How Did Adam Smith Influence Capitalism

Adam Smith a Scottish philosopher and economist was born in June, 1723, in Kirkcaldy a town in Scotland. He went to a local school, and at age 13 he was sent to Glasgow College. After that he attended Baliol College at Oxford University where he has a negative reaction to the professors which strongly influenced his philosophy. Little did he know eventually one day he’d be called the father of modern capitalism. Smith had a pretty good understanding of how human societies actually work. He believed that social harmony would happen naturally as people struggled to find ways to live and work with each other. Adam had confidence in freedom and self-interest not producing chaos, and that they’d be guided by an ‘invisible hand’. Another belief he had was that social order did not need to be controlled by a king. It would develop best in an open, competitive marketplace, with free exchange and without intimidation.

He argued that in a free exchanged both sides became better off, and nobody would trade if they anticipated to lose from it. That the buyer profits, just as the seller does. Imports are just as valuable to us as our exports are to others. Since trade benefits both sides it increases our wealth just as surely as do agriculture or manufacture. That a nation’s wealth is not the quantity of gold and silver, but the total of its production and trade. The Wealth of Nations influenced the politicians of the time, and even today the idea of free trade is accepted worldwide. Adam Smith has been someone who saw no role for government in economic life. But he believed that government had an important role to play, and that they should enforce contracts and grant patents and copyrights to encourage inventions and new ideas. Smith also wants the government to provide public works, such as roads and bridges. Even though he wanted the users to pay in proportion to their use of the public