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Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a
moral philosopher Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and wrong action (philosophy), behavior".''Internet Encyclopedia of Philosophy'"Ethics"/ref> The field of ethics, alo ...

moral philosopher
, a pioneer of
political economy Political economy is the study of production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (g ...
, and a key figure during the
Scottish Enlightenment The Scottish Enlightenment ( sco, Scots Enlichtenment, gd, Soillseachadh na h-Alba) was the period in 18th- and early-19th-century Scotland characterised by an outpouring of intellectual and scientific accomplishments. By the eighteenth century ...
, also known as ''The Father of Economics'' * * * or ''The Father of Capitalism''. * * * * Smith wrote two classic works, ''
The Theory of Moral Sentiments ''The Theory of Moral Sentiments'' is a 1759 book by Adam Smith. It provided the ethical, philosophical, psychological, and methodological underpinnings to Smith's later works, including '' The Wealth of Nations'' (1776), '' Essays on Philosop ...
'' (1759) and ''
An Inquiry into the Nature and Causes of the Wealth of Nations
An Inquiry into the Nature and Causes of the Wealth of Nations
'' (1776). The latter, often abbreviated as ''The Wealth of Nations'', is considered his ''
magnum opus 's ''The Creation of Adam ''The Creation of Adam'' () is a fresco Fresco (plural ''frescos'' or ''frescoes'') is a technique of Mural, mural painting executed upon freshly laid ("wet") lime plaster. Water is used as the vehicle for the dry-po ...

magnum opus
'' and the first modern work of economics. In his work, Adam Smith introduced his theory of
absolute advantage In economics, the principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce a good or service more efficiently than its competitors. Adam Smith Adam Smith ( 1723 – 17 July 1790) was a ...

absolute advantage
. Smith studied
social philosophy Social philosophy examines questions about the foundations of social institution Institutions, according to Samuel P. Huntington, are "stable, valued, recurring patterns of behavior." Institutions can refer to social mechanism, mechanisms which ...
at the
University of Glasgow The University of Glasgow (abbreviated as ''Glas.'' in Post-nominal letters, post-nominals; ) is a Public university, public research university in Glasgow, Scotland. Founded by papal bull in 1451, it is the List of oldest universities in continuous ...

University of Glasgow
and at
Balliol College, Oxford Balliol College () is one of the constituent colleges of the University of Oxford The University of Oxford , mottoeng = The Lord is my light , established = , endowment = £6.1 billion (including colleges) (2019) , budget = ...

Balliol College, Oxford
, where he was one of the first students to benefit from scholarships set up by fellow Scot
John Snell Sir John Snell (1629 – 6 August 1679), founder of the Snell Exhibition The Snell Exhibition is an annual scholarship awarded to students of the University of Glasgow to allow them to undertake Postgraduate education, postgraduate study at Bal ...
. After graduating, he delivered a successful series of public lectures at the
University of Edinburgh The University of Edinburgh ( sco, University o Edinburgh, gd, Oilthigh Dhùn Èideann; abbreviated as ''Edin.'' in post-nominals Post-nominal letters, also called post-nominal initials, post-nominal titles, designatory letters or simply ...
, leading him to collaborate with
David Hume David Hume (; born David Home; 7 May 1711 NS (26 April 1711 OS) – 25 August 1776) Cranston, Maurice, and Thomas Edmund Jessop. 2020 999999 or triple nine most often refers to: * 999 (emergency telephone number) 250px, A sign on a beach ...

David Hume
during the Scottish Enlightenment. Smith obtained a professorship at Glasgow, teaching moral philosophy and during this time, wrote and published ''The Theory of Moral Sentiments''. In his later life, he took a tutoring position that allowed him to travel throughout Europe, where he met other intellectual leaders of his day. Smith laid the foundations of classical
free market In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of pl ...
economic theory. ''The Wealth of Nations'' was a precursor to the modern academic discipline of economics. In this and other works, he developed the concept of
division of labour The division of labour is the separation of tasks in any economic system An economic system, or economic order, is a system A system is a group of interacting Interaction is a kind of action that occurs as two or more objects have an ...

division of labour
and expounded upon how rational self-interest and competition can lead to economic prosperity. Smith was controversial in his own day and his general approach and writing style were often satirised by writers such as
Horace Walpole Horatio Walpole (), 4th Earl of Orford (24 September 1717 – 2 March 1797), better known as Horace Walpole, was an English writer, art historian, man of letters, antiquarian and Whigs (British political party), Whig politician. He had Strawbe ...

Horace Walpole
.


Biography


Early life

Smith was born in
Kirkcaldy Kirkcaldy ( ; sco, Kirkcaldy; gd, Cair Chaladain) is a town and former royal burgh A royal burgh was a type of Scottish burgh which had been founded by, or subsequently granted, a royal charter. Although abolished by law in 1975, the te ...

Kirkcaldy
, in
Fife Fife (, ; gd, Fìobha, ; sco, Fife) is a council area{{Unreferenced, date=May 2019, bot=noref (GreenC bot) A council area is one of the areas defined in Schedule 1 of the Local Government etc. (Scotland) Act 1994 and is under the control of ...

Fife
, Scotland. His father, also Adam Smith, was a Scottish
Writer to the Signet The Society of Writers to Her Majesty’s Signet is a private society of Scottish solicitor A solicitor is a legal practitioner who traditionally deals with most of the legal matters in some jurisdiction Jurisdiction (from Latin ''Wikt:ius# ...
(senior
solicitor A solicitor is a legal practitioner A lawyer or attorney is a person who practices law, as an advocate An advocate is a professional in the field of law. Different countries' legal systems use the term with somewhat differing meanings. T ...

solicitor
),
advocate An advocate is a professional in the field of law. Different countries' legal systems use the term with somewhat differing meanings. The broad equivalent in many English law English law is the common law List of national legal systems, lega ...

advocate
and
prosecutor A prosecutor is a legal representative of the prosecution in states with either the common law In law, common law (also known as judicial precedent or judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tr ...

prosecutor
(judge advocate) and also served as
comptroller A comptroller is a management Management (or managing) is the administration of an organization, whether it is a business, a not-for-profit, non-profit organization, or a government body. It is the art and science of managing resources. Man ...
of the customs in Kirkcaldy. Smith's mother was born Margaret Douglas, daughter of the landed Robert Douglas of Strathendry, also in Fife; she married Smith's father in 1720. Two months before Smith was born, his father died, leaving his mother a widow. The date of Smith's baptism into the
Church of Scotland The Church of Scotland (CoS; sco, The Scots Kirk; gd, Eaglais na h-Alba), also known by its Scots language name, the Kirk, is the national National may refer to: Common uses * Nation A nation is a community of people formed on the basis ...

Church of Scotland
at Kirkcaldy was 5 June 1723 and this has often been treated as if it were also his date of birth, which is unknown. Although few events in Smith's early childhood are known, the Scottish journalist
John RaeJohn Rae may refer to: Sportsmen *Johnny Rae (rugby league), rugby league footballer of the 1960s for Great Britain and Bradford Northern *John Rae (New Zealand footballer), New Zealand international football (soccer) player *John Rae (footballer, ...
, Smith's biographer, recorded that Smith was abducted by
Romani Romani may refer to: Ethnicities *Romani people The Romani (), also known as the Roma, are an Indo-Aryan people, traditionally nomadic itinerants living mostly in Europe Europe is a continent A continent is one of several ...

