Adam Smith was a famous, economical figure. He believed that wealth was not the amount of gold or silver one had, but the essentials of life. He also said that if someone wanted a prosperity in life, then one should have the goods and services of life. Adam Smith said in order to have this type of life, he said there must be a free market for buying and selling. He called this the "free market system" and it is based upon a natural law he called "supply and demand." Smith believed the successful way for this market was competition, an increase in profit and productivity. He believed that this would eventually lead to lower prices so others could beat the competition. But, there was a major threat to his idea: governmental interference. He believed this threat because the government always fixes prices on items and they try to control production and distribution. He said that the government should only act if there were traces of illegal force, fraud, obscenity and monopoly. His basic ideas are freedom to buy, try, fail and sell.(Adam Smith and the Natural laws of Free Market Economics)
Economics is basically the study of how people can use their supplies to work against the competition of the markets. Many of the supplies that economics relate to are the money, property, and time that a person has. They use their supplies in the way they choose, but they will distribute them if they are insufficient. Insufficiency is actually a good thing for sellers because this means that buyers will be willing to pay higher for it. The rules of this economic system really determine the way of the market. The free market can be described as a market that allows people to engage in economics outside of the control of the government. Smith said that the society would benefit more if the sellers were free to choose their own prices for their goods instead of the government having a fixed price. He said that the actual competition would determine the prices. For example, if there is a surplus of one item and many buy that certain item, the price will be raised. where as an item that is not bought as much price would be lowered.(Economics, Free Market)
We all know of the big Auto Bailout that took place in 2009. During this bailout, the U.S. payed about $24.9 billion dollars for three major auto companies: General Motors and Chrysler, GMAC, and Chrysler Financial. The bailout occurred so that these companies could continue giving auto loans to car-owners. Many Americans have opposed to the bailout because these companies did not reorganize for the energy efficient time we are in. I personally believe that the U.S. should not have bailed out these companies. Cars are good transportation. But the U.S. alone makes up 40% of the pollution being produced. America could do without all the pollution producing vehicles these companies produce. Less cars makes for less pollution. The U.S., in my opinion, made a major mistake in bailing out these companies. These companies don't even produce gas efficient cars.(The Auto Bailout)
