Adam Smith

      

Adam Smith 

''The Wealth of Nations''

           

              Firstly,We need to know who is Adam Smith? Some of us know him as ''Father of Economics''but a lot of people know him as a professor of philosophy(moral). Mr.Smith was born in Kirkcaldy,Scotland in 1723. Mr.Smith has a fantastic life of his whole life. It wasn't a very ordinary life that is why his perspective was changed. At the age of four Mr.Smith was kipnapped....A few months later,Mr.Smith was found by his uncle. 

             Mr.Smith had an early educational life. At the age of fourteen Mr.Smith  started education as a student about moral philosophy in Glasgow University*. At the relevant university, Mr.Smith have the thoughts of Fredoom,Law.... His family was religious. Mr.Smith thougt like '' Religions is blocking Economics.'' So Mr.Smith's Economic thoughts are on atheism.At the relevant university Mr.Smith became professor. Mr.Smith attended more than fifteen conference whole of his professor life. Mr.Smith wrote a book about some of his conference in Glasgow name of ''The Theory of Moral Sentiments.'' With that book his fame started to known by others.The other book of him name of ''An Inquiry into the Nature and Causes of the Wealth of Nations.'' with this book Mr.Smith became famous.

          Mr.Smith died in 1790 in Edinburgh,Scotland. His testament was fulfilled by his friends. Mr.Smith left many notes and unpublished writings behind him, but instructed him to destroy everything that was not suitable for publication.

Signature of Adam Smith

The Wealth of Nations

         The main theme of this book ''Economic Growth''  We could call the book as a ''Handbook of Classical Economy.'' 

         One of the main points of the books is that although the free market seems complex and uncontrollable, it is actually directed by a "invisible hand" to produce the right amount and variety.

Mr.Smith knows the reasons why people move into action, because they were *selfish and greedy.*

The positive reasons of that competition in the free market, it showed to helpful all society by keeping prices down. For Mr.Smith at the same time this competition encouraged him to produce more various goods and services. Mr.Smith destroyed with his all power to get rid of state restrictions.As a matter of fact,some of the affections of government interventions,including the custom tax, caused inefficiency and in the long run(long-term) it caused high prices. Laissez-faire theory meaning of ' Let it go ' ,in next times, especially 19. Century affected the government laws.

The Main Topics of What The Book Mentioned

• Full competition
• Capital
• Invisible hand
• Division of Labour
• Labor
• Price
• Money

Theories

• Price Theory
• Labour Value Theory
• Rant Theory

Price Theory

         According to Adam Smith There is real price and nominal price.Real price is the cost of obtaining the goods,depends on labor, in the long run(long term) the real price applies to all goods.The nominal price is the price arising from short-term fluctuations in supply and demand balance or changes in market conditions.

Labour Value Theory

         According to Adam Smith one goods has  two kind of value. First one is benefit,second one is barter value with other goods.The first value usually varies from person to person, depending on the value of each person, and is difficult to calculate from a society perspective.

Rant Theory

Adam Smith talks about five kinds of rant.

• Net income
• The price paid to soil owner to make production from the soil rent.
• The profits that soil owners earn because of their monopolistic situation.
• The market of distance rant.
• Rarity rant.