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Adam Smith was the founder of economics as we know it today His thoughts have shaped modern ideas about the market economy and the role of the state in relation to it Smith laid the intellectual framework that explained the free market which still holds true today and laissez-faire Both are connected with the underlying theme of economic growth Smiths analysis is not confined to showing the interrelation between the different elements of a continually maintained system It also explains how the system can generate the continual accumulation of wealth And since according to Smith this process is most successful when left to the play of natural forces his analysis leads him to urge governments to let well alone Laissez-faire government believes commerce and trade should be permitted to operate free of controls of any kind there should be no tariffs or other barriers The direct translation from the French language is leave alone to do which is self-explanatory He is most often recognized for the expression the invisible hand which he used to demonstrate how self-interest guides the most efficient use of resources in a nations economy with public welfare coming as a by-product It simply encourages businesses to provide what consumers want and at the same time it discourages government involvement He believed that the only responsibilities of the government should be to define property rights set up honest courts impose minor taxes and subsides to compensate for well defined and narrowly specified market failures To underscore his laissez-faire convictions Smith argued that state and personal efforts to promote social good are ineffectual compared to unbridled market forces Adam Smith explained that a monopoly charges any price that it chooses robs consumers and makes countries less efficient and poorer Competition he said means that businesses try to charge the lowest price possible so consumers get maximum value for money If they can buy more they support more jobs in the
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