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Adam Smith - -Creates job and is expanded upon to provide...

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Adam Smith (1723-90) -Develops a classic liberal argument - Laissez faire state (The Invisible Hand) -Preference to markets control over government control -Syllogism: “natural freedom” -Beg, borrow, steal, and exchange -Only exchange offers the basis for a stable society - Division of Labor -Specialized DOL is generated from exercising “natural freedom" -Never make for yourself what you can purchase more cheaply from someone else (Mutual Benefit) -Mechanization -Breakdown of complex tasks into simple tasks/movements to be exercised by machines (pin factories vs. pin craftsman) -Leads to increased productivity -Individual Choice leads to optimal outcome -Resources will shift where they need to (Supply & Demand)
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Unformatted text preview: -Creates job, and is expanded upon to provide more goods-Capitalist mentality :-Driven by desire to seek profits-Invent new products (zippers, Velcro, etc)-If good no longer in demand, then shut down and shift resources-Consequences on State intervention-Mercantilism-Large trade; more exports than imports-Accumulation of treasure (Wealth of Nations)-Official monopolies are generated because less competition-Gov’t choice substitutes for individual choice-Keeps wages low and profits high-The Invisible Hand-Leads to optimal social outcome-Prices fall, wages, innovation, and mechanization rise leading to more efficiently produced goods...
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