Adam Smith and Economic Theory

The Father of Economics: Adam Smith and Economic Theory

TABLE OF CONTENTS

1. ADAM SMITH 3

1.1 Who Was Adam Smith? 3

1.2 Early Years, Education and Teaching 3

1.3 Influences 4

2. PUBLISHED THEORIES 5

2.1 The Theory of Moral Sentiments 5

2.2 The Wealth of Nations 7

3. IMPACT UPON ECONOMIC THEORY 9

3.1 Free Market and Anti-Mercantilism 9

3.2 Laissez-Faire Economics 10

3.3 Criticisms 10

4. Conclusion 11

Bibliography 12

1. ADAM SMITH

1.1 Who was Adam Smith?

Notably known as the ‘Father of Economics’, Scottish economist and moral philosopher Adam Smith introduced a modern concept of economic theory that created the foundation for social and economic evolution. During a time of excessive government intervention in the 1700’s, Smith had a newfound perspective of reason to examine economic theories, theories that challenged the form of government and economics at the time. Such theories included capitalism, the free market and laissez-faire economics. The Theory of Moral Sentiments and The Wealth of Nations were Smith’s two great published philosophies and also the first modern concepts of economic theory. These theories were some of the major contributions of the Scottish Enlightenment which molded the movements of humanistic reasoning instead of following the judgment of authority, followed by capitalism and the free market. Before Adam Smith became the ‘father of economics’, he was an educator, anxious to share his moral theories with his students.

1.2 Early Years, Education and Teaching

Adam Smith was exposed to the political and economic world at a young age. His father was both a lawyer and a civil servant, which also suggested he was able to afford a decent education for Smith. When first arriving at the University of Glasgow during his early adolescent years, he had a deep admiration for moral philosophy. Moral philosophy, or ethics, describes the values of human behavior...