Smith, Adam

Smith, Adam, 1723–90, Scottish economist, educated at Glasgow and Oxford. He became professor of moral philosophy at the Univ. of Glasgow in 1752, and while teaching there wrote his Theory of Moral Sentiments (1759), which gave him the beginnings of an international reputation. He traveled on the Continent from 1764 to 1766 as tutor to the duke of Buccleuch and while in France met some of the physiocrats and began to write An Inquiry into the Nature and Causes of the Wealth of Nations, finally published in 1776.

In that work, Smith postulated the theory of the division of labor and emphasized that value arises from the labor expended in the process of production. He was led by the rationalist current of the century, as well as by the more direct influence of Hume and others, to believe that in a laissez-faire economy the impulse of self-interest would bring about the public welfare; at the same time he was capable of appreciating that private groups such as manufacturers might at times oppose the public interest. Smith was opposed to monopolies and the concepts of mercantilism in general but admitted restrictions to free trade, such as the Navigation Acts, as sometimes necessary national economic weapons in the existing state of the world. He also accepted government intervention in the economy that reduced poverty and government regulation in support of workers.

Smith wrote before the Industrial Revolution was fully developed, and some of his theories were voided by its development, but as an analyst of institutions and an influence on later economists he has never been surpassed. His pragmatism, as well as the leaven of ethical content and social insight in his thought, differentiates him from the rigidity of David Ricardo and the school of early 19th-century utilitarianism. In 1778, Smith was appointed commissioner of customs for Scotland. His Essays on Philosophical Subjects (1795) appeared posthumously.

Bibliography

See biographies by J. Rae (1895, repr. 1965), I. S. Ross (1995), and J. Buchan (2006); studies by E. Ginzberg (1934, repr. 1964), T. D. Campbell (1971), S. Hollander (1973), and E. Rothschild (2001).

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Smith, Adam

Adam Smith, paste medallion by James Tassie, 1787; in the Scottish National Portrait Gallery, …

(credit: Courtesy of the Scottish National Portrait Gallery, Edinburgh)

(baptized June 5, 1723, Kirkcaldy, Fife, Scot.—died July 17, 1790, Edinburgh) Scottish social philosopher and political economist. The son of a customs official, he studied at the Universities of Glasgow and Oxford. A series of public lectures in Edinburgh (from 1748) led to a lifelong friendship with David Hume and to Smith's appointment to the Glasgow faculty in 1751. After publishing The Theory of Moral Sentiments (1759), he became the tutor of the future Duke of Buccleuch (1763–66); with him he traveled to France, where Smith consorted with other eminent thinkers. In 1776, after nine years of work, Smith published An Inquiry into the Nature and Causes of the Wealth of Nations, the first comprehensive system of political economy. In it he argued in favour of an economic system based on individual self-interest that would be led, as if by an “invisible hand,” to achieve the greatest good for all, and posited the division of labour as the chief factor in economic growth. A reaction to the system of mercantilism then current, it stands as the beginning of classical economics. The Wealth of Nations in time won him an enormous reputation and would become virtually the most influential work on economics ever published. Though often regarded as the bible of capitalism, it is harshly critical of the shortcomings of unrestrained free enterprise and monopoly. In 1777 Smith was appointed commissioner of customs for Scotland, and in 1787 rector of the University of Glasgow.