Adam Smith is universally regarded as the founding father of modern economics, laying the groundwork of global capitalism growing from the roots of feudal states, and subsequently, Mercantilism. The principle political concepts and ideals used by the majority of the contemporary world have been grounded in Smith's innovative views of England's eighteenth century political and economic landscape. Smith established this philosophy with his 1776 publication, "An Inquiry into the Nature and Causes of the Wealth of Nations." Within this influential work, Smith stated a sense of self-interest in the free market economy as the key to affluent success. To attain this pursuit, however, the Scottish philosopher advocated an alteration of the economic system dominating Europe over the past three centuries, that of mercantilism. Smith sought a global restructuring of economic theory focusing on the concept of free trade, and in turn presented to the world views that would forever alter the elements of economic and political structure. The purpose of this essay is to examine Adam Smith's philosophy of a free market economy opposing mercantilism, and his views central to this philosophy concerning the division of labour, and Smith’s theory of value.
Over three centuries prior to Smith's work, Europe's economic structure was embedded in a system known as Mercantilism. Mercantilism was an economic structure that was patterned on the accumulation of bullions, a regulation of free trade, and a variety of other inconsistent ideas. This strive for economic self sufficiency would dictate a nation's wealth over another.
Bullionism was the belief that the economic health of a nation could be
measured by the amount of precious metal, gold, or silver which it possessed.
The rise of a money economy, the stimulation provided by the influx of bullion
from America, the fact that taxes were collected in money, all seemed to support
the view that hard...