Nobody downloaded yet

The Nature and Causes of the Wealth of Nations, Adam Smith - Essay Example

Comments (0) Cite this document
The Nature and Causes of the Wealth of Nations Your name Institution The Nature and Causes of the Wealth of Nations Adam Smith is considered to be the father of modern economics. He contributed extensively towards the shaping of the overall foundation of economics by writing some works…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.9% of users find it useful
The Nature and Causes of the Wealth of Nations, Adam Smith
Read TextPreview

Extract of sample "The Nature and Causes of the Wealth of Nations, Adam Smith"

Download file to see previous pages One of the essential ideas in “The Wealth of Nations” is the division of labour. According to Smith, the division of labour occurs due to the increase in production rather than any other factor. The division of labour, however, can only be beneficial if a nation has more industry in place. The book argues that agriculture does not produce a larger division of labour as compared to industry. According to Smith, the division of labor arises not from the innate wisdom of the masses, but due to a human tendency to barter. Smith, therefore, argues that the reasons for the specialization are due to the differences in natural talent rather than any other factor. The book also discusses the limitations of the division of labour and indicates that the division of labour is actually limited by the extent of the market. The overall limited opportunities in the market actually result into the lack of labour specialization. If a market can be expanded, the specialization of labour can further occur, and the society can benefit from more skilled workers. In 1778, Smith was appointed the Commissioner to the Customs. This experience sharpened his understanding of trading and of the manner how exchange actually took place between two parties. He designed and developed policies and methods to curb smuggling so that overall revenues could be increased. He remained single during his entire life and died in Edinburgh on July 19, 1790 (Smith, 1761 a). He was a ruthless advocate of individualism, and his interests ranged from natural theology, ethics, and jurisprudence, to economics, which may explain the cause as to why he wrote “The Theory of Moral Sentiments” (Smith, 1761 a). He denied self-love as a principle which could never be virtuous. He thought that sympathy and self-interest were complementary. He once expressed that it was not from the benevolence of the butcher, the brewer, or the baker, that a worker could expect dinner, however, in fact, each agent worked in their own self-interest (Smith, 1761 a). He also discussed the concept of money and how various commodities were used as money. He reviewed the origins of money and how different nations actually used it in order to create a medium for exchange. He also speculated how metals were used as money and how nations actually invented new methods of developing money with the purpose of creating an exchange value. Further, he also discussed nominal prices for commodities as well as prices for labour. He also outlined how prices were actually determined and what were some of their components. Smith was in favour of labour and indicated that labour was the means by which an individual earned wages in a competitive market; a labourer must produce something others valued to earn (Smith, 1761 a). “The Wealth of Nations” reveals that nature and causes of the nation’s prosperity come from the increasing of the labour division to systematize its production (Smith, 1761 a). Smith professed that individual would invest resources, e.g. land and labour, to earn the highest possible return of investment, but it must yield to the equal rate of return (Smith, 1977 b). For classical economists this was the core of Smith’s proposition of economic theory. Smith advocated equality of returns to explain the differences of salaries based on the knowledge, skills, ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“The Nature and Causes of the Wealth of Nations, Adam Smith Essay”, n.d.)
The Nature and Causes of the Wealth of Nations, Adam Smith Essay. Retrieved from
(The Nature and Causes of the Wealth of Nations, Adam Smith Essay)
The Nature and Causes of the Wealth of Nations, Adam Smith Essay.
“The Nature and Causes of the Wealth of Nations, Adam Smith Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The Nature and Causes of the Wealth of Nations, Adam Smith

Wealth of nations by Adam Smith

...of productivity facilitated by specialization. He recognized benefits of trade, automatic market mechanism as well as the collaborated wide and fertile resources that provided great efficiency. Consequently, it is these ideas that make the basic fabric economic science that we adhere to up to date. This book inquires about the nature and causes of a nation’s wealth. In book one, chapter five, Adam expounds on real and nominal price of products and their prices of labor and money. In simple terms, Adam believes that every man is wealthy or poor. This status depends on the degree in which a man can afford to enjoy the conveniences,...
4 Pages(1000 words)Term Paper

Adam Smith

..., and this occurrence, Adam Smith has mentioned, exists due to the ‘benevolent invisible hand’. All these effects take place dynamically and automatically (Helen, 2001). Contribution to Economics Adam Smith gave major contributions in the field of economics through his economic thoughts, publications and theories. The major contribution of the economist was given in the year 1776 in the form of his most prominent book, The Wealth of Nations’. This work established the economic dimensions of the Industrial Revolution and has converted economics into the characteristics of social sciences. The Wealth of...
4 Pages(1000 words)Term Paper

