Reading Assignment Please write answers to the following questions. Use the Memoirs of Glückel of Hameln to complete your answer

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations “Invisible Hand” excerpt (1776)

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An Inquiry into the Nature and Casues of the Wealth of Nations might justly be called the bible of free-market capitalism. Written in 1776 in the context of the British (and European) debate over the proper role of government in the economy, Smith’s work takes aim at mercantilism, or government supervision of the economy. Mercantilists believed that national economies required government assistance and direction to prosper.

Smith argues that free trade will produce greater wealth than mercantilist trade and that free markets allocate resources more efficiently than the government. His notion of laissez-faire (literally “let do”) capitalism assumes neither that capitalists are virtuous nor that governments should absent themselves entirely from the economy. However, Smith does believe that the greed of capitalists generally negates itself and produces results that are advantageous to, but unimagined by, the individual. “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner,” Smith wrote, “but from their regard of their own interest. We address ourselves not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantage.” Each person seeks to maximize his or her own gain, thereby creating an efficient market in which the cost of goods is instantly adjusted to exploit changes in supply and demand, while the market provides what is needed at the price people are willing to pay “as if by an invisible hand.”

Reading and Discussion Questions:

What, do you think, Smith would say to a farmer or manufacturer who wanted to institute tariffs or quotas to limit the number of cheaper imports entering the country to minimize competition?

What would he say to a government official who wanted to protect an important domestic industry?

What would he say to a worker who complained about low wages or boring work?