Adam Smith

ADAM SMITH
Freddy Guzman
William Paterson University
10/13/13
ADAM SMITH
Adam Smith is one of the world`s most influential, best-known economist and philosopher. This paper will demonstrate that his contributions in teaching and his theories on wealth creation of nations, free market economics, and management make him the best if not one of the best economists of all time.
He was born in Kirkcaldy Scotland in the year 1723, although the exact date is not known. He joined Burgh school where he studied mathematics, Latin, history, and writing. When he was fourteen, Smith went to the University of Glasgow on a scholarship. In 1740, he attended Balliol College at Oxford, and graduated with extensive knowledge of European literature. Adam smith died on 17 July 1790 after a painful illness and he was buried in the Canongate Kirk yard. Adam Smith was a pioneer of political economy, and a moral philosopher. His most famous works for which he was known for were Theory of Moral Sentiments and the Wealth of Nations. Wealth of Nations was considered as the bible of capitalism. Wealth of Nations entails early systems of political economy. He is thus considered as the father of modern economics (Buchan, 2006).
Adam Smith started giving a series of public lectures at the University of Edinburgh in 1748. It is during these lectures where he met, and collaborated with David Hume in the Scottish Enlightenment. Smith was later appointed to the Glasgow University faculty. It was at the University where he obtained his professorship, wrote, and published The Theory of Moral Sentiments.
In 1763 Smith left the university to accompany the young Duke of Buccheuch in a grand tour around Europe. This trip enabled him to meet other intellectuals and exchange ideas. These intellectuals included great French Enlightenment thinkers like Voltaire d`Holbach Quesnay, and Turgot, who were a part of the physiocrats school of thoughts.
According to Smith, The Division of Labor is the specialization of individuals in different functions, which combine to achieve a common goal. The main contribution of the Division of Labor theory was to break down large jobs into many tiny functions, which enabled workers to be experts in their narrow fields (Otteson, 2011). Smith argued that The Division of Labor increased productivity. He also advocated for matching of skills with work area. Those who were good at a certain area were assigned to that function. He also emphasized on matching technology to improve productivity. The downside of The Division of Labor, and specialization was the mutilation of workers skills, and lack of innovation and growth (Alvey, 2003).
The Theory of Moral Sentiments was Smith`s first work, in 1759. He tried to explain human`s moral inclination despite his self-interest personality. Smith explained why humans developed social relations. He concluded that humans showed sympathy to others or in presence of others, and developed a conscience. The moral thinking was an attempt to please an external or impartial spectator and in return gain sympathy. This theory argues that human moral actions are guided by social physiology more or better than is guided by reason.
The basic human prudence rules and justice enable a society to advance. Prudence is the ability to govern oneself by use of reason. Prudence moderates people`s actions and excesses while justice prevents our destructive actions toward others (McKenna, 2006).
According to Smith, humans tend to care about other people`s welfare not for any self-interest or self-satisfaction but the pleasure one gets in seeing other people happy. This is called sympathy. The level of sympathy extended to others depends on whether we see firsthand the misfortune which befalls a fellow human; how vividly we recollect the misfortune and how vividly the account of another person. This limits the level of sympathy shown towards another person. Smith says, a person feels happy when other people around have the same emotions, and displeasure when people feel contrary emotions. Mutual sympathy has more pleasure when it is a negative emotion rather than a positive one. People communicate more anxiously when in a negative emotion (Smith, 1966).
The Wealth of Nations was Adam Smith`s second work. He titled the work ‘an inquiry to the nature and causes of Wealth of Nations`. It is the most important work of Adam Smith, according to other philosophers and economists. It offers an explanation on what builds a nation`s wealth, and is today viewed as the foundation of classical economics. It reflects economics at the beginning of industrial revolution (Weinstein, 2008). Topics covered in this work include topics as The Division of Labor, free markets, and productivity.