Adam Smith is famously known as the “Father of Modern Economics” and is one of the most influential economists in the world up to this day. He defined economy as “an inquiry into the nature and causes of the wealth of nations”.
Adam Smith’s The Wealth of Nations identified land, labor, and capital as the three factors of production and the major contributors to a nation’s wealth. This book was considered as the first formalization of economic thought. He addressed many issues that are, until this very day, debatable. Smith tackled the groups of politicians that attempt to abuse their power to manipulate a government into doing their bidding.
Economics as a social science, is separate from any government or other decision-making organization. This concept was defended by Adam Smith’s concept of the “Invisible Hand”. He believed that the sole purpose of producing products is for the common people to have economic growth and development. It was never something the government can wholly control, for the results will just simply be the opposite of what they wanted.
Adam Smith’s Invisible Hand is a reality that everyone has to face. It has been proven to be a useful fact in other countries, as it has been in ours. One perfect example of this is the condition of our economy during the time of Ferdinand Marcos. The Marcos government borrowed a large amount of money for the investment of a number of development projects. The Philippines’ debt rose from 360 million US dollars to 28.6 billion US dollars. These loans were funded for the contruction of a nuclear power plant that was unreasonably taken down.
After declaring Martial Law in 1972, Marcos promised to implement agrarian reforms. However, from 1972 to 1980, agricultural production fell by 30%.
But recently, our economy has been improving. According to statistics, the Philippines is now one of the most impressive Asian countries to emerge with regards to economic development so fast in such a short time. As I have observed, President Noynoy Aquino’s handle on our economy has been steady for the past few months of his time in presidency, but this will still continuously be judged as he guides us into what most of us hope is a better, more economically developed future.