Adam Smith

Adam Smith (1723-1790) was a Scottish economist and philosopher. He is
famous for his influential book The Wealth of Nations (1776). He is
generally thought of as the father of modern economics.

Smith was the son of the comptroller of the customs at Kirkcaldy, Fife,
Scotland. The exact date of his birth is unknown, but he was baptized at
Kirkcaldy on June 5, 1723, his father having died some six months previously.

At the age of about fifteen, Smith proceeded to the University of Glasgow,
studying moral philosophy under "the never-to-be-forgotten" (as Smith called
him) Francis Hutcheson. In 1740 he entered the Balliol College of the
University of Oxford, but as William Robert Scott has said, "the Oxford of
his time gave little if any help towards what was to be his lifework," and
he relinquished his exhibition in 1746. In 1748 he began delivering public
lectures in Edinburgh under the patronage of Lord Kames. Some of these dealt
with rhetoric and belles-lettres, but later he took up the subject of "the
progress of opulence," and it was then, in his middle or late 20s, that he
first expounded the economic philosophy of "the obvious and simple system of
natural liberty" which he was later to proclaim to the world in his Inquiry
into the Nature and Causes of the Wealth of Nations. About 1750 he met David
Hume, who became one of the closest of his many friends.

In 1751 Smith was appointed professor of logic at the University of Glasgow,
transferring in 1752 to the chair of moral philosophy. His lectures covered
the field of ethics, rhetoric, jurisprudence and political economy, or
"police and revenue." In 1759 he published his Theory of Moral Sentiments,
embodying some of his Glasgow lectures. This work, which established Smith's
reputation in his own day, is concerned with the explanation of moral
approval and disapproval. His capacity for fluent, persuasive, if rather
rhetorical argument is much in evidence. He bases his explanation, not as
the third Lord Shaftesbury and Hutcheson had done, on a special "moral
sense", nor (like Hume) to any decisive extent on utility, but on sympathy.
There has been considerable controversy as how far there is contradiction or
contrast between Smith's emphasis in the Moral Sentiments on sympathy as a
fundamental human motive, and, on the other hand, the key role of
self-interest in the The Wealth of Nations. In the former he seems to put
more emphasis on the general harmony of human motives and activities under a
beneficent Providence, while in the latter, in spite of the general theme of
"the invisible hand" promoting the harmony of interests, Smith finds many
more occasions for pointing out cases of conflict and of the narrow
selfishness of human motives.

Smith now began to give more attention to jurisprudence and economics in his
lecture and less to his theories of morals. An impression can be obtained as
to the development of his ideas on political economy from the notes of his
lectures taken down by a student in about 1763 which were later edited by E.
Cannan (Lectures on Justice, Police, Revenue and Arms, 1896), and from what
Scott, its discoverer and publisher, describes as "An Early Draft of Part of
The Wealth of Nations", which he dates about 1763.

At the end of 1763 Smith obtained a lucrative post as tutor to the young
duke of Buccleuch and resigned his professorship. From 1764-66 he traveled
with his pupil, mostly in France, where he came to know such intellectual
leaders as Turgot, D'Alembert, AndrŽ Morellet, HelvŽtius and, in particular,
Francois Quesnay, the head of the Physiocratic school whose work he much
respected. On returning home to Kirkcaldy he devoted much of the next ten
years to his magnum opus, which appeared in 1776. In 1778 he was appointed
to a comfortable post as commissioner of customs in Scotland and went to
live with his mother in Edinburgh. He died there on July 17, 1790, after a
painfull illness. He had apparently devoted a considerable part of his
income to numerous secret acts of charity.

Shortly before his death Smith had nearly all his manuscripts destroyed. In
his last years he seems to have been planning two major treatises, one on
the theory and history of law and one on the sciences and arts. The
posthumously published Essays on Philosophical Subjects (1795) probably
contain parts of what would have been the latter treatise.

The Wealth of Nations was influential since it did so much to create the
field of economics and develop it into an autonomous systematic discipline.
In the western world, it is arguably the most influential book on the
subject ever published. When the book, which has become a classic manifesto
against mercantilism, appeared in 1776, there was a strong sentiment for
free trade in both Britain and America. This new feeling had been born out
of the economic hardships and poverty caused by the war. However, at the
time of publication, not everybody was convinced of the advantages of free
trade right away: the British public and Parliament still clung to
mercantilism for many years to come.

There has been some controversy over the extent of Smith's originality in
The Wealth of Nations; some argue that the work added little to the already
established ideas of thinkers such as David Hume and Montesquieu.
Nevertheless, it remains one of the most influential and important books in
the field today.