Adam Smith showed great respect for the merchant class as well as credibility in his proposals for economic prosperity: a) true; b) false; d) none.
The correct answer and explanation is:
Correct Answer: a) true
Explanation:
Adam Smith, often referred to as the “father of modern economics,” showed significant respect for the merchant class in his influential work The Wealth of Nations (1776). He acknowledged their essential role in advancing economic prosperity and the functioning of free markets. Smith believed that individuals, including merchants, acting in their self-interest could unintentionally contribute to the greater economic good—a concept famously described as the “invisible hand.”
Smith’s philosophy emphasized that when merchants seek profit by producing goods and services that people want, they naturally promote efficiency, innovation, and overall economic growth. He saw commerce and trade as vital to a nation’s wealth, contrasting with earlier mercantilist views that prioritized hoarding gold and government-controlled trade.
However, Smith was not blindly loyal to the merchant class. While he respected their contributions, he also warned against potential abuses. He criticized monopolies, trade restrictions, and collusion among businessmen that could harm consumers or reduce competition. In this way, he maintained a balance: praising the positive economic role of merchants but cautioning against their potential to exploit power if unchecked by fair laws and competition.
Regarding credibility, Smith’s arguments were grounded in reason, observation, and a deep understanding of the economic dynamics of his time. His proposals—such as division of labor, free markets, and limited government intervention—formed the basis of classical economics and have influenced economic policy for centuries.
In summary, Adam Smith respected the merchant class and provided credible economic theories that highlighted their importance in wealth creation while also promoting a fair and competitive market system. Hence, the correct answer is (a) true.