• Born: June 1723
• Birthplace: Kirkcaldy, Scotland
• Died: 17 July 1790
• Best Known As: The author of An Inquiry into the Nature and Causes of the Wealth of Nations

Scottish philosopher Adam Smith is the author of the 1776 book An Inquiry into the Nature and Causes of the Wealth of Nations, a classic of modern economics beloved especially by free market advocates. He began his academic career as a professor of logic and moral philosophy in Glasgow (1751-64), but after about 1748 he was famously part of the Edinburgh intellectual circle that included David Hume. Smith gained international attention for his 1759 examination of societal ethics, Theory of Moral Sentiments, in which he argued that people are naturally empathetic to those suffering in their midst. But his Wealth of Nations secured Smith's fame -- the book sold out five editions during his lifetime, including revised versions in 1784 and 1789. He is credited with being the first to examine the importance of the division of labor and worker productivity, and for advancing the idea that free markets thrive on the basis of mutual self-interest. Although Smith warned against monopolies and mercantilism, his notion that markets are driven toward the public good by an "invisible hand" has made him a venerated figure among free market doctrinaires. He spent his last years in Edinburgh as a government official, as the Commissioner of Customs.

Most sources list his birthdate as 5 June 1723, the date of his baptism... His father died before Smith was born; Smith lived with his mother most of his life and never married.

The Scotch economist and moral philosopher Adam Smith (1723-1790) believed that in a laissez-faire economy the impulse of self-interest would work toward the public welfare.

Adam Smith was born on June 5, 1723, at Kirkcaldy. His father had died 2 months before his birth, and a strong and lifelong attachment developed between him and his mother. As an infant, Smith was kidnaped, but he was soon rescued. At the age of 14 he enrolled in the University of Glasgow, where he remained for 3 years. The lectures of Francis Hutcheson exerted a strong influence on him. In 1740 he transferred to Balliol College, Oxford, where he remained for almost 7 years, receiving the bachelor of arts degree in 1744. Returning then to Kirkcaldy, he devoted himself to his studies and gave a series of lectures on English literature. In 1748 he moved to Edinburgh, where he became a friend of David Hume, whose skepticism he did not share.

Theory of Moral Sentiments

In 1751 Smith became professor of logic at the University of Glasgow and the following year professor of moral philosophy. Eight years later he published his Theory of Moral Sentiments. Smith's central notion in this work is that moral principles have social feeling or sympathy as their basis. Sympathy is a common or analogous feeling that an individual may have with the affections or feelings of another person. The source of this fellow feeling is not so much one's observation of the expressed emotion of another person as one's thought of the situation that the other person confronts. Sympathy usually requires knowledge of the cause of the emotion to be shared. If one approves of another's passions as suitable to their objects, he thereby sympathizes with that person.

Sympathy is the basis for one's judging of the appropriateness and merit of the feelings and actions issuing from these feelings. If the affections of the person involved in a situation are analogous to the emotions of the spectator, then those affections are appropriate. The merit of a feeling or an action flowing from a feeling is its worthiness of reward. If a feeling or an action is worthy of reward, it has moral merit. One's awareness of merit derives from one's sympathy with the gratitude of the person benefited by the action. One's sense of merit, then, is a derivative of the feeling of gratitude which is manifested in the situation by the person who has been helped.

Smith warns that each person must exercise impartiality of judgment in relation to his own feelings and behavior. Well aware of the human tendency to overlook one's own moral failings and the self-deceit in which individuals often engage, Smith argues that each person must scrutinize his own feelings and behavior with the same strictness he employs when considering those of others. Such an impartial appraisal is possible because a person's conscience enables him to compare his own feelings with those of others. Conscience and sympathy, then, working together provide moral guidance for man so that the individual can control his own feelings and have a sensibility for the affections of others.

The Wealth of Nations

In 1764 Smith resigned his professorship to take up duties as a traveling tutor for the young Duke of Buccleuch and his brother. Carrying out this responsibility, he spent 2 years on the Continent. In Toulouse he began writing his best-known work, An Inquiry into the Nature and Causes of the Wealth of Nations. While in Paris he met Denis Diderot, Claude Adrien Helvétius, Baron Paul d'Holbach, François Quesnay, A.R.J. Turgot, and Jacques Necker. These thinkers doubtless had some influence on him. His life abroad came to an abrupt end when one of his charges was killed.

