Download Adam Smith was a Scottish political economist and philosopher. He

Biography of Adam Smith (1723-1790)
Adam Smith was a Scottish political economist and philosopher. He has become famous by his influential
book The Wealth of Nations (1776). Smith was the son of the comptroller of the customs at Kirkcaldy,
Fife, Scotland. The exact date of his birth is unknown. However, 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 Glasgow university, studying moral philosophy under "the
never-to-be-forgotten" Francis Hutcheson (as Smith called him). In 1740 he entered Balliol college,
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 belleslettres, 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 Glasgow university, 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 political economy 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, AndréMorellet, Helvétius 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 painful 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 has become so influential since it did so much to create the subject of political
economy and develop it into an autonomous systematic discipline. In the western world, it is the most
influential book on the subject ever published. When the book, which has become a classic manifesto
against mercantalism, 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 (Tindall and
Shi). However, controversial views have been expressed as to the extent of Smith's originality in The
Wealth of Nations. Smith has been blamed for relying too much on the ideas of great thinkers such as
David Hume and Montesquieu. Nevertheless, The Wealth of Nations was the first and remains the most
important book on the subject of political economy until this present day.
The Wealth of Nations Summary
Smith's seminal work, The Wealth of Nations, aims to create a new understanding of economics. Smith
writes largely against the mercantile system that existed at the time of writing, but, along the way, gives a
complicated but brilliant account of an economic system based in human nature and deeply rooted social
dynamics. The text is characterized by fact-heavy digressions, tables, and appendices that blend hard
research with broad generalities, demonstrating his commitment to give evidence for what seem like
timeless observations about the nature of economics.
Books I and II focus on developing the idea of the division of labor, and describing how this division adds
to the opulence of a given society by creating enormous surpluses, which can be exchanged among
members. The division of labor also fuels technological innovation, by giving intense focus to certain
tasks, and allowing workers to brainstorm ways to make these tasks more efficient. This, again, adds to
efficiency and grows surpluses. Surpluses, Smith writes, may be either traded or re-invested. In the latter
case, technologies are likely to improve, leading to even greater efficiencies.
Book III considers Great Britain in the context of the the social evolution of society in general, which
begins, according to Smith, with hunting and gathering societies and progresses through agricultural
stages to arrive at a state of international commerce. According to Smith, the fall of Rome and the rise of
feudalism retarded this progression by creating a system of decreased efficiency.
Book IV goes on to criticize the “mercantile commerce” that characterized much of Smith's Europe.
Smith's first major criticism of mercantilism is that it conflates value and wealth with precious metals.
According to Smith, the real measure of the wealth of a nation is the stream of goods and services that the
nation creates. In making this point, Smith invents the idea of gross domestic product, which has become
central to modern economics. The wealth of a nation is increased not by hoarding metals, but by
increasing the productive capacity by expanding the market—by increasing trade.
An important theme that persists throughout the work is the idea that the economic system is automatic,
and, when left with substantial freedom, able to regulate itself. This is often referred to as the “invisible
hand.” The ability to self-regulate and to ensure maximum efficiency, however, is threatened by
monopolies, tax preferences, lobbying groups, and other “privileges” extended to certain members of the
economy at the expense of others.
Finally, in the last book of The Wealth of Nations, Smith describes what he considers to be the
appropriate roles of government, namely defense, justice, the creation and maintenance of public works
that contribute to commerce, education, the maintenance of the “dignity of the sovereign,”—activities that
are to be financed by fair and clear taxation.