Download Enlightenment Thinking on Economic Theory Adam Smith

ECONOMIC
THEORY
Influence of Enlightenment Thinking
Adam Smith ‘The Wealth of Nations’
Objective: Explain how the ideas from the
Enlightenment changed economic systems
NEW
ECONOMIC
THEORIES
• Applied natural law to
economics
• Land source of nation’s
wealth
• Laissez-faire economymeaning let it alone.
• The government has little
or no control over
businesses.
• ‘The Wealth of Nations’
ADAM
SMITH
• Supported the theory of
laissez-faire economics
• Believed in a free-market
economy, supply and demand
would determine prices and
other economic decisions.
• He also believed that while
governments should not
interfere in economics, they
did have a duty to protect
citizens and provide public
works for the betterment of
society.
PARTNER
QUESTION
• Do you agree with
Adam Smith’s ideas?
Should government
have little or no
control over
businesses? Does
supply and demand
work? Explain why or
why not?
REMIND101
QUESTION
• Which concept is an
application of natural law to
the government's role in the
economic lives of its citizens?
• A. Free markets based on
supply and demand
• B. Government control to
achieve a favorable balance
of trade
• C. Agriculture based on
tenant farming and serfdom
• D. Lower taxes on the most
privileged groups in society