Smith then settled in Kirkcaldy with his mother. He continued to work on The Wealth of Nations, which was finally published in 1776. His mother died at the age of 90, and Smith was grief-stricken. In 1778 he was made customs commissioner, and in 1784 he became a fellow of the Royal Society of Edinburgh. Smith apparently spent some time in London, where he became a friend of Benjamin Franklin. On his deathbed he demanded that most of his manuscript writings be destroyed. He died on July 17, 1790.

The Wealth of Nations, easily the best known of Smith's writings, is a mixture of descriptions, historical accounts, and recommendations. The wealth of a nation, Smith insists, is to be gauged by the number and variety of consumable goods it can command. Free trade is essential for the maximum development of wealth for any nation because through such trade a variety of goods becomes possible.

Smith assumes that if each person pursues his own interest the general welfare of all will be fostered. He objects to governmental control, although he acknowledges that some restrictions are required. The capitalist invariably produces and sells consumable goods in order to meet the greatest needs of the people. In so fulfilling his own interest, the capitalist automatically promotes the general welfare. In the economic sphere, says Smith, the individual acts in terms of his own interest rather than in terms of sympathy. Thus, Smith made no attempt to bring into harmony his economic and moral theories.

Further Reading

John Rae, Life of Adam Smith (1895), is still useful and was reprinted (1965) with an introductory essay by Jacob Viner which details the recent scholarship on Smith. William R. Scott, Adam Smith as Student and Professor (1937), focuses on Smith's personality. Other biographies include Eli Ginzberg, The House of Adam Smith (1934); Sir Alexander Gray, Adam Smith (1948); and the not entirely successful work of E.G. West, Adam Smith (1969). Robert L. Heilbroner, The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers (1953; 3d ed. 1967), has a vivid profile of Smith and his times. Smith's place in the history of economics is assessed in Charles Gide and Charles Rist, A History of Economic Doctrines from the Time of the Physiocrats to the Present Day (trans., 2d ed. 1948), and Joseph Schumpeter, History of Economic Analysis (1954).

(1723-90) Scottish philosopher and founder of classical economics. Born in Kirkcaldy, Fife, Smith formed a bridge between the Scottish and French Enlightenments. After his youthful studies at Glasgow, where he probably studied under the leading figures of the early Scottish Enlightenment, Smith went to Oxford, from which he concluded that ‘In the University of Oxford the greater part of the professors have, for these many years, given up altogether even the pretence of teaching’. Thereafter, Smith had little intellectual or social contact with England. As a Scot with closer ties to France than to England, Smith much resembled his close friend David Hume. From 1752 to 1764 Smith was Professor of Moral Philosophy at the University of Glasgow; The Theory of Moral Sentiments (1759: hereafter TMS) arose from his lecture course there. In 1764 the offer of a post as tutor to a young aristocrat enabled Smith to resign his chair in Glasgow and travel in France, where he met the physiocrats, before returning to Scotland to work for ten years on The Wealth of Nations (1776: hereafter WN). His innocent revelation of the dying Hume's stoical atheism in 1776s ‘brought upon me ten times more abuse than the very violent attack I had made upon the whole commercial system of Great Britain’. In 1778 he became Commissioner of Customs for Scotland. This curious choice enabled him to see at first hand the distortions of trade and (what would now be called) rent-seeking that always surrounds the politics of tariffs. There are no signs that Smith felt unease at doing the sort of job—and doing it very conscientiously—which his economic and political theory castigated as worse than useless. His last public role was as Rector of Glasgow University (1787).

The unity of Smith's thought is more clearly seen now than it once was. The moral sentiment on which he placed most trust in TMS was sympathy. Sympathy—the knowledge that one shares others' feelings—is presented as the basis for cooperation, both in fact and normatively: ‘O wad some Pow'r the giftie gie us | To see oursels as others see us!’ (Robert Burns, To a Louse: Burns probably knew Smith's work, and the phrase ‘if we saw ourselves as others see us’ is Smith's). But TMS does not go so far as to say that there is enough benevolence to make the world go round unassisted; and it introduces the idea of the invisible hand in a passage describing how the investment of the surplus of the rich unintentionally benefits the poor. Smith's return to the invisible hand in WN moves the stress further from sympathy towards self-interest. Although ‘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’, still each individual's pursuit of his own gain leads him ‘by an invisible hand to promote an end which was no part of his intention’. ‘Sympathy’ for Smith has a wider meaning than in modern English, and in the wide meaning all these phenomena show sympathy at work.

