The classical school

Classical economics is a school of economic thought whose major developers were William Petty, Adam Smith, David Ricardo and John Stuart Mill. Classical economists attempted to explain growth and development. During the time when capitalism was emerging from past feudal society these great economists came with their theories which marked the era of industrial revolution and bringing about major changes in society. Classical economists reoriented economics away from an analysis of the ruler's personal interests to a class-based interest.

Publishing of book wealth of nations by Adam Smith gave birth to modern economics in 1776. The book identified land, labor and capital as three factors of production and major contributors to nation’s wealth. Smith for e.g. identified the wealth of a nation with the yearly national income, instead of the king's treasury. Smith saw this income as produced by labor applied to land and capital equipment. Once land and capital equipment are appropriated by individuals, the national income is divided up between laborers, landlords, and capitalists in the form of wages, rent, and profits. Wealth of nations highlighted a disproportionate number of ideas about the organizations and markets that survive today –nearly 300 years later, and an economic revolution or two after publications. Adam Smith was regarded as “Father of Modern Economics”.

The centeral thesis of welath of nations is that capital is best employed for the production and distribution of wealth under conditions of governmental non-interference , or laissez-faire, and free trade. In Smith's view, the production and exchange of goods can be stimulated, and a consequent rise in the general standard of living attained, only through the efficient operations of private industrial and commercial entrepreneurs acting with a minimum of regulation and control by the governments.in order to prove this ,he came out with a theory of invisible hand, which highlighted that market system appears to organize itself and even after an unexpected economic crash returning to pre-disastrous state with no intervention by greater body or so.
In today’s time book can be a difficult read for modern economists. Much of what is discussed in the book makes very little sense in a modern context - but still, the concept of an equilibrium market, where various negative forces may be applied, generally from interventionism and negative economic situations, holds strong to this day.