Often called the founder of modern economics, Adam Smith, born in Kirkcaldy, Scotland, June 5, 1723, was a wide-ranging social philosopher and economist whose masterwork, "An Inquiry into the Nature and Causes of the Wealth of Nations" (1776), is one of the most influential studies of Western civilization. .
Smith's intellectual interests were extensive. He wrote an important philosophical treatise, "The Theory of Moral Sentiments (1759)," and was well versed in science and history. He studied at Glasgow and Oxford universities, lectured at the University of Edinburgh, and in 1751, became a professor at Glasgow University. In 1764, he made a grand tour of the Continent as tutor to the young duke of Buccleuch. .
Wealth of Nations Thesis.
Smith's major thesis in the Wealth of Nations was that, except for limited functions (defense, justice, certain public works), the state refrained from interfering with the economic life of a nation. Smith did not view favorably the motives of.
merchants and businessmen. "People of the same trade," he wrote, "seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some.
contrivance to raise prices." He suggested, however, that businessmen seeking their own interest are led "as if by an invisible hand" to promote the well-being of society. .
Smith's Analysis of Economic Systems.
This position is supported in the Wealth of Nations by an elaborate analysis of how economic systems function and develop over time. Smith sought to show how competition in the market- place would lead businessmen to supply the goods consumers want, to produce these goods efficiently, and to charge only what they are worth. He saw monopoly, whether private or state-imposed, as the evil to be combated, and competition as promoting the best interests of society. He further argued that economic growth, which depends upon capital accumulation and an increased division of labor, would be promoted best by private rather than public efforts.
