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Postmaster General -> [Article] Adam Smith: A Short Biography (5/3/2010 15:57:45)
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Adam Smith, the Father of Modern Economic
Adam Smith, to many, is considered the father of economics as a social science. A Scott, born in Kirkcaldy in 1723 and raised by his widowed mother; he attended the University of Glasgow at the age of fourteen. Later, he graduated from Balliol College at Oxford. Through this schooling he received much information and knowledge about European Literature and also fostered a great dislike for English schools. After school, he received his first chair of logic in 1751, and then the chair of moral philosophy in 1752 at Glasgow University.
Once he had left school, Smith became the tutor to the young duke of Buccleuch, with whom he traveled and met many of his contemporaries. These great names include Voltaire, Jean-Jacques Rousseau, Francois Quesnay, and Anne-Robert-Jacques Turgot. Through service to the duke, Smith received a lifetime pension and retired to his birthplace where he spent ten years writing The Wealth of Nations, which was published in 1776. In 1778 Adam Smith became commissioner of customs, the title his father once held, and helped enforce laws against smuggling. This is ironic because in The Wealth of Nations, he had defended smuggling as a legitimate activity in the face of “unnatural” legislation.
In modern perspective, Smith is best known for his explanation of how rational self-interest in a free-market leads to economic well-being.
“It may surprise those who would discount Smith as an advocate of ruthless individualism that his first major work concentrates on ethics and charity. In fact, while chair at the University of Glasgow, Smith’s lecture subjects, in order of preference, were natural theology, ethics, jurisprudence, and economics, according to John Millar, Smith’s pupil at the time. In The Theory of Moral Sentiments, Smith wrote: “How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others and render their happiness necessary to him though he derives nothing from it except the pleasure of seeing it.” (Library of Economics and Liberty)
While at the same time, he had a negative view of self-love saying that it could never be a virtuous principle. Some major ideas that he had were:
-Nature provided a basis in sentiment for virtue.
-When we adopt the role of impartial spectators, sympathy is the sentiment that is the basis for moral judgements.
-Acting from a sense of duty corrects for any lack of appropriate sentiment in particular instances.
-The deity has implanted powerful instincts which lead us to behave in ways that are ultimately beneficial for all.
-Self-interest coupled with the predisposition to ‘trade’, ‘barter’, and ‘exchange’ provides a basis for the division of labor and economic development.
- And many other ideas.
As Smith explains in The Wealth of Nations:
“If in any way of trade men can make far greater gains by help of a large stock of money than they could have made without it, 'tis but just that he who supplies them with the money, the necessary means of this gain, should have for the use of it some share of the profit, equal at least to the profit he could have made by purchasing things naturally fruitful or yielding a rent. This shows the just foundation of interest upon money lent, though it be not naturally fruitful. Houses yield no fruits or increase, nor will some arable grounds yield any without great labour. Labour employed in managing money in trade or manufactures will make it as fruitful as anything. Were interest prohibited, none would lend except in charity; and many industrious hands who are not objects of charity would be excluded from large gains in a way very advantageous to the public.”
After writing An Inquiry into the Nature and Causes of the Wealth of Nations, (The Wealth of Nations for short) Smith followed up by writing The Theory of Moral Sentiments which was published in 1790. Smith Died in 1790 in Edinburgh with no surviving wife or children. And because more of his ideas have lasted than those of any other economist, some regard Adam Smith as the alpha and the omega of economic science. (Library of Economics and Liberty) So he has made considerable contributions to economics and how the field of Economics as a whole is thought of, around the world.
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