2013
Open Document
Text Preview
Adam Smith

When you think of capitalism you should be familiar with Adam Smith. Adam Smith is considered the founding fathers of capitalism. Even though Smith never referred to the term Capitalism he described it as “stock” and “profit” is an economic system based on private ownership of capital goods and the creation of goods and services for profit

Capitalism works perfectly with human nature or, more specifically greed. Greed is rewarded with large amounts of money and people working hard to furnish their own needs fuel the entire economy. In addition, greed causes competition, which is an essential part of advancing the human race. The power of competition is shown during wars, where huge technological achievements are made. People are motivated to work hard to earn more money. Yes it’s not always the case but usually if you work harder the greater the reward.

Capitalism gives motivation for people to get a good education to earn money and have a good life. With a communist view everyone earns the same even though for example a doctor requires more education and has more stress on the job then a construction worker.

Capitalism allows the economy to grow exponentially It is a basic fact of economics that the more money a business makes, the more it can invest in production, and the more money it invests, the more money it makes. Yes the earth has limited amount of resources, so this huge production will one day have to stop. However, the more the business invests the more innovated they will be. For example when oil begins to run out we will see price increases, which will mean the greater the reward and make it possible to search for new oil fields. Sites that were too expensive to drill earlier now have become available. With that innovation we are finding new ways to harvest energy like wind, solar and nuclear power.

We live in a place where we have a world-class education system and we take it for granted, as we don’t know how fortunate we...
tracking img