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Adam Smith Wealth of Nations Summary

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Adam Smith emphasizes the profound benefits humanity has received from their ability to collaborate in the pursuit of self-interest. Every deal and transaction is made possible because each party feels that they they’re gaining something by cooperating. Self-interest creates intense competition and rewards innovation, further advancing the development of human society. Adam Smith believes that it is through this ideal that all economic innovations are developed. From the implementation of the division of labor to globalized trade to the development of money, these ideas emerged not because it made the lives of the common man better, but because they offered the opportunity for men to increase their own stock. This is the essence of Capitalism. Smith continually harkens back to selfishness as the driving factor in all aspects of his theory of capitalism. Take for example the development of larger, more efficient maritime trade routes. Merchants of this era did not intend to greatly improve the quality of life for everybody in Europe, but to reap profits in emerging markets. As a result of this monetary incentive, better maritime navigation was developed and better ships were built, eventually allowing Europe and the rest of the world to access the vast resources of North America. Interestingly, self-interest even balances the economy, what Smith calls the “invisible hand.” People will find the place where they can be most profitable. As a result, people are evenly dispersed as they pursue markets and specializations they feel will be the most profitable to them as an individual. Smith’s point is that selfishness not only betters the life of the individual but also the quality of living of an entire civilization. Logically speaking, humans will continue to develop technologically as long as the incentive for personal gain exists. Whether it be mining asteroids,...

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