Images: Shutterstock
Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776 is the cornerstone of modern capitalism and has influenced government policies ever since.
Image: wikipedia.org/ public domain
This classical economics book explores how nations can generate wealth through the market. Here are some insights from a book that defined economics.
Adam Smith advocated for a free market where forces of demand and supply reign over the economic system, with minimal government interference.
The invisible hand is a metaphor for when people act in self-interest, unintentionally leading to the net good of society. A tech company improves gadgets, boosting consumer choice.
While pushing for free markets, Smith recognised the need for government intervention to provide national defence, administer justice, facilitate public works, etc.
Division of labour is when different people focus on specific tasks to increase efficiency. While this may seem obvious to the 21st-century reader, it was a revolutionary idea back then.
Adam Smith says the value of a good depends on the labour required to make it. More labour means higher value, like a hand-made shirt being more valuable than a machine-sewn one.
Thanks for reading!
See next