The Father of Economics
Early Life and Education
Adam Smith was born in 1723 in Kirkcaldy, Fife, Scotland, and baptized on June 5 of that year. A precocious child, he entered the University of Glasgow at the age of 14, where he studied moral philosophy under the renowned professor Francis Hutcheson. At 17, Smith earned a scholarship to attend Balliol College, Oxford, where he continued his education for six years.
After returning to his hometown, he began giving public lectures on literature, jurisprudence, and various branches of philosophy, quickly gaining a reputation as an intellectual. At the age of 27, Smith was appointed Professor of Logic at Glasgow University, and a year later, he was promoted to Professor of Moral Philosophy—a position in which he flourished.
The Theory of Moral Sentiments (1759)
Smith’s first major work, The Theory of Moral Sentiments, was published in 1759. This book explored the nature of morality and the foundations of human behavior, asking fundamental questions such as: “What constitutes virtue?” and “Why does the human mind favor one form of conduct over another?”
Rather than focusing on economic systems, this work delved into human psychology and ethics. Smith introduced concepts like sympathy and the impartial spectator, which laid the groundwork for his later ideas. Though not overtly economic, The Theory of Moral Sentiments helped frame the moral context for his future economic philosophy.
Wealth of Nations (1776): A Revolutionary Economic Work
In July 1764, Smith began writing what would become his magnum opus: An Inquiry into the Nature and Causes of the Wealth of Nations. He spent the next twelve years developing this work, influenced during this period by prominent Enlightenment figures such as the French philosopher Jean le Rond d’Alembert. After six years in Kirkcaldy, he relocated to London to finish the manuscript.
Published in 1776, The Wealth of Nations consists of five books that laid the foundational principles of classical economics. Smith explored groundbreaking concepts such as:
-
The Division of Labor: He argued that productivity increases dramatically when labor is divided into specialized tasks. He famously illustrated this with a pin factory example—showing how ten workers could produce 48,000 pins per day when specialized, compared to a mere handful if working independently.
-
The Invisible Hand: Smith’s most enduring metaphor, describing how individuals pursuing their self-interest inadvertently contribute to the overall economic good.
-
Free Markets and Laissez-Faire: He advocated for minimal government intervention, believing that free trade and competition would naturally regulate markets and maximize prosperity.
-
Critique of Mercantilism: Smith challenged protectionist policies and emphasized the importance of free trade, noting that such practices distorted market efficiencies and hindered growth.
Role of Government and Public Goods
Though often portrayed as a staunch advocate of laissez-faire policies, Smith acknowledged an essential role for government. He believed the state should provide certain public goods—such as defense, justice, and infrastructure—and that the cost of these services should be proportionate to each citizen’s usage.
Legacy and Influence
Adam Smith’s works represent both a philosophical exploration of human nature and a practical guide to economic policy. He combined insights from ethics, history, and political economy to create a systematic understanding of wealth and social development. His belief that free competition, guided by the invisible hand, yields the best outcomes remains a central pillar of economic thought to this day.
In sum, Smith did not merely contribute to economics—he shaped its very foundations. His ideas continue to influence economic theory, policy, and discourse worldwide.