Adam Smith born the year 1723 was thought to be one of the worlds greatest economists. In Fact he was known as the father of economy. He was also known by the way he thought and the way he wrote about the country’s economy and in this paper I will explain the way he described and the way he thought of the economy and why his thoughts have carried on for the last two hundred years.
In the eighteenth century, most people thought they knew how countries get rich. The way they thought was that you have to export as much as possible and import as little as possible so that they can have a rich economy. They also thought that we had a fixed wealth but Adam Smith was the first person to oppose this theory. He proposed that Hard-working, efficient families grow richer and hard working, efficient countries do also. He also proposed that we do not have a fixed wealth. Adam Smith said that wealth is a function of productivity and therefore of people and the incentives which encourage them.
Secondly, the colonists also believed that the government should keep most of the wealth and this because they believed that the wealth was limited. They established that the government could authorize monopolies, and that their friends and supporters, using the police to stop anyone competing with their monopolies could control it. Adam smith explained that monopoly charges any price that it chooses, and that it robs consumers and makes the countries less efficient and poorer. He also explained that competition means that businesses try to charge the lowest price possible, so that consumers could get the maximum value for money and that if they can buy more, jobs in the economy will be more supported and then the country will grow even more richer than it already is. Adam Smith also explained that without the police stopping competition, monopolies couldnt survive for very long.
Thirdly, Adam Smith wrote the most powerful incentive is Selfinterest. The reason for this is that people will work harder and more efficiently if they can keep the majority of the earn and he also explained that if governments grow to greedy, they will discourage and wreck peoples confidence from trying create their own wealth. He explained that Self-interest is an unchangeable part of human nature. So he was saying that it is wise for the government to let personal incentives build a richer economy. Smiths idea was thought to be kind of like Karl Maxis Utopia but it is found to be way more sophisticated.
Fourthly, Adam Smith believed that the government was to be a strong necessity. Particularly, to create and enforce laws and to ensure justice. Mr. Smith strongly believed in a democratic partnership between the government and the people for whom they work for. He also knew that each should do what is best for the country. Businessmen should not have any control of the justice system or the government should not try to run the businessman out of business.
Lastly, Adam Smith wrote a book of his thoughts about the economy and it was published the 1776. The name of the book was Wealth of nations. This was the first ever modern economics book and it influenced all economists since then. Readers were so delighted with his optimistic when he quoted that If the amount of global wealth was not fixed, then everyone could become wealthier. Countries could grow richer without harming their neighbours. After this, Kings, finance ministers, and readers everywhere flocked to Adam Smith, and booksellers went crazy and started putting statues of him in their shop windows.
In Conclusion, Adam Smith whose ideas of market based Economics is still going on after 200 years of his death. Adam Smith has accomplished a lot with his philosophical ideas. Thus he has really deserved the name the Father of Economics.