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Private and state roles in economic activity **1776 The Wealth of Nations** Adam Smith, Scottish professor of philosophy, developed the concept of freedom of enterprise in foreign trade. //Inquiry into the Nature and Causes of the Wealth of Nations//, written by Smith, sets the basis for economics and stresses the negative consequences of mercantilism. Smith argued that government should only contain three duties. It should fight against the invasions of foreign countries, maintain civil order with courts and police protection, and sponsor public works that could never profit private investors. Smith believed that states should not restrict individuals from pursuing economic gains freely. According to Smith, states should allow people to balance economics out instead of setting prices, granting exclusive economic privileges, and sponsoring business enterprises. His concepts were widely used beginning from the18th century. Works Cited:

McKay, John, Bennett Hill, and John Buckler. //A History of Western Society.// 7th ed. Boston: Houghton Mifflin Company, 2003.