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
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