Adam Smith 1723–1790
Scottish economist, philosopher, nonfiction writer, and essayist.
Often referred to as the founder of the science of political economy, Smith is best known as the author of An Inquiry into the Nature and Causes of the Wealth of Nations (1776), which is generally recognized as the first comprehensive and systematic examination of the economic forces in Europe that gave birth to capitalism in the eighteenth century. Combining theoretical analysis with policy recommendations, The Wealth of Nations is partly a history of European economics and partly a description of the state of manufacture and trade in Smith's day. Explaining in detail the reasons for the breakdown of feudal Europe and the growth of the newly emerging world of industry, Smith offered suggestions for achieving rapid economic development in contemporary circumstances. His advocacy of freedom from government restriction of the economic process—what has since become known as the laissez-faire doctrine—appealed to the individualistic consciousness of Europe's rising capitalist class, and their enthusiasm for Smith's policy proposals in The Wealth of Nations greatly contributed to the book's enormous impact on Western economic thought and institutions. Smith was also known among his contemporaries as a prominent moral philosopher. His study of ethics, particularly as revealed in The Theory of Moral Sentiments (1759), helped to define the meaning and attributes of moral behavior in an age when traditional religious teachings were being replaced by secular values. Like The Wealth of Nations, The Theory of Moral Sentiments has been widely praised for its insight into the psychology of human behavior and its expression of leading intellectual currents of Smith's day.
Smith was born in the seaport town of Kirkcaldy, Scotland. His father, a customs official, died shortly before his birth, and he was raised by his mother, with whom he enjoyed a close relationship until her death in 1784 at the age of ninety. When he was fourteen, Smith entered the University of Glasgow, where he became a favorite pupil of Francis Hutcheson, whose teaching of moral philosophy greatly influenced Smith's thought throughout his career. In his lectures on moral philosophy, Hutcheson emphasized themes that later
became prominent in Smith's writing: the notion that moral and aesthetic judgments are based on feelings, not reason; faith in the fundamental value and divine origin of an ethical law of nature; and the recognition of benevolence and justice as important human virtues. Smith left the University of Glasgow in 1740 and enrolled at Oxford, where he remained for seven years, pursuing a course of study that was largely self-directed. He moved to Edinburgh in 1748 at the suggestion of Lord Henry Home of Kames, who had invited him to deliver a series of public lectures there on rhetoric and belles lettres. It is believed that Smith repeated or revised many of these lectures, which encompass aesthetic subjects as well as history, jurisprudence, government, and science, during his subsequent teaching career at the University of Glasgow, first as a professor of logic in 1751 and later as a professor of moral philosophy from 1752 to 1764. Since Smith ordered his literary executors to burn his manuscripts, only a portion of these lectures are extant; some are printed in Essays on Philosophical Subjects (1795), and others, dating from 1762–63, appear in Lectures on Justice, Police, Revenue and Arms (1896; also referred to as Lectures on Jurisprudence) and Lectures on Rhetoric and Belles Lettres (1963). As Chair of Moral Philosophy at the University of Glasgow, Smith not only taught ethics, but also carefully considered the social aspects of the subjects of government and law. His study of jurisprudence led him to conclude that economic liberty was a fundamental human right, a theme he was to expand upon in The Wealth of Nations. Smith's first book, The Theory of Moral Sentiments, was drawn from his lectures at the University of Glasgow dealing properly with ethics. A critical and popular success that also elicited the admiration of Smith's peers, among them the philosophers David Hume and Edmund Burke, the work so impressed the politician Charles Townsend that he offered Smith the position of tutor to his stepson, Henry Scott, the Duke of Buccleuch. Smith accepted the assignment, resigning from his professorship in 1764, and accompanied the Duke on a two-year visit to France and Switzerland. Upon his return to Scotland, Smith settled in Kirkcaldy, where he spent the next ten years working on The Wealth of Nations. The immediate success of this book derived in large part from the popularity of its policy recommendations, which favored the rising capitalist class in Europe, and a variety of governments sought Smith's economic advice. During the remaining years of his life, Smith enjoyed recognition as a prominent economist and man of letters. He hosted regular Sunday dinners attended by important writers and other distinguished guests and devoted careful attention to his duties as commissioner of customs for Scotland, an appointment he received in 1778. He died in 1790, three years after his election to the office of Rector of Glasgow University.
