1. Adam Smith
• Author of An Inquiry into the Nature and
Causes of the Wealth of Nations

2. Adam Smith
• Private property
- Individuals have the right to
own physical objects (and
sometimes people!) as
private property to the
exclusion of others

3. Adam Smith
• Invisible Hand – Assumptions:
–Our preferences are
consistent
–We act based on self-interest
–Individual Good adds up to
Social Good

4. Adam Smith
•Laissez-faire
- The government should
not interfere with
economic matters

5. Adam Smith
• Division of Labor
- Economic output is
maximized when production
tasks are divided amongst
various workers with
specialized skills

7. Adam Smith
• Freedom of Trade
– Businesses and
governments should be
allowed to trade freely
(meaning without
tariffs) around the
world