Adam Smith

Adam Smith
Born	Template:Baptised 16 June 1723 (O.S. 5 June 1723)
Birthplace	Kirkcaldy, Fife, Scotland
Died	17 July 1790 (aged 67) Edinburgh, Scotland
Nationality	Scottish
Occupation	Philosopher, economist, author
Known for	The Wealth of Nations, The Theory of Moral Sentiments, founding principles of classical economics
Education	University of Glasgow, University of Oxford (Balliol College)
Awards	Lord Rector of the University of Glasgow (1787)

Adam Smith (baptised 16 June 1723 – 17 July 1790) was a Scottish economist and philosopher whose writings formed much of the intellectual foundation of classical economics and whose influence on modern economic thought has been profound and enduring. Born in the small coastal town of Kirkcaldy in Fife, Scotland, Smith became one of the central figures of the Scottish Enlightenment, forging close intellectual relationships with David Hume and other leading thinkers of the era. He is best known for two major works: The Theory of Moral Sentiments (1759), a treatise on moral philosophy exploring the basis of human ethical judgement, and An Inquiry into the Nature and Causes of the Wealth of Nations (1776), commonly referred to as The Wealth of Nations, which is regarded as a foundational text of modern economics. In the latter work, Smith articulated concepts such as the division of labour, the role of self-interest in promoting economic prosperity, and the theory of absolute advantage, challenging the prevailing mercantilist orthodoxy of his time. He refused to explain the distribution of wealth and power through appeals to divine will, instead grounding his analysis in natural, political, social, economic, legal, environmental, and technological factors. Often described as the "father of economics" or the "father of capitalism," Smith's ideas continue to inform debates about free markets, trade policy, and the role of government in economic life.

Early Life

Adam Smith was baptised on 16 June 1723 in Kirkcaldy, a seaport town in Fife, on the east coast of Scotland. The exact date of his birth is not recorded, but he was baptised on that date, and historical convention has treated it as his approximate date of birth. His father, also named Adam Smith, served as a lawyer and comptroller of customs in Kirkcaldy but died approximately six months before his son's birth. Smith was raised by his mother, Margaret Douglas, who is reported to have been a significant influence throughout his life.

Kirkcaldy, though a modest town, was a centre of trade and commerce during the early eighteenth century, and Smith's upbringing there exposed him to the practical workings of mercantile activity. His father's involvement in customs administration also connected the family to matters of trade regulation and government policy — subjects that would later become central preoccupations of Smith's intellectual career.

Little is documented about Smith's childhood beyond a few anecdotes. One widely repeated story, though its historicity is uncertain, recounts that Smith was briefly abducted by a group of travellers as a young child before being rescued. Smith attended the Burgh School of Kirkcaldy, which was considered one of the better secondary schools in Scotland at the time, and he showed early aptitude for learning, particularly in classical languages and mathematics. His education at the burgh school prepared him for entry into the University of Glasgow, where he would begin his formal study of philosophy at the age of fourteen — an age typical for university matriculation in eighteenth-century Scotland.

Education

Smith entered the University of Glasgow in 1737 at the age of fourteen. There, he studied moral philosophy under Francis Hutcheson, one of the most prominent philosophers in Scotland at the time. Hutcheson's lectures on ethics, natural jurisprudence, and political economy had a formative influence on Smith's thinking, particularly with regard to the relationship between human moral sentiments and economic behaviour.

In 1740, Smith was awarded a Snell Exhibition, one of a number of scholarships established by John Snell to fund Scottish students attending the University of Oxford. He enrolled at Balliol College, Oxford, where he remained for approximately six years. Smith's experience at Oxford was, by most accounts, disappointing. He found the quality of instruction to be considerably inferior to what he had encountered at Glasgow, and he spent much of his time in self-directed study, reading widely in classical and contemporary philosophy, literature, and political thought. In The Wealth of Nations, Smith would later criticise the English universities for their complacency, noting that their endowed professors had little incentive to teach effectively. Despite his dissatisfaction with the institution, the period at Oxford afforded Smith extended time for reading and intellectual development. He left Oxford around 1746 and returned to Scotland without having taken a formal degree from the university.

Career

Early Academic Career and Edinburgh Lectures

After returning to Scotland, Smith initially lacked a clear professional appointment. Beginning around 1748, he delivered a series of public lectures on rhetoric and belles-lettres at the University of Edinburgh, under the patronage of Henry Home, Lord Kames. These lectures proved successful and drew considerable attention, enhancing Smith's reputation as a thinker and speaker. The Edinburgh lectures covered a wide range of subjects, including literary criticism, language, and jurisprudence, and they helped establish Smith as a figure of intellectual consequence within Scottish academic circles.

