Adam Smith

Big Idea? The Government should stay OUT of the economy! Free Enterprise Capitalist System

Stay out?  No regulations  No protection for workers  No control of prices  No control of wages “Laissez-faire”

So what should government do?  Protect citizens from foreign invasion  Guard against crime within the nation  Help build infrastructure

What will guide the economy?  “The Invisible Hand”  Self-Interest  Supply and Demand  Competition

Self Interest?  Everyone wants to make the most…..

Supply and Demand?

So…  If demand is greater than the supply available…  If demand decreases for a particular item…

Competition?  Competition is great!  Prices  Efficiency

Is there a down side?  What if you don’t have skills needed in the economy?  What if you don’t have money or capital to buy the things that you need?

How about the U.S. economy?  Do we have a Free Enterprise Capitalist system?