Economics
Economics
Reading Response Iâ300-500 wordsâDue in class Tuesday 14 July
Readings: Heilbroner (p. 55-109)
Adam Smith is a pivotal figure in both the development of economic thought and in the development of market-based, commodity producing (i.e. capitalist) economies. As we progress through the course material, we will frequently revisit many of the fundamental elements of Smithâs relatively coherent and complete model of the industrial market economy that was taking form in the 18th century. His notion of the âinvisible handâ is probably the most well knownâand perhaps, most often misconstruedâeconomic concept both inside and outside of the economics discipline. Smith described the economic and social order that he analyzed as a âsociety of perfect libertyâ or, âa system of natural libertyâ and developed the idea of the invisible hand to demonstrate how a market system would ultimately lead to social harmony.
In this response, explain the role of the âinvisible handâ in Smithâs analysis of one of the following topics:
i. economic growth
ii. class conflict
iii. the proper role of the government
iv. division of labor
v. natural and market prices.