Romani
at the age of three and released when others went to rescue him. Smith was close to his mother, who probably encouraged him to pursue his scholarly ambitions. He attended the Burgh School of Kirkcaldy—characterised by Rae as "one of the best secondary schools of Scotland at that period"—from 1729 to 1737, he learned
Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communication (from Latin ''communicare'', meaning "to share" or "to be in relation with") is "an appa ...

Latin
, mathematics, history, and writing.


Formal education

Smith entered the
University of Glasgow The University of Glasgow (abbreviated as ''Glas.'' in Post-nominal letters, post-nominals; ) is a Public university, public research university in Glasgow, Scotland. Founded by papal bull in 1451, it is the List of oldest universities in continuous ...

University of Glasgow
when he was 14 and studied moral philosophy under Francis Hutcheson. Here, he developed his passion for
liberty Broadly speaking, liberty is the ability to do as one pleases, or a right or immunity enjoyed by prescription or by grant (i.e. privilege). It is a synonym for the word freedom Freedom, generally, is having the ability to act or change withou ...

liberty
,
reason Reason is the capacity of consciously applying logic Logic is an interdisciplinary field which studies truth and reasoning Reason is the capacity of consciously making sense of things, applying logic Logic (from Ancient Greek, Greek ...
, and
free speech Freedom of speech is a principle that supports the freedom Freedom, generally, is having the ability to act or change without constraint. Something is "free" if it can change easily and is not constrained in its present state. In philoso ...

free speech
. In 1740, he was the graduate scholar presented to undertake postgraduate studies at
Balliol College, Oxford Balliol College () is one of the constituent colleges of the University of Oxford The University of Oxford , mottoeng = The Lord is my light , established = , endowment = £6.1 billion (including colleges) (2019) , budget = ...

Balliol College, Oxford
, under the
Snell Exhibition The Snell Exhibition is an annual scholarship awarded to students of the University of Glasgow to allow them to undertake Postgraduate education, postgraduate study at Balliol College, Oxford. The award was founded by the bequest of Sir John Snell ...
. Smith considered the teaching at Glasgow to be far superior to that at Oxford, which he found intellectually stifling. In Book V, Chapter II of ''The Wealth of Nations'', he wrote: "In the University of Oxford, the greater part of the public professors have, for these many years, given up altogether even the pretence of teaching." Smith is also reported to have complained to friends that Oxford officials once discovered him reading a copy of David Hume's ''
A Treatise of Human Nature '' A Treatise of Human Nature: Being an Attempt to Introduce the Experimental Method of Reasoning into Moral Subjects and Dialogues Concerning Natural Religion'' (1739–40) is a book by Scottish philosopher David Hume David Hume (; born Davi ...
'', and they subsequently confiscated his book and punished him severely for reading it. According to William Robert Scott, "The Oxford of mith'stime gave little if any help towards what was to be his lifework." Nevertheless, he took the opportunity while at Oxford to teach himself several subjects by reading many books from the shelves of the large
Bodleian Library The Bodleian Library () is the main research library A research library is a library which contains an in-depth collection of material on one or several subjects.(Young, 1983; p. 188) A research library will generally include primary source ...

Bodleian Library
. When Smith was not studying on his own, his time at Oxford was not a happy one, according to his letters. Near the end of his time there, he began suffering from shaking fits, probably the symptoms of a nervous breakdown. He left Oxford University in 1746, before his scholarship ended. In Book V of ''The Wealth of Nations'', Smith comments on the low quality of instruction and the meager intellectual activity at English universities, when compared to their Scottish counterparts. He attributes this both to the rich endowments of the colleges at Oxford and
Cambridge Cambridge ( ) is a College town, university city and the county town of Cambridgeshire, England, on the River Cam approximately north of London. At the United Kingdom Census 2011, the population of the Cambridge built-up area (which is larger ...
, which made the income of professors independent of their ability to attract students, and to the fact that distinguished men of letters could make an even more comfortable living as ministers of the
Church of England The Church of England (C of E) is a Christian church Christian Church is a Protestant Protestantism is a form of Christianity that originated with the 16th-century Reformation, a movement against what its followers perceived to be Critic ...
. Smith's discontent at Oxford might be in part due to the absence of his beloved teacher in Glasgow, Francis Hutcheson, who was well regarded as one of the most prominent lecturers at the University of Glasgow in his day and earned the approbation of students, colleagues, and even ordinary residents with the fervor and earnestness of his orations (which he sometimes opened to the public). His lectures endeavoured not merely to teach philosophy, but also to make his students embody that philosophy in their lives, appropriately acquiring the epithet, the preacher of philosophy. Unlike Smith, Hutcheson was not a system builder; rather, his magnetic personality and method of lecturing so influenced his students and caused the greatest of those to reverentially refer to him as "the never to be forgotten Hutcheson"—a title that Smith in all his correspondence used to describe only two people, his good friend David Hume and influential mentor Francis Hutcheson.


Teaching career

Smith began delivering public lectures in 1748 at the
University of Edinburgh The University of Edinburgh ( sco, University o Edinburgh, gd, Oilthigh Dhùn Èideann; abbreviated as ''Edin.'' in post-nominals Post-nominal letters, also called post-nominal initials, post-nominal titles, designatory letters or simply ...
, sponsored by the Philosophical Society of Edinburgh under the patronage of
Lord Kames The Home-Drummond grave, Kincardine-in-Menteith Henry Home, Lord Kames (169627 December 1782) was a Scottish writer, philosopher, advocate An advocate is a professional in the field of law. Different countries' legal systems use the term with ...
. His lecture topics included
rhetoric Rhetoric () is the art Art is a diverse range of (products of) human activities Humans (''Homo sapiens'') are the most populous and widespread species of primates, characterized by bipedality, opposable thumbs, hairlessness, and ...
and ''
belles-lettres ''Belles-lettres'' or ''belles lettres'' is a category of writing, originally meaning beautiful or fine writing. In the modern narrow sense, it is a label for literary works that do not fall into the major categories such as fiction, poetry, or dra ...
'', and later the subject of "the progress of opulence". On this latter topic, he first expounded his economic philosophy of "the obvious and simple system of natural liberty". While Smith was not adept at
public speaking Public speaking, also called oratory or oration, has traditionally meant the act of speaking face to face to a live audience An audience is a group of people who participate in a show or encounter a work of art A work of ...

public speaking
, his lectures met with success. In 1750, Smith met the philosopher David Hume, who was his senior by more than a decade. In their writings covering history, politics, philosophy, economics, and religion, Smith and Hume shared closer intellectual and personal bonds than with other important figures of the Scottish Enlightenment. In 1751, Smith earned a professorship at Glasgow University teaching
logic Logic is an interdisciplinary field which studies truth and reasoning. Informal logic seeks to characterize Validity (logic), valid arguments informally, for instance by listing varieties of fallacies. Formal logic represents statements and ar ...

