but bus drivers get paid more, then he will, motivated by greater profit, find work as a bus driver and not as a taxi driver. Thirdly, the concept of The Invisible Hand, dictates that without external influence (most likely government) the market will itself find equilibrium. Theoretically speaking, if the 100 glove manufactures were to sell at 400% markup, eventually outside competition would force them to lower their prices, or go out of businesses. Although a very good theory at the time, today it is not relevant, because the mind set in which Smith wroth did not perceive the kind of big conglomerate/monopoly markets in which companies like Microsoft and the disbanded Standard Oil exist. These companies can afford to cut the margin so slim because of their sheer sales volume, that smaller companies cannot compete with them. Fourthly, Smith believed in the superior judgment of the capitalists. He was an optimist in his thinking of how people would react to economic freedom. A person can do as he/she pleases in a market, but if they do what the market disapproves of then will the price be economic ruin? Will a grocer selling rotten eggs go out of business? People should be educated in one profession for a society to be more productive. Because they will know all they need to know in life for their living, they will become professionals and they will be more efficient than the common man, who is handy at so many types of labor. Smith compares this concept to a pin factory, one person draws the wire while another cuts it and yet another pints it, the system going on and on with each job being given to a specialized worker, who would be more efficient at his particular job than any other. The system works better than having each person manufacture a certain amount of pins himself. Smith was right for his time. Although his theories were good they do not hold the same relevance today as they did when first presen...
