Adam Smith (June 16, 1723 to July 17, 1790) was a Scottish political economist and moral philosopher. He is considered the fundamental economist upon whose work modern capitalism is based, as he advocated individual economic growth, free enterprise and free will. He founded modern economic theory.
His most famous concept was that markets guide economic activity and act like an "invisible hand" - allocating resources through prices, which rise when there is a shortage of a commodity and fall when it is plentiful.
- Each individual strives to become wealthy "intending only his own gain" but to this end he must exchange what he owns or produces with others who sufficiently value what he has to offer; in this way, by division of labour and a free market, public interest is advanced.
One of the key figures of the intellectual movement known as the Scottish Enlightenment, he is known primarily as the author of two treatises:
- The Theory of Moral Sentiments (1759)
- An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
His The Wealth of Nations was one of the earliest attempts to study the historical development of industry and commerce in Europe, as well as a sustained attack on the doctrines of mercantilism. That work helped to create the modern academic discipline of economics and provided one of the best-known intellectual rationales for free trade, capitalism, and libertarianism. It continues to greatly influence the writings of economists.
Smith was born in Kirkcaldy, Scotland in 1723 and was raised by his widowed mother. Smith entered the University of Glasgow at the age of fourteen and then attended Balliol College at Oxford for six years until he graduated at the age of twenty-three. Adam returned to Scotland, and delivered a series of lectures which were very well received. Smith was appointed first chair of logic in 1751 at the University of Glasgow and later then chair of moral philosophy in 1752. In 1764, Adam Smith left the academy to tutor the young Duke of Buccleuch. They lived and traveled in France and Switzerland for two years. The duke had given his teacher a comfortable life pension, so Adam Smith retired to Kirkcaldy and began writing his book, An Inquiry into the Nature and Causes of the Wealth of Nations. In 1778 Smith was appointed to a post as commissioner of customs in Scotland and went to live with his mother in Edinburgh. He died there on July 17, 1790, after suffering with the painful illness, proctalgia fugax, and was buried in the Canongate Kirkyard, Royal Mile, Edinburgh. Smith is hailed as the one who discovered the invisible hand, and explained the theoretical bases of free enterprise.
With effect from March 13, 2007, Smith's portrait appears on the reverse of the English £20 note. He is the first true Scotsman to feature on currency issued by the Bank of England, though others with Scottish noble titles have been so featured. His portrait also features on £50 notes issued by the Clydesdale Bank. Many members of the British Conservative Party revere his economic philosophy and insights, and the Adam Smith Institute is a prominent UK pro-free market think tank.
- Adam Smith and the invisible hand - Helen Joyce
- Biography at the Concise Encyclopedia of Economics
- Life of Adam Smith by John Rae, at the Library of Economics and Liberty
- The Celebrated Adam Smith by Murray N. Rothbard; full text of Chapter 16 of An Austrian Perspective on the History of Economic Thought, Vol. I and II, Edward Elgar, 1995; Ludwig von Mises Institute 2006
- Smith's works
- An Inquiry into the Nature and Causes of the Wealth of Nations at MetaLibri Digital Library
- An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith. Fifth edition (1789), presented here, republished from: Edwin Cannan's annotated edition, 1904, Methuen & Co., Ltd. First edition: 1776.
- Works by Adam Smith - text and free audio - LibriVox