Adam smith economic thought

In his first book, "The Theory of Moral Sentiments," Smith proposed the idea of an invisible hand—the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest. Smith is also known for his theory of compensating wage differentials, meaning that dangerous or undesirable jobs tend to pay higher wages to attract workers to these positions.

Adam smith economic thought

Life and Influences a. Early Life and Influences Adam Smith was born in June,in Kirkcaldy, a port town on the eastern shore of Scotland; the exact date is unknown. Young Adam was educated in a local parish district school. Inat the age of thirteen he was sent to Glasgow College after which he attended Baliol College at Oxford University.

His positive experiences at school in Kirkcaldy and at Glasgow, combined with his negative reaction to the professors at Oxford, would remain a strong influence on his philosophy. In particular, Smith held his teacher Francis Hutcheson in high esteem.

One of the early leaders of the philosophical movement now called the Scottish Enlightenment, Hutcheson was a proponent of moral sense theory, the position that human beings make moral judgments using their sentiments rather than their "rational" capacities.

According to Hutcheson, a sense of unity among human beings allows for the possibility of other-oriented actions even though individuals are often motivated by self-interest.

The moral Adam smith economic thought, which is a form of benevolence, elicits a feeling of approval in those witnessing moral acts. Hutcheson opposed ethical egoism, the notion that individuals ought to be motivated by their own interests ultimately, even when they cooperate with others on a common project.

They met regularly in social clubs often at pubs to discuss politics and philosophy. Shortly after graduating from Oxford, Smith presented public lectures on moral philosophy in Edinburgh, and then, with the assistance of the literati, he secured his first position as the Chair of Logic at Glasgow University.

His closest friendship in the group—and probably his most important non-familial relationship throughout his life—was with David Humean older philosopher whose work Smith was chastised for reading while at Oxford.

Hume was believed to be an atheist, and his work brought into question some of the core beliefs in moral philosophy.

Adam smith economic thought

He famously asserted that reason is and ought to be slave to the passions, which means that even if the intellect can inform individuals as to what is morally correct, agents will only act if their sentiments incline them to do so.

Hume analogously argues that while you might be able to teach people what it means to be moral, only their passions, not their rational capacities, can actually inspire them to be ethical.

For Hume, this epistemology would bring into question the connection between cause and effect—our senses, he argued, could only tell us that certain events followed one another in time, but not that they were causally related.

For Smith, this meant a whole host of different problems. At the core of the Scottish project is the attempt to articulate the laws governing human behavior. Smith and his contemporary Adam Ferguson are sometimes credited with being the founders of sociology because they, along with the other literati, believed that human activities were governed by discoverable principles in the same way that Newton argued that motion was explainable through principles.

Smith describes it as "the discovery of an immense chain of the most important and sublime truths, all closely connected together, by one capital fact, of the reality of which we have daily experience" EPS, Astronomy IV.

Adam smith economic thought

While Smith held the chair of logic at Glasgow University, he lectured more on rhetoric than on traditional Aristotelian forms of reasoning. These notes, in combination with his essay on astronomy, offer an account of explanation that Smith himself regarded as essentially Newtonian.

According to Smith, a theory must first be believable; it must soothe anxiety by avoiding any gaps in its account. Again, relying upon a basically Aristotelian model, Smith tells us that the desire to learn, and the theories that result, stems from a series of emotions: This leads to understanding and admiration of the acts and principles of nature.

By showing that the principles governing the heavens also govern the Earth, Newton set a new standard for explanation. A theory must direct the mind with its narrative in a way that both corresponds with experience and offers theoretical accounts that enhance understanding and allow for prediction.

The account must fit together systematically without holes or missing information; this last element—avoiding any gaps in the theory—is, perhaps, the most central element for Smith, and this model of philosophical explanation unifies both his moral theories and his political economy.

As a young philosopher, Smith experimented with different topics, and there is a collection of writing fragments to compliment his lecture notes and early essays.

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These include brief explorations of "Ancient Logics," metaphysics, the senses, physics, aesthetics, the work of Jean-Jacque Rousseau, and other assorted topics.

Smith was a meticulous writer and, in his own words, "a slow a very slow workman, who do and undo everything I write at least half a dozen of times before I can be tolerably pleased with it" Corr. As a result, he ordered sixteen volumes of unpublished writing burnt upon his death because, presumably, he did not feel they were adequate for public consumption.

After holding the chair of logic at Glasgow for only one year —Smith was appointed to the Chair of Moral Philosophy, the position originally held by Hutcheson.

He wrote The Theory of Moral Sentiments, first published inwhile holding this position and, presumably, while testing out many of his discussions in the classroom. While he spoke very warmly of this period of his life, and while he took a deep interest in teaching and mentoring young minds, Smith resigned in to tutor the Duke of Buccleuch and accompany him on his travels.

It was not uncommon for professional teachers to accept positions as private tutors. The salary and pensions were often lucrative, and it allowed more flexibility than a busy lecturing schedule might afford.

He was asking the deep questions of the time; his answers would change the world. It was first published in and was praised both by his friends and the general public. In a letter written much later, he referred to it as the "very violent attack I had made upon the whole commercial system of Great Britain" Corr.

Smith indicated that he thought The Theory of Moral Sentiments was a better book, and his on-going attention to its details and adjustments to its theory bear out, at least, that he was more committed to refining it.

Eventually, Smith moved to Edinburgh with his mother and was appointed commissioner of customs in ; he did not publish anything substantive for the remainder of his life. Adam Smith died on July 17, After his death, The Wealth of Nations continued to grow in stature and The Theory of Moral Sentiments began to fade into the background.Adam Smith's classic "Wealth of Nations" may have had the largest global impact on economic thought.

Adam Smith Theory Of Value, Value Theory Definition Certain questions regarding value, or price, that should be kept separate were sometimes confused by . ADAM SMITH is known as the father of economics.

Most people think of him as the archetypal free-marketeer. But Smith is often misquoted. This post will give a few examples of how people have. Adam Smith proposes natural law in economic affairs. He advocated the philosophy of free and independent action. If every individual member of society is left to peruse his economic activity, he will maximize the output to the best of his ability.

READ LIKE A BOSS What Adam Smith Knew Moral Lessons on Capitalism from Its Greatest Champions and Fiercest Opponents James R. Otteson (ed.) Edited by the Executive Director of the BB&T Center for the Study of Capitalism at Wake Forest, the official reader of the Adam Smith Society provides perspectives on free market thought .

Adam Smith was an 18th-century philosopher renowned as the father of modern economics, and a major proponent of laissez-faire economic policies. In his first book, "The Theory of Moral Sentiments.

Adam Smith and "The Wealth Of Nations" | Investopedia