Adam Smith

Adam Smith was born in Kirkcaldy, a small fishing community near Edinburgh, Scotland. At 14, he went to the University of Glasgow, where he met the professor Francis Hutcheson, from whom he developed a lifelong passion for moral philosophy.

After further studies at Oxford, Smith returned to Glasgow in 1751, appointed as a professor of logic. A year later, he became chair of moral philosophy. In 1759, he published The Theory of Moral Sentiments.

In this work, Adam Smith explored a question that concerned many of the Scottish philosophers, including his former professor Hutcheson: if men were driven by selfish passions, why are they able to form (and act upon) moral judgements? Adam Smith believed, that every person had an "inner man", an "impartial spectator" that approved or condemned every human action whether performed by the self or others.

Smith outlined in The Theory of Moral Sentiments what he believed to be "human nature." Along with David Hume, who was a close friend, Smith believed that all people had an unchanging "nature," a core with which all human institutions and behavior can be derived. It was in this book that Adam Smith first proposed the "invisible hand" that guided people to advance the common good.

The Theory of Moral Sentiments paved the way for the work that he was most famous for: An Inquiry into the Nature and Causes of the Wealth of Nations ¹, which was published in 1776. By this time, Smith was in London. It was here that Smith was to form the framework for all theory on free market economics. Smith examined the consequences of what would later be called laissez faire capitalism, expounding then radical ideas such as wages based on free markets, rather than imposed by guilds.

The Wealth of Nations railed against what Smith called the mercantile system, which favored mononopolies. In his work, Smith again used the invisible hand metaphor. This time the invisible hand that made regulated people's self interest was not the "inner man," but competition. Competition, Smith believed, not only made the economy self regulating, but it was a mechanism that assured economic growth. The role of government, Smith argued, was to leave businesses to themselves, rather than encourage monopolies.

Smith died on July 17, 1790. After his death, it was discovered that he had made numerous secret donations to charity.