Countries all around the world are heavily dependent on their economies. Concepts such as the division of labor, free trade, and wage differences are commonplace, essential to a country’s economic well-being. Adam Smith, author of the famous book The Wealth of Nations, developed and put into writing the concepts that would influence the world for centuries to come.

Born in 1723 at Kirkcaldy, a town in Scotland, Smith was raised by his widowed mother. His intelligence earned him a scholarship at age fifteen, and he attended the University of Glasgow. In 1740 he entered Balliol College at Oxford University, but left in 1746. He began to lecture extensively, expounding on topics such as ethics and rhetoric. His lectures were well received, and he earned much respect in the intellectual community. Meeting David Hume in 1750, the two men forged a friendship that would last until Hume’s death in 1776. He accepted the position of first chair of logic at Glasgow University in 1751, and a year later he transferred to the chair of moral philosophy. Publishing his Theory of Moral Sentiments in 1759 established his reputation as a persuasive debater and initiated his theories on morality and ethics, ideas that he would continue to develop as time went on.

In 1764, Smith was offered a lucrative job tutoring the third duke of Buccleuch, and he resigned his professorship at Glasgow to travel with his pupil. From 1764 to 1766, Smith toured France and Switzerland, an experience that would influence him greatly. During his travels he met many of Europe’s philosophers who would become famous in future years, including Voltaire, Rousseau, and Turgot. He also came into contact with the physiocratic school of thought, a sect of philosophers who developed economic theories and were also known as “the economists”. Smith would later derive many of his economic beliefs from the ideas of the physiocrats. Due to the lifelong pension granted to him for his service to the duke, Smith retired comfortably. Returning to Kirkcaldy to work on The Wealth of Nations, he remained in his hometown for several years.

The publishing of The Wealth of Nations in 1776 revolutionized economic thought for years after Smith’s death. Though not all of the ideas presented in the book were original, it gave a well rounded and complete treatise on economic theory. Many marketplace principles that are the foundation of economies today were expounded on by Smith. He convincingly argued the benefits of specialized labor, something that would lead to the assembly line and other ideas that revolutionized economies in the world and paved the way for the Industrial Revolution. The idea that wages depended on worker hazard and the desirability of a job explains why some jobs are higher paying than others. Capitalism was the idea the entire book centered on, because Smith’s theories all had one thing in common: they all depended on the human desire to improve one’s lot in life. In other words, human self-centeredness drove the economy. Even though this sounded rather pragmatic and amoral, Smith placed emphasis on ethics; he still held to principles he had lectured on earlier in his life, although they might have evolved to some extent. He did not promote reckless selfishness or disregard for other people. Smith argued that self-interest and sympathy for others were not necessarily contradictory; rather they were complimentary. This may seem rather confusing, but fortunately the Bible can tell us why we should strive to do our best in business. 1 Corinthians 10:31 says "Therefore, whether you eat or drink, or whatever you do, do all to the glory of God." This means that in business we should do our best for God, not to satisfy our desire for money or power. Karl Marx would later study The Wealth of Nations, and it greatly influenced him as he developed his theory of Communism.

The same year The Wealth of Nations was published, Smith’s close friend David Hume died. In 1778, Smith was appointed commissioner of customs in Edinburgh, where he resided until his death in 1790. It was discovered that he had given secretly to numerous charities. The Wealth of Nations was by far Smith’s most famous work. It represented the most complete exposition on economic theory yet published, and affected millions of people for centuries to come. Though the ideas are old, the fundamentals survive even today. Adam Smith left one of the most influential and important pieces of literature in world as his lasting legacy.

Quick Quiz:

1. Who did Adam Smith meet in 1750 and forge a strong friendship with?
a. Karl Marx
b. David Hume
c. Benjamin Franklin
d. John Doe

2. What was The Wealth of Nations?
a. Adam Smith’s autobiography
b. A list of the world’s most powerful corporations
c. A book on economic theory
d. The first book to promote communism

3. When was The Wealth of Nations published?
a. 1776
b. 1788
c. 1945
d. 2004

4. Where did Adam Smith die?
a. New York
b. Kirkcaldy
c. London
d. Edinburgh

Sources:
Bibliography:

"Smith, Adam (economist)," Microsoft® Encarta® Online Encyclopedia 2004
http://encarta.msn.com © 1997-2004 Microsoft Corporation. All Rights Reserved.

“Smith, Adam,” Columbia Encyclopedia, Sixth Edition, Copyright (c) 2004. http://www.encyclopedia.com/html/s/smith-a1d.asp

“Smith, Adam (biography of),” Library of Economics and Liberty. 15 April 2004.
http://www.econlib.org © 1999-2002.

“Physiocrats,” Columbia Encyclopedia, Sixth Edition, Copyright (c) 2004.
http://www.encyclopedia.com/html/p1/physiocr.asp

“Smith, Adam,” Wikipedia © 2004
http://en.wikipedia.org/wiki/Adam_Smith