Adam Smith

Adam Smith wrote Wealth of Nations, and in turned the global economics into a new direction. Prior to the development of the Market system nations practiced Mercantilism. The idea that a nations wealth depended on how much the king had. The more in the royal bank the wealthier the nation was. Consequently wealthily nations had set policies, planned economic durability, and regulated trade to ensure that their exports did not exceed the nations imports. When Adam Smith introduced the Market system in his theory book Wealth of Nations it was like questioning that people need food to live.
Mercantilism had Kings sitting in gold palaces and eating off of gold plates with engraved silverware, and the common people living in dung huts. Yes, the nation had wealth, but the lifestyle of the people was poor. Adam believed that common people had the right to wealth, and that could come from the lifestyle they lived. His concept of per capita income, were the per capita welfare of the people was measured a nations wealth was a shock to the expanding world.
“The invisible” hand controls the market system, and people are driven by what they want when they make a purchase. In a market system both people feel that they win in the trade. If I want to buy a laptop because I need to type my homework I buy one from Mackintosh. Although I am giving up my money or “wealth” I am happy because my way of living has improved and I feel that the trade of $2,000 was worth the easy of writing my college papers in my apartment. It was based on the ideal that people have the freedom to chose what they want. Although Adam recognized both parties will win in a fair trade he understood that some would “win” more than others by terms of wealth. My laptop for example, I am out $2,000 and Mackintosh earned $2,000. Some would consider him the winner in this trade, but my laptop improved my way of living and so I maintain my wealth.
It is important to note that debt was not in Adam Smith’s vision of Market system. Debt is a bondage, and decreases freedom. Now there are some debts aka student loans, mortgages, ex. That have a specific investment, and improve ones way of living. These are what are needed to improve our way of life. Not all debt is an investment and will decrease our wealth and eventually decay our freedom. Making the distinction between “good” debt and “bad” debt is a personal choice and should be taken with delicate concern. I am not a financial assistant, just a college student.
Adam Smith opened the door for the market system I am accustom to: exchanges made on mutual interest, both parties are happy, consumer seventy, voluntary exchange, market determining what will sale, and the base of what sales being the consumer’s interest. His idea was introduced and flourished in the new world. A place were freedom was delicately blossoming. Although the United States had established freedoms in the constitution and Declaration of Independence there was no mention of economic freedom in either document. I can not even think of America without a free market economy. All because Adam Smith wrote down his thoughts and published them.