Adam SmithAdam Smith

Big Idea?Big Idea?The Government should stay OUT of the The Government should stay OUT of the

economy!economy!

Free Enterprise Capitalist SystemFree Enterprise Capitalist System

Stay out?Stay out?

No regulationsNo regulations No protection for workersNo protection for workers No control of pricesNo control of prices No control of wagesNo control of wages

““Laissez-faire”Laissez-faire”

So what should So what should government do?government do?

Protect citizens from foreign invasionProtect citizens from foreign invasion Guard against crime within the nationGuard against crime within the nation Help build infrastructureHelp build infrastructure

What will guide the What will guide the economy?economy?

““The Invisible Hand”The Invisible Hand” Self-InterestSelf-Interest Supply and DemandSupply and Demand CompetitionCompetition

Self Interest?Self Interest?

Everyone wants to make the most…..Everyone wants to make the most…..

Supply and Demand?Supply and Demand?

So…So…

If demand is greater than the supply If demand is greater than the supply available…available…

If demand decreases for a particular If demand decreases for a particular item…item…

Competition?Competition?

Competition is great!Competition is great! PricesPrices EfficiencyEfficiency

Is there a down side?Is there a down side?

What if you don’t have skills needed in What if you don’t have skills needed in the economy?the economy?

What if you don’t have money or capital What if you don’t have money or capital to buy the things that you need?to buy the things that you need?

How about the U.S. How about the U.S. economy?economy?

Do we have a Free Enterprise Capitalist Do we have a Free Enterprise Capitalist system?system?