What were Adam Smith's views on economic behavior?

Adam Smith argued that economic prosperity is driven by rational self-interest, competition, and the division of labour within a self-regulating market system. Rather than relying on divine will or mercantilist protectionism, he analyzed wealth as a product of national income generated by human labor. His foundational works, particularly The Theory of Moral Sentiments and The Wealth of Nations, shaped classical economics by promoting free markets while still recognizing a role for the state in providing for the common good.

What we know

• Adam Smith developed the concept that rational self-interest and competition can lead to economic prosperity. [2]
• Smith argued that a nation's wealth is determined by its national income based on the labor of its inhabitants, organized efficiently by the division of labour. [4]
• He opposed mercantilist policies that sought to safeguard national markets through import reductions and export augmentations, laying the groundwork for classical free-market economics. [2, 4]
• Smith acknowledged that there are areas where the market is not the best way to serve the common interest, and he believed the costs supporting the common good should be borne by those best able to afford them. [4]

Where to go next

• how it workedHow does the division of labour increase productivity?
• how we knowWhat was the invisible hand metaphor in classical economics?
• what followedHow did Karl Marx critique classical political economy?
• the bigger pictureWhat is the labor theory of value?
• compared withWho were the main thinkers of classical economics?
• an unexpected connectionHow did a critique by Karl Marx establish the canon of classical economics?Marx's critique of political economy inadvertently canonized earlier figures like Adam Smith and David Ricardo by grouping them into a recognized classical school.

Sources

• [1]Adam Smith (Wikidata Q9381) · CC0 1.0
• [2]Adam Smith · CC BY-SA 4.0
• [3]The Theory of Moral Sentiments · CC BY-SA 4.0
• [4]Classical economics · CC BY-SA 4.0
• [5]Labor theory of value · CC BY-SA 4.0

Your path

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5. /What were Adam Smith's views on economic behavior?