The Wealth Of Nations Adam Smith Analysis

One major point made by Adam Smith in his philosophy of economics is the idea that self-interest is the main influence to the flow of capitalism. Self interest in this context is the desire to have personal gain, which as a whole promotes the state of the economy. Smith provides a metaphor for economic interest in “The Wealth of Nations” when stating, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We do not rely on their humanity, but their selfishness” (Smith). This explains the idea that capitalist markets will function on the individual benefits of each consumer and producer as each desire personal gain. This factor of open markets applies heavily in modern economics, as there is the motivation of each individual to obtain advantages. This provides reasoning as to why people seek jobs and why producers provide …show more content…
As Smith brings up government involvement in capitalism in “The Wealth of Nations” he states, “The exclusive privilege of an incorporated trade necessarily restrains the competition, in the town where it is established, to those who are free of the trade” (Smith). In Adam Smith’s perspective, as shown in the quote, is that the government involvement will counteract the ability to have proper competition with other industries and therefore promoting the creation of monopolies. His thoughts, while some cases can be true, is not applicable to modern times. In today’s economy, specifically the U.S., there is slight government interaction in the capitalist economy, such as the Fiscal and Monetary Policies. Adam Smith at that time was unable to understand each possible issue with the economy, and as time went on, the need for government monitoring to fix recessionary and inflationary issues became