According to Adam Smith, how does free market competition provide greater benefits than government interference?
Please provide the best answer for the statement.
Answer: One point of support for free markets is the utilitarian argument that free markets and private property will produce more benefits than any government interference. Free market competition will provide these increased benefits by enticing private business to produce and sell what consumers want and to do this at the lowest possible price. Private businesses will do this by trying to cut costs and reduce resources used. The free market, when working with private business, ensures the economy is producing what consumers want at the lowest possible price point. Smith claims that demand drives profit, and supply causes a rebound in price. Resources are allocated to those industries where they are in the most demand. The role of government is to advance the public welfare, and interventions in the market by the government will serve to interrupt the self-regulating effect of competition, thereby creating either surpluses or shortages.
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