Who was Adam Smith

... of the Adam Smith is an economist and a of a number of prominent books, such as The Nature and Causes of the Wealth of Nations written in 1776. He theorized a system, which fixed essential principles of economics and its operations (Smith (a), n. d.).  His book explicates the relation of supply and demand and the ideation of division of labour forces in the industrial period, which accorded him such distinction that catapulted him to the Board of Customs in Scotland. This historic distinction later became an anthropological and historical interest for those who would visit Edinburgh (Smith (b), n. d.). Smith was born in Scotland and got education in Glasgow. He also spent his academic life in Oxford and gained extensive knowledge... produce...
4 Pages(1000 words)Essay

Adam Smith Wealth of Nations

...Adam Smith - Wealth of Nations Adam Smith is one of the well-known political economists in the 18th century because of his work called "An Inquiry into the Nature and Causes of the Wealth of Nations" or simply called Wealth of Nations. His work paved the way to modern economics and gave rationale for capitalism, free-trade and libertarianism. Smith is actually considered to be the Father of Modern Economics. Adam Smith's ideas as reflected in his work are still relevant today. His concept of free-trade is still what majority of the world's economy is practicing. Free trade, according to Smith, is the ability of the economy to produce the sufficient amount of goods and provide different varieties with the guidance of what he calls... in the...
1 Pages(250 words)Essay

Adam smith biography

...of "the obvious and simple system of natural liberty", which was the basis of his influential book entitled An Inquiry into the Nature and Causes of the Wealth of Nations (The Wealth of Nations).1 Around 1750 Smith met the philosopher, economist and historian David Hume, one of the most famous figures of the Scottish Enlightment along Smith himself. They became close friends, and Smith was influenced by his works as it has been noted by many scholars. In 1751 Smith became a professor at Glasgow University where he lectured on logic and moral...
8 Pages(2000 words)Essay

Adam Smith: Wealth of Nations - Book IV, Chaper II

...on Inquiring into the Nature and Causes of the Wealth of Nations, which was published in 1776, after almost twelve years of endeavor. In 1778, Smith was appointed Commissioner of Customs in Scotland. In this post, he settled down with his mother, friends and books in Edinburgh, until his death in 1790. Adam Smith’s seminal work has rightly been acknowledged to be the single most important book on political economy to ever be written. Its’ basic premise is that rational self-interest, rooted in a free-market economy, leads to the economic well-being of the individual and this in turn contributes to the economic...
5 Pages(1250 words)Essay

Adam Smith

...Adam Smith Today Adam Smith is recognized as one of the foremost economist of the modern world. In his text the Wealth of Nations, Smith established a view of economic structures that has since come to be recognized and adopted by world nations as capitalism. While Smith’s theories proved widely prescient, in some regards they clung to an overly idealistic articulation of world processes. This essay examines Smith’s understanding of capitalism and demonstrates why his ideals cannot entirely be followed in the modern world. In the Wealth of...
2 Pages(500 words)Essay

Adam Smith Inquiry on the Wealth of Nations

...Adam Smith Inquiry on the Wealth of Nations In comparing the lives of industrial laborers in England with those of hunters and shepherds in more primitive, ‘barbarous’ societies, Adam Smith successfully portrays the difference between the two lives and equally holds a higher opinion on the life of a “barbarous” hunter or herdsmen. Nevertheless, he suggests that that the government initiates a widespread education for children for the sake of eliminating poverty in the nation. This is despite the fact that he initially argued that specialization and division of labor are engines are the key to success. Subject to his...
1 Pages(250 words)Essay

Adam Smith

... increases chances of inventions due to improved skills in one area of operation. However, it is in order to conclude that division of labor is not mainly facilitated by human wisdom but by other greater factors such as necessity. Actually, since necessity leads people to work and specialize in their most productive areas, it could arguably be considered as the main driving force behind division of labor. Works Cited Smith, A 2007, An inquiry into the nature and causes of the wealth of nations, Volume 1, New York, Cosimo.... DVISION OF LABOR: ADAM SMITH By Division of Labor: Adam Smith Division of labor has, to a great extent, improved production levels and efficiency of...
5 Pages(1250 words)Essay

Economic systems envisioned by Adam Smith in An Inquiry into the Nature and Causes of The Wealth of Nations and Karl Marx in The Communist Manifesto

... of classism and self-interest are part of the drive but the produce is for the entire world as more and more production becomes revolutionized and centralized. In contrast, Smith and Marx show the variation of growth of wealth. Smith focuses on how labor and skill are important in the means of production while Marx criticizes the society today to have classes that will keep thriving into self-interest. References Smith, Adam (1776): An Inquiry into Nature and Causes of Wealth of Nations Marx, Karl (1848): Manifesto of the Communist Party... perspective in the causes of the wealth of nations is division of labor. Both Carl Marx and Adam Smith agree that it...
3 Pages(750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic The Nature and Causes of the Wealth of Nations, Adam Smith for FREE!

Contact Us