What will you learn from this book
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Invisible Hand: Smith introduced the concept of the "invisible hand," arguing that individuals pursuing their own self-interest unintentionally contribute to the overall economic well-being of society. This idea became a cornerstone of free-market economic philosophy.
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Division of Labor: Smith emphasized the benefits of the division of labor, stating that when workers specialize in specific tasks, it leads to increased efficiency and productivity.
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Role of Government: While advocating for free markets, Smith acknowledged the need for a limited government role. He argued that governments should protect property rights, enforce contracts, and provide for national defense but generally refrain from excessive intervention in the economy.
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Laissez-Faire Economics: Smith is often associated with the concept of laissez-faire economics, promoting the idea that economies operate most efficiently with minimal government interference.
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Theory of Value: Smith contributed to the labor theory of value, suggesting that the value of a good or service is derived from the amount of labor required to produce it.
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Wealth Creation: According to Smith, the true wealth of a nation is not just its accumulated gold and silver but its ability to produce goods and services, known as the wealth of nations.
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Critique of Mercantilism: Smith criticized the prevailing economic theory of mercantilism, which emphasized the accumulation of wealth through exports and the acquisition of precious metals.
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Productive and Unproductive Labor: Smith distinguished between productive labor (which adds value to goods and services) and unproductive labor (which does not contribute to wealth creation, such as government bureaucracy).
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Importance of Competition: Smith highlighted the importance of competition in driving innovation, efficiency, and better outcomes for consumers. He argued that a competitive market serves the public interest.
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Critique of Monopolies: Smith was critical of monopolies, arguing that they hinder competition, reduce efficiency, and harm consumers. He saw competition as essential for economic progress.1-11
| Language | English |
|---|---|
| ISBN-10 | 0-553-58597-5 |
| No of pages | 1231 |
| Book Publisher | Om Books |
| Published Date | 01 Jan 2001 |
About Author
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“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Scottish political economist and philosopher Adam Smith (1723–1790) is considered the father of modern economics. His influential book, The Wealth of Nations, is the first great work in political economy.
In it, Smith argues against regulations on commerce and calls for a limited role of the government. The market economy is to be kept open and free if nations
are to prosper, and the government’s core functions must be to maintain law and order, defence, build infrastructure, and promote education. Smith is critical of government control, but not an advocate of laissez-faire. He believes that the market economy can function only when rules are adhered to. Hence the government’s role in maintaining the rule of law is critical.
The Wealth Of Nations, written before the Industrial Revolution transformed the world, resonates with readers in modern times and offers valuable lessons
in solving the economic conundrums of the day.