Philosopher and Economist
Adam Smith has a prominent place in history as a philosopher and economist whose book the Wealth of Nations had a profound effect on the economic thinking of his time and became one of the most influential books ever written.
The early years
He was born in Kirkcaldy Scotland on the 16th June 1723, a few months after the death of his father, also Adam Smith. The young Adam Smith was described as a delicate child in relation to his health but this improved as he grew older. His early schooling was important to him and he was fortunate that the secondary school he attended, the Burgh school of Kirkcaldy was one of the best secondary schools in Scotland at that time. Smith went on to study at Glasgow University and then Balliol College in Oxford England.
Adam Smith: The Theory of Moral Sentiments
This was actually the first major work that Smith was recognised for and is seen as an extremely important contribution to the history of moral and political thought.
The Father of Economics
Adam Smith is seen as a pioneer in his thinking and writing. He challenged the accepted economic principles of his day which were based on simple Mercantalism, and propounded his theories based on free market capitalism. His work deeply influenced the political powers of the day and provided the intellectual basis of the periods growth in trade and commercial expansion throughout the world.
The economic theories
The fundamental theory proposed by Adam Smith was the effects of the ‘invisible hand’ of commercial and economic markets which was driven by the individual pursuit of private economic interests and wealth.
This is now famously known as laissez-faire economic policy which states that there should be no external interference in economic markets as this will only lead to disruption and ultimately disaster.
The relevance to today’s economy
Smith’s theories are still relevant today and often referred to in many economic arguments and assessments of the global economy and in particular in recent financial crises experienced in many countries throughout the world.
Many of the financial problems experienced in the era of the writing of the Wealth of Nations are similar to those prevalent today. Adam Smith experienced this himself and in fact the bankruptcy of Ayr Bank in 1772 was a particular example that affected many of Smiths friends and business acquaintances and did in fact delay the publication of the Wealth of Nations.
Smith’s accolade as the father of economics is endorsed by many and is well deserved. He died in 1790 but his ideas and theories live on to this day. His image was placed on the £20 note by the Bank of England in recognition of his contribution to the world of economics.