Adam Smith： Father of Modern Economics

Adam Smith popularized many of the ideas that created classical economics. Smith's laissez-faire philosophies included minimizing government intervention and taxation in free markets. He also conceived the invisible hand theory that guides supply and demand, as well as the idea that best outcomes are created by people looking out for themselves. For example, the butcher, brewer, and baker make money by selling products people want. They enjoy financial rewards because they meet customers' needs. Smith argued that this system creates wealth not only for the butcher, brewer, and baker, but also for the country whose citizens work to better themselves and their finances. Smith's book, The Wealth of Nations, helped drive the move from land-based wealth to wealth created from assembly line production methods. In it, he argued that one man taking 18 steps to create one pin could make only a few pins, but a 10-man assembly line could make thousands per week. Today, Smith's invisible hand theory is applied to free markets and capitalism through supply and demand and through the competition for scarce resources. Smith's ideas established him as a founder of economics. His work led to other revelations and innovations in economics, including a few that contradict his philosophies.