The Edinburgh period was also important for Smith's personal intellectual development. It was during this time that he formed a close and lasting friendship with David Hume, the philosopher and historian who was among the most important figures of the Scottish Enlightenment. Smith and Hume shared wide-ranging intellectual interests, and their correspondence and collaboration over the subsequent decades influenced both men's work. Hume's empiricism and scepticism about conventional moral reasoning found echoes in Smith's own approach to moral philosophy and political economy.

Professorship at Glasgow

In 1751, Smith was appointed to the Chair of Logic at the University of Glasgow, and in 1752 he was transferred to the Chair of Moral Philosophy, a more prestigious position that had previously been held by his mentor Francis Hutcheson. The chair of moral philosophy at Glasgow encompassed a broad curriculum, including ethics, jurisprudence, political economy, and rhetoric. Smith's lectures during this period covered what he referred to as "police, revenue, and arms" — a framework that laid the groundwork for his later economic writings.

Smith's teaching at Glasgow was reputed to be engaging and substantive. He lectured on topics including natural theology, ethics, jurisprudence, and the economic principles governing trade and the production of wealth. The breadth of his teaching reflected the intellectual culture of the Scottish Enlightenment, which favoured the integration of philosophy, science, and practical knowledge.

It was during his tenure at Glasgow that Smith wrote and published his first major work, The Theory of Moral Sentiments, in 1759. The book examined the foundations of human moral judgement, arguing that moral sentiments arise from a natural capacity for sympathy — the ability to imagine and share in the feelings of others. Smith posited that individuals possess an "impartial spectator" within themselves, a kind of internal arbiter that guides moral evaluation. The work was well received and established Smith's reputation throughout Europe as a leading moral philosopher. It went through several revised editions during Smith's lifetime, with significant revisions appearing in the sixth edition of 1790, published shortly before his death.

Tutoring and European Travel

In 1764, Smith resigned his professorship at Glasgow to accept a position as tutor to Henry Scott, 3rd Duke of Buccleuch, a young nobleman. The position was lucrative, providing Smith with a substantial pension that would support him financially for the rest of his life. The tutoring role required Smith to accompany the young duke on a Grand Tour of continental Europe, a customary practice for the education of young British aristocrats.

Smith and his charge spent approximately two and a half years travelling through France and Switzerland. During this time, Smith met and engaged with several of the leading intellectual figures of the European Enlightenment. In France, he encountered members of the Physiocratic school of economics, including François Quesnay and Anne-Robert-Jacques Turgot, whose ideas about natural economic order and the importance of agriculture influenced Smith's own developing economic thought. He also met Voltaire in Geneva. The exposure to French economic thinking, particularly the Physiocratic emphasis on free trade and the critique of mercantilist regulation, reinforced and refined Smith's own emerging views on political economy.

The European tour ended abruptly in 1766 following the death of the Duke of Buccleuch's younger brother. Smith returned to Kirkcaldy, where he spent the next decade working on his major economic treatise.

The Wealth of Nations

Smith spent approximately ten years composing An Inquiry into the Nature and Causes of the Wealth of Nations, working primarily from his home in Kirkcaldy. The book was published on 9 March 1776 and is regarded as his magnum opus. It appeared at a pivotal historical moment — the same year as the American Declaration of Independence — and addressed fundamental questions about the sources of national prosperity, the nature of trade, and the proper role of government in economic affairs.

The Wealth of Nations is structured in five books, covering topics including the division of labour, the nature and accumulation of capital, the history of economic policy in Europe, systems of political economy, and the revenue of the sovereign. Among its most influential contributions is the concept of the division of labour, which Smith illustrated with his famous example of a pin factory. He demonstrated how breaking the production process into specialised tasks could dramatically increase productivity, a principle that would become foundational to industrial economics.

Smith argued that when individuals pursue their own economic self-interest within a framework of competitive markets, the collective result tends toward general economic prosperity — an idea often associated with the metaphor of the "invisible hand," though Smith used this phrase only sparingly in his writings. He contended that free trade among nations, based on the principle of absolute advantage, would be mutually beneficial, in contrast to the mercantilist policies that sought to protect domestic industries through tariffs and trade restrictions.

The work mounted a sustained critique of mercantilism, the dominant economic doctrine of the time, which held that national wealth was best promoted by accumulating gold and silver reserves through trade surpluses and by restricting imports. Smith argued instead that the true wealth of a nation lay in the productive capacity of its people and that government interference in markets often produced inefficiency and reduced overall prosperity. He did not, however, advocate for an entirely unregulated economy; he recognised roles for government in providing public goods such as defence, justice, and certain infrastructure projects that private enterprise would not undertake.

The Wealth of Nations was a precursor to the modern academic discipline of economics. It received significant attention upon publication and was influential among policymakers, including figures involved in debates over British trade policy. The work was controversial in its day; Smith's general approach and writing style were sometimes satirised by contemporary writers, including Horace Walpole. Nevertheless, the book's influence grew steadily over subsequent decades and centuries.

