Adam Smith and His Contribution to Modern Economics Business Essay (Essay Sample)

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Adam Smith and His Contribution to Modern Economics
Almost every western world country operates on capitalist principles, whereby a small percentage of private owners control the country’s industries and wealth. This principle can be traced back to Adam Smith, popularly referred to as the father of modern economics. Smith is a Scottish philosopher in the 18th century who became famous for his influential book The Wealth of Nations, which is one of the earliest and most significant contributions to modern economics. His idea of an “invisible hand” and laissez-faire economics were critical aspects in guiding free markets. Among all economists, he is said to be the most significant contributor to free-market economics. Smith argued against mercantilism, which was the predominant form of government during his time. He presented justifications based on the notions of capitalism, free markets, as well as limited government intervention in commerce (Sharma). Smith’s core argument was that human beings’ focus on fulfilling self-interests results in prosperity. Therefore, giving everyone the freedom and opportunity to trade would create both domestic and foreign market competition, as self-interest would enhance prosperity, unlike in scenarios with strict government regulations. He noted that human beings make economic choices every day, through which they promote public interest and achieve prosperity. This paper reviews Adam Smith’s free-market economic policy, theories, school of thought, and contributions to society. In addition, it argues that his publications revolutionized global economics and laid robust foundations of modern-day industrialization and policymaking.