logic
courses, and in 1752, he was elected a member of the Philosophical Society of Edinburgh, having been introduced to the society by Lord Kames. When the head of Moral Philosophy in Glasgow died the next year, Smith took over the position. He worked as an academic for the next 13 years, which he characterised as "by far the most useful and therefore by far the happiest and most honorable period f his life. Smith published ''
The Theory of Moral Sentiments ''The Theory of Moral Sentiments'' is a 1759 book by Adam Smith. It provided the ethical, philosophical, psychological, and methodological underpinnings to Smith's later works, including '' The Wealth of Nations'' (1776), '' Essays on Philosop ...
'' in 1759, embodying some of his Glasgow lectures. This work was concerned with how human morality depends on sympathy between agent and spectator, or the individual and other members of society. Smith defined "mutual sympathy" as the basis of moral sentiments. He based his explanation, not on a special "moral sense" as the Third Lord Shaftesbury and Hutcheson had done, nor on
utility As a topic of economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within thos ...
as Hume did, but on mutual sympathy, a term best captured in modern parlance by the 20th-century concept of
empathy Empathy is the capacity to understand or feel what another person is experiencing from within their frame of reference, that is, the capacity to place oneself in another's position. Definitions of empathy encompass a broad range of emotional st ...

empathy
, the capacity to recognise feelings that are being experienced by another being. Following the publication of ''The Theory of Moral Sentiments'', Smith became so popular that many wealthy students left their schools in other countries to enroll at Glasgow to learn under Smith. After the publication of ''The Theory of Moral Sentiments'', Smith began to give more attention to
jurisprudence Jurisprudence, or legal theory, is the theoretical study of the propriety of law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whol ...
and economics in his lectures and less to his theories of morals. For example, Smith lectured that the cause of increase in national wealth is labour, rather than the nation's quantity of gold or silver, which is the basis for
mercantilism Mercantilism is an economic policy The economic policy of governments covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the labour market, nationalization, national owner ...

mercantilism
, the
economic theory Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. ...
that dominated Western European economic policies at the time. In 1762, the University of Glasgow conferred on Smith the title of
Doctor of Law Doctor of Law or Doctor of Laws is a degree in law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influe ...
s (LL.D.). At the end of 1763, he obtained an offer from
Charles Townshend Charles Townshend (28 August 1725 – 4 September 1767) was a British politician who held various titles in the Parliament of Great Britain The Parliament of Great Britain was formed in May 1707 following the ratification of the Acts of ...
—who had been introduced to Smith by David Hume—to tutor his stepson, , the young Duke of Buccleuch. Smith resigned from his professorship in 1764 to take the tutoring position. He subsequently attempted to return the fees he had collected from his students because he had resigned partway through the term, but his students refused.


Tutoring and travels

Smith's tutoring job entailed touring Europe with Scott, during which time he educated Scott on a variety of subjects, such as etiquette and manners. He was paid £300 per year (plus expenses) along with a £300 per year pension; roughly twice his former income as a teacher. Smith first travelled as a tutor to
Toulouse Toulouse ( , ; oc, Tolosa ) is the prefecture A prefecture (from the Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area ...

Toulouse
, France, where he stayed for a year and a half. According to his own account, he found Toulouse to be somewhat boring, having written to Hume that he "had begun to write a book to pass away the time". After touring the south of France, the group moved to
Geneva Geneva ( ; french: Genève ; frp, Genèva ; german: link=no, Genf ; it, Ginevra ; rm, Genevra) is the List of cities in Switzerland, second-most populous city in Switzerland (after Zürich) and the most populous city of Romandy, the French-spea ...

Geneva
, where Smith met with the philosopher
Voltaire François-Marie Arouet (; 21 November 169430 May 1778), known by his ''nom de plume A pen name, also called a ''nom de plume'' () or a literary double, is a pseudonym A pseudonym () or alias () (originally: ψευδώνυμος in Greek) is a ...

Voltaire
. From Geneva, the party moved to Paris. Here, Smith met
Benjamin Franklin Benjamin Franklin ( April 17, 1790) was one of the Founding Fathers of the United States that was negotiated on behalf of the United States by John Adams, Benjamin Franklin and John Jay The Founding Fathers of the United States, or simp ...

Benjamin Franklin
, and discovered the
Physiocracy , a physician who is considered the founding father of physiocracy, published the "Tableau économique" (Economic Table) in 1758 Image:Pierre Samuel du Pont de Nemours (1739-1817).png, Pierre Samuel du Pont de Nemours, a prominent physiocrat. In ...
school founded by
François Quesnay François Quesnay (; 4 June 1694 – 16 December 1774) was a French economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and conce ...

François Quesnay
. Physiocrats were opposed to
mercantilism Mercantilism is an economic policy The economic policy of governments covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the labour market, nationalization, national owner ...

mercantilism
, the dominating economic theory of the time, illustrated in their motto '' Laissez faire et laissez passer, le monde va de lui même!'' (Let do and let pass, the world goes on by itself!). The wealth of France had been virtually depleted by
Louis XIV , house = House of Bourbon, Bourbon , father = Louis XIII, Louis XIII of France , mother = Anne of Austria , birth_date = , birth_place = Château de Saint-Germain-en-Laye, Saint-Germain-en-Laye, Kingdom of France, Fr ...

Louis XIV
and in ruinous wars, and was further exhausted in aiding the American insurgents against the British. The excessive consumption of goods and services deemed to have no economic contribution was considered a source of unproductive labour, with France's agriculture the only economic sector maintaining the wealth of the nation. Given that the English economy of the day yielded an income distribution that stood in contrast to that which existed in France, Smith concluded that "with all its imperfections, he Physiocratic schoolis perhaps the nearest approximation to the truth that has yet been published upon the subject of political economy." The distinction between productive versus unproductive labour—the physiocratic ''classe steril''—was a predominant issue in the development and understanding of what would become classical economic theory.


Later years

In 1766, Henry Scott's younger brother died in Paris, and Smith's tour as a tutor ended shortly thereafter. Smith returned home that year to Kirkcaldy, and he devoted much of the next decade to writing his ''magnum opus''. There, he befriended Henry Moyes, a young blind man who showed precocious aptitude. Smith secured the patronage of David Hume and
Thomas Reid Thomas Reid (; 7 May ( O.S. 26 April) 1710 – 7 October 1796) was a religiously trained Scottish philosopher. He was the founder of the Scottish School of Common Sense and played an integral role in the Scottish Enlightenment. In 1783 he wa ...

