Introduction
Adam Smith was born in June, 1723, in the port town of Kirkcaldy, the county of Fife, Scotland. His father, also Adam Smith, died several months before the boy was born, and his mother, Margaret Douglas, raised the son alone (Weinstein, n.d.). In 1737, the boy graduated from one of top Scotland’s secondary schools and entered the University of Glasgow on scholarship where he studied under the influential philosopher Francis Hutchenson. In 1740, Adam Smith graduated from the university and attained a prestigious “Snell Exhibition” scholarship to Oxford University’s Balliol College where he studied European literature for six years.
In 1746, Smith returned to Kirkcaldy; his reputation was established after he was proposed to read a course of public lectures on rhetoric and jurisprudence in Edinburgh (Weinstein, n.d.). In 1751, Smith was appointed a professor of logic and a later professor of moral philosophy at Glasgow University (Adam Smith, The Library of Economics and Liberty). Using an opportunity to travel to France, Smith met with influential people from intellectual circles, in particular, Francois Quesnay and the physiocrats. In 1752, Smith became a member of the Philosophical Society of Edinburgh, though held the position only for several years.
In 1759, The Theory of Moral Sentiments written by Smith was published to attract international attention and win the author the reputation of an intellectual (Weinstein, n.d.). Having resigned from the University of Glasgow, Smith became a private tutor and had more time for writing. Soon he published Inquiry into the Nature and Causes of the Wealth of Nations which was expected to be the first volume of a complete theory of society. Adam Smith never married and died on the 17th of July in 1790.
Adam Smith’s School of Thought
Adam Smith is held to be the main thinker of classical economics or classical political economy. This is because his main work Inquiry into the Nature and Causes of the Wealth of Nations marked the beginning of a new era in economics. The main idea of classical economics is that markets operate best when they regulate themselves and equilibrium is maintained through market forces. This school of economic thought was active from the 18th to the mid-19th century, and then it was followed by neoclassical economists. Adam Smith was one of the proponents of classical economics who reoriented economics to a broader sphere of national interests instead of the personal interests of a ruler.
Contributions to the Field of Economics
It should be stated that Adam Smith’s contribution to the tradition of classical economics was highly influential, which explains why he is generally regarded as the father of that school. One of his the most famous works, The Wealth of Nations, discusses market society as a decentralized system where a rational allocation of resources is governed by price (Weinstein, n.d.). Having appeared at the dawn of industrial development of Europe, the work discussed the importance of the principle of division of labor and defending free trade.
In Smith’s days, people believed that national wealth meant the amount of silver and gold possessed by a country. As a result, a vast network of controls was maintained by governments to prevent valuable metals from draining to other countries. Protective monopolies were rarely given to manufacturers and merchants by a ruler. Smith, however, showed that such a mercantile approach was folly.
Being a proponent of free trade, Smith proved that both sides benefit from it since none wants to lose. Also, he explained that a country’s wealth is measured not by the amount of gold and silver but by the total of its production and commerce (the equivalent of the gross domestic product). The book Inquiry into the Nature and Causes of the Wealth of Nations had a deep impact on the politicians and served as an intellectual base for the era of free trade.
Particular attention should be paid to the concept of the invisible hand which Smith introduced in The Theory of Moral Sentiments. The writer assumed that the economy could work well in a free market scenario with everyone being ruled by their own self-interest (About Adam Smith, Adam Smith Institute). In other words, people should be left alone to buy and sell. This will result in sellers competing with each other, and markets will be led towards a positive output.
Smith’s account of the division of labor and free trade, as well as the limits of the government interventions in markets, signified a transition to a new period of economics. However, it should be stated that the work should not be regarded as a book on economics. Inquiry into the Nature and Causes of the Wealth of Nations is sooner a mixture of political science, philosophy, and history.
Conclusion
Adam Smith was an 18th-century Scottish philosopher renowned as a father of classical economics and a proponent of free markets. His works The Theory of Moral Sentiments and Inquiry into the Nature and Causes of the Wealth of Nations made a huge impact on the economics. Concepts of the division of labor and the invisible hand introduced by Smith have become an important element of modern economic theories.
References
About Adam Smith. (n.d.). Web.
Adam Smith. (n.d.). Web.
Weinstein, J. R. (n.d.). Adam Smith (1723-1790). Web.