Adam Smith may be the most famous economist and economic theorist of all time. His theories have influenced the way economic markets all over the world have functioned for many, many years. His theories will continue to be studied by students of economics, perhaps for centuries to come.
1. Teaching Logic
Adam Smith was well educated, having attended Glasgow and Oxford, two of the most prestigious schools in the world. He began teaching logic at the University of Glasgow in 1751, was promoted to chair of the moral philosophy in 1952 and wrote his Theory of Moral Sentiments, while there, in 1759. This paper established him on the international scene and helped him gain the reputation that he had throughout his life.
2. An Inquiry into the Nature and Causes of the Wealth of Nations
Smith was known for his writings and the way that he communicated his theories in writing. In his best known work, An Inquiry into the Nature and Causes of the Wealth of Nations, Smith discussed the concept of the division of labor and said that value comes from the labor that it takes to produce something.
Rationalism, a very important concept during the time of Adam Smith, influenced his work. He believed that everything could be explained rationally, therefore there is was an explanation for everything. Another famous Smith concept is the Laissez-faire theory of economics, which says markets are best left to govern themselves.
4. Economic Beliefs
Adam Smith believed that monopolies were bad for the economy because they disrupted the way things should actually function in markets. Although he was generally in favor of free markets, he believed that restrictions to free trade were sometimes necessary and could be used as economic weapons to reduce poverty. He also believed that it was sometimes necessary for the government to assist companies and industries.
5. Logical But Negated
As many of Smith’s theories were written before or during the Industrial Revolution, various new methods of production negated some of his ideas. While they were still very logical and made sense under the previous system of production, some his ideas were discounted under the new system. Despite the changing economic scene, Smith’s theories still influenced many economists for centuries and some of them are still applicable today.
6. Raised by His Mother
Adam Smith’s, whose father died six months prior to his birth, was raised by his widowed mother, who encouraged her son to pursue his scholarly interests which, early on, included moral philosophy as well as his passion for liberty and free speech.
7. Moral Philosopher
Although Smith was best known for his theories on economics, he was also a morality philosopher and was very influential in that field as well. He put forth the idea that our moral feelings come from sympathy which is an innate trait in all people; this concept is also known as ’putting ourselves in their shoes’.
When Adam Smith taught his lectures, he always divided the course into four fundamental ideas or segments: natural theology, ethics, jurisprudence and political regulations founded on expediency.
9. The Scottish Enlightenment
Smith expressed some of his ideas with the help of David Hume, who was also a noted philosopher in Britain and together they took part in what was called the Scottish Enlightenment.
10. Wealth of Nations
Smith has been praised and cursed by theorists all over the world and has been perhaps the most important name in economics since he wrote the Wealth of Nations. His theories have influenced the way nations have been formed and his ideas are at the heart of many governments and societies.