Like TMS, WN is partly descriptive and partly normative. It opens with a description of the division of labour, which Smith sees as the foundation of the wealth of nations. In his famous opening example, a workman in the ‘trifling’ manufacture of pins might at best make twenty pins a day if he had to do all the operations himself, whereas even an ‘indifferent’ factory where ten men worked, each on a different task, could produce 48,000 pins a day. Therefore the process in which labourers hire themselves to capitalists, who organize industry on the basis of the division of labour, makes everybody in a capitalist society richer than even the richest members of a non-capitalist traditional society. From this Smith argues towards his general prescription in favour of capitalism, laissez-faire, and free trade.

Every school of political thought has found an Adam Smith to suit it. To Marx, Smith advanced the labour theory of value, making mistakes which it fell to Marx to correct. Marx also accepted that Smith was right descriptively about the division of labour, but failed to understand the alienation to which it led. Defenders of laissez-faire have found a spiritual father in Smith, but their opponents have also found sustenance. Smith believed that defence, public works, and education ought not to be left to the market, and defenders of protectionism and of government intervention can quote Smith in their support.

Both of Smith's books are full of ironic asides (‘Place, that great object which divides the wives of aldermen, is the end of half the labours of human life’, TMS; ‘the discipline of colleges and universities is in general contrived, not for the benefit of the students, but for the interest, or more properly speaking, for the ease of the masters’, WN). The asides seem to make him a precursor more of public choice than of any other school of political or economic theory.

For more information on Adam Smith, visit Britannica.com.

Smith, Adam (1723-90). Famous son of Kirkcaldy (Fife) and educated at Glasgow University, Smith graduated at the age of 14. After six years at Balliol College, Oxford, he became professor of logic, then moral philosophy, at Glasgow University. Although his reputation was founded on The Theory of Moral Sentiments (1759), his magnum opus was An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Itanalysed the operation of free market economies where the key players were motivated by self-interest and profit maximization. Most interpretations have labelled Adam Smith a parent of laissez-faire economics, but he was much more interventionist than this.

Smith, Adam (1723-90) Scottish philosopher and economist. Although best remembered as an economist, Smith was a polymath, and an eminent social theorist and moral philosopher. Born in Kirkcaldy, he was educated at Glasgow university and Balliol College, Oxford. He resided in Edinburgh, and became friends with Hume and his circle, from 1748 until 1751, in which year he was appointed professor of logic at the university of Glasgow. In the following year he changed to the chair of moral philosophy. On publication of The Theory of Moral Sentiments (1759), he received patronage from the Duke of Buccleuch, enabling him to resign his chair, and subsequently devote himself to scholarship. An Inquiry into the Nature and Causes of the Wealth of Nations was published in 1776. Smith's moral philosophy differs from that of Hutcheson and Hume in its emphasis on Stoic virtues, and in particular that of self-command. Smith's man of perfect virtue ‘joins, to the most perfect command of his own original and selfish feelings, the most exquisite sensibility both to the original and sympathetic feelings of others’ (The Theory of Moral Sentiments, ii. 3. 34). His system hinges on the operation of sympathy, arising from an intellectual or moral appreciation of the situation of one who is aroused, and provoking a fellow-feeling or analogous sensation in the attentive spectator. The ‘impartial spectator’ is introduced as an explanation of the working of conscience: it is an internalization of the gaze of others, whereby I imagine what I should feel were I to have an unprejudiced and undistorted view of my own actions. The impartial spectator functions as a ‘tribunal within the breast’ whose authority derives from the censure of the world, but which nevertheless has the power to overturn the judgements of others (iii. 2. 31).

The ‘invisible hand’ for which Smith is famous first appears as a phrase in an essay he wrote on the history of astronomy. It recurs in The Theory of Moral Sentiments at iv. 1. 11. In spite of their insatiable greed and rapacity, the rich are unable actually to consume much more than anyone else, and so are led by the invisible hand to make ‘nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants’. In The Wealth of Nations the emphasis is less on equal distribution and more on the promotion of the common good that arises from the pursuit of self-interest (see also Mandeville). In economics, Smith gives the pioneering analysis of the structure of a functioning economy, and the first discussion of the benefits of the ‘division of labour’. His general optimism about the economic results of free markets has given his name a lustre in libertarian political circles that he might not have entirely welcomed, given his low opinion of the motives that lead to economic activity (see vanity). In fact, in Pt. v of the book he allows for the provision of public services out of general taxation where market mechanisms fail, and argues that the state has a vital role in providing educational services for the poor, both to ward off the ‘mental mutilation’ consequent upon industrial working conditions, and to enable them to become better workers and citizens.