Later Career and Commissioner of Customs

In 1778, Smith was appointed Commissioner of Customs for Scotland, a government post based in Edinburgh. The appointment was somewhat ironic given Smith's critiques of trade regulation, but he carried out the duties conscientiously. He moved to Edinburgh, where he lived with his mother and a cousin, Janet Douglas, in a house on Panmure Close (later moving to Canongate).

During the Edinburgh period, Smith continued to revise his published works. He made substantial revisions to The Theory of Moral Sentiments, and he had plans for additional major works, including a comprehensive treatise on jurisprudence and a history of the liberal arts and sciences. However, these projected works were never completed. Shortly before his death, Smith instructed his executors to destroy the bulk of his unpublished manuscripts, and most were burned, though some survived and were later published posthumously.

Smith also served as Lord Rector of the University of Glasgow in 1787, an honorary position reflecting his distinguished association with the institution.

Personal Life

Adam Smith never married and had no children. He lived for much of his life with his mother, Margaret Douglas, to whom he was devoted and who survived until 1784. After his appointment as Commissioner of Customs, he resided in Edinburgh with his mother and his cousin Janet Douglas, who served as his housekeeper.

Smith was known among his contemporaries for his absent-mindedness and his habit of talking to himself while walking. He maintained a wide circle of intellectual friendships, most notably with David Hume, whose death in 1776 Smith chronicled in a public letter that generated some controversy due to its sympathetic portrayal of the openly irreligious Hume's composure in the face of death.

Smith was reputed to be generous with his income, quietly supporting various charitable causes, a fact that only became widely known after his death. He was a private individual who left relatively few personal papers, having arranged for the destruction of most of his unpublished manuscripts.

Adam Smith died on 17 July 1790 in Edinburgh and was buried in Canongate Kirkyard.

Recognition

Smith's contributions have been recognised in numerous ways over the centuries since his death. His image has appeared on Bank of England banknotes, specifically the £20 note introduced in 2007, making him the first Scotsman to appear on an English banknote. A large statue of Smith, erected in 2008, stands on the Royal Mile in Edinburgh, near the site of his former residence.

The Adam Smith Institute, a free-market think tank founded in London in 1977, is named in his honour, and the Adam Smith Prize is awarded by the University of Cambridge for academic distinction in economics. Glasgow's University of Glasgow houses the Adam Smith Business School, and the city of Kirkcaldy has commemorated its most famous son in various ways, including the preservation of sites associated with his life.

Smith's works remain in print and are widely available. Public domain editions of The Wealth of Nations and The Theory of Moral Sentiments are accessible through repositories such as Project Gutenberg. Audio recordings of his works are available through LibriVox.

His intellectual legacy continues to be debated and reassessed. A 2025 essay in The Economist argued that Smith's ideas are frequently misinterpreted and that his influence on later economic thought is often overstated, noting that, like Darwin or Newton in their respective fields, Smith's ideas have become so embedded in common understanding that their original complexity and nuance are sometimes lost.

Legacy

Adam Smith's intellectual legacy rests principally on his two major works, which together established a framework for understanding both the moral and economic dimensions of human social life. The Theory of Moral Sentiments offered an account of ethical behaviour grounded in human psychology rather than religious doctrine, anticipating developments in moral philosophy and social science that would unfold over subsequent centuries. The Wealth of Nations provided a systematic analysis of economic production, exchange, and policy that became the starting point for the classical school of economics and influenced subsequent thinkers including David Ricardo, John Stuart Mill, and Karl Marx.

Smith's articulation of the benefits of free trade, the division of labour, and competitive markets became central tenets of classical liberalism and informed economic policy debates from the late eighteenth century onward. His critique of mercantilism contributed to the gradual liberalisation of trade policy in Great Britain and elsewhere during the nineteenth century. The concept of the "invisible hand," though employed only briefly in Smith's own writings, became one of the most cited metaphors in the history of economics.

However, Smith's legacy is not reducible to a simple endorsement of unregulated markets. He recognised the potential for market failures, the importance of public goods, and the need for certain forms of government intervention. Scholars have noted that selective readings of The Wealth of Nations have sometimes produced caricatures of Smith's positions that do not reflect the full complexity of his thought. An opinion piece in The Wall Street Journal in 2026 invoked Smith's arguments about free traders acting out of self-interest to increase each other's wealth and standard of living, illustrating the continuing relevance of his ideas to contemporary policy debates.

Smith's position as a major figure in the history of ideas has been sustained by ongoing scholarly attention. His works have been the subject of extensive academic commentary, and debates about his intended meaning, his relationship to his intellectual predecessors and successors, and the applicability of his ideas to modern economies continue to generate significant scholarship.

Behind only Karl Marx, Smith remains the best-known economist in history, and his works continue to be read, taught, and debated across the world.