Readings Heilbroner’s book (p. 55-109) http// I. Birth of the free market II. Wealth of Nations

Readings: Heilbroner’s book (p. 55-109) I. Birth of the free market II. Wealth of Nations III. Invisible hand Adam Smith is a pivotal figure in both the development of economic thought and in the development of market-based, commodity producing (i.e. capitalist) economies. As we progress through the course material, we will frequently revisit many of the fundamental elements of Smith’s relatively coherent and complete model of the industrial market economy that was taking form in the 18th century. His notion of the ‘invisible hand’ is probably the most well known—and perhaps, most often misconstrued—economic concept both inside and outside of the economics discipline. Smith described the economic and social order that he analyzed as a ‘society of perfect liberty’ or, ‘a system of natural liberty’ and developed the idea of the invisible hand to demonstrate how a market system would ultimately lead to social harmony. In this response, explain the role of the ‘invisible hand’ in Smith’s analysis of one of the following topics: i. economic growth ii. class conflict iii. the proper role of the government iv. division of labor v. natural and market prices.

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