QQuestionEconomics
QuestionEconomics
Which economic idea did Adam Smith promote in The Wealth of Nations?
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Answer
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Step 1: Understand the question and provide a general overview
The Wealth of Nations is a foundational work in classical economics, written by Adam Smith and published in 1776. In this book, Smith promoted the idea of the "invisible hand," which suggests that the self-regulating behavior of the free market tends to benefit society as a whole, even if individual participants are only pursuing their own self-interest.
Step 2: Define the "invisible hand" concept
The "invisible hand" is a metaphor used by Adam Smith to describe the self-organizing behavior of the market. When individual participants in the market pursue their own self-interest (such as producing goods or services to sell at a profit), their actions collectively contribute to the overall well-being of society. This happens because competition among producers leads to lower prices and increased efficiency, and because the division of labor allows for greater specialization and productivity.
Final Answer
This concept implies that government intervention in the economy is not always necessary or beneficial, as the market can regulate itself through individual actions.
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