Adam Smith

Life and legacy

Adam Smith was baptized on 16 June 1723 in Kirkcaldy, a small seaport town in Fife, Scotland. His exact date of birth is unknown, though it was a few days before his baptism. His father, also Adam Smith, was a customs comptroller who died before his son's birth; his mother, Margaret Douglas, raised him and remained his closest companion throughout her life. Smith attended the University of Glasgow at the age of fourteen, where he studied under the moral philosopher Francis Hutcheson, and then won a scholarship to Balliol College, Oxford, where he spent six unhappy years and largely educated himself.

Smith returned to Scotland and delivered public lectures in Edinburgh before being appointed to the chair of moral philosophy at the University of Glasgow in 1752. His first major work, The Theory of Moral Sentiments (1759), explored how human beings form moral judgments through sympathy - the ability to imagine themselves in the position of others. The book earned him an international reputation and led to his appointment as tutor to the young Duke of Buccleuch, with whom he traveled across France and Switzerland from 1764 to 1766, meeting Voltaire, Turgot, and other leading thinkers.

Smith spent the next decade in Kirkcaldy writing his masterwork, An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776 - the same year as the American Declaration of Independence. The Wealth of Nations analyzed the sources of economic prosperity with unprecedented rigor and clarity. Smith demonstrated how the division of labor dramatically increases productivity, how free markets coordinate economic activity through the price mechanism, and how the pursuit of individual self-interest can, through the operation of what he famously called an "invisible hand," promote the general welfare of society. He argued against the mercantilist policies of his day, which sought to accumulate national wealth through trade restrictions, and made the case for free trade and limited government intervention in economic life.

Smith's insights extended far beyond abstract theory. The Wealth of Nations contains detailed analyses of wages, profits, rent, taxation, public debt, education, defense, and the role of government. His argument that monopolies and trade restrictions benefit special interests at the expense of the public good remains as relevant today as in the eighteenth century. He was no uncritical advocate of business, however: he warned repeatedly that merchants and manufacturers would seek to manipulate markets for their own advantage.

Smith was appointed Commissioner of Customs in Edinburgh in 1778 and spent his final years in quiet civic service. He died on 17 July 1790, having ordered most of his unpublished manuscripts destroyed. The Wealth of Nations is widely regarded as the first modern work of economics and one of the most influential books ever written.

Key accomplishments

• Published An Inquiry into the Nature and Causes of the Wealth of Nations (1776), the founding text of modern economics
• Articulated the concept of the "invisible hand" and the self-regulating nature of free markets
• Analyzed the division of labor as the primary driver of economic productivity
• Published The Theory of Moral Sentiments (1759), a foundational work of moral philosophy
• Made the intellectual case against mercantilism and for free trade that transformed economic policy

Quotes

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

The Wealth of Nations, Book I, Chapter 2, 1776

No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.

The Wealth of Nations, Book I, Chapter 8, 1776

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