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Adam Smith, Inquiry into the Nature and Causes of the Wealth of Nations . What business does a government have in commerce and trade? Why would a government want to interfere between two countries benefiting from each other by trade? What right does the government have in two individuals wanting each other’s products or services? This is where the term laissez-faire is introduced. It’s direct translation in French, “leave alone to do”.


A strong believer in this type of economics is Adam Smith, both a philosopher and an economist. The Wealth of Nations , examined in detail the consequences of economic freedom, such as division of labor, the function of markets, and the international implications of a laissez-faire economy. A majority of people saw confusion when they observed economic activity in England .


Consumers purchased whatever they wanted to buy. No one told anyone what had to be bought and what had to be sold especially the government. And yet, somehow, businesses seemed to be providing the goods and services that consumers wanted and needed. Some might have called it luck; Adam Smith called it an “invisible hand”. This “invisible hand” encourages businesspeople to pursue profits and it pushes consumers to buy goods and services. And at the same time, that “invisible hand” discourages government from directing the economic activity.


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This “invisible hand” that Adam Smith refers to as a guiding force was the people and their attitudes. It all started with profit-seeking individuals. Using self-interest to feed their drive, people started businesses. Adam Smith argued that an individual acting purely out of self-interest, would be a progressive force for the maximization of the total wealth of a nation.


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