Political economist
Adam Smith, a very influential eighteenth-century political economist, wrote, “By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it” (cited in Stiglitz & Rosengard, 2015, p. 62). Considering the quotation, in 1,250-1,500 words, address the following questions.
- Describe what Smith meant by the “invisible hand.” How exactly does it function?
- Describe how Smith’s work is a reaction to mercantilism, which dominated the seventeenth and eighteenth centuries. As a point of departure, define mercantilism.
- Discuss if all 19th-century thinkers agree with Smith. How did, for instance, Karl Marx view the doctrine of laissez-faire? What were the inevitable consequences of such an economic system?
- Discuss the influences of Smith and his critics, like Marx, reflected in the mixed economy of the United States today.
Use three to five scholarly resources to support your explanations.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
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Answer preview
Mercantilism is an economic ideology that originated in Europe during the sixteenth century (Conti, 2018). The concept revolves around the tenet that governmental regulation is necessary for a country’s economy. Adam Smith heavily criticized this ideology to the extent that he came up with another one to counter it. Most people consider the free market concept introduced by Adam Smith as a reaction to the subsisting concept of mercantilism. Those who ascribe to this theory believe that the world’s resources are static. As such, countries should do everything within their power to control the most significant portion of these resources (Conti, 2018). This happens when a country maximizes the goods and services they export to other countries and limit the imports they bring into their country.
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Political economist
