Satisfied with the answer, your sister hurts. Don't! Grade 6 2011-03-251723 Adam Smith was born in Kirk Caldi, Fife, Scotland. Britain was an advanced capitalist country in Europe at that time. It is not only a central country in world trade, but also an industrial country leading other countries. /kloc-At the beginning of the 0/8th century, France and Germany in Europe were still in the stage of naive feudal family industry or independent handicraft industry, and still dominated production in this way. However, Britain has entered the primary stage of capitalism, and the so-called workshops and handicrafts have taken root in major cities in China. In the cottage industry or independent handicraft industry in the Middle Ages, the workers were scattered in various families, and the individual was only an isolated worker in the whole operation process. Factory-made handicraft industry means that many workers work in a factory and divide their work with simple tools under the command of a capitalist. It was not until 1760 that the industrial revolution occurred and large-scale industries using machinery appeared. Before the industrial revolution, Britain was still a factory handicraft industry in the early days of capitalism. Adam Smith, a world-famous master of classical economics, was born in the transitional period of factory handicraft industry and machinery industry. His achievement is to sort out the fragmentary economic theory at that time systematically and make it a university question independent of philosophy. Shortly after Smith died, almost all his manuscripts were destroyed. In the last year of his life, it seems that he plans to write two major papers, one on the theory and history of law and the other on art and science. A collection of philosophical works published after death may contain part of the latter paper. The Wealth of Nations is Smith's most influential work, which has made great contributions to the establishment of the field of economics and made economics an independent discipline. In the western world, this book can even be said to be the most influential book in the history of the Institute of Economics. The Wealth of Nations has become the most classic refutation of mercantilism (a large number of precious metals are indispensable to economic success). 1776 After the book was published, there were many voices calling for free trade between Britain and the United States. These voices also believe that the economic hardship and poverty at that time were caused by the American War of Independence. However, not everyone believes in the advantages of free trade: the British government and parliament have maintained mercantilism for many years. The Wealth of Nations also denies that the physiocrats attach importance to land. On the contrary, Smith thinks that labor is the most important, and division of labor will greatly improve production efficiency. The Wealth of Nations was a great success, which actually led to the abandonment of many early school theories. Later economists such as thomas robert malthus and david ricardo focused on integrating Smith's theory into what is now called classical economics (from which modern economics is derived). Malthus further extended Smith's theory to overpopulation, while Ricardo put forward iron law of wages, who believed that overpopulation would lead to wages not even reaching the level of subsistence. Smith's assumption that the increase in wages will be accompanied by the increase in production is more accurate today. One of the focuses of The Wealth of Nations is the free market. On the surface, the free market looks chaotic and unrestrained, but in fact it is led by a pair of invisible fingers, which will guide the market to produce the right number and variety of products. For example, if there is a shortage of products, the price of products will go up, and the profit of producing such products will stimulate others to join the production, and finally eliminate the shortage. If many products enter the market, the competition among producers will increase, and the increase of supply will reduce the price of products to be close to the production cost of products. Even if the profit rate of products is close to zero, the profit incentive of producing products and services will not disappear, because all the costs of products also include the wages of producers. If the price drops to zero profit and continues to fall, producers will leave the market; If the price is higher than zero profit, producers will enter the market. Smith believes that people's motives are selfish and greedy, and competition in the free market will be able to use such human nature to lower prices, thus benefiting the whole society, while providing more products and services will still be stimulated by profits. However, Smith was also wary of businessmen and opposed the formation of monopoly.