Liberalism vs. Marxism essay - Question 2 Nick Hinman PS...

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Question 2Nick HinmanPS 204 Fall 07950-55-6355The political economic theory presented by the 16thcentury Scottish philosopher Adam Smith is a perpetually relevant and effective solution to economic discrepancy in historical and contemporary form. In Smith’s proposed liberal world, those who act privately in their own interest in business and trade will ultimately service the public good. Classic liberal ideology, including Smith’s hypothetical world, held any economic market regulation in disdain, reflecting the common economic phrase of laissez faire, or “let it be.” Evolving markets that embrace competition and personal gain are forced to produce better goods at lower prices to appeal to the consumer in a capitalist economy, reinforcing Smith’s theory.Adam Smith first introduced this hypothesis in his work, Inquiry into the Nature and Causes of the Wealth of Nations, a two volume philosophy written in the wake of the Enlightenment and Europe’s Industrial Revolution. According to Smith, a free-trade and unregulated market will be perpetuated by an “invisible hand;” a metaphor defined by Smith to be the driving force behind the competitive nature of private sectors of the economy maximizing personal revenue to add up to the sum off all public revenue. Smith writes, By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.

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