Welcome to a brief history of economics! Knowing everything there is to know about the development of economics is not essential in understanding its basic concepts, but a little background may help you understand the fundamental ideas of economics!

The father of modern economics is Adam Smith who lived in the 18th century. He believed that the best way to improve the wealth of a nation was to let people act freely in the economy--not to break laws or distrupt the world, but to be able to have choices.  Smith believed that it was better to let people decide than have the government be in control of everything.

But how can people make all the decisions in the economy with a central figure making sure everything goes right? Adam Smith believed that people were primarily motivated by self-interest. That means that we usually think of ourselves when we do things, although that doesn't mean everyone is always selfish. For example, if you bought a new pair of pants, most likely that'd be for yourself. You'd buy if it was a price that you would pay, if it was comfortable on you, and if you looked nice in it. None of these actions are selfish, but they are self-interested and rightly so!

However, sometimes people are selfish if left unchecked. Adam Smith explained that competition controls self-interest in the economy. If you had an orange, and someone was willing to buy it for 1 million dollars, you would probably sell it to him. Why not? You made lots of money! But we don't see 1 million dollar oranges at the supermarket, and that's because sellers must compete with eachother. If Jane sold oranges for 1 million dollars, but Jack sold them for $10, who would you buy from? Jack of course! Because of Jack, Jane won't make any money if she sells oranges for that outrageous amount. Instead, sellers will compete to have the lowest prices to buyers will buy from them.

Finally, Adam Smith said that the government must provide certain services to the people such as law, order, and protection. That's why we have contracts and property rights. Under laws, the economy can be fair and trustworthy. 

This leads to the final, and most important idea. Adam Smith, the father of economics, believed in an "invisible hand" that could naturally produce the "best" economic well-being for everyone. This was because self-interest is a motivation for people to work, while competition makes sure that no one gets too selfish. Finally, the government should provide laws and protections so that buyers and sellers can trust eachother under the law. No one needed to "orchestrate the economy." The economy, and everyone in it, could work by itself.

These ideas have continued to be used by economists around the world, but they are only the beginning. Economics is a well-developed field, and many other important people have contributed to its theories. Many people have devoted their lives to the development of economic theories, and made a career of it! It is impossible to cover ALL of economics on this site, so we will focus on one very important idea: trade.