The Origin of Adam Smith
Adam Smith, a prominent liberal philosopher and economist, was born on July 16, 1723, in the small Scottish village of Kirkcaldy, situated near Edinburgh. His father worked as a customs inspector but passed away just three months after Adam’s birth. As a result, he was raised by his mother, Margaret Douglas, who belonged to a wealthy family in the village.
Adam Smith’s Academic Journey
At a young age, Smith enrolled in the Kirkcaldy Primary School. By the time he turned fourteen, he left his village to attend the University of Glasgow, where he studied social philosophy. During this period, he was significantly influenced by the renowned philosophy and ethics professor, Francis Hutcheson, whose ideas played a crucial role in shaping Smith’s views, particularly in relation to economics and philosophy. After three years of study, Adam successfully completed his academic program and received a scholarship to pursue higher education.
In 1740, Smith joined Balliol College at the University of Oxford, where he continued his exploration of classical and contemporary philosophy. He excelled in his studies and graduated at the age of twenty-three. Subsequently, he returned to his hometown. In 1748, he began delivering lectures in Edinburgh on various topics, including economics, philosophy, and history. He also contributed articles to the Edinburgh Review.
In 1751, Smith was appointed as a professor of logic at the University of Glasgow at the age of twenty-seven. A year later, he transitioned to a position as a professor of moral philosophy. This phase of his life was marked by creativity and distinction, culminating in his appointment as the Dean of the Faculty in 1758.
Additionally, Adam Smith served as a tutor to the Duke of Buccleuch, accompanying him on various travels. In 1763, he traveled to France, where he took on the role of private tutor to Charles Townsend’s son, a key figure in economics and a former finance minister.
Adam Smith’s Intellectual Contributions
Upon his return to Kirkcaldy in 1776, Smith announced his retirement from formal employment and began to advocate several ideas that would later lay the foundation for classical economics. His theories became the bedrock for subsequent classical economists.
It is noteworthy that Smith was influenced by the thoughts of several philosophers and economists, including Scottish philosopher David Hume, as well as the aforementioned Francis Hutcheson. Smith’s ideas later resonated with the works of figures like David Ricardo and Karl Marx in the nineteenth century, as well as John Maynard Keynes and Milton Friedman in the twentieth century.
Smith strongly believed in the concept of a free market economy, positing that individual interests would lead to a balanced economy with no need for imposed restrictions. His core ideas in philosophy and economics are summarized as follows:
Ethical Philosophy
According to Adam Smith, human society has traversed various stages to reach its current state. He identified the first stage as one where humans lived in the wild, relying on hunting without any rights related to ownership. This evolved into a settled life characterized by agriculture.
The second stage, identified as the feudal society, was marked by the imposition of laws and property rights that were limited to the wealthy and landowners.
Economic Philosophy and Free Markets
Smith argued that the government’s role in any country should be confined to defense and education; the economy, he believed, should be based on an unrestricted free market philosophy, relying solely on the forces of supply and demand. He contended that wealthy nations are typically those whose citizens are more engaged in production.
Smith also emphasized the importance of institutional frameworks to guide people towards effective production methods that benefit society. These institutions serve as a system to promote and safeguard free competition.
His ideas presented in “The Wealth of Nations” had a profound impact in establishing what is now recognized as political economy and in developing it into an independent systematic discipline, particularly in the Western world, which contrasted with mercantilist views.
Notable Works by Adam Smith
Adam Smith authored several influential works, including:
- The Wealth of Nations: Published in 1776, this seminal book is one of Smith’s greatest contributions to economic thought. It presents the first detailed account of how national wealth is created, solidifying the foundation of classical economics. In it, he addresses various economic issues, including division of labor, productivity, and free markets.
- The Theory of Moral Sentiments: Released in 1759, this book laid the groundwork for many of Smith’s subsequent works. It deals with ethics and general philosophical concepts, including his ideas in The Wealth of Nations. Smith categorized ethical philosophy into four sections: private rights, natural rights, morality, and virtue, and also discussed family rights and state and individual rights under politics.
All of Smith’s contributions to economics and business remain significant references for economists and philosophers worldwide to this day.
Death of Adam Smith
There aren’t many accounts regarding the events surrounding Adam Smith’s death, except that he passed away on July 17, 1790, in Edinburgh at the age of 67. He never married during his lifetime, and it appears that he succumbed to a painful illness. Reports indicate that he dedicated a substantial portion of his earnings to charitable causes.
As a foundational figure in the philosophy and principles of economics during the Scottish Enlightenment, Smith’s image has been printed on banknotes in Scotland and England as a form of honor. Additionally, a statue was erected in St. Giles’ Cathedral in Edinburgh.
Prior to his death, Smith reportedly destroyed all his manuscripts written in the latter part of his life, the reason for which remains unknown. He was preparing two theories: one concerning the history of law and the other regarding the sciences and arts, as indicated in the articles published posthumously in 1795.
Famous Quotations by Adam Smith
Adam Smith is known for numerous insightful quotes across various fields, including:
- On division of labor: “The immense increase in productivity across various fields due to the division of labor results in widespread wealth permeating down to the lower strata of society in a well-governed community.”
- On justice: “If we wish for the state to progress from the lowest levels of barbarism to the highest degrees of wealth, we do not require many prerequisites; simply peace, reasonable taxes, and a fair application of justice will suffice, while the other factors take care of themselves naturally.”
- On the invisible hand: “The rich do not consume more than the poor except to a small extent, and despite their inherent selfishness and greed… they share with the poor all the benefits derived from improvements they create. Such wealthy individuals are guided by an invisible hand to achieve a distribution of necessities similar to what would occur if the land were equally divided among its inhabitants, thereby promoting societal interests unwittingly.”
- On planning: “A systematic man’s hubris often blinds him to his own vanity, and he becomes enamored with the supposed grandeur of his ideal government plan, to the point of rejecting even the slightest deviation from any aspect of it. He imagines himself capable of orchestrating the various facets of a large society with the same ease as moving chess pieces, yet fails to recognize that in the grand chessboard of human society, each piece possesses its own unique approach to movement, distinct from that imposed by the legislator.”