Adam Smith

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Adam Smith
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Scottish philosopher and economist considered the father of classical economics. His work "Inquiry into the Nature and Causes of the Wealth of Nations", published in 1776, was the first systematic work in the field of economics. Theories of Smith are still presented at universities and are subject of hot discussion at various conferences. His achievements in the fields of economics, as jokingly say historians, correspond to his name: Smith (name derived from word: blacksmith) "forged" the science of management.


Adam Smith born on June 5, 1723 in the small coastal town Kirkcaldy County Fife in Scotland. From the age of seventeen he studied Latin, Greek, mathematics and moral philosophy at the University of Glasgow. Following graduation from the university Smith began further studies in Balliol College, Oxford. In 1794, he finished it with the title of Bachelor of Humanities, and returned to Portsmouth, where, thanks to the intrigues and help of his mother earned a job at the University of Edinburgh.

He taught English literature, rhetoric, philosophy, law and political economy. As the Professor he enjoyed great appreciation of students, and was highly respected by his peers. In autumn 1751 at age 28 he was appointed professor of logic at the University of Glasgow. A year later he was appointed professor of moral philosophy, taking over the chair of his former teacher Francis Hutcheson. At the same time struck up a cordial friendship with the Scottish philosopher David Hume. In 1773 the professor was a member of the Royal Society, Which was the highest ennoblement for scientist. Already at the age of 36 Smith achieved great fame.

In 1759 he published a book, which immediately caused a sensation. "Theory of Moral Sentiments" introduced Smith to the forefront of English philosophers. Then, for ten years he worked for the work with a total volume of more than a thousand-page titled "Inquiry into the Nature and Causes of the Wealth of Nations". The book was published 9 March 1776 and was a huge success. The first edition was sold out within six months.

Basic views

  • Efficient functioning of society is based on a market mechanism - the government should not intervene in economic processes, because the "invisible hand" of the market makes optimal allocation of resources;
  • The market is self-regulating mechanism of price, quantity of goods and services and income, mechanism of joining society, and also its own guardian,
  • The Greatest danger for market system lies in the monopolistic agreements;,
  • The driving force behind the actions of individuals is self-interest, competition is the regulator of conflicting interests - through the interaction of these selfish motives they are transformed into harmony the interests of the whole society,
  • The source of all wealth is human labour,
  • Not every labour creates wealth - it only arises as a result of productive labour, which is the one that creates the material means to meet the needs of people in society,
  • A means of increasing labour productivity is the division of labour - everyone should perform this task, which is then mastered (pin-factory example),
  • Smith was a supporter of liquidation of customs and free trade between countries.

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