Thomas Reid
in the young man's education. In May 1773, Smith was elected fellow of the
Royal Society of London The Royal Society, formally The Royal Society of London for Improving Natural Knowledge, is a learned society and the United Kingdom's national academy of sciences. Founded on 28 November 1660, it was granted a royal charter by Charles II of ...
, and was elected a member of the Literary Club in 1775. ''The Wealth of Nations'' was published in 1776 and was an instant success, selling out its first edition in only six months. In 1778, Smith was appointed to a post as commissioner of customs in Scotland and went to live with his mother (who died in 1784) in
Panmure House Image:PanmureHouse.jpg, Panmure House Panmure House was a 17th-century country house in the Parish of Panbride, Angus, Scotland, Angus, Scotland, to the north of Carnoustie. It was the seat of the Earl of Panmure. It was rebuilt in the 19th centur ...
in Edinburgh's
Canongate The Canongate is a street and associated district in central Edinburgh, the capital city of Scotland. The street forms the main eastern length of the Royal Mile while the district is the main eastern section of Old Town, Edinburgh, Edinburgh's ...
. Five years later, as a member of the Philosophical Society of Edinburgh when it received its royal charter, he automatically became one of the founding members of the
Royal Society of Edinburgh The Royal Society of Edinburgh is Scotland's national academy of science and letters. It is a registered charity, operating on a wholly independent and non-party-political basis and providing public benefit throughout Scotland. It was establishe ...
. From 1787 to 1789, he occupied the honorary position of Lord
Rector of the University of Glasgow The (Lord) Rector of the University of Glasgow is one of the most senior posts within University of Glasgow, the institution, elected every three years by students. The theoretical role of the Rector is to represent students to the senior manage ...
.


Death

Smith died in the northern wing of Panmure House in Edinburgh on 17 July 1790 after a painful illness. His body was buried in the
Canongate Kirkyard The Canongate Kirkyard ( en, Churchyard) stands around Canongate Kirk The Kirk of the Canongate, or Canongate Kirk, serves the Parish of Canongate in Edinburgh's Old Town, Edinburgh, Old Town, in Scotland. It is a Wiktionary:congregation, c ...
. On his deathbed, Smith expressed disappointment that he had not achieved more. Smith's literary executors were two friends from the Scottish academic world: the physicist and chemist
Joseph Black Joseph Black (16 April 1728 – 6 December 1799) was a Scottish physicist and chemist, known for his discoveries of magnesium, latent heat, specific heat, and carbon dioxide. He was Professor of Anatomy and Chemistry at the University of Glasgo ...
and the pioneering geologist
James Hutton James Hutton (; 3 June 172614 June 1726 New Style Old Style (O.S.) and New Style (N.S.) indicate a dating system from before and after a calendar change, respectively. Usually this is the change from the Julian calendar The Julian c ...

James Hutton
. Smith left behind many notes and some unpublished material, but gave instructions to destroy anything that was not fit for publication. He mentioned an early unpublished ''History of Astronomy'' as probably suitable, and it duly appeared in 1795, along with other material such as '' Essays on Philosophical Subjects''. Smith's library went by his will to
David Douglas, Lord Reston Hon David Douglas, Lord Reston FRSE (24 July 1769 – 23 April 1819) was a Scottish people, Scottish judge and a cousin and the heir of Adam Smith. Life He was born on 24 July 1769, in Strathendry, the fifth and youngest son of Cecilia Craigie, ...
(son of his cousin Colonel Robert Douglas of Strathendry, Fife), who lived with Smith. It was eventually divided between his two surviving children, Cecilia Margaret (Mrs. Cunningham) and David Anne (Mrs. Bannerman). On the death in 1878 of her husband, the Reverend W. B. Cunningham of Prestonpans, Mrs. Cunningham sold some of the books. The remainder passed to her son, Professor Robert Oliver Cunningham of Queen's College, Belfast, who presented a part to the library of Queen's College. After his death, the remaining books were sold. On the death of Mrs. Bannerman in 1879, her portion of the library went intact to the New College (of the Free Church) in
Edinburgh Edinburgh (; sco, Edinburgh; gd, Dùn Èideann ) is the capital city of Scotland and one of its 32 Council areas of Scotland, council areas. Historically part of the county of Midlothian (interchangeably Edinburghshire before 1921), it is ...

Edinburgh
and the collection was transferred to the
University of Edinburgh The University of Edinburgh ( sco, University o Edinburgh, gd, Oilthigh Dhùn Èideann; abbreviated as ''Edin.'' in post-nominals Post-nominal letters, also called post-nominal initials, post-nominal titles, designatory letters or simply ...
Main Library in 1972.


Personality and beliefs


Character

Not much is known about Smith's personal views beyond what can be deduced from his published articles. His personal papers were destroyed after his death at his request. He never married, and seems to have maintained a close relationship with his mother, with whom he lived after his return from France and who died six years before him. Smith was described by several of his contemporaries and biographers as comically absent-minded, with peculiar habits of speech and gait, and a smile of "inexpressible benignity". He was known to talk to himself, a habit that began during his childhood when he would smile in rapt conversation with invisible companions. He also had occasional spells of imaginary illness, and he is reported to have had books and papers placed in tall stacks in his study. According to one story, Smith took Charles Townshend on a tour of a
tanning Tanning may refer to: *Tanning (leather), treating animal skins to produce leather *Sun tanning, using the sun to darken pale skin **Indoor tanning, the use of artificial light in place of the sun **Sunless tanning, application of a stain or dye to ...
factory, and while discussing
free trade Free trade is a trade policy A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade International trade is the exchange of capital, goods, and servic ...
, Smith walked into a huge tanning pit from which he needed help to escape. He is also said to have put bread and butter into a teapot, drunk the concoction, and declared it to be the worst cup of tea he ever had. According to another account, Smith distractedly went out walking in his nightgown and ended up outside of town, before nearby church bells brought him back to reality.
James Boswell James Boswell, 9th Laird of Auchinleck (; 29 October 1740 (New Style, N.S.) – 19 May 1795), was a Scottish people, Scottish biographer, diarist, and lawyer, born in Edinburgh. He is best known for his biography of his friend and older contem ...

James Boswell
, who was a student of Smith's at Glasgow University, and later knew him at the Literary Club, says that Smith thought that speaking about his ideas in conversation might reduce the sale of his books, so his conversation was unimpressive. According to Boswell, he once told
Sir Joshua Reynolds Sir Joshua Reynolds (16 July 1723 – 23 February 1792) was an English painter, specialising in Portrait, portraits. John Russell (art critic), John Russell said he was one of the major European painters of the 18th century. He promoted the Gra ...

Sir Joshua Reynolds
, that "he made it a rule when in company never to talk of what he understood". Smith has been alternatively described as someone who "had a large nose, bulging eyes, a protruding lower lip, a nervous twitch, and a speech impediment" and one whose "countenance was manly and agreeable". Smith is said to have acknowledged his looks at one point, saying, "I am a beau in nothing but my books." Smith rarely sat for portraits, so almost all depictions of him created during his lifetime were drawn from memory. The best-known portraits of Smith are the profile by
James Tassie James Tassie (1735–1799) was a Scotland, Scottish engraved gem, gem engraver and modeller. He is remembered for a particular style of miniature medallion heads, portraying the profiles of the rich and famous of Britain, and for making and sell ...
and two
etching Etching is traditionally the process of using strong acid or mordant to cut into the unprotected parts of a metal surface to create a design in Intaglio (printmaking), intaglio (incised) in the metal. In modern manufacturing, other chemicals may ...
s by
John KayJohn Kay may refer to: * John Kay (flying shuttle) (1704–c. 1779), English inventor of the flying shuttle textile machinery * John Kay (spinning frame) (18th century), English developer of the spinning frame textile machinery * John Kay (caricatur ...
. The line engravings produced for the covers of 19th-century reprints of ''The Wealth of Nations'' were based largely on Tassie's medallion.


