Adam Smith was born in Scotland. When he was fourteen he entered the University of Glasgow to study moral philosophy. He developed a desire for liberty and free speech. In 1750 he met someone who he worked with. Together they developed ideas on politics, economics, and religion. Their writings became the Scottish Enlightenment. In 1759 he published the Theory of Moral Sentiments which included lectures from previous years teacher at the University of Glasgow. He then developed the idea "communication depends on sympathy between the individual and the wider community." His focus later changed to economics and he wrote the Wealth of the Nations. It was the first book to suggest a free trade system. The free market system was based on supply and demand. He also believed wealth was in the essentials of life instead of things like gold. Adam Smiths ideas influenced many later economists.
Capitalism is "an ecomomic model that calls for individual households and privately owned businesses to control the economy." Perfect competitionis where privately owned businesses decide what and how much goods or services to provide. The prices of labor, capital, goods, and services and based mainly on market forces. Prices fall when supply exceeds demand and prices rise when demand exceeds supply.
The government deffinitly should have bailed out the auto industry. If those industries collapsed it could lead to a collapse of the whole U.S. economic system. Although it caused more taxes it works out in the long run beacause without huge industries like that our economy would not work. Also many of the industries have already paid back portions of the money.
