1. Adam Smith

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

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

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

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

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

7. Supply and Demand?

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

9. Competition?  Competition is great!  Prices  Efficiency

10. 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?

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