Adam Smith Flashcards
(9 cards)
Where did Adam Smith believe real wealth came from?
Production and Exchange, instead of the accumulation of gold and silver at the expense of other nations
Why did Smith call for free trade?
He argues that it encourages growth and benefits the common man.
What is the key to prosperity, according to Smith?
Give people economic freedom
What is economic freedom, according to Smith?
- Right to buy goods from any source
- Right to be employed in whatever occupation desired
- Right to charge whatever the wage market might bear
- Right to save, invest, and accumulate capital without government restraint
How does Smith conceptualize the Division of Labor?
It is necessary for the gradual progression of human society as each human being is talented with their own strengths and the division of labor allows them to hone and cultivate their craft or “geniuses.”
What, according to Smith, is the greatest sin in capitalism?
Bankruptcy
How does Smith conceptualize the Invisible Hand?
The voluntary self-interest of each individual creates a system that benefits society as a whole; Letting the market do its thing
What is Smith’s conceptualization of Justice?
The actions of individuals must be just and honest, according to the rules of society.
How should the state operate, according to Smith?
The state should limit its activities to administer justice, enforce private property rights, engage in certain public work, and defend the nation against aggression. It should adopt a general policy of laissez-faire.
