Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth
of Nations in 1776. Now referred to by most people simply as The Wealth
of Nations, it is considered to be the beginning of modern economics.
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Efficiency
Another great insight, which was hinted at by Smith and fully developed
over the next century and a half, was that this spontaneously generated
economic order is relatively efficient. Loosely speaking, efficiency means
that the resources available to the nation are organized so as to produce
the various goods and services that people want to purchase and to
produce them with the least possible amount of resources.
An economy organized by free markets behaves almost as if it were
guided by “an invisible hand,” in Smith’s now-famous words. This does
not literally mean that a supernatural presence runs a market economy.