Adam Smith believed that the economy is based off the people and exists for the benefit of the people. He was opposed to high unemployment as it meant that the economy was not working to its full potential. In the same train of thinking, he also believed in high wages. Only if the people have money to spend will they be able to contribute to the economy through spending. He also believed that self interest is favourable towards society. By companies innovating in order to make more profit, this benefits consumers so they receive higher quality of goods, and we can advance society through the creations of new technology and goods. This is in direct contrast with mercantilist thinking. Mercantilists believed that acting in self-interest is selfish and should be avoided at all costs. They strived to have rapid population growth so there would be high unemployment. This in turn would result in being able to pay lower wages which would bring down the costs of production. By doing this, companies would have less expenses and would be able to lower the costs of goods. Mercantilisms believe that the people work for the economy and not vice versa, unlike Adam
Adam Smith believed that the economy is based off the people and exists for the benefit of the people. He was opposed to high unemployment as it meant that the economy was not working to its full potential. In the same train of thinking, he also believed in high wages. Only if the people have money to spend will they be able to contribute to the economy through spending. He also believed that self interest is favourable towards society. By companies innovating in order to make more profit, this benefits consumers so they receive higher quality of goods, and we can advance society through the creations of new technology and goods. This is in direct contrast with mercantilist thinking. Mercantilists believed that acting in self-interest is selfish and should be avoided at all costs. They strived to have rapid population growth so there would be high unemployment. This in turn would result in being able to pay lower wages which would bring down the costs of production. By doing this, companies would have less expenses and would be able to lower the costs of goods. Mercantilisms believe that the people work for the economy and not vice versa, unlike Adam