Religious views

Considerable scholarly debate has occurred about the nature of Smith's religious views. Smith's father had shown a strong interest in Christianity and belonged to the moderate wing of the
Church of Scotland The Church of Scotland (CoS; sco, The Scots Kirk; gd, Eaglais na h-Alba), also known by its Scots language name, the Kirk, is the national National may refer to: Common uses * Nation A nation is a community of people formed on the basis ...

Church of Scotland
. The fact that Adam Smith received the Snell Exhibition suggests that he may have gone to Oxford with the intention of pursuing a career in the
Church of England The Church of England (C of E) is a Christian church Christian Church is a Protestant Protestantism is a form of Christianity that originated with the 16th-century Reformation, a movement against what its followers perceived to be Critic ...
. Anglo-American economist
Ronald Coase Ronald Harry Coase (; 29 December 1910 – 2 September 2013) was a British economist and author. He was the Clifton R. Musser Professor of Economics at the University of Chicago Law School, where he arrived in 1964 and remained for the rest of hi ...
has challenged the view that Smith was a
deist Deism ( or ; derived from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, known as Latium. Through the p ...
, based on the fact that Smith's writings never explicitly invoke God as an explanation of the harmonies of the natural or the human worlds. According to Coase, though Smith does sometimes refer to the "
Great Architect of the Universe Great may refer to: Descriptions or measurements * Great, a relative measurement in physical space, see Size File:Comparison of planets and stars (sheet by sheet) (Oct 2014 update).png, A size comparison illustration comparing the sizes of vario ...
", later scholars such as
Jacob Viner Jacob Viner (3 May 1892 – 12 September 1970) was a Canadian economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from ...
have "very much exaggerated the extent to which Adam Smith was committed to a belief in a personal God", a belief for which Coase finds little evidence in passages such as the one in the ''Wealth of Nations'' in which Smith writes that the curiosity of mankind about the "great phenomena of nature", such as "the generation, the life, growth, and dissolution of plants and animals", has led men to "enquire into their causes", and that "superstition first attempted to satisfy this curiosity, by referring all those wonderful appearances to the immediate agency of the gods. Philosophy afterwards endeavoured to account for them, from more familiar causes, or from such as mankind were better acquainted with than the agency of the gods". Some other authors argue that Smith's social and economic philosophy is inherently theological and that his entire model of social order is logically dependent on the notion of God's action in nature. Smith was also a close friend of
David Hume David Hume (; born David Home; 7 May 1711 NS (26 April 1711 OS) – 25 August 1776) Cranston, Maurice, and Thomas Edmund Jessop. 2020 999999 or triple nine most often refers to: * 999 (emergency telephone number) 250px, A sign on a beach ...

David Hume
, who was commonly characterised in his own time as an
atheist Atheism, in the broadest sense, is an absence of belief A belief is an attitude Attitude may refer to: Philosophy and psychology * Attitude (psychology) In psychology Psychology is the science of mind and behavior. Psy ...

atheist
. The publication in 1777 of Smith's letter to William Strahan, in which he described Hume's courage in the face of death in spite of his irreligiosity, attracted considerable controversy.


Published works


''The Theory of Moral Sentiments''

In 1759, Smith published his first work, ''The Theory of Moral Sentiments,'' sold by co-publishers Andrew Millar of London and Alexander Kincaid of Edinburgh. Smith continued making extensive revisions to the book until his death. Although ''The Wealth of Nations'' is widely regarded as Smith's most influential work, Smith himself is believed to have considered ''The Theory of Moral Sentiments'' to be a superior work. In the work, Smith critically examines the moral thinking of his time, and suggests that conscience arises from dynamic and interactive social relationships through which people seek "mutual sympathy of sentiments." His goal in writing the work was to explain the source of mankind's ability to form moral judgment, given that people begin life with no moral sentiments at all. Smith proposes a theory of sympathy, in which the act of observing others and seeing the judgments they form of both others and oneself makes people aware of themselves and how others perceive their behaviour. The feedback we receive from perceiving (or imagining) others' judgment creates an incentive to achieve "mutual sympathy of sentiments" with them and leads people to develop habits, and then principles, of behaviour, which come to constitute one's conscience. Some scholars have perceived a conflict between ''The Theory of Moral Sentiments'' and ''The Wealth of Nations''; the former emphasises sympathy for others, while the latter focuses on the role of self-interest. In recent years, however, some scholars of Smith's work have argued that no contradiction exists. They claim that in ''The Theory of Moral Sentiments'', Smith develops a theory of psychology in which individuals seek the approval of the "impartial spectator" as a result of a natural desire to have outside observers sympathise with their sentiments. Rather than viewing ''The Theory of Moral Sentiments'' and ''The Wealth of Nations'' as presenting incompatible views of human nature, some Smith scholars regard the works as emphasising different aspects of human nature that vary depending on the situation. James Otteson, Otteson argues that both books are Newtonian in their methodology and deploy a similar "market model" for explaining the creation and development of large-scale human social orders, including morality, economics, as well as language. Robert Ekelund, Ekelund and Hebert offer a differing view, observing that self-interest is present in both works and that "in the former, sympathy is the moral faculty that holds self-interest in check, whereas in the latter, competition is the economic faculty that restrains self-interest."


''The Wealth of Nations''

Disagreement exists between classical and neoclassical economists about the central message of Smith's most influential work: ''An Inquiry into the Nature and Causes of the Wealth of Nations'' (1776). Neoclassical economists emphasise Smith's invisible hand, a concept mentioned in the middle of his work – Book IV, Chapter II – and classical economists believe that Smith stated his programme for promoting the "wealth of nations" in the first sentences, which attributes the growth of wealth and prosperity to the division of labour. Smith used the term "invisible hand, the invisible hand" in "History of Astronomy" referring to "the invisible hand of Jupiter", and once in each of his ''
The Theory of Moral Sentiments ''The Theory of Moral Sentiments'' is a 1759 book by Adam Smith. It provided the ethical, philosophical, psychological, and methodological underpinnings to Smith's later works, including '' The Wealth of Nations'' (1776), '' Essays on Philosop ...
'' (1759) and The Wealth of Nations (1776). This last statement about "an invisible hand" has been interpreted in numerous ways.
As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
Those who regard that statement as Smith's central message also quote frequently Smith's dictum:
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. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.
However, in ''The Theory of Moral Sentiments'' he had a more sceptical approach to self-interest as driver of behaviour:
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.
Smith's statement about the benefits of "an invisible hand" may be meant to answer Bernard Mandeville, Mandeville's contention that "Private Vices ... may be turned into Public Benefits". It shows Smith's belief that when an individual pursues his self-interest under conditions of justice, he unintentionally promotes the good of society. Self-interested competition in the free market, he argued, would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and warned of their "conspiracy against the public or in some other contrivance to raise prices". Again and again, Smith warned of the collusive nature of business interests, which may form cabals or Monopoly, monopolies, fixing the highest price "which can be squeezed out of the buyers". Smith also warned that a business-dominated political system would allow a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. Smith states that the interest of manufacturers and merchants "in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public ... The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention." Thus Smith's chief worry seems to be when business is given special protections or privileges from government; by contrast, in the absence of such special political favours, he believed that business activities were generally beneficial to the whole society:
It is the great multiplication of the production of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. Every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his own goods for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs. He supplies them abundantly with what they have occasion for, and they accommodate him as amply with what he has occasion for, and a general plenty diffuses itself through all the different ranks of society. (''The Wealth of Nations,'' I.i.10)
The neoclassical interest in Smith's statement about "an invisible hand" originates in the possibility of seeing it as a precursor of neoclassical economics and its concept of General equilibrium theory, general equilibrium – Paul Samuelson, Samuelson's "Economics" refers six times to Smith's "invisible hand". To emphasise this connection, Samuelson quotes Smith's "invisible hand" statement substituting "general interest" for "public interest". Samuelson concludes: "Smith was unable to prove the essence of his invisible-hand doctrine. Indeed, until the 1940s, no one knew how to prove, even to state properly, the kernel of truth in this proposition about perfectly competitive market." Very differently, classical economists see in Smith's first sentences his programme to promote "The Wealth of Nations". Using the physiocratical concept of the economy as a circular process, to secure growth the inputs of Period 2 must exceed the inputs of Period 1. Therefore, those outputs of Period 1 which are not used or usable as inputs of Period 2 are regarded as unproductive labour, as they do not contribute to growth. This is what Smith had heard in France from, among others,
François Quesnay François Quesnay (; 4 June 1694 – 16 December 1774) was a French economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and conce ...

