The Economic Theory Of Adam Smith - 2094 Words

In this paper, I will examine the economic theory of Adam Smith, a historic and highly renowned economist and philosopher during the 17th century. Smith is often referred to as the father of economics, and is considered the first theorist of what we commonly refer to as capitalism. I will discuss his economic theory in relation to, and as illustrated by one of his original works. The Wealth of Nations was published in 1776, and is considered to be one of the backbones or modern economics. In this book, Smith explores the nature and causes of wealth in a given society. He emphasizes key economic concepts capable of sparking economic growth and progression. I plan to shed some light upon the encompassing elements of Smith’s theory, such as a division of labor, market exchange methods and the overall coordination of market activities. It is important to keep in mind the emphasis Smith places on the respect for individual liberty within a respective society when examining the elem ents of his theory. Once this has been accomplished, I will then elaborate as to why I believe Smith’s economic theory is philosophically superior to other economic theories that also aim to create the most economically functional type of society. To start, I believe that is necessary to discuss the economic concept of a gross domestic product (GDP). In today’s day and age, modern economics defines a GDP as a nations total output over a given period of time. However according to Smith, a nation’s GDPShow MoreRelatedAdam Smith Influence on Economic Theory Essay1655 Words   |  7 PagesWhy is the work of Adam Smith considered so crucial in the development of economic thought? Adam Smith is widely regarded as the father of economics as a social science, and is perhaps best known for his work The Wealth of Nations. 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