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- Date Submitted: 11/28/2010 08:49 PM
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Adam Smith: the Wealth of Nations
Adam Smith and The Wealth of Nations
Capitalism is considered a pivotal part of today’s society but in 1776 when Adam Smith wrote his keystone article, The Wealth of Nations, capitalism did not exist. It is actually through The Wealth of Nations that Smith introduced the idea of capitalism. Smith is commonly referred to as the father of modern economics because of his revolutionary ideas that changed both American politics and the American economy. Even though capitalism is an idea closely associated with the United States, Smith did intend for his work to solely define one nation. He was a Scottish philosopher who took part in the enlightenment.
The Wealth of Nations was written to challenge the economic system that was dominating world politics in the sixteenth century. The most common economic system at the time when the article was written in 1776 was the Mercantilist System. It essentially required a mother country to take on a protectionist role over other countries in which the receive capital gain. This system was popular being of the widespread Imperialism of the 16th, 17th, and 18th centuries.
The Mercantilist System was set up so that nations would gain as much wealth out of their colonies so the mother country would benefit. It was a system that used relative gain as the world economic system. Countries believed that the world wealth was limited and was based on one countries gains coming at the expense of another nations lose. To be successful in this system, nations had to get as much resources from their colonies as possible. Europe especially depended on this system to gain access to the lucrative trade market of East Asia, especially China. Europe needed to acquire silver to trade with China. European leaders demanded their colonies to produce labor and resources in their countries yet the colonies had no representation in the politics of the European mother countries.
When Enlightenment ideals spread after the example of the French...