MAIN QUESTION: WHAT IS "THE WEALTH OF NATIONS?

• This was a book written by Adam Smith to explain a better and more efficient economy
• In this book he showed how output and prices are determined in a market econmony

ADAM SMITH(1723-1790)

• Scottish philosopher and economist
• Considered to be the father of economics
• At age 14 he enrolled at Glasgow university to study moral philosophy

VIDEO ABOUT WEALTH OF NATIONS

IF USED IN THE uS

• According to smith's book, he argued that the free market should be able to regulate business activity
• Smith tried to show how manufacturing trade,wages, profits and economic growth were all linked to the market forces of supply and demand

SUPPLY/DEMAND(INVISIBLE HAND)

• Whenever there was a demand for goods or services, suppliers would seek to meet that demand in order to make profit
• (Example on next slide)

FACEBOOK EXAMPLE #2

• An example of this would be Facebook. No government official ever decreed "make a social networking site." Instead, some people had an idea and tried it out. The invisible hand of consumers started to use it. When this was seen, advertisers started to use Facebook also. In this way, Facebook became economically available without anyone ever ordering it to be so.

SMITH SUPPORTS LAISSEZ FAIRE

• This idea allows business to operate with little or no government interference.

HIS IDEAS...

• Smiths ideas would come to shape productive economics in the 1800-1900's
• Invisible hand

¿QUESTIONS?

• Who was Adam Smith?
• Why did he support laissez faire?
• What did he mean by the invisible hand theory?

Untitled Slide

• Political Economist, social philosopher, naturalist, and author of wealth of nations
• He believed this would create a productive and profitable country
• This meant that everything would take care of itself without any government influence