François Quesnay
, whose ideas Smith was so impressed by that he might have dedicated ''The Wealth of Nations'' to him had he not died beforehand. To this French insight that unproductive labour should be reduced to use labour more productively, Smith added his own proposal, that productive labour should be made even more productive by deepening the division of labour. Smith argued that deepening the division of labour under competition leads to greater productivity, which leads to lower prices and thus an increasing standard of living—"general plenty" and "universal opulence"—for all. Extended markets and increased production lead to the continuous reorganisation of production and the invention of new ways of producing, which in turn lead to further increased production, lower prices, and improved standards of living. Smith's central message is, therefore, that under dynamic competition, a growth machine secures "The Wealth of Nations". Smith's argument predicted Britain's evolution as the workshop of the world, underselling and outproducing all its competitors. The opening sentences of the "Wealth of Nations" summarise this policy:
The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes ... . [T]his produce ... bears a greater or smaller proportion to the number of those who are to consume it ... .[B]ut this proportion must in every nation be regulated by two different circumstances; * first, by the skill, dexterity, and judgment with which its labour is generally applied; and, * secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed [emphasis added].
However, Smith added that the "abundance or scantiness of this supply too seems to depend more upon the former of those two circumstances than upon the latter."


Other works

Shortly before his death, Smith had nearly all his manuscripts destroyed. In his last years, he seemed to have been planning two major treatises, one on the theory and history of law and one on the sciences and arts. The posthumously published ''Essays on Philosophical Subjects'', a history of astronomy down to Smith's own era, plus some thoughts on ancient physics and metaphysics, probably contain parts of what would have been the latter treatise. ''Lectures on Jurisprudence'' were notes taken from Smith's early lectures, plus an early draft of ''The Wealth of Nations'', published as part of the 1976 Glasgow Edition of the works and correspondence of Smith. Other works, including some published posthumously, include ''Lectures on Justice, Police, Revenue, and Arms'' (1763) (first published in 1896); and ''Essays on Philosophical Subjects'' (1795).


Legacy


In economics and moral philosophy

''The Wealth of Nations'' was a precursor to the modern academic discipline of economics. In this and other works, Smith expounded how rational self-interest and competition can lead to economic prosperity. Smith was controversial in his own day and his general approach and writing style were often satirised by Tories (British political party), Tory writers in the moralising tradition of Hogarth and Swift, as a discussion at the University of Winchester suggests. In 2005, ''The Wealth of Nations'' was named among the 100 Best Scottish Books of all time.100 Best Scottish Books, Adam Smith
Retrieved 31 January 2012
In light of the arguments put forward by Smith and other economic theorists in Britain, academic belief in mercantilism began to decline in Britain in the late 18th century. During the Industrial Revolution, Britain embraced free trade and Smith's ''laissez-faire'' economics, and via the British Empire, used its power to spread a broadly liberal economic model around the world, characterised by open markets, and relatively barrier-free domestic and international trade. George Stigler attributes to Smith "the most important substantive proposition in all of economics". It is that, under competition, owners of resources (for example labour, land, and capital) will use them most profitably, resulting in an equal rate of return in Economic equilibrium, equilibrium for all uses, adjusted for apparent differences arising from such factors as training, trust, hardship, and unemployment. Paul Samuelson finds in Smith's pluralist use of supply and demand as applied to wages, rents, and profit a valid and valuable anticipation of the general equilibrium modelling of Léon Walras, Walras a century later. Smith's allowance for wage increases in the short and intermediate term from capital accumulation and invention contrasted with Thomas Robert Malthus, Malthus, David Ricardo, Ricardo, and Karl Marx in their propounding a rigid subsistence–wage theory of labour supply. Joseph Schumpeter criticised Smith for a lack of technical rigour, yet he argued that this enabled Smith's writings to appeal to wider audiences: "His very limitation made for success. Had he been more brilliant, he would not have been taken so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used more difficult and ingenious methods, he would not have been understood. But he had no such ambitions; in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along." Classical economists presented competing theories of those of Smith, termed the "labour theory of value#The theory's development, labour theory of value". Later Marxian economics descending from classical economics also use Smith's labour theories, in part. The first volume of Karl Marx's major work, ''Das Kapital'', was published in German in 1867. In it, Marx focused on the labour theory of value and what he considered to be the exploitation of labour by capital.John Roemer, Roemer, J.E. (1987). "Marxian Value Analysis". ''The New Palgrave: A Dictionary of Economics'', v. 3, 383. The labour theory of value held that the value of a thing was determined by the labour that went into its production. This contrasts with the modern contention of neoclassical economics, that the value of a thing is determined by what one is willing to give up to obtain the thing. The body of theory later termed "neoclassical economics" or "marginalism#The Marginal Revolution, marginalism" formed from about 1870 to 1910. The term "economics" was popularised by such neoclassical economists as Alfred Marshall as a concise synonym for "economic science" and a substitute for the earlier, broader term "
political economy Political economy is the study of production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products (g ...
" used by Smith. This corresponded to the influence on the subject of mathematical methods used in the natural sciences.Clark, B. (1998). ''Political-economy: A comparative approach'', 2nd ed., Westport, CT: Praeger. p. 32. Neoclassical economics systematised supply and demand as joint determinants of price and quantity in market equilibrium, affecting both the allocation of output and the distribution of income. It dispensed with the labour theory of value of which Smith was most famously identified with in classical economics, in favour of a marginal utility theory of value on the demand side and a more general theory of costs on the supply side. The bicentennial anniversary of the publication of ''The Wealth of Nations'' was celebrated in 1976, resulting in increased interest for ''The Theory of Moral Sentiments'' and his other works throughout academia. After 1976, Smith was more likely to be represented as the author of both ''The Wealth of Nations'' and ''The Theory of Moral Sentiments'', and thereby as the founder of a moral philosophy and the science of economics. His ''homo economicus'' or "economic man" was also more often represented as a moral person. Additionally, economists David Levy and Sandra Peart in "The Secret History of the Dismal Science" point to his opposition to hierarchy and beliefs in inequality, including racial inequality, and provide additional support for those who point to Smith's opposition to slavery, colonialism, and empire. They show the caricatures of Smith drawn by the opponents of views on hierarchy and inequality in this online article. Emphasised also are Smith's statements of the need for high wages for the poor, and the efforts to keep wages low. In The "Vanity of the Philosopher: From Equality to Hierarchy in Postclassical Economics", Peart and Levy also cite Smith's view that a common street porter was not intellectually inferior to a philosopher, and point to the need for greater appreciation of the public views in discussions of science and other subjects now considered to be technical. They also cite Smith's opposition to the often expressed view that science is superior to common sense. Smith also explained the relationship between growth of private property and civil government:
Men may live together in society with some tolerable degree of security, though there is no civil magistrate to protect them from the injustice of those passions. But avarice and ambition in the rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the passions which prompt to invade property, passions much more steady in their operation, and much more universal in their influence. Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days' labour, civil government is not so necessary. Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property. (...) Men of inferior wealth combine to defend those of superior wealth in the possession of their property, in order that men of superior wealth may combine to defend them in the possession of theirs. All the inferior shepherds and herdsmen feel that the security of their own herds and flocks depends upon the security of those of the great shepherd or herdsman; that the maintenance of their lesser authority depends upon that of his greater authority, and that upon their subordination to him depends his power of keeping their inferiors in subordination to them. They constitute a sort of little nobility, who feel themselves interested to defend the property and to support the authority of their own little sovereign in order that he may be able to defend their property and to support their authority. Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all. (Source: ''The Wealth of Nations'', Book 5, Chapter 1, Part 2)


