ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The policy of laissez-faire received strong support in classical economics as it developed in Great Britain under the influence of An Inquiry into the Nature and Causes of the Wealth of Nations, by the Scottish philosopher and economist Adam Smith.

Detailed explanation-2: -So then, while Smith was sympathetic to laissez-faire proponents, he was not totally committed to laissez-faire economics. He was not as rigid nor as minimalistic as laissez-faire economists advocate. He did not see laissez-faire principles as absolutes.

Detailed explanation-3: -The laissez-faire theory mainly advocates government non-intervention. Economic theorist Adam Smith believed that the optimal functioning of markets needed minimal government intervention.

Detailed explanation-4: -Smith is most famous for his 1776 book, “The Wealth of Nations.” Smith’s writings were studied by 20th-century philosophers, writers, and economists. Smith’s ideas–the importance of free markets, assembly-line production methods, and gross domestic product (GDP)–formed the basis for theories of classical economics.

Detailed explanation-5: -For many he has become associated with a quasi-libertarian laissez-faire philosophy. Others, often heterodox economists and social philosophers, on the contrary, focus on Smith’s “Theory of Moral Sentiments, ” and explore his moral theory.