Adam Smith the father of economics

August 31, 2015
Adam Smith the father of

The wealth of nations is not the source of relatively modern economics.

John Locke in two books in the 1670's has priority on the supply and demand determining price, and arguments that show the harmfulness of price controls in the same way as we do today. His philosophy was later written to justify his political views!

Lord North explained mutual gain to exchange and price coordination.

Cantillon explained inflation effect on price and supply and demand price determination as auction rationing, and finally, presented the entrepreneur concept.

Condilliac discovered opportunity cost, in the appendix to his theory of sensation, the concept of utility as source of value, and discussed the general idea behind decreasing marginal utility, the water and diamond paradox (which Smith failed to solve).

Adam Smith is mostly famous for the first eighty pages of the first volume of wealth of nations, because this is the clearest explanation of division of labor gains and reasons for peaceful social cooperation until the early nineteenth century.

Both Condillac and Smith referred to Cantillon, who in turn based his work on that of Locke.

The physiocrats mostly had their own theories based on land and labor as major sources of value, and these theories did not survive criticism, except where they followed Cantillon.

The first Western economist was Copernicus, who wrote an essay against inflation (he argued that it was more destructive than war and plague, but preferable to death). One can find this essay, also discussing prices, in his collected works, both surviving versions translated.

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