Adam Smith was against government intervention in the economy but they 2 areas that he encouraged...

Adam Smith was against government intervention in the economy but they 2 areas that he encouraged government intervention what are they?

Expert Solution

Adam Smith was against government intervention in the economy but he said that Government should limit its activities to administer justice, enforcing private property rights, and defending the nation against aggression.

Economic liberalism as described by Adam Smith as a system of natural liberty in which government intervention is minimal and individuals are encouraged to invent, develop business, and meet their basic needs.

Smith rejects government interference in market activities, and instead states governments should serve just 3 functions: protect national borders; enforce civil law and engage in public works like education. The government would step in when people acted on their short-term interests and would make and enforce laws against robbery, fraud, and other similar crimes. According to him government should concentrate on more crucial roles.He emphasized on providing universal education as a role to be played by government inorder to nullify the adverse effects of division of labor which was essential for industrialisation.

Rahul Sunny answered 1 year ago

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