Impoverishment of the Powerful Country

The Wealth of Nations asserted that government ought to assume a laissez-faire position and permit the economy to be guided by what Smith referred to as the "invisible hand" - that is, supply and demand. Furthermore, he places emphasis on the individual, stressing that a single needs to be motivated by self interest, which in turn would benefit the welfare of all. Galbraith understands Smith to become the founder in the central American economic tradition. However, it has inequalities which must also be attributed to Smith. He put the focus on a production of aggregate wealth and not its distribution.

The fruits of the nation's labor are not dispersed evenly in between the population, but instead fall into the hands of the upper classes. Galbraith stresses the fact that Smith understood the plight of the working classes yet conceded their disadvantage on the merchants, manufacturers and landlords who held them under their thumbs. On the other hand, Galbraith's critics argue that a compact has been reached inside the society allowing each individual to pursue his personal interest in accordance with his values as lengthy as the rights of others aren't placed in jeopardy. If the liberties of people were restrained by the system , it would only indicate the return to the age-old company of superiors claiming their right to rule inferiors (Friedman, 35).

Alluding to Smith's statement about the marketplace mechanism, conservative economist Milton Friedman ironically comments that, "in the political sphere, folks like Galbraith who attempt to pursue the public interest as they view it are led by an invisible hand to further personalized interest" (35). more clothing for ones cold, and much more houses for Malthus affirmed how the population would be determined by the meals supply.

Famine, for example, was an indication of an excessive population, which would soon remedy itself and return to a natural balance through malnutrition and eventual starvation. Ricardo then asserted that society may perhaps too retain the working class on the verge of starvation, thereby maximizing capital to be directed towards the expansion, research, and development rather than wages.

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