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- Adam Smith (1723 – 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by many as the "father of economics", or the "father of capitalism", he is primarily known for two classic works: The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).
- The Invisible Hand a metaphor inspired by the Scottish economist and moral philosopher Adam Smith that describes the incentives which free markets sometimes create for self-interested people to accidentally act in the public interest, even when this is not something they intend. Smith originally mentioned the term in two specific, but different, economic examples. It is used once in his Theory of Moral Sentiments when discussing a hypothetical example of wealth being concentrated in the hands of one person, who wastes his wealth, but thereby employs others. More famously, it is also used once in his Wealth of Nations, when arguing that governments do not normally need to force international traders to invest in their own home country. In both cases, Adam Smith speaks of an invisible hand, never of the invisible hand.
- Classical Economics a school of thought in political economy that flourished primarily in Britain in the late 18th and early-to-mid 19th century. It includes both the Smithian and Ricardian schools. Its main thinkers are held to be Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. These economists produced a theory of market economies as largely self-regulating systems, governed by natural laws of production and exchange (famously captured by Adam Smith's metaphor of the invisible hand).
- Market Economy an economic system in which decisions regarding investment, production, and commerce (the distribution of goods and services) are guided by price signals resulting from the forces of supply and demand. A key characteristic of a market economy is the presence of factor markets, which play a major role in allocating capital and other factors of production such as labor and land.
