The Importance Of Adam Smith's Work To Economic Thought

2161 words - 9 pages

The Importance of Adam Smith's Work to Economic Thought

Adam Smith is widely regarded as the father of economics as a social science, and is perhaps best known for his work The Wealth of Nations. Throughout this work Smith states and informs towards his belief that society is not at its most productive when ruled over by rules and limitations with regards to trade, and that in order for markets to maximise prosperity, a free trade environment should be made accessible. In this essay I intend to asses the way in which many of Smiths theories taken directly form his works can be applied to past and current situations, first from an economic then social, and then a political point of view. I will also outline some of Smiths major theories on market determining factors, such as supply and demand, and the labour theory of value, with focus on how these theories can be applied to current day situations, demonstrating the strength of his works.

I believe it is first important to mention that Smith was raised in a market environment in which Mercantilism was regarded as the most positive policy with which to increase a countries wealth. This theory is based upon the idea that a countries assets are a measure of its prosperity as a nation, and so therefore was often implemented using such policies as high rates of exports, and low rates of imports. In order to ensure this low rate of imports tariffs were often imposed on goods entering the country.
Adam Smith was one of the first men to voice his opinions on this mercantile system, stating that the policies were flawed, and that assets and wealth were not good measures of a countries prosperity, and that in fact nations should strive to increase productivity using policies within a free market environment. One such suggested policy was that the division of labour, when used effectively, could maximise production without increasing the workforce. This division of labour theory stated that a workforce, when broken down and assigned separate tasks within production, could become specialised increasing production and often quality of goods. Smith also argued that this specialisation would increase the ratio of productive workers against unproductive workers, lowering costs of production as a whole. This theory has been crucial in the development of economic thought in that it has been followed closely and been adopted by many large firms within industries, and proven successful in lowering costs and increasing production.

From an economic point of view Smiths theories on the division of labour have been used to good effect within markets. As a general consensus, the division and specialisation of labour means that everything becomes cheaper than it was under mercantilism. If tariffs are imposed upon imports, part of this tariff will be passed on to the consumer upon purchase of the good. This means that a higher price is...

Find Another Essay On The Importance of Adam Smith's Work to Economic Thought

"Secular stagnation: The importance of economic growth"!

851 words - 3 pages INTRODUCTION TO MACROECONOMICS Tom Assouline 1442477 Christian Krelling Monday, November 24, 2014 !! One thing falls, everything else falls apart "Secular stagnation: The importance of economic growth"!! Economic growth is the increase in the market value of the goods and services produced by an economy over time. It is measured as the percent rate of increase in real gross domestic product, or real GDP. Of more importance is the growth of the

The Creation of Adam Essay

956 words - 4 pages red cape.The Creation of Adam is perhaps one of the most inspiring paintings ever created. This is due to the fact that God?s descend over Adam?s body, to bring life to it, is ?invoked to bring speech to our lips, light to our senses, love to our hearts, and strength to our bodies.?2 Humans are nothing without speech, light, love, or strength; humans would just be dead laying bodies without those ingredients. Therefore, humans have the tools to work out life, make the best out of it and enjoy it.

The Apocalypse of Adam

2361 words - 9 pages first conclusion ([85], 19-22a) is very simple. There is nothing new presented; Adam simply presented these revelations to Seth, who then taught his seed. The second conclusion ([85], 22b-31], however, seems quite clearly to be the work of redactor. This conclusion presupposes knowledge of a mythological structure that received no support from the text (Hedrick, 28).   Purpose of Writing According to Douglas Parrott, The Apocalypse

A Comparison of the Economic Theories of Adam Smith and Karl Marx

2467 words - 10 pages There is perhaps not a more famous ongoing dialectic argument in the field of political economy than the one between Adam Smith and Karl Marx in regards to capitalism. The two thinkers, although coming to radically different conclusions about the outcomes of the capitalist system for all parties involved, agree on a surprising number of ideas such as labor being the source of commodities’ value, as well as the fact that the division of labor

The Importance of Group Work in Education

2406 words - 10 pages The Importance of Group Work in Education When I was in high school, and one of my teachers would ask us to form groups in order to do something, I would usually roll my eyes. Ironically enough, some of the best work that I put forth and learned from was done in a group work setting. By working with my peers towards a common end, I got things done much quicker and thorough than I ever did on my own. I chose to research group work for

