Adam Smith

• Author of An Inquiry into the Nature and Causes of the Wealth of Nations

Adam Smith

• Private property

- Individuals have the right to own physical objects (and sometimes people!) as private property to the exclusion of others

Adam Smith• Invisible Hand – Assumptions:

–Our preferences are consistent

–We act based on self-interest–Individual Good adds up to Social Good

Adam Smith

•Laissez-faire- The government should not interfere with economic matters

Adam Smith• Division of Labor

- Economic output is maximized when production tasks are divided amongst various workers with specialized skills

Adam Smith• Freedom of Trade

– Businesses and governments should be allowed to trade freely (meaning without tariffs) around the world