Smith, Adam

Smith, Adam (1723–90). Famous son of Kirkcaldy (Fife) and educated at Glasgow University, Smith graduated at the age of 14. After six years at Balliol College, Oxford, he became professor of logic, then moral philosophy, at Glasgow University. In 1764–6 he was tutor to the duke of Buccleuch, followed by advisory work for Charles Townshend; in 1778 he was appointed commissioner of customs for Scotland in which role he remained until his death. Although his reputation was founded on The Theory of Moral Sentiments (1759), his magnum opus was An Inquiry into the Nature and Causes of the Wealth of Nations (1776). This book was the foundation of the classical school in Britain. It analysed the operation of free market economies where the key players were motivated by self-interest and profit maximization. Out of it economists saw an ‘invisible hand’ at work and the division of labour, which was eventually responsible for the wealth of nations. Most interpretations have labelled Adam Smith a parent of laissez-faire economics, but he was much more interventionist than this. Nevertheless, he was an advocate of an economy based primarily upon free trade, private enterprise, and ‘perfect’ competition wherever possible.

John R. Presley