Adam Smith and his contribution to the modern economy
INTRODUCTION
The economy was born as a science with the work of Adam Smith, which is known as the father of modern economy, is the first to give a scientific character to the economy, that science is political economy, because he combines history, Human nature, ethics and economic development in an exemplary way, Smith said that economic growth depends on the extension of the market and that the value of all goods is work, he also commented that the market was the great unknown of the economy of the economy since it has some factors such as geographical extension, domestic consumption and economic development.
Smith also mentions that no matter how selfish the man can be supposed to The pleasure of contemplating it. Such is the case of pity or compassion, the emotion we feel at the misfortune of others when we see it or when they make it conceive in a very vivid way
DEVELOPING
Adam Smith and his economic contribution
Adam Smith is one of the most famous economists in history and is considered the father of modern economy. His economic theories combine history, philosophy, economic development, psychology and ethics. He is one of the greatest exponents of classical economy. He was born in Scotland in 1723. He possessed a prodigious memory and vocation for the study, faculties that facilitated admission to the University of Glasgow. (Sánchez. F.)
In the conception of Smith, development or economic progress is characterized as an endogenous, circular and cumulative process of change and structural transformation that results from the interdependence relations between the capital accumulation process, the expansion of the markets and the Growth of production, productivity and employment. In this process, the growth of the product and social wealth is determined by the dynamics of productivity and the increase in the use of productive workers, which, in turn, is determined by the accumulation of capital. On the other hand, the dynamics of productivity is determined by the accumulation of capital and the progressive extension of the division of labor, which refers to the organization of particular production processes and, what is fundamental and significant, to the industrial sector structure. (Ricoy, 2005)
Adam Smith said that to know if a country is rich or poor is not the amount of gold or silver but the total amount of producing a trade, which a country has, what we know today as the gross domestic product, considers the good of the good of Exchange between parts favors everyone, because everyone benefits, both buyers and vendors because both groups get what they want, some manage to sell their products and others manage to buy them.
Adam Smith, invisible hand
In 1776 Adam Smith stated that an invisible hand was the one who moved the markets to obtain his efficiency, it is actually the trust that each person feels at the time of doing a business. Which is also unique, because it is different from the trust of others and that it is a non -linear variable that is fundamentally linked to the respective personal stories. (Gaché & Otero, 2010)
The invisible hand is the metaphorical way with which the historic economist Adam Smith referred to the self-regulation capacity that free market has intrinsic according to its theories and studies. In his work "Theory of moral feelings", published in 1759, was the first place where this term saw the light, although it reached greater notoriety in it another book of 1776 "The wealth of nations". (Pfefferkorn & Roland, 2008).
Adam Smith states that the human being is empathetic for nature, that is, he has the ability to put himself in the place of the other even when this does not present any benefit, society is benefiting itself, because each person is in the search From his own personal benefit constantly, but for that he needs the other what he triggers in turn, Adam Smith states that markets is the exchange of goods and service among free people and works much more efficient when they are not regulated , bone when prices are not intervened or when people are not obstructed to buy and sell, this mesclated with free competition any person can offer a good or a service without work would then generate the correct allocation of resources and also of the products produced.
Adam Smith stated that individual selfishness is the one that leads to generating wealth and economic growth of nations. With a nascent capitalism following the colonization of the Americas, the formation of a business class eager for money, which accumulates and reinvested surpluses, gives way to the industrialization and wealth of the peoples. (Lalama & Bravo)
Smith mentions that the market economy is the tool to achieve social well -being, while each one seeks their own interest, however it never believed that the market was perfect or automatically operated by magic, it is more admitted that a totally trade market Free was a utopia, neither did an anarchic system support, without norms or laws, but a market economy where they were allowed in free trade and considers the human being as a cold and selfish individual without any ethics and only concerned about their material interests.
Adam Smith, moral feelings
In his theory of moral feelings Adam Smith proposes an ethic that reconciles two paradigms usually considered incompatible: an ethic of virtues, with orientative and ideal norms of excellence, and an ethic with universal rules that apply in all cases without exception. Smith does it by changing the point of view from which the moral judgment takes. This novel point of view allows you to introduce modern characteristics to the classical ethics of virtue to give new justification to positive virtues, as well as change the way of understanding universal rules or principles ’. In this way, Smith builds an ethic capable of accounting, within the same theoretical framework, both of the ideals of excellence of virtue, and of modern universal imperatives. (Carrasco, 2016)
Smith relates sympathy to humanitarianism, that is to say that the human being drives him to do naturally, such as performing different acts of charity, but the human being sometimes misunderstands and imagines other things, such as for example, we can To think that someone is feeding to the hungry, when in reality it could be poisoning it, in which it relates empathy to antipathy and hate, it also mentions that you dare of the concordance between our feelings and the actions we perceive on the other, we exercise judgments that Our opinion is correct since it is so, as a fully subjective act, Smith raises us that the way to approve or reprob our behavior is to place ourselves in the place of other people.
CONCLUSION
In conclusion, Adam Smith is one of the most famous economists in history and is considered the father of modern economy, in which in his conception of Smith, development or economic progress appears characterized as an endogenous, circular and cumulative process of change and structural transformation that results from the interdependence relations between the capital accumulation process, the expansion of markets and the growth of production, productivity and employment, whereby, Adam Smith stated that a hand Invisible it was the one who moved the markets to obtain their efficiency, which is the metaphorical way with which the historic economist Adam Smith referred to the self-regulation capacity that free market has intrinsic according to its theories and studies, in which Adam Smith Smith He affirmed that individual selfishness is the one that leads to generating wealth and economic growth of nations, it also manifests in his theory of Sentim Morales Adam Smith proposes an ethic that reconciles two paradigms usually considered as incompatible: an ethic of virtues, with orientative and ideal norms of excellence, and an ethic with universal rules that are applied in all cases without exception.
BIBLIOGRAPHIC REFERENCES
- Lalama & Bravo. (2017). Adam Smith’s economic wealth and growth. Scielo. http: // scielo.Senescyt.Gob.EC/Scielo.PHP?script = sci_arttext & pid = s1390-86182017000100169
- Ricoy, (2005). Adam Smith’s economic growth theory. Redalyc. https: // www.Redalyc.org/pdf/4255/425541308001.PDF
- Sánchez, (S.F.). Adam Smith and invisible hand. Economipedia. https: // economipedia.com/Definitions/the-man-invisible.HTML
- Gache & Otero, (2010). Adam Smith, invisible hand. Dialnet. File: /// c:/USERS/Dell/Downloads/Dialnet-Adamsmith-5265981.PDF
- Carrasco, (2016).Adam Smith ethics. Scielo. https: // www.Scielo.Br/Scielo.PHP?script = sci_arttext & pid = s0101-31732016000300023 & lng = es & tlng = is
- Pfefferkorn & Roland (2008). Adam Smith, a well -tempered liberalism. Redalyc. https: // www.Redalyc.org/pdf/996/99616725010.PDF
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