USA HISTORY

Detailed explanation-1: -We know Adam Smith today as the father of laissez faire ("to leave alone") economics. This is the idea that government should leave the economy alone and not interfere with the “natural course” of free markets and free trade.

Detailed explanation-2: -Self-regulating markets: classical theorists believed that free markets regulate themselves when they are free of any intervention. Adam Smith referred to the market’s ability to self-regulate as the “invisible hand” because markets move towards their natural equilibrium without outside intervention.

Detailed explanation-3: -As he saw it, unfettered regulation of business would result in businessmen hijacking the economy to maximize their profits at the expense of society. This, he claimed, was what the mercantilists in England were doing.

Detailed explanation-4: -Adam Smith’s writings influence economics today as he believed wealth is created via labor, and self-interest spurs people to use their resources to earn money. Smith’s theories that economies thrive when competition, capitalism, and a free market, are alive and well in the 21st century.