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The term free market means a market economy based on classical laws of supply and demand without government interference. This is in contrast to mercantilism, which was a dominant economic system from the 16th to the 18th centuries based on government regulation of the national economy to augment state power over rival nations. Adam Smith (1723–1790) argued that man’s natural tendency toward self-interest in a free market would open markets to competition and thus bring about the accumulation of universal wealth. This free-market hypothesis became known as the doctrine of “the invisible hand”: enlightened self-interest, limited government, and the free market would bring about universal wealth (and overturn mercantilism). Adam Smith’s The Wealth of Nations (1776) marked the beginning of modern economics and helped to ...

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