Essay on Adam Smith: Views on Economics Mercantilist

852 WordsFeb 2, 20134 Pages
Adam Smith Adam Smith looked at economics differently than the mercantilist. The old view of economics, mercantilism, believed that wealth was measured in terms of the amount of gold and silver the nation stocked, importing goods from other countries would negatively impact the wealth of a country, trade only benefited the seller and not the buyer, and nations could only become richer by making other countries poorer. Adam Smith believed the opposite by thinking that the wealth of a nation is based on production and commerce not the amount of gold and silver, free exchange increases productivity, both parties benefit during a free exchange and imports can be just as valuable as exports to a nation. According to “Making Adam Smith” in the…show more content…
A laissez faire attitude from the government, a free market and the invisible hand will provide the most amounts of good for the most number of people while generating economic growth for the nation. While Smith does not mention the term capitalism in his book the Wealth of Nations it is evident from his book that he believes capitalists play important roles in keeping the economy functioning. A capitalist distributes funds to the market which helps to direct resources and growth. People with a higher income can save their funds and spend on goods/services that were unnecessary yet fulfill their need for higher living. This therefore created jobs that otherwise may not be necessary satisfy their immense desires for high living. Without capitalists the economy will not continue to grow and prosper. Many people believe that unequal distribution of wealth leads to social unrest. I believe that Adam Smith would refute this claim. According to Adam Smith the market works best when it is a free market with little government interference. Adam Smith also looked at wealth differently than many people look at it. Adam Smith didn’t believe that wealth was measured by the amount of money a person had instead he thought it was measured by the production and commerce within the market. Smith also believed that members of
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