Adam Smith Seventeen seventy-six, the year that we associate with the signing of the Declaration of Independence, also marked the publication in England of one of the most influential books of our time, “The Wealth of Nations. Written by Adam Smith, it earned the author the title The father of economics.
Smith objected to the principal economic beliefs of his day. He differed with the physiocrats who argued that land was the only source of wealth. He also disagreed with the mercantilists who measured the wealth of a nation by its money supply.
In Smiths view, a nations wealth was dependent upon production, not agriculture alone. How much it produced, he believed, depended upon how well it combined labour and the other factors of production. The more efficient is the combination, the greater is the output and the greater is the nations wealth.
The heart of Smiths economic philosophy was his belief that the economy would work best if it functioned on its own without government regulation. In those circumstances, self-interest would make business firms produce only those products that consumers wanted, and produce them at the lowest possible cost. They would do it in an effort to outperform their competitors and gain the greatest profit.
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What title did “The Wealth of nations” bring to Adam Smith?
What was a nation’s wealth dependent upon in Smith’s opinion?
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