“No complaint... is more common than that of a scarcity of money.”

Born in Kirkcaldy Scotland at an unknown date, he was baptized on June 16, 1723 Died on July 17, 1790 A Scottish moral philosopher, he wrote The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations. Often considered his greatest work, The Wealth of Nations, written in 1776, argued that free market economies are more productive and beneficial to their societies. Widely considered as the father of modern economics.

Mercantilism states that the prosperity of a nation is dependent on its supply of capital, and that the global volume of international trade is “unchangeable”. Economic assets are represented by bullion (gold, silver etc.) held by the state, best increased by a positive balance of trade with foreign nations: greater volume of exports than imports. This belief dominated Western Europe from the 16 th to late 18 th century. With this economic theory, it is clear why European nations sought gold and silver from the new world with such intensity. Adam Smith was a controversial protester of this theory, arguing against mercantilism, promoting his idea of a free market.

Adam smiths most famous book, An Inquiry into the Nature and Causes of the Wealth of Nations (often shortened to simply the wealth of nations) was a controversial book in which he attacked the British mercantile system. He attempted to explain what would happen to trade and industry if governments did not interfere with individuals natural behavior (regulation) Argued that Free market systems are self regulating, because all humans are motivated by rational self interest. Motivated by self interest a person does something the market “approves” and therefore succeeds. However, if one to do something the market “disproves” the result is economic ruin due to competition. He called this governing force the “invisible hand” that regulates/manages economies. Advocated a capitalist free enterprise system Believed an economy's value is measured in labor, not in gold or silver.

Mercantilism Wealth of a nation lied in silver and gold Regulation should determine what shall be bought and sold. Exports be encouraged, and imports discouraged. Tariffs on imports, bounties on exports to keep wealth within country. Markets must be regulated. Wealth of a nation lies in available labor Self interest should determine what is bought or sold (supply/demand) Let self interest determine what is imported and exported. Place tariffs on some imports to counteract internal taxes on same good. A free market is self regulating. Free market

Adam smith completely changed the way people viewed economies He is regarded as one of the most important economists of all time. He was the father of the “Free market” that we now today. (although no country truly has a “free market, as the government intervenes in some aspects when it feels it necessary to do so.)