By Devon and Chris

Wealth of Nations

HistoryGeneral economic view at the time: gold and silver = wealth

Nations focused on exports over imports

1776- Smith rejected the Townshend act which declared that there would be taxes on tea, paint, glass etc…

Refused this act because of his beliefs:• Nations wealth is in goods and services (not silver and gold)

• Basically embodied mercantilism: developed industry based on the balance of trade in Europe.

• Wrote Wealth of Nations to express views

More History

“In those great manufactures, on the

contrary, which are destined to supply the

great wants of the great body of the people,

every different branch of the work employs

so great a number of workmen, that it is

impossible to collect all into the same

workhouse.”

-Claiming that division of the manufacturers

helps supply a greater amount of products

-Example: Trade of pin-making

Division of Labor

Laissez faire economics: No government interference

- Tariffs/taxes

- Restrictions/limitations

- Corruption

Allow free competition, free trading

Let the market expand to its full production capabilities

Adam Smith disagreed on one thing: government involvement is necessary to uphold contracts, laws, needed for security

Government needed to get involved after stock market crash-1929

New deal-1930

Economics

Roles of Government- Defense

- Justice

- Education

- Maintenance of commerce

-Fair and clear taxation

Nations need to save money for economic progress

Invest in labor-saving technologies

More investing/saving = more efficient production

- Everyone will become wealthier

Accumulation of Capital

Countries should do what they are best at

-ex: France should produce and trade grapes because they are plentiful; not Scotland

Restrictions of foreign trade should be prohibited

Foreign Trade

How would you think that the government is involved with the economy today?

And what are some ways that they restrict the market?

Reference Today