Adam Smith, who first introduced the concepts of modern economics in 1776 in his

Question

Adam Smith, who first introduced the concepts of modern economics in 1776 in his book The Wealth of Nations, ?stated, "LIttle else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things." Analyze each of Smith's 3 conditions in terms of economic tools you've learned. For each condition analzye its presence or absence in todays society. Please answer in reference to the tolerable administration of justice!

Explanation / Answer

>>One of these ideas was that if left alone a society will produce its own spontaneous order, or what he termed “her own designs.” Also in this passage Smith hints that he advocates a policy by the government of “laissez-faire” (or hands off), or again in his terms “to let her (nature) alone, and give her fair play in the pursuit of her ends”.

>>>The second idea in this “early Smith” is a clear statement of the policy of very limited government which he believed should limited to three things: peace, low taxes, and an acceptable (and presumable also cheap) system of justice. To what extent Smith continued to believe these principles in 1776 is open to debate. What is interesting here is that there is no mention of government provision of public goods which was later to play an important role in the Smithian state as described in Wealth of Nations.

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