“The Wealth of Nations”
Adam’s Smith published The Wealth of Nations in 1776, which has been named one of the greatest works in the Political Economy. After nine years of extensive observations and personal experience, Smith wrote The Wealth of Nations that simply attacked government intervention in the economy. The word “Wealth” comes from “well- being”. In his book, Smith emphasizes material of well- being. The book also describes that government should not attempt to control or direct economic activity. Smith’s arguments are in terms of both economic efficiency and justice. He also believed people act from their self-interest because of economic situations, which he felt was appropriate. Smith soon discovered that self-seeking individuals were “led by and invisible hand” that caused unintentionally acts that may hurt or help benefit society.
Smith’s attack was centered towards “Mercantilism”, which was used during the 18th century that controlled exporting and importing. The object of each nations goal was to increase exports to its colonies and other nations, while limiting imports. By doing this you would end up with a “favorable balance of trade”. If a nation exported more that it imported, the difference was acquired in gold or silver. The Mercantilism nations believed that the more gold or silver they received, the more wealth they possessed. This is one of the main conflicts that Smith can across. This policy was silly and limited the potential for what they called “real wealth”. His theory later developed into “the annual produce of the land and labor of the society”.
Europeans mercantilism trusted monopolies designed to benefit specific manufacturers and merchants. Unfortunately, the system caused inflammation in prices, hindered economic growth, limited trade, and kept large amounts of people deprived of money. The argument Smith arises was that a free- market trade would produce true national wealth, leading to all social classes equal....
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