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Adam Smith, Royal Society of London|FRS (Baptised
June 5, 1723 – July 17, 1790) was a
Scotland|Scottish political economy|political
economist and moral philosophy|moral philosopher. 
His Wealth of Nations|Inquiry into the Nature and
Causes of the Wealth of Nations was one of the
earliest attempts to study the historical
development of industry and commerce in Europe. 
That work helped to create the modern academic
discipline of economics and provided one of the
best-known intellectual rationales for free trade
and capitalism.

==Biography==
 
Smith was the son of the controller of the customs
at Kirkcaldy, Fife, Scotland. The exact date of
his birth is unknown, but he was baptized at
Kirkcaldy on June 5, 1723, his father having died
some six months previously.  At around the age of
4, he was kidnapped by a band of Roma people, but
he was quickly rescued by his uncle and returned
to his mother.  Smith's biographer, John Rae,
commented wryly that he feared Smith would have
made "a poor Gipsy."

At the age of about fifteen, Smith proceeded to
the University of Glasgow, studying moral
philosophy under "the never-to-be-forgotten" (as
Smith called him) Francis Hutcheson
(philosopher)|Francis Hutcheson. In 1740 he
entered the Balliol College, Oxford|Balliol
College of the University of Oxford, but as
William Robert Scott has said, "the Oxford of his
time gave little if any help towards what was to
be his lifework," and he left the university in
1746. In 1748 he began delivering public lectures
in Edinburgh under the patronage of Lord Kames.
Some of these dealt with rhetoric and
belles-lettres, but later he took up the subject
of "the progress of opulence," and it was then, in
his middle or late 20s, that he first expounded
the economic philosophy of "the obvious and simple
system of natural liberty" which he was later to
proclaim to the world in his Inquiry into the
Nature and Causes of the Wealth of Nations. About
1750 he met David Hume, who became one of the
closest of his many friends.

In 1751 Smith was appointed professor on logic at
the University of Glasgow, transferring in 1752 to
the chair of moral philosophy. His lectures
covered the fields of ethics, rhetoric,
jurisprudence, political economy, and "police and
revenue." In 1759 he published his The Theory of
Moral Sentiments, embodying some of his Glasgow
lectures. This work, which established Smith's
reputation in his day, was concerned with how
human communication depends on sympathy between
agent and spectator (that is, the individual and
other members of society). His capacity for
fluent, persuasive, if rather rhetorical argument
is much in evidence. He bases his explanation, not
as the third Lord Shaftesbury and Hutcheson had
done, on a special "moral sense", nor (like Hume)
on utilitarianism|utility, but on sympathy.

Smith now began to give more attention to
jurisprudence and economics in his lecture and
less to his theories of morals. An impression can
be obtained as to the development of his ideas on
political economy from the notes of his lectures
taken down by a student in about 1763 which were
later edited by E. Cannan (Lectures on Justice,
Police, Revenue and Arms, 1896), and from what
Scott, its discoverer and publisher, describes as
"An Early Draft of Part of The Wealth of Nations",
which he dates about 1763.

At the end of 1763 Smith obtained a lucrative post
as tutor to the young Henry Scott, 3rd Duke of
Buccleuch|Duke of Buccleuch and resigned his
professorship. From 1764-1766|66 he traveled with
his pupil, mostly in France, where he came to know
such intellectual leaders as Anne Robert Jacques
Turgot, Baron de Laune|Turgot, Jean le Rond
d'Alembert| Jean D'Alembert, André Morellet,
Helvétius and, in particular, Francois Quesnay,
the head of the physiocrats|Physiocratic school
whose work he much respected. On returning home to
Kirkcaldy he devoted much of the next ten years to
his magnum opus, An Inquiry into the Nature and
Causes of the Wealth of Nations, which appeared in
1776. It was very well-received and popular, and
Smith became famous. In 1778 he was appointed to a
comfortable post as commissioner of customs in
Scotland and went to live with his mother in
Edinburgh. He died there on July 17, 1790, after a
painful illness. He had apparently devoted a
considerable part of his income to numerous secret
acts of charity.