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).

Smith, Adam (1723–1790), Scottish economist. Along with figures like his teacher Francis Hutcheson (1694–1746) and his best friend David Hume (1711–1776), Smith was one of the principals of a period of astonishing learning that has become known as the Scottish Enlightenment. He is the author of two books: The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). His first book brought him considerable acclaim during his lifetime and was quickly considered one of the great works of moral theory—impressing, for example, such people as Immanuel Kant (1724–1804), who called Smith his Liebling, or 'favorite', and Charles Darwin (1809–1882), who in his Descent of Man(1871) adopted some of Smith's argument and called his moral thought "striking." The book went through fully six revised editions during Smith's lifetime. Since the nineteenth century, however, Smith's fame has largely rested on his second book, which must be considered one of the most influential works of the past millennium.

Smith matriculated at the University of Glasgow at the age of fourteen in 1737. He considered his instruction at Glasgow, which was heavy in the classics, quite good; the influence of Hutcheson—whom Smith later referred to as "the never to be forgotten Dr. Hutcheson"—was pronounced. After Glasgow, Smith studied at Balliol College, Oxford, with whose level of instruction Smith was not so impressed: "In the university of Oxford, the greater part of the publick professors have, for these many years, given up altogether even the pretence of teaching" (Wealth of Nations, Liberty Fund edition, p. 761). Smith made good use of the libraries at Oxford, however, studying widely in English, French, Greek, and Latin literature. He left Oxford and returned to Kirkcaldy in 1746.

In Edinburgh (1748) Smith began giving "Lectures on Rhetoric and the Belles Lettres," as Kames's biographer Alexander Tytler reports, focusing on literary criticism and the arts of speaking and writing well. It was during this time that Smith met and befriended Hume, who was to become Smith's closest confidant and greatest philosophical influence. Smith left Edinburgh to become professor of logic at the University of Glasgow in 1751 and then professor of moral philosophy in 1752. The lectures he gave there eventually crystallized into The Theory of Moral Sentiments.

In his Theory of Moral Sentiments Smith argues that human beings naturally desire a "mutual sympathy of sentiments" with their fellows, which means that they long to see their own judgments and sentiments echoed in others. Because we all seek out this "sympathy" or harmony, much of social life is a give-and-take whereby people alternately try to moderate their own sentiments so that others can "enter into them" and try to arouse others' sentiments so that they match their own. This market-like negotiation results in the gradual development of shared habits, and then rules, of judgment about moral matters ranging from etiquette to moral duty. This process also gives rise, Smith argues, to an ultimate standard of moral judgment, the "impartial spectator," whose perspective we routinely seek out in judging both our own and others' conduct. When we use it to judge our own, it is what constitutes our conscience. We consult the impartial spectator simply by asking ourselves what a fully informed but disinterested person would think about our conduct. If such a person would approve, then we may proceed; if he would disapprove, then we should desist.

Morality on Smith's account is thus an earthly, grounded affair. Although he makes frequent reference to God and the "Author of Nature," scholars disagree over to what extent such references do any real work in his theory—and thus to what extent Smith's theory of moral sentiments is a relativistic account, eschewing reliance on transcendent, objective rules of morality.

In 1763, Smith resigned his post at Glasgow to become the personal tutor of Henry Scott, the third duke of Buccleuch, whom Smith accompanied on an eighteen-month tour of France and Switzerland. It was during his travels with the duke that Smith met François Quesnay (1694–1774), Jacques Turgot (1727–1781), and others in France called Physiocrats, who were publicists arguing for a relaxation of trade barriers and for laissez-faire economic policies. Although Smith had long been developing his own, similar ideas, frequent conversations with the Physiocrats no doubt helped him refine and sharpen his ideas. In 1767, Smith returned to Kirkcaldy to continue work on what would become his Wealth of Nations.

In The Wealth of Nations Smith argues against the mercantilists that wealth is not mere pieces of metal: it is rather the ability to satisfy one's needs and desires. Since each person wishes to "better his own condition," the argument of The Wealth of Nations is that those policies should be adopted that best allow each of us to do so. It turns out, Smith argues, that markets in which the division of labor is allowed to progress, in which trade is free, and in which taxes and regulations are light are the most conducive to this end. Smith argues that in market-oriented economies based on private property, each person working to better his own condition will increase the supply, and thus lower the price, of whatever good he is producing; this means that others will be in a better position to afford his goods. Thus each person serving his own ends is led, in Smith's famous phrase, "by an invisible hand" simultaneously to serve everyone else's ends as well. Much of The Wealth of Nations's 1000-plus-page bulk is concerned with providing historical evidence supporting this theoretical argument.

