An Inquiry Into The Nature And Causes Of The Wealth Of Nations Adam Smith

693 words - 3 pages

In 1776, Adam Smith completed and published “An Inquiry into the Nature and Causes of the Wealth of Nations”, more commonly referred to as simply “The Wealth of Nations”. In this document, Smith analyzed wages, labor, trade, population, rents, and money supply (Andrea, 151). Because of his work, Smith is known as the founder of the academic study of economics and the father of capitalism. The kind of economy Smith envisioned and described in “The Wealth of Nations” resembles capitalism, as well as promoted a free market. Smith also spends a great deal of time arguing against mercantilism, which was largely popular at the time. Throughout Smith’s work, he talks about self-interest, embodying the Enlightenment obsession with human nature and progress. All in all, Smith helped shape the modern views on economics today.
Smith says in his explanation of “The Wealth of Nations” that self-interest is an important component of economics. He argued that with private individuals owing business instead of the government, an economy would gain the greatest financial reward and maximize the economic well-being of a society (“Invisible hand”). Through his series of explanations and ties to self-interest, we are introduced to a view of capitalism. He believed that private individuals should control most of the economy. Within his view on capitalism, we are introduced to Smiths promotion of a limited government. He believed that the people should hold more power than the government. This view, of course, fits in with his policies on self-interest. Smith also envisioned a world with a free market. He explained that governments should keep taxes low and allow free trade across borders by eliminating tariffs (Beattie).
Smiths document “The Wealth of Nations” is largely a refutation of mercantilism. Mercantilism, popular in the sixteenth to eighteenth centuries, was the assumption that the wealth of a nation was based on how much precious metal, such as gold or silver, it possessed. Also, a country would limit the amount of imported goods, and maximize exports. (Beattie) In simple terms, a country would try to sell their goods to other countries while they bought nothing in return. Smith argued against these tariffs enforced by mercantilist views, and instead promoted that the wealth of a nation was based on its annual labor (“Grad Student...

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