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capitalism -. Carol Mathias. Adam Smith - Father of Capitalism. Lived 1723 - 1790 in Scotland. Economist and philosopher. The Wealth of Nations. Written in 1776 as a protest against mercantilism . By the Way … . FACTOID: The full title of Adam Smith ’ s book is

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capitalism -

Carol Mathias

Adam smith father of capitalism
Adam Smith - Father of Capitalism

  • Lived 1723 - 1790 in Scotland.

  • Economist and philosopher

The wealth of nations
The Wealth of Nations

  • Written in 1776 as a protest against mercantilism.

By the way
By the Way…...


  • The full title of Adam Smith’s book is

    • An Inquiry into the Nature and Causes of the Wealth of Nations.


  • System set up by Jean Baptiste Colbert during Louis XIV time in France.

Louis had a problem
Louis had a problem….

  • Being King was very expensive.

  • Louis needed money….real bad!

Colbert had a solution
Colbert had a solution!

  • C + I + G + X - M = GDP

  • Decided to try

    • C + I + G + X = GDP

C i g x gdp
C + I + G + X = GDP

  • Colbert made King Louis rich.

    • opportunity benefit!

C i g x gdp1
C + I + G + X = GDP

  • But what are the opportunity costs?

Adam smith predicted
Adam Smith predicted….

  • Revolution!!

  • People would get ticked off.

The american revolution
The American Revolution...

  • We weren’t allowed to spend our money the way we wanted.

The french revolution
The French Revolution

  • People really got ticked off!

Adam smith proposed
Adam Smith proposed...

  • Capitalism!

  • Let the people decide the 3 economic questions!

Smith proposed
Smith proposed...

  • People need incentives to work.

  • Profits are the best incentives.

People need incentives
People need incentives….



  • People who take risks and create goods and services & enjoy profit.

Warren buffet omaha s billionaire
Warren Buffet - Omaha’s billionaire.

  • FoundedBuffy’s Buffet.

  • Chairman of Solomon Brothers Investments.

  • Chairman of Borsheim’s Jewelry.

  • Most expensive stock is Berkshire Hathaway.

Rose blumkin nebraska furniture mart
Rose Blumkin – Nebraska Furniture Mart

  • 1893-1998

  • “Always sell cheap and tell the truth.”

Famous entrepreneurs
Famous entrepreneurs

  • Buffalo Bill Cody.

  • Created Wild West Show for world.

Ray kroc founder of mcdonald s
Ray Kroc - Founder of McDonald’s

  • Began the fast food revolution.

The invisible hand
The Invisible Hand

  • One person’s acting in their self-interest is likely others.

The invisible hand1
The Invisible Hand

  • Runs all through the economy.

  • Problems are solved by it as well.

Govt only ties up the invisible hand
Govt. only ties up the invisible hand.

  • Even when well-intentioned, government just “screws things up.”

  • Government should just keep out of the way of business.

Laissez faire

  • French for “hands off”.

  • Govt. should be laissez faire with business.

Smith didn t mean no government
Smith didn’t mean no government.

  • Government did have special jobs to make economy work.

Government s job
Government’s Job

  • Provide Infrastructure for the system.

What govt provides

Fire & Police protection.

Transportation system.

Public education.


What Govt. Provides.

Smith s role for govt

Court system to define property rights.

Military protection for borders and products.

Smith’s Role for Govt.

Key benefits
Key Benefits

  • Summarize the key benefits provided by the product, service, or idea being promoted

Next steps
Next Steps

  • Specify the actions required of your audience