According to the article, ideas make history. Little else govern the world apart from the creative ideas. The practical men may be slaves of the intellectual individuals like the defunct economist. For example, Armies and emperors may leave unnoticed in the history unless they leave ideas. Adam Smith is a great economist who has significantly contributed to the development of the modern world. Smith developed insight into the market economies in the Wealth of Nations. According to him, changes in the social organization would far much contribute to improved standards of living. Previously, the society seemed to be static and was predictable. For instance, an individual could foretell the expected soil and famine to face. Moreover, life expectancy was so short at twenty-five years. The society expected their children and the generation to come to till the same land. Such a life which seemed to be programmed left to opportunity for individual enterprise. Smith observed that the market forces were beginning to erode the rigidities of the society. Political and economic expression started to gain attraction. The enlightened had a vision of the community whereby the individuals guided by reason were free to choose their destinies. Consequently, the rule of law which protected the rights of individuals encouraged efforts to produce. Also, it gave rise to innovation and trade. A new enterprise system took a new path which was complicated, but it appeared to be stable as if guided by an invisible hand. Adam Smith was left to find the operating principles that brought clarity to what seemingly could be chaos in the market system. As a result, Smith had a great achievement “An inquiry into the Nature and Causes of the Wealth of Nations” (Greenspan, 2005). The free market system has since then remained practical in the modern world. In this system, Smith concluded that to enhance a Nation’s Wealth, everyone should be left to pursue their own interest in their own way and bring their capital into competition with that of others. However, one should remain consistent with the law. Smith notes that in creating wealth, an individual is prompted by individual gain, but an invisible hand helps to promote the good.
Malthus had a pessimistic vision. According to Malthus, forces of economic stagnation would continue to exist. The reason he postulated this was that the population grew geometrically while means of subsistence grew arithmetically. Hence, population growth would out way food. Malthus failed to notice growth in technology that would enhance food production. For example, maize yields increased from twenty-five bushels per acre in the 1800s to one hundred and sixty in 2004. Additionally, he did not foresee that life expectancy would increase as income increased. Increase in per capita income enabled the society to devote more of their resources on improving sanitation and healthcare. However, what he said about population controlling itself is evident. For example, pestilence like AIDS and periodic famine exist in the modern economy. Free market capitalism and industrial revolution have significantly brought material civilization. Real per capita income and the Gross domestic product have grown. Furthermore, living standards have far much improved. However, the new economic order was subject to critics. It brought misery during the early days. Robert Owen challenged Smith in that nature would lead to poverty and disease. On the other hand, Karl Max viewed capitalism as a path to communism. However, Karl Max observed that capitalists would exploit workers. Also, the great depression questions the work of classical economists. All in all, the work of Adam Smith cannot be underestimated.
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References
Greenspan, A. (2005). Adam Smith: a speech at the Adam Smith Memorial Lecture, Kirkcaldy, Scotland, February 6, 2005 (No. 73).
