Adam Smith, Theory of Economic Development Leader

Adam Smith, Theory of Economic Development Leader
Adam Smith was a leading figure in the field of economic development theory. Adam Smith was born in Kirkcaldy, Scotland, in 1723. A teenager he studied at Oxford University, and from the year 1751 until 1764 he was a professor at the University of Glasgow.


As long as that's where he published his first book, "Theory of Moral Sentiments" which lifted him into the middle of the intellectual community. However, the peak of his fame mainly rests on his masterpiece book "An Inquiry Into the Nature and Causes of the Wealth of Nations" published in 1776. The book was an immediate success and seize the market, and the rest of life Smith enjoys fame and recognition thanks to the work. He died in Kirkcaldy in 1790.


Adam Smith was not the first to devote itself to economic theory, and a lot of his ideas are not original famous out of his head. However, he was the first to present a systematic economic theory and easily digested fairly precise as the basis for progress in the field opposite it in the future. On the basis of reason, it is worth thought that "The Wealth of Nations" is the base point of the modern study of political economy.


One of the major results presented this book is because he is straight and dispel the notion that various people so fad before. Smith's argument against the old theory of economic and trade which emphasized the importance of the need for the country has gold bullion supplies in bulk. Similarly, the book rejects the view of the Physiocrats who say that the land is the main source of value. Instead Smith emphasized the most important subject is labor. Smith emphasizes that the persistent increase in production can be achieved through the division of labor, and he attacked exhausted all government regulations and interference following obsolete barriers that hinder the development and expansion of industry.


The central idea of ​​"The Wealth of Nations" is a free market that moves according to the market mechanism that can automatically produced considers the type and quantities of goods of the most loved and needed consumer society. For example, inventory declined liked it, naturally the price will rise and the price increase will bring a lot of profit for those who produce it. Because a lot of luck, others moved factories to manufacture as well. As a result of the increase in production can not be rid of the state of shortage of goods. Moreover, the increase in supply in relation to the competition between the various companies will tend to lower the price of the commodity at a price that is "normal," for example, costs of production.

In the book "The Wealth of Nations" Smith part using Malthusian views on overpopulation. However, if Ricardo and Karl Marx both insisted that the pressures will prevent wages rise beyond the purposes (so-called "law of wages steel"), Smith asserts that the conditions of production increases wages can be increased. It is increasingly clear, the events proved that Smith was right in this respect, while Ricardo and Marx misses.

There was nothing to do with the provision of or influence on Smith's view of the economic theorists who came later, the most important is its influence on legislation and policy taken by the government. The book was written by a high prominence and clarity leave  view is very broad appeal and legible. Arguments Smith faced government interference in business and the world of commerce and for the low price and free economy, it certainly has affected the line all government policy in the 19th century. Indeed, in terms of its influence was still felt to this day.

Since economic theory developed rapidly after the time of Smith, and some of the ideas being displaced by the opinions of others, it is easy to downplay the significance of Adam Smith. It must be so, the fact is, he was the starter and founder of economic figures as a systematic study, and he is indeed a prominent figure in the history of human thought.