2. z OBJECTIVES
Who was Adam smith?
What was Mercantilist thought and why did Adam opposed this idea?
“wealth of Nations
SMITH'S MOST PROMINENT IDEAS GIVEN TO THE MANAGERIAL FIELD WERE:--
“wealth of Nations
3. z
Who was Adam smith?
20XX
presentation
title
3
• Birth in 1723
• Born in a small village in
Kirkcaldy, Scotland
• Known as “the father of modern
economics”.
• Died in Edinburgh on July
19,1790
• Strongly opposed mercantilism.
4. z
What was Mercantilist thought and why did Adam opposed
this idea?
Mercantilism was the dominant economic system from the 16th
century to the 18th century. It was based on the idea that a nation’s
wealth and power were best served by increasing exports and
reducing imports.
Its characterized by the belief that global wealth was static and that a
nations economics health relied heavily on its supply of capital.
Smith argued that what determines how prosperous a country is how
a country produces.Economics polices should be set to encourage
people to produce a diverse set of goods.
5. z
“wealth of Nations”
On March 9, 1776 , an Inquiry into Nature and Causes of
the wealth of Nations --- commonly referred to simply as
The Wealth of Nations --- was first published.
The central thesis of Smiths The Wealth of Nations is that
our individual need to fulfil self interest results in social
benefits.
He called the force behind this fulfilment the invisible hand
Self interest and division of labour in an economy results
in mutual independencies that promote stability and
prosperity through the market mechanism.
20XX
presentation
title
5
6. SMITH'S MOST PROMINENT IDEAS
GIVEN TO THE MANAGERIAL FIELD
WERE:--
"INVISIBLE HAND":-
Adam Smith introduced the concept in his 1759 book "The Theory Of
Moral Sentiments " and later in his 1776 book "An Enquiry Into
The Nature And Causes Of The Wealth Of Nations".
- "DIVISION OF LABOUR”
"In the first sentence of an enquiry into the "Nature and Causes Of
The Wealth Of Nations " (1776) , Adam Smith foresaw the essence of
industrialism by determining that division of labour represents a
substantial increase in productivity.
7. The Wealth of Nations is a seminal book that represents the birth of
free market economics , but it's not without faults . It lacks proper
explanations for pricing or a theory of value . Also , Smith failed to see
the importance of the entrepreneur in breaking up inefficiencies and
creating new markets.
Both the opponents and believers in Adam Smith's free market
Capitalism gets stronger with each reformulations , whether prompted
by friend or foe.
Marginal utility, comparative advantage, entrepreneurship, the time
preference theory of interest, monetary theory and many other pieces
have been added to the whole since 1776
AULTS OF "THE WEALTH OF NATIONS"-
8. X
Adam Smith referred to the natural forces that guided self interest
to fulfill people's and society's needs on it's own without
government intervention, as The Invisible Hand .
The Invisible Hand is a metaphor for how , in a free market
economy, self interested individuals operate through a system of
mutual interdependence.-
This interdependence incentivizes producers to make what is
socially necessary, even though they may care only
about their own well being .
WHAT WAS SMITH'S INVISIBLE HAND?
9. 20XX
presentation
title
9
The Wealth of Nations, one of the earliest attempts to study the
rise of industry and commercial development in Europe, was a
precursor to the modern academic discipline of economics.
• It provided one of the best-known intellectual rationales for
free trade and capitalism, greatly influencing the writings of
later economists.
• David Ricardo and Karl Marx were influenced by economic
theories of Adam Smith. Smith was ranked #30 in Michael H.
Hart's list of the most influential figures in history.
INFLUENCE OF ADAM SMITH
10. 20XX
presentation
title
10
Shortly before his death, Smith had nearly all his manuscripts
destroyed.
In his last years he seemed to have been planning two major
treatises, one on the theory and history of law and one on the
sciences and arts.
The posthumously published Essays on Philosophical Subjects
(1795) probably contain parts of what would have been the
latter treatise
HIS WORKS BEFORE HIS
DEATH
