Adam Smith: A Wealth of Wisdom Philosopher and moral economist Adam Smith authored influential theories of classical economics, but some of his explanations are foreshadowed by writers earlier, such as Thomas Mun and Anne Robert Jacques Turgot. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay In his important work, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Scott explains in depth how nations create wealth through trade. Scott argues that strong economies thrive on consumption, rather than production, and that it is important to refrain from excessive regulation of this trade, as excessive regulation could create internal monopolies that harm society. However, Scott was not the first economist to advocate international trade as a means of creating national wealth. Thomas Mun also argued that one must accumulate gold by expanding the volume of international trade, since there was no other means of hoarding it. Mun advocated mercantilism through common port facilities, where there should be more exports than imports to protect a nation's wealth. Smith refutes this, arguing that these trade barriers harm the nation by denying it access to better goods abroad, and that open trade is the real answer. A pioneer of what would be known as the "classical period" of economics, Smith introduces the concept of the "invisible hand," explaining that economies can regulate themselves if left free through free trade, since self-interest benefits society as a whole. Smith also states that the richest countries are those that have mastered the division of labor. He explains that asking workers to perform a specific step in the pin-making process is much more effective and productive than having a worker make an entire pin. Smith warns that there is a limit to the division of labor and specialization, being the "measure" of the market. Exchange can only occur with goods and services that people want, as evidenced by the forces of supply and demand. This leads Smith to discuss the natural price of a product, which is always determined by supply and demand. These will always control costs, and Smith also explains that many factors can move a price higher or lower than its natural price, but it will always maintain a natural price. This is foreshadowed by Anne Robert Jacques Turgot's theory of a balanced equilibrium price between supply and demand. This also applies to labor: Smith explains that when a company's demand for labor increases, they increase their wages to attract labor quickly when they need it. This is also foreshadowed by Turgot, as he argues that the goal of both parties is to maximize benefits and minimize costs in the transaction, since any price will be based on the parties' level of need rather than an actual price. Please note: This is just an example. Get a custom article from our expert writers now. Get a Custom Essay Although Smith's The Wealth of Nations is foundational in itself, early economists such as Mun and Turgot planted several seeds that Smith watered to create lasting influences of classical economics.