Adam Smith's Theory Research Paper Example | Topics and Well Written Essays - 750 words

Adam metalworkers Theory - Research Paper ExampleBorn in 1723 and died in 1790, Smith left a legacy in his model Wealth of Nations that has been an influential contribution in economics. In brief, the conjecture identifies the basic principles that nation acquire wealth and function effectively when individuals use metropolis and proficiency at their own diplomacy. His model revealed the nature of countrys prosperity as many learn the principles of economics. Up-to-date, his arguments are used and cited in debates as many learn from his great insights. Nevertheless, some people disagree with his assumption as many view him as an activist of callous individualism. Regardless of the dash he is viewed, his theory is paramount in the economics field. How the economy does stem from his theory and importantly economists assume that the theory is accurate in how the worlds economy operates. At this point, this paper seeks to analyze the theory and lay a discussion of its pros and cons. W ealth of Nations In his theory wealth of nation, Smith noted that pay and prices might reach optimal level when freedom of using capital and skills as per wish is imposed (Smith, In Cannan & Lerner, 1937). He taught by examples of new products, which he argued that, when invented prices are usually high until when others discover the profit potential, and join the field then prices go down. Indeed this can be outlined in forthwiths electronics where such scenarios take place. ... According to ORourke and Smith (2007), the theory explored that in that location cannot be consumption if there is no production. To explain further, Smiths theory affirmed political machines do not just exist there is a process through which they are put together in production to catch up with cars. Similarly, capitalism works in this way in the sense that when a car is manufactured, those in need of a car search for it in the car factory and purchase as per their choice of the car. In the 21st Centur y, people do not just walk in the car factory and orison to purchase the car but they are purchased by a dealership and later sold to clients. The main point that Smith wanted to highlight is that, maven can break capitalism in two parts consumption and production. In this case, there cannot be consumption without production and vice versa. Applicability This fair play is applicable in todays society in that one cannot purchase products at the market without being manufactured and supplied by a contrasting party. Still, one cannot eat without preparing or acquiring food and cannot be in a house that has not been constructed. From his theory, Smith assumed that the market force ensured there is right invention of goods and services. The theorist based his idea on the aspect of free market economy whereby consumers have the free will to choose what they need. Smith perceived capitalism as the main aspect, which drives, and motivate the economy. He believed that it motivates compan ies and individuals to gain and accumulate profits. To support his argument, Smith developed two theories through a research on production in Europe during industrial revolution. The two theories are moral sentiments and wealth of nations, which