Adam Smith was the author of An Inquiry into the Nature and Causes of the Wealth of Nations and developed key economic concepts including the invisible hand, private property rights, division of labor, laissez-faire policies, and free trade. He argued that when individuals act in their own self-interest through free markets and specialization of labor, it indirectly promotes the greater good of society as a whole.

1. Adam Smith
• Author of An Inquiry into the Nature and
Causes of the Wealth of Nations

2. Adam Smith
• Private property
- Individuals have the right to
own physical objects (and
sometimes people!) as
private property to the
exclusion of others

3. Adam Smith
• Invisible Hand – Assumptions:
–Our preferences are
consistent
–We act based on self-interest
–Individual Good adds up to
Social Good

4. Adam Smith
•Laissez-faire
- The government should
not interfere with
economic matters

5. Adam Smith
• Division of Labor
- Economic output is
maximized when production
tasks are divided amongst
various workers with
specialized skills

7. Adam Smith
• Freedom of Trade
– Businesses and
governments should be
allowed to trade freely
(meaning without
tariffs) around the
world