==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 (1795) probably
contain parts of what would have been the latter
treatise.

The Wealth of Nations was influential since it did
so much to create the field of economics and
develop it into an autonomous systematic
discipline. In the Western world, it is arguably
the most influential book on the subject ever
published. When the book, which has become a
classic manifesto against mercantilism (the theory
that large reserves of bullion are essential for
economic success), appeared in 1776, there was a
strong sentiment for free trade in both Kingdom of
Great Britain|Britain and United States|America.
This new feeling had been born out of the economic
hardships and poverty caused by the war. However,
at the time of publication, not everybody was
immediately convinced of the advantages of free
trade: the British public and Houses of
Parliament|Parliament still clung to mercantilism
for many years to come.

The Wealth of Nations also rejects the
Physiocratic school's emphasis on the importance
of land; instead, Smith believed labour was
tantamount, and that a division of labour would
effect a great increase in production. Nations was
so successful, in fact, that it led to the
abandonment of earlier economic schools, and later
economists, such as Thomas Malthus and David
Ricardo, focused on refining Smith's theory into
what is now known as classical economics. (Modern
economics evolved from this.) Malthus expanded
Smith's ruminations on overpopulation, while
Ricardo believed in the "iron law of wages"
— that overpopulation would prevent wages
from topping the subsistence level. Smith
postulated an increase of wages with an increase
in production, a view considered more accurate
today.

One of the main points of The Wealth of Nations is
that the free market, while appearing chaotic and
unrestrained, is actually guided to produce the
right amount and variety of goods by a so-called
"Invisible Hand|invisible hand". If a product
shortage occurs, for instance, its price rises,
creating incentive for its production, and
eventually curing the shortage. The increased
competition among manufacturers and increased
supply would also lower the price of the product
to its production cost, the "natural price". 
Smith believed that while human motives are often
selfishness|selfish and Greed (emotion)|greedy,
the competition in the free market would tend to
benefit society as a whole anyway. Nevertheless,
he was wary of businessmen and argued against the
formation of monopoly|monopolies. 

Smith vigourously attacked the antiquated
government restrictions which he thought were
hindering industrial expansion. In fact, he
attacked most forms of government interference in
the economic process, including tariffs, arguing
that this creates inefficiency and high prices in
the long run. This theory, now referred to as
"laissez-faire", influenced government legislation
in later years, especially during the 19th
century. However, Smith criticised a number of
practices that later became associated with
laissez-faire capitalism, such as the power and
influence of Big Business and the emphasis on
Capital (economics)|capital at the expense of
labour (economics)|labour.

=="Das Adam-Smith-Problem"==

There has been considerable controversy as to
whether there is a contradiction between Smith's
emphasis on sympathy in his Theory of Moral
Sentiments and the key role of self-interest in
the Wealth of Nations.  Economist Joseph
Schumpeter referred to this in German as das Adam
Smith
Problem.http://de.wikipedia.org/wiki/Adam-Smith-Pr
oblem  In his Moral Sentiments Smith seems to
emphasize the broad synchronization of human
intention and behavior under a beneficent
Providence, while in the Wealth of Nations, in
spite of the general theme of "the invisible hand"
creating harmony out of conflicting
self-interests, he finds many more occasions for
pointing out cases of conflict and of the narrow
selfishness of human motives.  Yet it would be
inaccurate to describe the Adam Smith of the Moral
Sentiments as disbelieving of an essential
selfishness of most human motives, for he writes
that:

:"Thus self-preservation, and the propagation of
the species, are the great ends which Nature seems
to have proposed in the formation of all animals.
Mankind are endowed with a desire of those ends,
and an aversion to the contrary; with a love of
life, and a dread of dissolution; with a desire of
the continuance and perpetuity of the species, and
with an aversion to the thoughts of its intire
extinction. But though we are in this manner
endowed with a very strong desire of those ends,
it has not been intrusted to the slow and
uncertain determinations of our reason, to find
out the proper means of bringing them about.
Nature has directed us to the greater part of
these by original and immediate instincts. Hunger,
thirst, the passion which unites the two sexes,
the love of pleasure, and the dread of pain,
prompt us to apply those means for their own
sakes, and without any consideration of their
tendency to those beneficent ends which the great
Director of nature intended to produce by them."

