Adam Smith, highly regarded as the father of economics, was born in 1723 in Scotland. He is best known for his masterpiece which he published in 1776, “An Inquiry into the Nature and Causes of the Wealth of Nations”. At his time, mercantilism was the dominant economic policy in Europe. He contradicted this philosophy with his ideas.
In 1737, he began his education at the University of Glasgow, where he studied moral philosophy, mathematics and political economy. In 1740, he received a scholarship from Oxford University. Upon graduating from Oxford, which he did not find intellectually satisfying, he was offered a position as a Logic professor at Glasgow University in 1751. Later on, he began teaching Moral Philosophy too.
His first literary work, The Theory of Moral Sentiments, was a success. In his book, smith tried to explain how morality governs our actions and how human beings acquired these feelings that helps them distinguish right from wrong. Here, Smith puts forth the idea that our actions and ideas are a product of our nature as social creatures.
In 1764, Smith decided to resign from his professorship at Glasgow University to take the Duke of Buccleuch under his tutelage in France. The three years that he spent there provided him with lots of free time and also gave him the opportunity to meet and cooperate with French physiocrats.
In 1776, the Wealth of Nations was published, a masterpiece that truly reflects the noble ideas of Smith. In contrast to what he had proposed in his former book, in the latter one, Smith assumed that people act according to their own self-interest, however, these selfishness contributes to the public good through a mechanism which Smith named as the Invisible Hand. One excerpt from the book goes as, “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”
Adam Smith died in 1790, yet, his ideas and pioneering concepts are still with us today. If you are curious enough, you will find that his image also lies on the 20 pound bill.
1. Adam Smith
6. Smith’s Word