Adam Smith
Adam Smith was a Scottish moral philosopher and political economist whose two masterworks — The Theory of Moral Sentiments and The Wealth of Nations — established him as the founder of modern economics and one of the most important moral philosophers of the Enlightenment. Far from the caricature of a laissez-faire ideologue, Smith developed a sophisticated moral psychology grounded in sympathy and the 'impartial spectator,' combined with a pioneering analysis of how the division of labor, market exchange, and the pursuit of self-interest can — under the right institutional conditions — generate collective prosperity.
Key Ideas
Key Contributions
- ● Developed a moral philosophy grounded in sympathy — the capacity to imaginatively share the feelings of others — and the concept of the impartial spectator as an internalized moral judge
- ● Founded modern economics with The Wealth of Nations, analyzing the division of labor, market exchange, and the conditions of national prosperity
- ● Introduced the concept of the 'invisible hand' — the idea that individuals pursuing self-interest can unintentionally promote the public good through market mechanisms
- ● Analyzed the division of labor as the primary source of productivity growth and wealth creation
- ● Distinguished between productive and unproductive labor, and between the natural price and market price of commodities
- ● Argued for free trade against mercantilist restrictions, demonstrating the mutual benefits of commercial exchange
- ● Developed a four-stage theory of social development (hunting, pasturage, agriculture, commerce) as a framework for understanding economic and institutional change
- ● Provided the first systematic analysis of the relationship between markets, institutions, and moral conduct
Core Questions
Key Claims
- ✓ Moral judgment is grounded in sympathy — the ability to enter imaginatively into the situation and feelings of another person
- ✓ The impartial spectator — an internalized, idealized observer — is the standard by which we judge our own and others' conduct
- ✓ The division of labor is the greatest source of improvement in the productive powers of labor
- ✓ Every individual intending only his own gain is led by an invisible hand to promote an end which was no part of his intention — the public interest
- ✓ 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
- ✓ The natural effort of every individual to better his own condition is a powerful engine of prosperity that, left to operate freely, tends to overcome the effects of bad policy
- ✓ Commerce and manufacturing gradually introduced order and good government, and with them the liberty and security of individuals
- ✓ No society can surely be flourishing and happy of which the far greater part of the members are poor and miserable
Biography
Early Life and Education
Adam Smith was born on June 5, 1723 (new style), in Kirkcaldy, Fife, Scotland. His father, a customs comptroller, died before his birth. Raised by his mother, Margaret Douglas, to whom he remained devoted throughout his life, Smith attended the University of Glasgow from the age of fourteen, where he studied under the brilliant moral philosopher Francis Hutcheson. He then won a scholarship to Balliol College, Oxford, where he spent six unhappy years (1740–1746), finding the teaching negligent and the intellectual atmosphere stifling compared to Glasgow.
Academic Career
Returning to Scotland, Smith delivered public lectures in Edinburgh on rhetoric, literature, and jurisprudence that attracted the attention of David Hume, who became his closest intellectual friend. In 1751, he was appointed Professor of Logic at the University of Glasgow, and in 1752, Professor of Moral Philosophy — the most prestigious academic position in Scotland.
His lectures covered natural theology, ethics, jurisprudence, and political economy. The ethical component became The Theory of Moral Sentiments (1759), which established Smith's reputation as a major philosopher. The book develops a moral psychology based on sympathy — the human capacity to imaginatively enter into the feelings of others — and introduces the concept of the 'impartial spectator,' an internalized judge whose imagined approval or disapproval guides moral conduct.
The Grand Tour and The Wealth of Nations
In 1764, Smith resigned his professorship to serve as tutor to the young Duke of Buccleuch on a grand tour of France and Switzerland (1764–1766). In Paris, he met the leading French economists (Physiocrats) — Quesnay, Turgot — and intellectuals including Voltaire. These encounters stimulated his thinking about political economy.
After returning to Scotland, Smith spent the next decade composing An Inquiry into the Nature and Causes of the Wealth of Nations (1776), published in the same year as the American Declaration of Independence. The Wealth of Nations is a vast, empirically rich, and theoretically ambitious analysis of how nations become prosperous. Its central arguments — that the division of labor is the principal source of productivity gains, that free trade and competition generally serve the public interest better than government direction, and that individuals pursuing their own self-interest are 'led by an invisible hand' to promote the public good — transformed economic thinking.
Later Life
Smith was appointed Commissioner of Customs for Scotland in 1778 and spent his final years in Edinburgh. He continued to revise The Theory of Moral Sentiments through six editions, significantly expanding the final edition (1790) with a new section on the corruption of moral sentiments by wealth-worship — demonstrating that his moral concerns were never subordinated to his economics. He died on July 17, 1790.
Legacy
Smith's influence on economics, political philosophy, and moral theory is foundational. He is rightly regarded as the father of modern economics, but his thought is far richer than the market-fundamentalist caricature suggests. His moral philosophy, his analysis of the relationship between self-interest and social order, his attention to institutions and incentives, and his humane concern for the laboring poor make him one of the most complete social thinkers of the Enlightenment.
Methods
Notable Quotes
"{'text': '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.', 'source': 'The Wealth of Nations, I.ii', 'year': 1776}"
"{'text': 'Every individual is led by an invisible hand to promote an end which was no part of his intention.', 'source': 'The Wealth of Nations, IV.ii', 'year': 1776}"
"{'text': 'No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.', 'source': 'The Wealth of Nations, I.viii', 'year': 1776}"
"{'text': 'How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others.', 'source': 'The Theory of Moral Sentiments, I.i.1', 'year': 1759}"
"{'text': 'The real tragedy of the poor is the poverty of their aspirations.', 'source': 'attributed, various compilations', 'year': None}"
Major Works
- The Theory of Moral Sentiments Treatise (1759)
- The Wealth of Nations Treatise (1776)
- Essays on Philosophical Subjects Essay (1795)
- Lectures on Jurisprudence Lecture (1896)
- Lectures on Rhetoric and Belles Lettres Lecture (1963)
Influenced
- Karl Marx · influence
- John Stuart Mill · influence
Influenced by
- David Hume · influence
Sources
- The Theory of Moral Sentiments (ed. D.D. Raphael and A.L. Macfie, Liberty Fund)
- The Wealth of Nations (ed. Edwin Cannan)
- Adam Smith: An Enlightened Life by Nicholas Phillipson
- The Cambridge Companion to Adam Smith (ed. Knud Haakonssen)
External Links
Translations
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