In British imperial debates

Smith's chapter on colonies, in turn, would help shape British imperial debates from the mid-19th century onward. ''The Wealth of Nations'' would become an ambiguous text regarding the imperial question. In his chapter on colonies, Smith pondered how to solve the crisis developing across the Atlantic among the empire's 13 American colonies. He offered two different proposals for easing tensions. The first proposal called for giving the colonies their independence, and by thus parting on a friendly basis, Britain would be able to develop and maintain a free-trade relationship with them, and possibly even an informal military alliance. Smith's second proposal called for a theoretical imperial federation that would bring the colonies and the metropole closer together through an imperial parliamentary system and imperial free trade. Smith's most prominent disciple in 19th-century Britain, peace advocate Richard Cobden, preferred the first proposal. Cobden would lead the Anti-Corn Law League in overturning the Corn Laws in 1846, shifting Britain to a policy of free trade and empire "on the cheap" for decades to come. This hands-off approach toward the British Empire would become known as Cobdenism or the Manchester Liberalism, Manchester School. By the turn of the century, however, advocates of Smith's second proposal such as Joseph Shield Nicholson would become ever more vocal in opposing Cobdenism, calling instead for imperial federation. As Marc-William Palen notes: "On the one hand, Adam Smith’s late nineteenth and early twentieth-century Cobdenite adherents used his theories to argue for gradual imperial devolution and empire 'on the cheap'. On the other, various proponents of imperial federation throughout the British World sought to use Smith's theories to overturn the predominant Cobdenite hands-off imperial approach and instead, with a firm grip, bring the empire closer than ever before." Smith's ideas thus played an important part in subsequent debates over the British Empire.


Portraits, monuments, and banknotes

Smith has been commemorated in the UK on banknotes printed by two different banks; his portrait has appeared since 1981 on the £50 notes issued by the Clydesdale Bank in Scotland, and in March 2007 Smith's image also appeared on the new series of Bank of England £20 note, £20 notes issued by the Bank of England, making him the first Scotsman to feature on an Bank of England note issues, English banknote. A large-scale memorial of Smith by Alexander Stoddart was unveiled on 4 July 2008 in Edinburgh. It is a -tall bronze sculpture and it stands above the Royal Mile outside St Giles' Cathedral in Parliament Square, near the Mercat cross. 20th-century sculptor Jim Sanborn (best known for the ''Kryptos'' sculpture at the United States Central Intelligence Agency) has created multiple pieces which feature Smith's work. At Central Connecticut State University is ''Circulating Capital'', a tall cylinder which features an extract from ''The Wealth of Nations'' on the lower half, and on the upper half, some of the same text, but represented in binary code. At the University of North Carolina at Charlotte, outside the Belk College of Business Administration, is ''Adam Smith's Spinning Top''. Another Smith sculpture is at Cleveland State University. He also appears as the narrator in the 2013 play ''The Low Road (play), The Low Road'', centred on a proponent on ''laissez-faire'' economics in the late 18th century, but dealing obliquely with the financial crisis of 2007–2008 and the recession which followed; in the premiere production, he was portrayed by Bill Paterson (actor), Bill Paterson. A bust of Smith is in the Hall of Heroes of the National Wallace Monument in Stirling.


Residence

Adam Smith resided at Panmure House from 1778 to 1790. This residence has now been purchased by the Edinburgh Business School at Heriot-Watt University and fundraising has begun to restore it. Part of the Northern end of the original building appears to have been demolished in the 19th century to make way for an iron foundry.


