Adam Smith

Adam Smith was a Scotsman who is widely accredited with being the inventor of Economics.

He wrote a number of papers. One was regarding the stages of man. From hunter, shepherd, farmer and commerce. His theory was that to survive we need to eat. The more developed we become the more efficient that process becomes and we are able to produce a surplus to sell and increase the population.

His main work is the Wealth of Nations, which is a treatise about the nature of trade. His main theory is that to trade there needs to be an admission of the selfish, ambition and nature of man that leads him to go after greater wealth. He believed that too much morality was a hindrance to the accumulation of wealth. He believed that the most important part was frugality, not spending money would increase the profit, by reducing revenue and increasing capital.

His proposal was that the main aim of man from birth was to better themselves. The main ways to do this would be to maximise profit. Other than frugality in spending there is efficiency in labour. He proposed the division of labour, where in a manufacturing process, different labourers would specialise in certain areas of production. In becoming expert in a special area, instead of being a jack of all trades, they could make the process more efficient.

Another inefficiency in profit-making was unnecessary laws and regulation that prevent the entrepreneur from maximising profit. If they are freed from these unnatural constraints they can make more money for themselves and therefore for the rest of society.

Having achieved that wealth, the businessman is able to parade that wealth in front of people for all to see. Thus demonstrating the success of their attempts to better themselves. By allowing people to see the fruits of your labour, this demonstrates to the world the success of your betterment and that is the ultimate goal of men.

Conway-Laird (2017)

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