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An introduction to the works of adam smith an economist

In his first book, "The Theory of Moral Sentiments," Smith proposed the idea of the invisible hand—the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest.

Smith is also known for his theory of compensating wage differentials, meaning that dangerous or undesirable jobs tend to pay higher wages to attract workers to these positions, but he is most famous for his 1776 book: Early Life The recorded history of Smith's life begins on June 5, 1723, at his baptism in Scotland; however, his exact birthdate is undocumented.

  • While critics note that Smith didn't invent many of the ideas that he wrote about, he was the first person to compile and publish them in a format designed to explain them to the average reader of the day;
  • Early Life The recorded history of Smith's life begins on June 5, 1723, at his baptism in Scotland; however, his exact birthdate is undocumented;
  • Shortly before his death Smith had nearly all his manuscripts destroyed;
  • Today, the invisible-hand theory is often presented in terms of a natural phenomenon that guides free markets and capitalism in the direction of efficiency, through supply and demand and competition for scarce resources, rather than as something that results in the well-being of individuals;
  • In 1748 he began delivering public lectures in Edinburgh under the patronage of Lord Kames;
  • At the end of 1763 Smith obtained a lucrative post as tutor to the young duke of Buccleuch and resigned his professorship.

Smith attended the University of Glasgow at age 14, later attending the prestigious Balliol College at Oxford University. He spent years teaching and tutoring, publishing some of his lectures in his 1759 book, "The Theory of Moral Sentiments. The Theory of Moral Sentiments Smith is most famous for his 1776-piece, "The Wealth of Nations," but his first major treatise, "The Theory of Moral Sentiments," released in 1759 created many ideas still practiced today. The book extensively explored ideas such as morality and human sympathy.

In the book, Smith argued that people are self-interested but naturally like to help others. While critics note that Smith didn't invent many of the ideas that he wrote about, he was the first person to compile and publish them in a format designed to explain them to the average reader of the day.

As a result, he is responsible for popularizing many of the ideas that underpin the school of thought that became known as classical economics. Other economists built on Smith's work to solidify classical economic theorywhich would become the dominant school of economic thought through the Great Depression.

Laissez-faire philosophies, such as minimizing the role of government intervention and taxation in the free markets, and the idea that an "invisible hand" guides supply and demand are among the key ideas Smith's writing is responsible for promoting.

Biography of Adam Smith (1723-1790)

These ideas reflect the concept that each person, by looking out for him or herself, inadvertently helps to create the best outcome for all. By selling products that people want to buy, the butcher, brewer, and baker hope to make money. If they are effective in meeting the needs of their customers, they will enjoy the financial rewards. Such a system, Smith argued, creates wealth not just for the butcher, brewer, and baker, but for the nation as a whole when that nation is populated with citizens working productively to better themselves and address their financial needs.

Today, the invisible-hand theory is often presented in terms of a natural phenomenon that guides free markets and capitalism in the direction of efficiency, through supply and demand and competition for scarce resources, rather than as something that results in the well-being of individuals.

The ideas it promoted generated international attention and helped drive the move from land-based wealth to wealth created by assembly-line production methods driven by the division of labor.

One example Smith cited involved the work required to make a pin. One man undertaking the 18 steps required to complete the tasks could make but a handful of pins each week, but if the 18 tasks were completed in assembly-line fashion by ten men, production would jump to thousands of pins per week.

In short, Smith argues that the division of labor and specialization produces prosperity.

  • Smith was the son of the comptroller of the customs at Kirkcaldy, Fife, Scotland;
  • His lectures covered the field of ethics, rhetoric, jurisprudence and political economy, or "police and revenue;
  • However, he was baptized at Kirkcaldy on June 5, 1723, his father having died some six months previously.

Before the release of "The Wealth of Nations," countries declared their wealth based on the value of their gold and silver deposits.

However, Smith argued that a free exchange should be created, as both sides trading become better off.

Adam Smith: The Father of Economics

This led to the increase in imports and exports and countries judging their value accordingly. Smith also argued for a limited government. He wanted to see a hands-off government and legislation conducive an open and free market. Smith did see the government responsible for some sectors, however, including education and defense.

Early Life

The Bottom Line The ideas that became associated with Smith became the foundation of the classical school of economics and gave him a place in history as the father of economics. Concepts Smith pioneered, such as the invisible hand and the division of labor serve are now quintessential economic theories. Smith died on July 19, 1790, at age 67 but the ideas he promoted live on in the form of contemporary economic research and institutes like the Adam Smith Institute.