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George Smith Overpopulation

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Smith explains why prices are close to costs and how society causes the goods it wants to be produced. He also shows why high prices do not last for long and why incomes tend to be almost the same for the same kind of work. All of this happens automatically in the marketplace based on the role of self-interest, which causes the market to function in a well-organized manner. The individual can do whatever he wants in the marketplace but if what he wants is not what society wants, he faces economic ruin. Therefore the preferences of the consumers are what feeds the whole system.
By acting on personal interests, the individual accidently contributes to the economic wellbeing of society. The second law of the market is competition. Businesses …show more content…
So, the two laws of the market react upon each other and form a balance, guaranteeing the survival of society.

The law of accumulation refers to the accumulation of profits, which are put back into production. When businesses accumulating profits, they can expand production. In order to do this they must purchase additional machinery, which will stimulate further division and specialization of labor, in that way boosting productivity. However, additional machinery means more workers are needed to work them. Eventually this increased demand for workers leads to higher and higher wages until profits for the business disappear.
The solution to this obstacle is Smith's law of population. Labor is a demand of businesses. As the law of accumulation increases wages for workers, societies population can afford to increase. As the population of workers increases, the increase in labor supply, pushing wages down. As a result of lower wages, profits for the capitalist will rise again, and accumulation will continue.
The laws of the market also control incomes of producers. When one type of business become unusually large and profitable, new producers are attracted to the business — until competition reduces the surplus of

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