Government and the Market Economy

The origin of economics as a science dates back to the publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith in 1776.  Smith believed a market economy would generally bring individual self-interest and the public interest into harmony.

Based upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes?  What is government’s place in that market economy?

Think about society’s need to choose amongst competing resources and goals.  How does personal gain affect choices by individuals and government?  Opportunity costs.  While we want to do one thing, we can’t do others based upon scarcity and opportunity costs.  Resources are finite.  What about incentives as opposed to free offerings?  What about trade?

For your follow up post…review the responses provided by your peers. Engage in conversation, or even civil debate, as you discuss their insights and viewpoints. You may ask questions for clarification (if you are confused by their initial post) or pose questions that advance the conversation. You might even find a topic that leads you to further research in the area!