==Influence== 

The Wealth of Nations, and to a lesser extent The
Theory of Moral Sentiments, have become the
starting point for any defence or critique of
forms of capitalism, most influentially in the
writings of Karl Marx|Marx and Humanist
economics|Humanist economists. Because capitalism
is so often associated with unbridled selfishness,
there is a recent movement to emphasize the moral
philosophy of Smith, with its focus on sympathy
with one's fellows.

There has been some controversy over the extent of
Smith's originality in The Wealth of Nations; some
argue that the work added modestly to the already
established ideas of thinkers such as David Hume
and the Charles de Secondat, Baron de
Montesquieu|Baron de Montesquieu.  Indeed, many of
the theories Smith sets out simply describe
historical trends away from mercantilism, towards
free-trade, that had been developing for many
decades, and had already had significant influence
on governmental policy.  Nevertheless, it
organizes their ideas comprehensively, and remains
one of the most influential and important books in
the field today.

See also: History of economic thought

==Bibliography==
* Smith, Adam. An Inquiry into the Nature and
Causes of the Wealth of Nations (The Wealth of
Nations). 1776.
* Smith, Adam. The Theory of Moral Sentiments.
1759.

==See also==
*Liberalism
*Contributions to liberal theory
*Adam Smith rule
*capitalism
*Anders Chydenius

==External links==
Wikiquote
*http://www.econlib.org/library/Enc/bios/Smith.htm
l Biography at the Concise Encyclopedia of
Economics
*http://www.econlib.org/library/YPDBooks/Rae/raeLS
.html Life of Adam Smith by John Rae, at the
Library of Economics and Liberty
*http://cepa.newschool.edu/het/profiles/smith.htm
Smith's works
*http://econ161.berkeley.edu/Economists/smith.html
Brad deLong's Adam Smith page
*http://www.adamsmith.org The Adam Smith Institute
*http://www.libertyforums.com/ LibertyForums -
Classical Liberal, Libertarian & Objectivist
Discussion Board.
*http://www.boomerbible.com/adam20.html Excerpt
from "The Book of the VIP Adam"
Adam Smith is buried in Canongate Churchyard,
Royal Mile, Edinburgh
*http://web.uvic.ca/~rutherfo/a_smith.html Grave
of Adam Smith on the
http://web.uvic.ca/~rutherfo/mr_grvs.html Famous
Economists Grave Sites

===Works===
Wikisource author
*http://www.econlib.org/library/Smith/smWN.html
The Wealth of Nations at the
http://www.econlib.org/index.html Library of
Economics and Liberty. Cannan edition. Definitive,
fully searchable, free online.
*Gutenberg|no=3300|name=The Wealth of Nations
*http://www.mondopolitico.com/library/wealthofnati
ons/toc.htm The Wealth of Nations from
http://www.mondopolitico.com/library/ Mondo
Politico Library - full text; formatted for easy
on-screen reading.
*http://www.adamsmith.org/smith/won-intro.htm The
Wealth of Nations from the
http://www.adamsmith.org/ Adam Smith Institute -
elegantly formatted for on-screen reading
*http://oll.libertyfund.org/Home3/BookSetToCPage.p
hp?recordID=0141 Works and Correspondence of Adam
Smith. Glasgow edition, 7 volumes at the
http://oll.libertyfund.org/ Online Library of
Liberty. Definitive, free online.
*http://www.econlib.org/library/Smith/smMS.html
The Theory of Moral Sentiments at the
http://www.econlib.org/index.html Library of
Economics and Liberty

===Images===
The National Portrait Gallery has several images
of Adam Smith

*http://www.npg.org.uk/live/search/ Search the
collection