Adam Smith and "The Wealth of Nations"

Adam Smith and the "Invisible Hand"

In 1776 a Scottish economist, Adam Smith, wrote a book titled "An Inquiry into the Nature and Causes of the Wealth of Nations"--now referred to as "The Wealth of Nations."

It would eventually be seen as a "paradigm shift" for the world.

Unfortunately only a small part of the world realized the importance.  Even today one of our two political parties apparently doesn't believe most of what Smith wrote.

Smith was the first to try to deduce what helps nations build wealth.  It was the beginning of the Industrial Revolution, and Smith introduced key concepts such as specialization (he calls it "division of labour), the huge importance of free markets, how supply and demand set prices, and the role prices play in how people allocate resources.

Smith believed the robust trading of goods would encourage specialization, which make things less costly for both nations:  If one country efficiently produces X and another produces Y, and each wants some of what the other produces, free trade makes that profitable.  And note that this doesn't mean nations can't impose tariffs, which are useful to persuade another nation to reduce its trade barriers. 

But Smith's biggest breakthrough was in proposing that the "selfish choices" of millions of people were far better than the decisions of bureaucrats in determining how economies should work.  He called this "the invisible hand of the marketplace."  He asserted that these millions of free choices every day by citizens, operating under the natural results of the laws of supply and demand, produced far better results than government rules.

To say this was revolutionary barely describes it.

"The Wealth of Nations" seems to be a clear paradigm shift in economics.  But bureaucrats and politicians want power above all, and can't resist the temptation to *control as much as possible*--an arrogance they ALWAYS wrap in two lies: 
    1) "It's for your own good" (ahh, of course); and 
    2) "We're smartah den you, so what we decree is good for you shall not be questioned."

Any guesses which of our two main political parties pushes those two claims?