Similar Principles of the Natural and Economic Environments Essay

Called the Father of Modern Economics, Adam Smith was an enormous advocate for private markets. He supported an economic system based on the decision making by individuals instead of the government. Smith felt that no one person or a group is fit to make decisions for a whole population of people and that the population knows how to make decisions for its welfare. In Smith’s mind, people work to supplement their own lives, and when people seek individual economic gain then they unexpectedly promote society and stimulate the economy subconsciously. If people earn more money by working harder then almost all people will work harder. Smith insinuates that people are naturally self preserving and by default selfish; but to a point. Everyone has something that they want and in this world most things can be obtained if a person has enough money. Smith believes that every man should be free to

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” This is a quote from the book Wealth of Nations, which Adam Smith wrote, addresses well about why and what reason people work for. The butcher, the brewer, or the baker does not cut, stir, or bake because they want to please the customer or to feed the poor, but to earn money and for their own happiness. Adam Smith, who fully understood the concepts of capitalism and free market system, became one of the most well respected economists throughout the world. Smith became famous because of his philosophy of economics. Because of his thoughts on economics, today he is well known as the “father of

John Smith's capitalism from A Wealth of Nations would provide a competitive edge over nations that practiced Colbert's form of mercantilism. On one hand, capitalism is free competition that only succeeds without government intervention, a lack of guilds, and the "invisible hand". On the other side is the destructive mercantilism that feeds off of tariffs, exports, and control.

Capitalism has been the subject of ethical criticism since it was first introduced into society. I defend the morality of capitalism because it gives people incentive to work, establishes a web of trust between them, satisfies their material well-being, and generates a wide spectrum of prosperity.

It’s a generally accepted notion that to create an advanced civilization, there must be an economic system in place. Over the course of history, many systems have been invented and implemented with varying degrees of success. Of these, communism, socialism, and capitalism seem to be the three systems that societies keep coming back to. Communism and socialism are related, however capitalism stems from a whole other school of thought. Examining these systems together will reveal that each has its own merits and its own flaws.

The fortunes of the big businessmen who emerged under capitalism no longer depended upon the patronage of a few wealthy clients. Rather, these entrepreneurs began catering to the needs and desires of a newly empowered working class consisting of millions of people. By meeting those needs and desires, businessmen greatly increased their own wealth and influence. In the first days of the Industrial Revolution, workers were abused. Yet they organized into unions that protected their interests and changed capitalism itself, pressuring it to evolve from its early exploitative model to a more humane one. As a result, capitalism helped improve the lives of people in every social stratum. For example, the transition into the capitalist era brought a dramatic decrease in infant-mortality rates and a significant rise in life expectancy. Moreover, the average blue-collar worker under capitalism was far wealthier than the “bosses” of socialist economies.

Adam Smith wrote the book “Wealth of Nations”, where he stated his opposition to mercantilist beliefs. “Wealth of Nations” basically provided an outline of what we know today as Capitalism, which was to replace feudalism. Smith built his view on the principle that the nation is best served when state power is used to create wealth, which results in more power and national security. Smith also believed that the best interest of society was served by an “invisible hand”, which was based on an individual’s personal self-interest. The five dominant features of Capitalism are strongly based on Smith’s work: markets coordinate society’s economic activities; extensive markets exist for the exchange of land, labor, commodities, and money; competition

The source suggested that under a strong leader’s administration, the common good will be best served. It is true that having a powerful government that supports all aspects of life could bring about collective benefits. However, the controlling and regulation of the lives of citizens within the nation should be used appropriately. Which means the government intervention could not inflict upon the rights and freedom of the individuals. Adam Smith’s ideas of “ Invisible Hand” and “ Laissez-faire” may oppose the perspective of the source. Since he believed that individuals’ self-interest can unintendedly works for the benefit of all and it will work just fine without the government interference. Smith asserted that operating out self-interest,

“The thought experiment of Adam Smith correctly takes into account the fact that people rationally pursue their economic interests. Of course they do. But this thought experiment fails to take into account the extent to which people are also guided by noneconomic motivations. And it fails to take into account the extent to which they are irrational or misguided. It ignores the animal spirits.” Ibid., 3.

Capitalism's foundational manifesto is usually accreditted to be Adam Smith's 1776 book Inquiry into the Nature and Causes of the Wealth of Nations, even though Smith based his work on mostly older concepts. It has in actuality been the dominant economic system in certain places of Europe since the 1600s. A naturally expansionary system from its earliest years, capitalism has infiltrated into most countries in the world. It has grown very unevenly; in some places it has been a strong instrument of growth and industrialization—as in the majority of Europe, the United States, and Japan—but has, on the other hand, left other places of the world struggling financially and underdeveloped.

The step from having some goods and needing others to trading with those who have the needed goods and want the overabundant ones cannot be understood or warranted without the presumption of a rational actor. Smith does not blatantly state this and on occasion refers to the development of capitalism as guided by an “invisible hand.” Yet, every development towards improved efficiency, if these are anything more guided than random evolutionary steps, require such an actor to instigate it. More so Smith is suggesting that human reason is the catalyst for trade. The ability to reason is the singular factor that allows for the development of a free market system.

Capitalism leads to the creation of unprecedented wealth, advanced technology, and wide prosperity. Yet capitalism is denounced as a system of greed, materialism, and ruthless dog-eat-dog competition

capitalism is fundamental in societal evolution: there needs to be an era where people could

The free-market capitalist system as a whole is detrimental to the human population and the environment because it violates the natural laws that govern them both. American economist Richard Wolff argues that capitalism throughout history has led to the excessive manufacturing of products and economic crises, which have negative social and ecological effects (Wolff, 217). As dependents on the resources of the earth, we have become aware that these resources are finite and should be preserved. Free-market capitalism violates this law because it allows corporations to deplete resources in order to maximize their financial gain. In addition, the competitive structure of the capitalist system empowers the few corporation owners and shareholders to achieve excessive wealth while their employees struggle to gain financial stability. This only results in the disproportionate distribution of the benefits and burdens of society that contradicts the principle of individual freedom because it places financial restrictions on the majority of the population.

Adam Smith, like his colleague and friend David Hume one of the greatest Scottish philosophers, was a member of the English Enlightenment. Smith is popularly known as the Father of Economics and his ideas and theories are believed to have laid the foundation for economic thought and thereafter the emergence of schools of economic thought. Smith wrote The Wealth of Nations, at his time as a lecturer at the University of Glasgow. In fact, the book is believed to have laid the above-said foundation on economic thoughts and the emergence of schools on economic thought. Smith’s concern as a lecturer was based on ethics and morality and he was a believer in the idea of a free market economy that preceded the modern day capitalism, Smith, therefore, is also referred to as the father of modern-day capitalism. His works, views, and suggestions brought him a fortune and great fame across the British Empire and as far as the American Colonies. Perhaps more importantly, it would only be fair to suggest that Smith’s ideas and views not only impacted the Europeans, but also the Founding Fathers of the United States of America thus greatly influenced the trading patterns in both the European countries and in the formation of the structure of the American government in the 18th century.