Final answer:
Adam Smith believed capitalism is naturally profitable for society due to individuals' innate selfishness and self-interest, which leads them to make economic contributions that benefit society as a whole. This process is guided by the 'invisible hand' of market forces.
Step-by-step explanation:
Adam Smith believed that human nature, through inherent selfishness and self-interest, led capitalism to be naturally profitable for society. This concept is encapsulated in what Smith termed the invisible hand of the marketplace, as described in his seminal work, The Wealth of Nations. Smith proposed that when individuals act in their own self-interest, they inadvertently contribute to the economic benefit of society as a whole by providing goods and services that are truly needed. This behavior fosters competition and drives businesses to innovate and improve, ensuring that consumers get the best deals possible. Smith's ideas were based on rational choice theory, which posits that individuals make decisions with the objective of maximizing their own welfare.