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Adam smith demonstrated that each individual in pursuing his self-good was led as if by an invisible hand to achieve the best good of all the society Adam Smith’s book ‘Wealth of Nations’ highlights some of the most prominent developments in classical economists. Classical economic theory developed shortly after the development of western capitalism and the industrial revolution and nearly all classical economists rejected government interference in exchanges preferring a looser market strategy. Capitalism, based on the agreement of classical economists, more so Adam Smith, is an economic system in which capital goods or all factors of production are owned by private individuals or businesses and the production of goods and services is based on the supply and demand in the general market rather than through central planning. One of the most enduring contributions of classical economists is the central place it gives to free trade in promoting economic development. This is a belief derived from Adam Smith ideas about the benefits of specialization. Adam Smith believed that everyone should specialize in making things that they are best at producing and trade at what others are better at producing. This is the absolute advantage theory. Adam Smith was highly critical of mercantilism who believed that countries declared their wealth based on the value of their gold and silver deposits. He argued that countries should be evaluated based on their levels of production and commerce, sentiments that created the basis of measuring a country’s wealth based on a metric Gross Domestic Product
Dana05 answered the question on July 3, 2019 at 11:17
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