"By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of it." Adam Smith, Inquiry into the Nature and Causes of the Wealth of Nations 1776.

What business does a government have in commerce and trade? Why would a government want to interfere between two countries benefiting from each other by trade? What right does the government have in two individuals wanting each other's products or services? According to some, commerce and trade should be permitted to operate free of controls of any kind; there should be no tariffs or other barriers. This is where the term laissez-faire is introduced. It's direct translation in French, "leave alone to do", is self-explanatory.

A strong believer in this type of economics is Adam Smith, both a philosopher and an economist. Born on 1723

in Kirkcaldy, Fife, he studied at Oxford, and became a professor of logic at Glasgow (1751), but took up t

IV, Chap. II), who stressed the role that the "invisible hand" played in attaining a harmony of interests.

Pearce, David W. The MIT Dictionary of Modern Economics. Cambridge, Massachusetts. The Macmillan Press. 1992.

and Causes of the Wealth of Nations (1776), the first major work of political economy. This examined in detail the consequences of economic freedom, such as division of labor, the function of markets, and the international implications of a laissez-faire economy.

Imagine this "invisible hand" suspended above everyone. This "invisible hand" encourages businesspeople to pursue profits and it pushes consumers to buy goods and services. And at the same time, that "invisible hand" discourages government from directing the economic activity. This "invisible hand" that Adam Smith refers to as a guiding force was the people and their attitudes.

It all started with profit-seeking individuals. Using self-interest to feed their drive, people started businesses. When a business would become successful, others would notice and enter into the same field. As a direct result, growing consumer demand was satisfied while competition controlled rising prices.

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Approximate Word count = 900
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