The Importance of Work-Life Initiatives

2140 words - 9 pages and the employer. Work-life balance is the need to provide a schedule that will combine work, family relationships, and leisure time into a satisfying life. Flexible work arrangements balance work and responsibility at home; which helps employees cope with stress, encourages smart work instead of hard work, and empowers them to make healthy decisions. Organizations need to assess workplace culture and provide mechanisms to support work-life

The Importance of Professionalism at Work

1227 words - 5 pages Professionalism is defined as one's conduct at work. The quality of professionalism is not restricted to those in occupations with high level of education or high earnings. Any worker regardless of their level of education or occupation should demonstrate a high level of this trait (About.com, 2013). Acting professionally at workplace makes others think of you as reliable, respectful, and competent. Professionalism, however, can take on many

The Importance of Vacations from Work

780 words - 3 pages a break from this can only positively affect you. Once a person is taking a vacation it has to be done correctly. By taking along a blackberry or laptop you are gaining absolutely nothing. A vacation is a break from everyday life. Its goal is to escape the stressful components of working. By taking work along with you, you’re defeating the whole purpose. Researchers in Austria found that in an average-sized company fifty-three employees reported

An intellectual profile of economic thinker Joseph Schumpeter summarizing the thinker's life and thought

586 words - 2 pages Analysis” and is known to alluded to Adam Smith the father of economics as unoriginal, Alfred Marshall yet another economist as a confused man.Schumpeter is said to be have based a major portion of his works on economic history and the book “History of Economic Though”. He believed in theory and is best known for presenting ideas and notions with facts and information. He defined the term vision as an ideology that differs from

Adam smiths economic theory about the invisible hand, opinionated

923 words - 4 pages . It is my opinion that Adam Smith's theory of economic growth and wealth creation is a valid one. People start a business to become wealthy. To do this they must produce some type of goods or offer some type services to satisfy societies demands. To produce those goods and services they must either perform the manual labor themselves or hire others to help produce the goods or perform the services for them. The invisible hand will cause

The Diminishing of Nomadic Power and Importance of Economic Development

1556 words - 6 pages The Diminishing of Nomadic Power and Importance of Economic Development From the time human society has divided the labor and agrarian societies emerged, the type of relationships between nomadic and sedentary societies can be characterized as hostile, warlike and suspicious. There might be a number of prerequisites for such kind of relations. Firstly, nomads’ economies were not entirely self-sufficient. The fact that their sources of food

Similar Essays

Adam Smith's "The Wealth Of Nations"

650 words - 3 pages grocery stores or hardware stores. The manufacturing of domestic goods fell in the hands of the artisans who spend their entire life learning and perfecting their desired trade.The main idea in The Wealth of Nations by Adam Smith lies in the notion of economic growth. Throughout the century growth has evolved to new heights, different people had different ways of conducting business. The economic growth, according to Smith is emphasized in the

The Importance Of Social Stability And Economic Freedom To Conservatism

2100 words - 8 pages The Importance of Social Stability and Economic Freedom to Conservatism Traditionally Conservatism has generally focussed on both social stability and economic freedom, believing that the two are inherently intertwined. The central theme of Conservative thought, namely “the desire to conserve”, is closely linked to the emphasis placed on respect for tradition, established customs and institutions that have endured the

Ideal Ideal: Comparison, Contrast, And Synthesis Of Marxist Socialism And Adam Smith's Capitalist Ideals

1801 words - 7 pages position of workers in a post-industrialization capitalist society. Each of these works contain opinions so popular among their followers that the opinions hypothesized with them have sparked interest, thought, debate, revolution, and even war. Adam Smith's praise of the division of labor during the industrial revolution find it's antithesis in The Communist Manifesto, but a synthesis of efficiency and equity could lead to a more just society for

A Comparison Of The Economic Philosophies Of Adam Smith, John Stuart Mill, And Karl Marx

1811 words - 7 pages economists shared within their economic process and their beliefs regarding human nature. The first economist we will discuss is Adam Smith. Before we discuss Smith's views, we will provide a brief description of the setting in which Smith was able to create his assumptions, and formulate his theories. Smith studied Social Philosophy at the University of Glasgow and the University of Oxford, the latter of which he was not as fond of. The primary