ADAM SMITH

Adam Smith was an economist and philosopher who wrote what is considered the "bible of capitalism," The Wealth of Nations, in which he details the first system of political economy.

Early Years While his exact date of birth isn’t known, Adam Smith’s baptism was recorded on June 5, 1723, in Kirkcaldy, Scotland. He attended the Burgh School, where he studied Latin, mathematics, history and writing. Smith entered the University of Glasgow when he was 14 and in 1740 went to Oxford.

The Wealth of Nations After toiling for nine years, in 1776 Smith published An Inquiry into the Nature and Causes of the Wealth of Nations (usually shortened to The Wealth of Nations), which is thought of as the first work dedicated to the study of political economy. Economics of the time were dominated by the idea that a country’s wealth was best measured by its store of gold and silver.

Smith proposed that a nation’s wealth should be judged not by this metric but by the total of its production and commerce—today known as gross domestic product (GDP). He also explored theories of the division of labor, an idea dating back to Plato, through which specialization would lead to a qualitative increase in productivity

Smith’s ideas are a reflection on economics in light of the beginning of the Industrial Revolution, and he states that free-market economies (i.e., capitalist ones) are the most productive and beneficial to their societies. He goes on to argue for an economic system based on individual self-interest led by an “invisible hand,” which would achieve the greatest good for all.

In time, The Wealth of Nations won Smith a far-reaching reputation, and the work, considered a foundational work of classical economics, is one of the most influential books ever written. In 1787, Smith was named rector of the University of Glasgow, and he died just three years later, at the age of 67.

Kanjanaree Phosanga M.4.3 No.8