Adam Smith

By Max Patterson
 Background
• June 5, 1723 in Kirkcaldy, Fife, Scotland?
• Gypsies
• 1737- University of Glaskow
• 1740- Scholarship to Oxford North
• 1752- Professor of moral Sea
philosophy at University of
Glaskow

England
 Basic Beliefs
• Economic liberty= foundation of a natural
economic system
• Mercantilist gov’t in England should be
abolished-

Hindered the England should let

expansion of individuals pursue
wealth and their own economic
production interests
 Thoughts on Mercantilism
• No mercantilism
• Production and commerce, not gold and
silver
• Free exchange- trade without gov’t
interference
 Ideas on Social Order
• Work with each other
• No king or monarch needed
• It would happen best with the idea of free
exchange
 Inquiry into the Nature and Causes of
the Wealth of Nations(1776)
• First comprehensive system of political economy (how
countries are managed)
• Wants met through competition
• The state should provide basic amenities
• Contains two theories of the economic thinking of
capitalists:
 1. Laws of Supply and Demand
• Low supply+ high demand= high prices
• High supply+ low demand= low prices
• Seller will be obliged to sell an item
depending on the supply and demand
 2. Law of Competition
• Enables economic growth and success
• Risk of high prices
• Problem with low prices
• Competition assures business efficiency
and great production
 Four-stage Theory
• Stage of Movement- Human societies in
four categories
1. Hunting and Gathering- little or no settled life
2. Pastoral or herding- nomads- tend herds, little bit of settled
property
3. Agricultural- settled, property arrangements
4. Commercial- advanced cities, manufacturing, trade
• More and more civilized as chart goes on
• Enlightenment- carrying out civilized
mission to the rest of the world
 Legacy
• Founder of Laissez-faire (gov’t should play as
small a role as possible- also thought by people
like Thomas Jefferson)
• His four-stage theory allowed Europeans to look
at themselves and find out what stage they are in
• Mercantilism should be abolished
• Inquiry into the Nature and Causes of the Wealth
of Nations has been called one of the most
influential books ever written
• Died July 17, 1790 in Edinburgh, Scotland
 Bibliography
• Adam Smith." Encyclopædia Britannica. 2009. Encyclopædia Britannica
Online. 13 Nov. 2009
<http://www.britannica.com/EBchecked/topic/549630/Adam-Smith>.
• Kagan, Donald, Steven Ozment, and Frank M. Turner, eds. The Western
Heritage. 9th AP. Upper Saddle River, NJ: Pearson Education Inc., Print.
• Web. 13 Nov. 2009.
<http://news.bbc.co.uk/olmedia/1805000/images/_1807282_scot_kirkcaldy2
_150map.gif>.
• Web. 13 Nov. 2009.
<http://guynewey.files.wordpress.com/2009/02/adamsmith.jpg>.
• adamsmith.org. Adam Smith Institute, Web. 15 Nov. 2009.
<http://adamsmith.org/adam-smith/>.
• “The Philosophical Response to Industrialization”