Question

Why did Adam Smith believe that factory workers should be
paid higher wages?

Adam Smith thought higher wages would prevent a transition to socialism.

Adam Smith knew that higher wages would grow the economy.

Adam Smith believed on moral grounds that all men deserved a living wage.

Adam Smith wanted the government to set minimum wage limits.

Answer 1

Best answer: "Adam Smith knew that higher wages would grow the economy."

Why: In The Wealth of Nations Smith argued that higher wages raise workers’ productivity and encourage frugality and capital accumulation, which in turn fosters investment and economic growth. He thought employers facing higher wage costs would also innovate and adopt labor‑saving improvements, increasing overall output.

Why the others are wrong:
- He did not argue higher wages chiefly to prevent a transition to socialism (socialism as a movement came later and this was not Smith’s rationale).
- While Smith had moral views about justice and sympathy (The Theory of Moral Sentiments), he did not ground his classical policy prescriptions on a modern idea that “all men deserve a living wage” in the way that phrase is used today.
- Smith generally opposed heavy-handed government wage‑setting; he favored market-determined wages and did not advocate a government minimum wage as a general policy.