Born: Kirkcaldy, United Kingdom
Died: 17 July 1790, Adam Smith’s Panmure House, Edinburgh, United Kingdom
Influenced: David Ricardo, John Maynard Keynes, MORE
Influenced by: Jean-Jacques Rousseau, François Quesnay, Gottfried Wilhelm Leibniz, Francis Hutcheson
Education: Kirkcaldy High School (1729–1737), MORE
Children: David Anne, Cecilia Margaret
Adam Smith was a Scottish moral philosopher and political economist who is widely considered the father of modern economics. He is best known for his two major works, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776), the latter of which is often shortened to The Wealth of Nations.
Here are some of the key things to know about Adam Smith:
- Early life and education: Smith was born in Kirkcaldy, Scotland, in 1723. He studied at the University of Glasgow and Balliol College, Oxford, where he received a strong grounding in philosophy, literature, and jurisprudence.
- Moral philosophy: Smith's first major work, The Theory of Moral Sentiments, explored the nature of human sympathy and its role in shaping moral judgments. This work helped to lay the foundation for his later economic thinking.
- Economics: In The Wealth of Nations, Smith argued that the pursuit of individual self-interest, guided by the "invisible hand" of the market, could lead to economic prosperity for society as a whole. He advocated for free markets and limited government intervention in the economy.
- Legacy: Smith's ideas have had a profound impact on the development of economic theory and practice. He is considered one of the most important figures in the history of economics, and his work continues to be studied and debated today.
Here are some of Smith's most famous ideas:
- The division of labor: Smith argued that the division of labor, in which workers specialize in different tasks, can lead to increased productivity and economic growth.
- The invisible hand: Smith believed that individuals, acting in their own self-interest, would unknowingly promote the good of society as a whole. This is known as the "invisible hand" theory.
- Supply and demand: Smith helped to develop the theory of supply and demand, which explains how the price of a good or service is determined by the interaction of supply and demand.
Smith's work has been both praised and criticized. His supporters argue that his ideas have led to economic prosperity and freedom. His critics argue that his ideas have led to inequality and exploitation.
Overall, Adam Smith is a complex and important figure in the history of economics. His ideas continue to be relevant today, and his work is sure to be studied and debated for many years to come.
Adam Smith Quotes
“Adventure upon all the tickets in the lottery, and you lose for certain; and the greater the number of your tickets the nearer your approach to this certainty.”
“All money is a matter of belief.”
“As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.”
“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
“Defense is superior to opulence.”
“Great ambition, the desire of real superiority, of leading and directing, seems to be altogether peculiar to man, and speech is the great instrument of ambition.”
“Happiness never lays its finger on its pulse.”
“Humanity is the virtue of a woman, generosity that of a man.”
“I have never known much good done by those who affected to trade for the public good.”
“It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country.”
“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.”
“Labor was the first price, the original purchase – money that was paid for all things.”
“Labour was the first price, the original purchase – money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased.”
“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
“Man is an animal that makes bargains: no other animal does this – no dog exchanges bones with another.”
“No complaint… is more common than that of a scarcity of money.”
“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
“On the road from the City of Skepticism, I had to pass through the Valley of Ambiguity.”
“Poor David Hume is dying fast, but with more real cheerfulness and good humor and with more real resignation to the necessary course of things, than any whining Christian ever dyed with pretended resignation to the will of God.”
“Resentment seems to have been given us by nature for a defense, and for a defense only! It is the safeguard of justice and the security of innocence.”
“Science is the great antidote to the poison of enthusiasm and superstition.”
“The propensity to truck, barter and exchange one thing for another is common to all men, and to be found in no other race of animals.”
“The real and effectual discipline which is exercised over a workman is that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence.”
“The real tragedy of the poor is the poverty of their aspirations.”
“The theory that can absorb the greatest number of facts, and persist in doing so, generation after generation, through all changes of opinion and detail, is the one that must rule all observation.”
“This is one of those cases in which the imagination is baffled by the facts.”
“To feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature.”
“Virtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience.”
“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”
“With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches.”