What were the contributions of Adam Smith to economics ? Please explain and do not include his life story .?

Answer 1

1. His systematic and learned analysis of economic matters was so vastly better and more comprehensive than any of the scattered ideas that had come before, that he is credited with launching Economics as a scientific discipline.

2. He gave the first really good analysis of division of labor and how it dramatically increases productivity.

3. He explained how a free market economy channels peoples' natural self interest into doing useful things that benefit other people and society. Thus he laid the foundation for understanding free markets.

4. He (along with David Ricardo a little later) laid the foundation for understanding the real benefits of international trade, destroying the previously-existing "mercantilist" ideas.

Answer 2

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Answer 3

One contribution from Adam Smith is the concept of the invisible hand. The invisible hand means that there are invisible forces that push markets towards equilibrium. So supply and demand will always meet at equilbrium.