Adam Smith was a philospher whom later became an economist. He believed that gold and silver were not real wealth. He said real wealth was the essentials of life: Food, water, shelter, etc. He believed that if people wanted a better lif style standard, goods and services should be pleniful and cheap. He soon developed the Free Market System, which is based of of the basic known law, "supply and demand", and allows people to "vote" with their money for what they agree and like or with that with which they disagree and dislike. He believed that marketing was democratic, and belived that the best and most sucessful operation in free market was competition. He thought that compitition would create greater quantity, quality, and lower prices on goods and services. He also believed that the only thing that could truly effect and threaten free market was government interference, such as: fixing prices and wages, controlling production, controlling distribution, and subsidizing production
Economics is the study of how people use their scarce resources to meet their competing desires. A resource is called scarce if they do not have what they would if their product was free. so the desicion is left to them to figure out how to use their scarce resources to convince consumers to buy the product.
