source: adam smith, the wealth of nations, 1776.
note: the most common economic system in europe during the 16th and 17th centuries was called mercantilism that a monarch, with the help of a country’s rich, could be in charge of making economic decisions. the monarch was granted his power by god. he believed in making decisions that would benefit the national economy.
without government interference the obvious and simple system of natural liberty establishes itself of its own accord. every man ... is left perfectly free to pursue his own interest in his own way... the ruler is ... ever completely discharged from a duty for which no human wisdom or knowledge could ever be sufficient – the duty of superintending the industry of private people, and of directing it towards ... the interest of the society.
as every individual, therefore, endeavours as much as he can both to employ his capital money in the support of ... industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily contributes to the annual revenue of the society as great as he can. he ... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own gain, and he is in this ... led by an invisible hand to promote an end which was no part of his intention... by pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it.
document analysis
1. in paragraph one, does adam smith support an economic system based on government control or individual decision-making? why?
2. in paragraph two, according to adam smith, why do most individuals work?
3. according to smith, what is the happy and unexpected result when people pursue their own economic gain?
4. in paragraph two, smith mentions an \invisible hand.\ what do you think he means by that?
5. what is adam smith’s main idea about trade and economic decision-making?
6. what does adam smith’s economic philosophy have in common with john locke’s and voltaire ideas about government and religion?

Question

Accepted Answer

To answer these questions, we analyze the provided text from Adam Smith's work:

### 1. In paragraph one, does Adam Smith support an economic system based on government control or individual decision - making? Why?
# Brief Explanations:
Adam Smith supports individual decision - making. The text says “Without government interference…Every man…is left perfectly free to pursue his own interest in his own way” and implies government control (like a monarch's economic control) is not ideal as individuals should make economic choices.
# Answer:
Adam Smith supports individual decision - making. He states that without government interference, people should be free to pursue their own economic interests in their own way, implying that government - controlled economic systems (like mercantilism under monarchs) are not the best, and individual economic choices are preferred.

### 2. In paragraph two, according to Adam Smith, why do most individuals work?
# Brief Explanations:
Individuals work to employ their capital (money) in the support of industry and to direct that industry to produce as much as they can, ultimately to gain their own economic benefit (their own gain).
# Answer:
According to Adam Smith, most individuals work to employ their capital in the support of industry, direct that industry to produce as much as they can, and in doing so, seek their own economic gain (to promote their own gain).

### 3. According to Smith, what is the happy and unexpected result when people pursue their own economic gain?
# Brief Explanations:
When people pursue their own economic gain, they are “led by an invisible hand to promote” the public interest (the interest of society). Even though they intend only their own gain, they end up promoting the good of society more effectively than if they tried to do so directly.
# Answer:
The happy and unexpected result is that when people pursue their own economic gain, they are led by an “invisible hand” to promote the public interest (the interest of society). They end up promoting the good of society more effectively than if they had intended to do so directly.

### 4. In paragraph two, Smith mentions an “invisible hand.” What do you think he means by that?
# Brief Explanations:
The “invisible hand” is a metaphor for the unintended social benefits of individual self - interest in a free market. When individuals pursue their own economic goals (like profit, income), the natural workings of the market (without government interference) lead them to actions that also benefit society as a whole, even though they did not aim to do so.
# Answer:
By “invisible hand,” Smith means the unintended positive impact on society that comes from individuals pursuing their own self - interest in a free market. When people act to gain economically for themselves, the market's natural mechanisms lead their actions to also promote the overall good of society, even though they did not set out to do that.

### 5. What is Adam Smith’s main idea about trade and economic decision - making?
# Brief Explanations:
Smith's main idea is that economic decision - making (and trade) should be left to individuals acting in their own self - interest, without government interference. People, when free to pursue their own economic goals, will (through the “invisible hand”) also benefit society, and this individual - driven, free - market approach is the best for economic activity.
# Answer:
Adam Smith’s main idea about trade and economic decision - making is that economic decisions (and trade) should be made by individuals acting in their own self - interest, without government interference. He believes that when people are free to pursue their own economic goals, the “invisible hand” of the market will lead their actions to also benefit society as a whole.

### 6. What does Adam Smith’s economic philosophy have in common with John Locke’s and Voltaire’s ideas about government and religion?
# Brief Explanations:
Smith, Locke, and Voltaire all support limited government (or reduced government control in Smith’s case for the economy, and in Locke/Voltaire’s cases for political/religious spheres). Smith wants less government in the economy, Locke (with ideas like natural rights and limited government power) and Voltaire (with criticism of religious and government tyranny) also advocate for less government control and more individual freedom (in politics, religion for Locke/Voltaire; in the economy for Smith).
# Answer:
Adam Smith’s economic philosophy (favoring individual economic freedom and limited government economic control) shares with John Locke’s (ideas of limited government power, natural rights, individual freedom from excessive government) and Voltaire’s (criticism of religious/government tyranny, support for individual rights and limited government interference) the theme of advocating for limited government control and increased individual freedom (in the economic sphere for Smith, in political/religious spheres for Locke and Voltaire).

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Question

Explanation:

1. In paragraph one, does Adam Smith support an economic system based on government control or individual decision - making? Why?

Answer:

2. In paragraph two, according to Adam Smith, why do most individuals work?