Use the excerpt to answer the question.
“[The rich] consume little more than the poor, and in spite of their natural selfishness and rapacity . . . they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.”
What economic system does the evidence support?
(1 point)
Responses
laissez-faire capitalism
mercantilism
communism
utopian socialism
laissez-faire capitalism
The evidence supports the economic system of laissez-faire capitalism.
The excerpt mentioned in the question is attributed to Adam Smith, a prominent economist and philosopher. In this excerpt, Smith talks about how the actions of the rich ultimately benefit the society as a whole, even though they may act out of selfishness and greed.
The key phrase to focus on is "they divide with the poor the produce of all their improvements." This suggests a system where the wealth created by the rich is shared with the poor, leading to a distribution of the necessaries of life. Additionally, Smith mentions that this distribution would be similar to what would happen if the earth was divided equally among all its inhabitants.
Based on this evidence, the economic system that the excerpt supports is laissez-faire capitalism. Laissez-faire capitalism is a system in which the government does not interfere in economic activities, and individuals and businesses have the freedom to pursue their own self-interests. In this system, the actions of the rich in pursuing their own interests collectively benefit society by providing for the needs of the poor.
Therefore, the correct answer is (1) laissez-faire capitalism.