Thursday, January 2, 2020

Adam Smith’s contribution to capitalism Essay - 2772 Words

Adam Smith is considered as one of the most influential economists in the 18th century. Although his theories have been criticized by several socialist economists, however, his idea of capitalism still has great impact to the rest of the economists during classical, neo classical periods and the structure of today’s economy. Even the former Prime Minister of Britain, Margaret Thatcher had praised on Smith’s contribution on today’s capitalism market. She commented â€Å"Adam Smith, in fact, heralded the end of the strait-jacket of feudalism and released all the innate energy of private initiative and enterprise which enable wealth to be created on a scale never before contemplated† (Copley and Sutherland 1995, 2). Smith is also being recognized†¦show more content†¦Smith believed that societies were being motivated by passions and self-interest. Therefore, motive of morality came in to explain what is backing up the passion of human beings. The ess ential components of passion are self-interest and reasons. Self-interest indicated the goal of an individual wanted to achieve in a certain period of time and the reason gives explanation why this individual wanted to achieve this goal in that period of time. With these two components, Smith was able to conclude that the behaviors of individuals are motivated by reasoning. Also because of human beings are always looking for better living standard, therefore, he explained that the motive of morality is one of the keys to improve our society. The â€Å"theory of moral sentiment† did not only explain how human behaviors are modified by sympathy, but in addition, the theory supported Smith’s view on what policies should be adopted based on these theories. Laissez-faire was the early form of attitudes that Smiths and some of economists pursued in Europe during 18th century. It suggested that government should reduce their intervention on import and export regulation, such as imposing taxes and tariffs on these transactions on private parties. In addition, governments should advocate perfect competition in the nation in order to maximize economic growth. The Theory of Moral Sentiment has properly backed Lassies-faire up and clarified why human beings can regulated themselves in anShow MoreRelatedThe Biography Of Adam Smith1505 Words   |  7 PagesThe Biography of Adam Smith Adam Smith was born in Kirkcaldy, Scotland in the year 1923, and died in the year 1790 at the age of 67 (Stewart, 1861). His exact date of birth is unknown but was baptized on 5th June 1723. His father was a prosecutor, advocate, and solicitor but passed on two months after his birth, leaving his mother to bring him up. His mother, Margaret Douglas, played a great role in his upbringing, especially in education. 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