An Inquiry Into Adam Smiths the Rise and Fall of the...

An inquiry into Adam Smiths: The rise and fall of the Wealth of Nations What was the most important document published in 1776? The Declaration of Independence is the easy answer for Americans, but many would argue that Adam Smiths The Wealth of Nations had a more important global impact. In this article, we will look at Smiths masterpiece and its contributions to modern economics. (For background reading, see Adam Smith: The Father Of Economics.) In Opposition to Mercantilism On March 9, 1776, An Inquiry into the Nature and Causes of the Wealth of Nations (commonly referred to as simply The Wealth of Nations) was published. Smith, a Scottish philosopher by trade, wrote the book to upend the mercantilist system.†¦show more content†¦By backing currency with hard metals, Smith hoped to curtail the governments ability to depreciate currency by circulating more of it to pay for wars or other wasteful expenditures. With hard currency acting as a check to spending, Smith wanted the government to follow free-market principles by keeping taxes low and allowing free trade across borders by eliminating tariffs. He pointed out that tariffs and other taxes only succeeded in making life more expensive for the people while also stifling industry and trade abroad. (For more on backing a currency with precious metal, read The Gold Standard Revisited.) Grapes Overthrow Mercantilism To drive home the damaging nature of tariffs, Smith used the example of making wine in Scotland. He pointed out that good grapes could be grown in Scotland in hothouses, but the extra costs of heating would make Scottish wine 30 times more expensive than French wines. Far better, he reasoned, would be to trade something Scotland had an abundance of, such as wool, in return for the wine. In other words, because France has a competitive advantage in producing wine, tariffs aimed to create and protect a domestic wine industry would just waste resources and cost the public money. What Wasnt in The Wealth Of Nations? The Wealth of Nations is an incredible book that represents the birth of free-market economics, but its not without faults. It lacks proper explanations for pricing or a theory of value, and Smith failed toShow MoreRelatedThe Implications to the Pursuit of Prosperity1770 Words   |  7 Pagesthe status-quo giving rise to a new modern capitalistic society the world knows well in this present age. However, this new social environment in the late 1700s presented uncharted maps for the citizens of society and newly formed governments. Naturally individuals carried a new found freedom without the reigns of monarchy holding them back and individuals could pursue wealth free from oppressing tyrants dictating. Societies were surging with their freedom, herein, giving rise to industrial innovationsRead MoreAdam Smith : The Father Of Modern Trade And The Free Market1258 Words   |  6 PagesAdam Smith is widely regarded as the father of modern trade and the free market. His avant-garde ideas are presented in An Inquiry into the Nature and Causes of the Wealth of Nations, a masterwork of political and economic analysis published in 1776. The general thesis of Smith’s argument is that it is in the best interest of countries to manufacture or maintain a â€Å"perfect liberty† in their economies, raising worthwhile questions of what this notion of liberty entails, and where it originates. ToRead MoreAn Inquiry into the Wealth of Nations by Adam Smith Essay674 Words   |  3 Pages40 years after the publication of Adam Smith’s â€Å"An Inquiry into the Wealth of Nations† during the early 19th century, the rivalry between the Capitalists and the Landlords was at its peak. 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In this description demand is rent: â€Å"The price of any commodity rises or falls by the proportion of the number of buyer