Paragraph On Adam Smith And David Ricardo

Carlos Flores S.J.C S.P.S Principles of Economics -105 September 22nd , 2009 ADAM SMITH Scottish economist and philosopher Adam Smith made an intense development in economic theory with his book ‘Wealth of the Nation’, (1776). Smith's elemental argument was that each person should have the right to pursue their own private gain (economic interests) as much as they can and as long as they do not violate the law. In this way, Smith thought, they would do much more to extend the public good and public interests. He also thought that private businesses pursuing their own benefits would organize the economy most efficiently, “as if by an invisible hand.”Smith called this the invisible hand of the market - although everyone is acting in their own self-interest, they are led to achieve the good of all as if by an invisible hand of economic forces. Therefore any interference of competition from the government could lead to serious damage. This became known as laissez-faire economic policy. Meaning that the economy works best if private industry is not regulated and markets are free.

DAVID RICARDO David Ricardo British Economies who left school at the age of 14, in his mid-20 he was influence a lot from Adam’s Smith Book Wealth of Nations 1776. He became immensely rich at the age of 21 in the stock market where his father hat put him to work .Ricardo had a lot of theories and believes concerning economics, for instance he argued for the continuation of the convertibility of paper money into gold. Also one that attract me was the “labor theory of value” in it he argues that the price of a product is conclude by the time and work a worker spends on it,

to make it. However later this became a Problem for Smith. He also had a theory of growth, Smith believes that the increase of population would require more land and lead to less land for cultivation.