As a symbol of free-market economics

Smith has been celebrated by advocates of free-market policies as the founder of free-market economics, a view reflected in the naming of bodies such as the Adam Smith Institute in London, multiple entities known as the "Adam Smith Society", including an historical Italian organization, and the U.S.-based Adam Smith Society, and the Australian Adam Smith Club, and in terms such as the Adam Smith necktie. Alan Greenspan argues that, while Smith did not coin the term ''laissez-faire'', "it was left to Adam Smith to identify the more-general set of principles that brought conceptual clarity to the seeming chaos of market transactions". Greenspan continues that ''The Wealth of Nations'' was "one of the great achievements in human intellectual history". P.J. O'Rourke describes Smith as the "founder of free market economics". Other writers have argued that Smith's support for ''laissez-faire'' (which in French means leave alone) has been overstated. Herbert Stein wrote that the people who "wear an Adam Smith necktie" do it to "make a statement of their devotion to the idea of free markets and limited government", and that this misrepresents Smith's ideas. Stein writes that Smith "was not pure or doctrinaire about this idea. He viewed government intervention in the market with great skepticism...yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system. He did not wear the Adam Smith necktie." In Stein's reading, ''The Wealth of Nations'' could justify the Food and Drug Administration, the Consumer Product Safety Commission, mandatory employer health benefits, environmentalism, and "Pigovian tax, discriminatory taxation to deter sin tax, improper or sumptuary tax, luxurious behavior". Similarly, Vivienne Brown stated in ''The Economic Journal'' that in the 20th-century United States, Reaganomics supporters, ''The Wall Street Journal'', and other similar sources have spread among the general public a partial and misleading vision of Smith, portraying him as an "extreme dogmatic defender of ''laissez-faire'' capitalism and supply-side economics". In fact, ''The Wealth of Nations'' includes the following statement on the payment of taxes:
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.
Some commentators have argued that Smith's works show support for a progressive, not flat, income tax and that he specifically named taxes that he thought should be required by the state, among them Luxury tax, luxury-goods taxes and tax on rent. Yet Smith argued for the "impossibility of taxing the people, in proportion to their economic revenue, by any capitation" (''The Wealth of Nations,'' V.ii.k.1). Smith argued that taxes should principally go toward protecting "justice" and "certain publick institutions" that were necessary for the benefit of all of society, but that could not be provided by private enterprise (''The Wealth of Nations,'' IV.ix.51). Additionally, Smith outlined the proper expenses of the government in ''The Wealth of Nations, Book V, Ch. I''. Included in his requirements of a government is to enforce contracts and provide justice system, grant patents and copy rights, provide public goods such as infrastructure, provide national defence, and regulate banking. The role of the government was to provide goods "of such a nature that the profit could never repay the expense to any individual" such as roads, bridges, canals, and harbours. He also encouraged invention and new ideas through his patent enforcement and support of infant industry monopolies. He supported partial public subsidies for elementary education, and he believed that competition among religious institutions would provide general benefit to the society. In such cases, however, Smith argued for local rather than centralised control: "Even those publick works which are of such a nature that they cannot afford any revenue for maintaining themselves ... are always better maintained by a local or provincial revenue, under the management of a local and provincial administration, than by the general revenue of the state" (''Wealth of Nations,'' V.i.d.18). Finally, he outlined how the government should support the dignity of the monarch or chief magistrate, such that they are equal or above the public in fashion. He even states that monarchs should be provided for in a greater fashion than magistrates of a republic because "we naturally expect more splendor in the court of a king than in the mansion-house of a doge". In addition, he allowed that in some specific circumstances, retaliatory tariffs may be beneficial:
The recovery of a great foreign market will generally more than compensate the transitory inconvenience of paying dearer during a short time for some sorts of goods.
However, he added that in general, a retaliatory tariff "seems a bad method of compensating the injury done to certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all the other classes of them" (''The Wealth of Nations,'' IV.ii.39). Economic historians such as
Jacob Viner Jacob Viner (3 May 1892 – 12 September 1970) was a Canadian economist An economist is a practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from ...
regard Smith as a strong advocate of free markets and limited government (what Smith called "natural liberty"), but not as a dogmatic supporter of ''laissez-faire''. Economist Daniel B. Klein, Daniel Klein believes using the term "free-market economics" or "free-market economist" to identify the ideas of Smith is too general and slightly misleading. Klein offers six characteristics central to the identity of Smith's economic thought and argues that a new name is needed to give a more accurate depiction of the "Smithian" identity. Economist David Ricardo set straight some of the misunderstandings about Smith's thoughts on free market. Most people still fall victim to the thinking that Smith was a free-market economist without exception, though he was not. Ricardo pointed out that Smith was in support of helping infant industries. Smith believed that the government should subsidise newly formed industry, but he did fear that when the infant industry grew into adulthood, it would be unwilling to surrender the government help.Buchholz, Todd (December 1990). pp. 38–39. Smith also supported tariffs on imported goods to counteract an internal tax on the same good. Smith also fell to pressure in supporting some tariffs in support for national defence. Some have also claimed, Emma Rothschild among them, that Smith would have supported a minimum wage, although no direct textual evidence supports the claim. Indeed, Smith wrote:
The price of labour, it must be observed, cannot be ascertained very accurately anywhere, different prices being often paid at the same place and for the same sort of labour, not only according to the different abilities of the workmen, but according to the easiness or hardness of the masters. Where wages are not regulated by law, all that we can pretend to determine is what are the most usual; and experience seems to show that law can never regulate them properly, though it has often pretended to do so. (''The Wealth of Nations'', Book 1, Chapter 8)
However, Smith also noted, to the contrary, the existence of an equality of bargaining power, imbalanced, inequality of bargaining power:
A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run, the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate.


Criticism

Alfred Marshall criticised Smith's definition of the economy on several points. He argued that man should be equally important as money, services are as important as goods, and that there must be an emphasis on human welfare, instead of just wealth. The "invisible hand" only works well when both production and consumption operates in free markets, with small ("atomistic") producers and consumers allowing supply and demand to fluctuate and equilibrate. In conditions of monopoly and oligopoly, the "invisible hand" fails. Nobel Prize-winning economist Joseph E. Stiglitz says, on the topic of one of Smith's better-known ideas: "the reason that the invisible hand often seems invisible is that it is often not there."''The Roaring Nineties'', 2006


See also

* Organizational capital * List of abolitionist forerunners * List of Fellows of the Royal Society of Arts * List of people on banknotes#Scotland, People on Scottish banknotes


References


Informational notes


Citations


Bibliography

* * * * * * * * Helbroner, Robert L. ''The Essential Adam Smith''. * * Otteson, James R. (2002). ''Adam Smith's Marketplace of Life.'' Cambridge: Cambridge University Press. * * * * * * * * * * *


Further reading

* * * * * * Hardwick, D. and Marsh, L. (2014).
Propriety and Prosperity: New Studies on the Philosophy of Adam Smith
'. Palgrave Macmillan * * * * * * * * * * Phillipson, Nicholas (2010). ''Adam Smith: An Enlightened Life'', Yale University Press, , 352 pages; scholarly biography * McLean, Iain (2004)
''Adam Smith, Radical and Egalitarian: An Interpretation for the 21st Century''
Edinburgh University Press * Éric Pichet, Pichet, Éric (2004)
Adam Smith, je connais !
French biography. * Fernando Vianello, Vianello, F. (1999). "Social accounting in Adam Smith", in: Mongiovi, G. and Petri F. (eds.), ''Value, Distribution and capital. Essays in honour of Pierangelo Garegnani'', London: Routledge, . * * Wolloch, N. (2015). "Symposium on Jack Russell Weinstein's Adam Smith's Pluralism: Rationality, Education and the Moral Sentiments".
Cosmos + Taxis
'
"Adam Smith and Empire: A New Talking Empire Podcast,"
''Imperial & Global Forum'', 12 March 2014.


External links

* at the Adam Smith Institute * * * *
References to Adam Smith in historic European newspapers
{{DEFAULTSORT:Smith, Adam Adam Smith, 1723 births 1790 deaths 18th-century Scottish writers 18th-century economists 18th-century British philosophers Academics of the University of Glasgow Age of Enlightenment Alumni of Balliol College, Oxford Alumni of the University of Glasgow British classical liberals British male non-fiction writers Burials at the Canongate Kirkyard Capitalism Classical economists British cultural critics Enlightenment philosophers Fellows of the Royal Society Fellows of the Royal Society of Arts Founder Fellows of the Royal Society of Edinburgh Members of The Club Members of the Philosophical Society of Edinburgh Moral philosophers People from Kirkcaldy Philosophers of economics Philosophers of ethics and morality Philosophers of logic Rectors of the University of Glasgow Scottish business theorists Scottish economists Scottish logicians Scottish philosophers Scottish scholars and academics Scottish social commentators Social critics Social philosophers Fellows of the Royal Society of Edinburgh Critics of work and the work ethic