ADAMSMITH

About

Laissez-Faire theory

Why?

Adam

He is considered to be the father of economics for many reasons. One of witch was his creation of the idea that the ecconomy would be run without any supervision of the Government. Another thing is the idea of this "invisible hand", or the idea that the market or ecconomy was going to drive the price of produtcs based on supply and damand. Because of these ideas he proposed, and the actual corectivness of this invisble hand, Adam Smith is cretited for creating the modern capitilist ecconomy. This is the ecconomy where only the best ideas and products survive while the bad ones are replaced with inovative ideas.

Capitalism

Smith

The phrase capitalism, emphasized his belief that the econonomy is only one component of the human condition. This is the idea that all humans have some sort of desire or drive and wantingness, to want to measure there humanity. He came up with the idea that if you look out for yourself, you will have more prosperity. According to Adam Smith, there is no better way then to create a capitalistic economy. This enables all people the ability to do or create what they want to gain either money and social status, or a combination of both. In addition to that, he presents a blueprint for a just society that concerns itself with its least well-off members, not just those with economic success. Because of this, Adam Smith is given the title of "Father of Capitalism" for his free market ideology and also his moral status on how we also need a moral society that looks after the less fortunate in life. This is especial important as he also talks about how many people in this society are going to look out for there own interests and only there own interests.

Relationship within a country's Wealth.

Wealth

Smith comes out and says that the Gold and Silver index is the wrong way to look at how wealthy a country is. Instead, you measure its wealth, by creating almost a modern day GDP measurement, that measures how much things you are able to make and how is not a measure of gold and sliver it is a measure of how much things you are able to make how many labor's you have and the more product and labor you will have

Relationship within a country's materials.

Materials

What Adam Smith wanted to do with a countries materials was to make as much things as it possibly could. He also wanted the country to import as little as possible. HE wanted this to happen, so within a country, people could produce products for national and international consumers. That way the business are able to produce more and create more profit for themselves.

Relationship within country's People and Possessions

People and

Possessions

Adam Smith wanted every able person in the society to be working and making money for themselves. that way everyone is contributing to society and is able to not only work for the society and create a better economy. But they will also have money to buy other peoples products that will also help the capitalistic economy. That way the economy as a whole is lifted up and will continue to grow as time goes by.

What is it?

What

The "invisible hand" is what drives a products price up and down. For example if a product is in high demand and there is a short supply, the seller, will charge more for the product because people will be willing to spend more money due to the fact, people will believe its utility is higher due to is scarcity being high as well. But... if an item is in low demand and there is tons of supply for the product, the price will cost much less due to the fact that people don't find much utility in a product that isn't all that scarce.

How is it formed?

Why

Basically, the invisible hand is natural and you cant do anything about it. This is because it is human nature and is based on the amount of something you can create and how unique it is to what is on the market at a given time. Theoretically, this "invisible hand" tells the entrepreneurs what a good target sell price is, and as the consumer we determine what is in high demand witch in change will drive the price up or down according to the trends in a society.

My thoughts

Extra

After reading about Adam Smith, I thought about many things. One of the main topics that kept on going into my head is that the economy that we live in is very very diverse and there are so many different views not only from the government, but from the people the we live in such a diverse and funky world. All in although, I am happy that Adam Smith created this system because I believe that capitalism is much less flawed then all the other systems that have been in place around the world such as communism and socialism.

Bibliography