Smith's reputation as a writer rests on his success in formulating systems in the realm of the social sciences to explain human behavior. In The Theory of Moral Sentiments, Smith examined the nature and origin of ethical judgments, and in his masterpiece, The Wealth of Nations, he explored the motivations of economic actors operating in a free market. Smith's system of moral philosophy, as outlined the The Theory of Moral Sentiments, is founded on the sentiment of sympathy, which, Smith maintained, forms the basis for humankind's judgments about both the propriety and merit of people's actions and feelings. According to Smith, it is sympathy, in the sense of imagining oneself in another person's situation, that shapes our judgments about whether another person's actions and feelings are right or wrong, deserving of praise or blame. As Smith points out, in order to form sound judgments about the conduct of others, individuals must be able to make judgments about their own behavior that are free of self-interest. In what is considered the most original aspect of Smith's ethical theory, he argued that the only way to avoid self-deception in our assessments of ourselves is to view our own actions through the eyes of an "ideal impartial spectator," a person possessed of perfect virtue who knows all the relevant facts but is not personally involved and who adheres to a set of general rules about what is considered socially appropiate behavior. In Smith's system, these general rules derive from accepted social virtues, such as benevolence and justice; sympathy, a natural human phenomenon, is the ultimate source of virtuous sentiments. While The Theory of Moral Sentiments deals with humankind's struggle to achieve happiness on a moral level, The Wealth of Nations concerns humankind's material welfare. Smith's primary objective in The Wealth of Nations was to define the ways and means of producing national wealth and to outline the conditions for rapid economic development in terms of national income. He rejected the mercantilist theory that money, in the form of gold and silver, is wealth, maintaining instead that wealth is measured in terms of consumer goods. Smith emphasized that the greatest amount of trade will take place among countries that possess surplus stocks of consumer goods, or the raw materials necessary to produce them, and he argued that the best way to maximize a country's capital accumulation is to increase productivity through a division of labor whereby individual workers are assigned specialized functions in the manufacture of a particular product. It follows from Smith's analysis that producers, in an effort to ensure that all of their material wants will be supplied, will concentrate on the manufacture of goods for which there is the greatest demand. Thus, Smith views self-interest as the primary motivation of economic agents in a capitalist society. He writes, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest." Smith adds, however, that economic actors, through no design of their own, actually help to promote the general welfare by producing and selling the goods that satisfy the greatest needs of the people: the capitalist "intends only his own gain" but is "led by an invisible hand to promote an end which was no part of his intention." In Smith's view, then, there exits a natural order in the universe whereby individual selfishness adds up to the maximum social good. He therefore concluded that government attempts to disrupt this natural order in the form of restrictions on free trade should be abolished. One of the major themes of The Wealth of Nations—and the one that most appealed to the capitalist class that was coming to power in Europe at the time of the book's publication—is economic liberalism and the need to remove the government controls on individual economic agents that had survived from feudal and mercantilist times.
Smith is widely viewed as the philosopher of the capitalist revolution for his achievement in The Wealth of Nations. Scholars generally agree that Smith's genius lie in his ability to bring together into a coherent whole a vast range of topics that had been treated in the economic literature of his day and to fashion a system that explained the forces that were then at work forging a new economic order in Europe. Among Smith's contemporary audience, The Wealth of Nations was more applauded for its practical recommendations than for its analytic aspects. The acceptance of Smith's policy proposals by Europe's rising capitalist class helped to put in place economic practices and institutions that still survive and that continue to be associated with Smith's name. From a modern standpoint, however, Smith's lasting legacy is his economic analysis, which has been the subject of a vast amount of literature written by both professional and academic economists all over the world. In addition to discussing specific aspects of Smith's theory, most notably his ideas concerning the division of labor and the proper role of government in a free market economy, scholars have studied the philosophical foundations of his thought. Another prominent topic in the literature on Smith is the relationship between The Wealth of Nations and The Theory of Moral Sentiments. While it is almost unanimously agreed that both works attest to Smith's keen understanding of human psychology, critics have debated whether Smith's moral outlook has any bearing on his economic analysis. While some critics have argued that the concept of sympathy in The Theory of Moral Sentiments is in direct conflict with the idea of self-interest in The Wealth of Nations, others have found that Smith's notions of justice and benevolence as formulated in the earlier work are the key to an understanding of Smith's economic analysis. The ongoing controversy over whether Smith's moral and economic systems can be reconciled has not detracted from the critical stature of either The Wealth of Nations or The Theory of Moral Sentiments. The Theory of Moral Sentiments, like The Wealth of Nations, continues to be analyzed by critics on its own merits, for its theory and methodology as well as for the light it sheds on the Scottish philosophical tradition. Smith's fame, however, rests almost entirely on The Wealth of Nations. The economic system Smith developed in this work became the model for capitalist societies all over the globe, and today Smith is ranked with Thomas Robert Malthus, David Ricardo, John Stuart Mill, and Karl Marx among the world's greatest classical economists.
Show MoreThe Father of the Economics
During the 18th century, when Adam Smith lived, the most important social, moral, and technological presumptions had matured. These assumptions have helped to shape the market system as the publicly accepted and entrenched economic lifestyle, and the basis for cultural and even ethical relationships. The presumptions were market intensification and the spread of money operations, as well as the need for accounting and technical production, not the seizure of new lands or colonial conquest, as it used to be, but the accumulation of wealth became the source of vitality for many nations. At the same times, the type for economic man, the one who is absorbed with resource realization, was formed. The history…show more content…
Here he studied moral philosophy, which included the basic sciences of society, including economy. Smith was taught by one of the most prestigious Scottish educators Francis Hutcheson, which made a significant impact for him (Ross). After three years of study at the University of Glasgow and when he was only seventeen years old, Smith received a Master of Arts degree and a scholarship for further studies at Oxford College (Say). He stayed there for six years. In 1748 Adam Smith began to read public lectures on literature and law in Edinburgh. That is how he became popular. Smith remained celibate, who was reluctant to associate his life with someone else, other than education (Say).
In 1751 Adam Smith became free logic professor at the University of Glasgow (Ross). A year later he became a professor of moral philosophy. He held his position for thirteen years. In his opinion, it was the happiest and the most useful stage of his life (Ross). His moral philosophy lectures supplemented sociology and economic issues. Based on his lectures material in 1759 Smith published the first treatise called The Moral Sentiments Theory which has attracted a kit if resonance and has been translate into French, German and other European languages (Ross). In 1764 Smith went to France where he acquainted with many eminent economists (Say). After two years he returned to his native Kirkcaldy, which for an entire