What is the main inference that can be drawn from Adam Smith’s book The Wealth of Nations?
Answers
A free-market economy works well only without the government’s interference.
Adam Smith's theories are the basis for free-market capitalism and is the model of early capitalistic systems.
The Wealth of Nations lays out the economic theory of capitalism based on a free-market. As Adam Smith describes a free-market, the government should not interfere or regulate trade for the best results. When the government keeps their hands off the economy, large amounts of wealth can be earned and new businesses can grow with private investment and competition. Gilded Age capitalism is an example of free-market without government regulation. It produced unbridled wealth but also a large gap in social classes. Smith argues that is a necessary consequence to create motivation and competition.