Economic Foundations: Adam Smith and the Classical School of Economics

Collection Location Koleksi E-book & E-Journal Perpustakaan Pusat Unila
Call Number
Author(s) Bowden, Bradley
Classification NONE
Series Title
GMD E-Book
Language English
Publisher Springer International Publishing AG, part of Springer Nature
Publishing Year 2019
Publishing Place Singapore
Abstract/Notes Although economic debates remain central to our world, they are wrapped in
myth and misunderstanding. Many believe that Adam Smith provided the basis
for classical economics through his exposition of the principle that outcomes are
best decided through “the invisible hand of the market.” In truth, Smith never
used the term, instead associating the concept of an “invisible hand” with selfinterest.
Smith’s ideas about self-interest were, moreover, derived from David
Hume. Many of his ideas about value were obtained from the earlier work of
Richard Cantillon. This chapter nevertheless argues that understanding of the
foundational principles of classical economics – concepts associated with production
as well as markets and exchange – remains central to our time. There is
particular utility in understanding the nature of economic value and how it is
created. For what is most revolutionary about the modern world is not its
mechanisms for distribution and exchange but its systems of production; systems
underpinned by the division of labor, the utilization of fixed capital, and the selfinterested
pursuit of occupational and firm advantage.
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