- 10 Jul, 23
Adam Smith 101: The Father of Modern Economics
Adam Smith was a Scottish philosopher and economist who is widely regarded as the founder of modern economics and capitalism. He was born in Kirkcaldy, Fife, in 1723 and died in Edinburgh in 1790. He wrote two influential books: “The Theory of Moral Sentiments (1759)” and “An Inquiry into the Nature and Causes of the Wealth of Nations (1776)”.
Adam Smith is also known for his ideas on the invisible hand, the division of labour, the free market, and the moral and social implications of economic activity. If you are interested in learning more about Smith, check out this Zatrun.com article.
Table of Contents
Who is Adam Smith?
Adam Smith was the son of a customs officer and a landowner’s daughter. He received his elementary education in Kirkcaldy and then attended the University of Glasgow, where he studied moral philosophy under Francis Hutcheson. He later won a scholarship to study at Balliol College, Oxford, but he was dissatisfied with the scholastic curriculum and left without a degree in 1746. He returned to Scotland and became a public lecturer in Edinburgh, where he met David Hume and other leading figures of the Enlightenment.
Smith was appointed as a professor of logic and then of moral philosophy at the University of Glasgow in 1751. He gave lectures on ethics, jurisprudence, rhetoric, and political economy. He also published his first book, “The Theory of Moral Sentiments”, which explored the nature and origin of human morality and sympathy. The book was well received and established Smith’s reputation as a philosopher.
Adam Smith resigned from his professorship to become a tutor to the young Duke of Buccleuch in 1763. He accompanied him on a grand tour of France and Switzerland, where he met many prominent intellectuals, such as Voltaire, Jean-Jacques Rousseau, and François Quesnay. He also studied the French physiocrats, who advocated a natural order of economic liberty and opposed mercantilism.
His Major Academic Works
Adam Smith returned to Britain in 1766 and devoted himself to writing his magnum opus, “An Inquiry into the Nature and Causes of the Wealth of Nations”. The book was published in 1776 and was an instant success. It provided a comprehensive analysis of the production, distribution, and consumption of wealth in society. It also argued for free trade, limited government intervention, and individual self-interest as the main drivers of economic growth and prosperity.
Smith spent the last years of his life in Edinburgh as a commissioner of customs for Scotland. He revised his works and published new editions of his major works in 1789. He also worked on an unfinished manuscript on the history of law and government, which was later published as “Essays on Philosophical Subjects (1795)”. He died on July 17, 1790, after pneumonia.
His Ideas and Legacy
Adam Smith’s works and ideas are considered as classics of economic, capitalism and moral philosophy. They have influenced many thinkers and policymakers across different disciplines and ideologies. Some of his main contributions are:
- The invisible hand: Smith coined this term to describe how individuals pursuing their own self-interest unintentionally promote the common good of society through market competition.
- The division of labour: Smith explained how the specialization and cooperation of workers increase productivity and efficiency. He used the famous example of a pin factory to illustrate how dividing the work into different tasks can multiply output.
- The free market: Smith advocated for a system of natural liberty where individuals are free to pursue their own economic interests without interference from the state or monopolies. He argued that free trade benefits both domestic and foreign consumers and producers by increasing competition, innovation, and wealth.
- The moral sentiments: Smith argued that human beings are not only motivated by self-interest but also by sympathy, benevolence, justice, and other moral sentiments. He claimed that these sentiments are derived from our ability to imagine ourselves in the situation of others and to feel what they feel. He also proposed a theory of conscience based on an impartial spectator who judges our actions according to universal rules.
Adam Smith’s legacy is immense and influential, as his ideas have shaped the economic policies and institutions of many countries and regions, such as the United States, the European Union, and China. His work has also inspired many other thinkers and disciplines, such as sociology, psychology, political science, ethics, history, and law. Smith is not without controversy, however, as some critics have challenged his assumptions, methods, conclusions, and implications on various grounds.