By the middle of the nineteenth century, The Wealth of Nations was regularly cited in the British Parliament—for example, in the Corn Law debates—and its recommendations of free markets and free trade went on to have great influence in the subsequent political and economic developments not only of the British Isles, but also of most of the Western and even parts of the Eastern world. Smith's influence on the founding of the United States was also great. Among his readers were Benjamin Franklin (1706–1790), George Washington (1732–1799), Thomas Paine (1737–1809), and Thomas Jefferson (1743–1826). When compiling a "course of reading" in 1799, Jefferson included The Wealth of Nations along with John Locke's Second Treatise of Government (1690) and Marie-Jean Caritat de Condorcet's Equisse d'un table historique des progrès de l'esprit humaine (1793; Sketch of the progress of the human spirit) as the essential books. The English historian Henry Thomas Buckle (1821–1862) wrote that The Wealth of Nations "is probably the most important book that has ever been written," including the Bible. Today most countries in the world either rely on some version of Smithian market-based economies or are in the process of creating them.

Smith remained in Kirkcaldy until 1777, when he left to become commissioner of customs in Edinburgh. During this time he visited regularly with friends—including Edmund Burke (1729–1797), the chemist Joseph Black (1728–1799), the geologist James Hutton (1726–1797), the younger William Pitt (1759–1806), and Lord North (1732–1792)—and he took active roles in learned organizations like the Poker Club and the Oyster Club. He also extensively revised his two books for new editions, while additionally working on a "theory and history of law and government." The latter work was never published, however. One week before he died, Smith summoned Black and Hutton to his quarters and asked that they burn his unpublished manuscripts, a request they had been resisting for several months. This time Smith insisted. They reluctantly complied, destroying sixteen volumes of manuscripts. It is probable that Smith's theory and history of law and government were among the works that perished in that tragic loss.

Smith was a true polymath: he was master of several languages and their literatures, a historian of the ancient and modern worlds, a philosopher in his own right, and a brilliant observer of human society and behavior. Although he is known today principally as the father of the discipline now known as economics, given the scope and breadth of his work, he is probably better considered the father of sociology.

Bibliography

Primary Source

Smith, Adam. The Glasgow Edition of the Works and Correspondence of Adam Smith. Edited by R. H. Campbell and A. S. Skinner. 6 vols. Oxford, 1976–1977. The definitive edition of Smith's collected works, including student notes on his lectures on jurisprudence, his smaller essays, and his letters. Also published in paperback by the Liberty Fund, Inc. (Indianapolis, 1981–1987).

Secondary Sources

Campbell, R. H., and A. S. Skinner. Adam Smith. New York, 1982.

Campbell, T. D. Adam Smith's Science of Morals. London, 1971.

Griswold, Charles L., Jr. Adam Smith and the Virtues of Enlightenment. Cambridge, U.K., and New York, 1999.

Haakonssen, Knud. The Science of a Legislator: The Natural Jurisprudence of David Hume and Adam Smith. Cambridge, U.K., and New York, 1981.

Heilbroner, Robert L. The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. 7th ed. New York, 1999. See chapter 3, "The Wonderful World of Adam Smith."

Muller, Jerry Z. Adam Smith in His Time and Ours: Designing the Decent Society. New York and Toronto, 1993.

Otteson, James R. Adam Smith's Marketplace of Life. Cambridge, U.K., and New York, 2002.

Rae, John. Life of Adam Smith. London and New York, 1895.

Raphael, D. D. Adam Smith. Oxford and New York, 1985.

Ross, Ian Simpson. The Life of Adam Smith. Oxford and New York, 1995.

Skousen, Mark. The Making of Modern Economics: The Lives and Ideas of the Great Thinkers. Armonk, N.Y., 2001.

Winch, Donald. Adam Smith's Politics: An Essay in Historiographic Revision. Cambridge, U.K., and New York, 1978.

—JAMES R. OTTESON

A Scottish scholar of the eighteenth century whose ideas about economics led to the growth of modern capitalism. His best-known work is The Wealth of Nations. (See invisible hand.)

Quotes:

"To found a great empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers, but extremely fit for a nation that is governed by shopkeepers."

"Man, an animal that makes bargains."

"Happiness never lays its finger on its pulse."

"What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?"

"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."

"Humanity is the virtue of a woman, generosity that of a man."

See more famous quotes by Adam Smith