1. By Devon and Chris

2. History
General economic view at the time: gold and silver
= wealth
Nations focused on exports over imports

3. More History
1776- Smith rejected the Townshend act which declared that there would be
taxes on tea, paint, glass etc…
Refused this act because of his beliefs:
• Nations wealth is in goods and services (not silver and gold)
• Basically embodied mercantilism: developed industry based on the balance of trade in
Europe.
• Wrote Wealth of Nations to express views

4. Division of Labor
“In those great manufactures, on the
contrary, which are destined to supply the great
wants of the great body of the people, every
different branch of the work employs so great a
number of workmen, that it is impossible to collect
all into the same workhouse.”
-Claiming that division of the manufacturers helps
supply a greater amount of products
-Example: Trade of pin-making

5. Economics
Laissez faire economics: No government interference
- Tariffs/taxes
- Restrictions/limitations
- Corruption
Allow free competition, free trading
Let the market expand to its full production capabilities
Adam Smith disagreed on one thing: government involvement is necessary
to uphold contracts, laws, needed for security
Government needed to get involved after stock market crash-1929
New deal-1930

6. Roles of Government
- Defense
- Justice
- Education
- Maintenance of commerce
-Fair and clear taxation

7. Accumulation of Capital
Nations need to save money for economic progress
Invest in labor-saving technologies
More investing/saving = more efficient production
- Everyone will become wealthier

8. Foreign Trade
Countries should do what they are best at
-ex: France should produce and trade grapes because they are
plentiful; not Scotland
Restrictions of foreign trade should be prohibited

9. Reference Today
How would you think that the government is involved with the economy
today?
And what are some ways that they restrict the market?