&nb sp;   Between the 16^th and 19^th centuries the international economic attitude/system was Mercantilism. This system was how each Nation measured their wealth in comparison to opposing powers. They were so focused on the calculated number of riches they had stored away in their banks. They let it collect dust instead of using if to better the lives of their people. Because the great Powers were so determined to claim the title of the “Wealthiest Nation” there was a tight regulation of trade, strong governmental intervention managing the economy, and numerous laws preventing any form of revenue from escaping their grasps. The government would do all its power to keep their own money from flowing into neighbor nations and have the money filling their own banks.  A great contrast developed between the Royalty of each nation and their people. The livelihood of the people suffered greatly.

In the 18^th century writer Adam Smith wrote his famous “Wealth of Nations” with the radical and opposing idea of a free market economy benefitting society over the popular Market Economy. He believed a nation’s wealth is not determined by how much money is collected, but the lifestyle of the country’s people. Smith promoted the new idea of production and consummation. Money needed to be flowing through the economy and benefiting all citizens.  Per capita income was a better measurement of the Nation’s wealth than just by how much the King of a nation had. Smith’s ideas also flourished into the notion of Consumer Sovereignty; in which people should have the liberty and freedom to choose what and when to produce and consume. When an exchange is made is should be based on a mutual interest, where the self interest of each party is achieved. This is the basic method for a flourishing economy, where both parties feel the exchange benefits the self and where they have the freedom to exchange or not. Smith explained that an invisible hand is involved within such an economy making the exchanges a benefit for both sides every time.  

Tags: Adam Smith Wealth Nations Economy America Revolution

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