![]() ![]() He demonstrates the way the availability of particular commodities and the demand influence the price. ![]() Before the part under consideration, the author contemplates the nature of natural price and market price. In the fourth book, he criticizes the mercantilism and introduces the notion of gross domestic product.įinally, in the fifth book, Smith describes the role of the sovereign or government in the economy. In the third book, the author proceeds to the description of the evolution of societies and their economic growth. In these books, Smiths also dwells on the nature of money and pricings. The author explains that the division of labor leads to the situation when every employee has to conduct the particular task, and it makes the work more efficient. Smith emphasizes the significance of labor division and pays attention to the fact that it makes the nations prosperous. In the first two books, the general idea of the author refers to the division of labor. The rapid progress led to new challenges concerning the proper division of labor force, the activities of free markets, and revenue-related issues.Īdam Smith provides readers with his understanding of the nature of the economy in “The Wealth of Nations”. The Industrial Revolution was followed by a substantial growth of population. New employment opportunities appeared, and the general income of people arose. However, the later data showed that the standard of living of most people increased with the progress of manufacturing. According to historical evidence, people were against such drastic changes as far as they were afraid that they would be left without work. Factories started using coal and other fuels in their work. It was the age when the intensive usage of water and steam power began. The primary change during that period concerned the substitution of the ways of productions. Industrial revolution commenced in the United Kingdom and soon expanded in the other countries of Western Europe. The Industrial Revolution should be regarded as the watershed moment in the history. Adam Smith wrote his book at the beginning of the Industrial Revolution.
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