Adam Smith

CONTENTS

INTRODUCTION

PART 1: THE LIFE OF ADAM SMITH

„П His life and influences

PART 2: ÐŽ§WEALTH OF NATIONSЎЁ

„П A brief summary of the book

„П Ideas presented in the book

CONCLUSION

Selim Eren Yener

20300817

THE HISTORY OF CIVILIZATION

ÐŽ§ADAM SMITH AND MERCHANTALISMЎЁ

NESLIHAN SENOCAK

INTRODUCTION:

Obviously, the term capitalism comes from the word capital. Capital is the money someone has. So capitalism has to do something with money. Simply we can define capitalism as making more money from the starting capital. The economicians claim that there are three distinctive features of this making more money process, which divides capitalism from other economic models. They are: ÐŽ§Private ownership of property, pursuit of personal profit, and free market ideaЎЁ1 All of these three ideas were developed for the first time by the Scotch Economican, Adam Smith, so he is considered as the founder of the capitalist economy although he has never mentioned the word capitalism in his books.2

In this essay, I will discuss Adam Smith in two parts; in the first part I will talk about SmithÐŽ¦s life and the purpose of this is that, some particular events played very important roles on Smith to write his famous works. In the second part I will focus on SmithÐŽ¦s famous book, ÐŽ§Wealth of NationsЎЁ and discuss the important terms that are given in this book.

1: John j. Macionis, Sociology, 9th edition. (New Jersey: Pearson Education Inc. 2003), 415.

2:Micheal Fray, Adam SmithÐŽ¦s Legacy. (London:Biddles Publications, 1993), 5

PART 1: THE LIFE OF ADAM SMITH

Adam Smith was born in 1723 in Kirkcaldy, a seaport near Edinburgh, where his father had been a customs officer. I am saying ÐŽ§had beenЎЁ because SmithÐŽ¦s father died before he was born. He had no father but they had plenty of money. His mother was Margeret Douglas who was a strict woman with firm religious values, and it is considered that she has a great effect on Adam Smith to encourage him to be a scholar. As I said, SmithÐŽ¦s mother wanted Smith to be a scholar, she was ready to spend all of her money for Smith to get a good education. So Smith had a good fortune in his early education, first he went to Kirkcaldy burgh school where he was thought English composition and Roman history. He then went to Glasgow University where he met the leading figures of that daysÐŽ¦ famous movement: enlightement. Being a student at Glasgow, also had a instructive effect on him. The place he was born, Kirkcaldy was a small town with a small economy where Glasgow was a big port city. What interested Smith was the growing pattern of cityÐŽ¦s economy. Probably, he was inspired from this when he introduced his trade based economic growth model.1

Smith continued his education at Oxford University. Although most of us think that Oxford is the best university in the world, Adam Smith did not think so. This reminds me of Albert Einstein who also rejected the regular education. In SmithÐŽ¦s case, we see that the teachers of Oxford University were not so willing to share their knowledge with others. This provoked Smith to educate himself, spending most of his time on reading.2 since I am talking

1:Ian Simpson Ross,The Life Of Adam Smith.(London:Oxford University Press,1995)1-25

2:Jack Russel Weintein, On Adam Smith. (Belmont:Thomson Learning inc., 2001) 43

about the influences in SmithÐŽ¦s life, his years in Oxford also helped him in developing his ideas about economy. There is no wonder that Oxford was inefficient and Smith gave the reason for this as lack of competition.1 This competition figure, again probably inspired Smith to focus on the importance of free trade.

Beginning his career as a teacher, he spent three years in the Scottish capital, Edinburgh. There he met David Hume who will later be a famous philosopher. They became life long friends. HumeÐŽ¦s influence on Smith was complex, because they disagreed more than they agreed. Hume was stressing the importance of symphaty while Smith found it useless. Again if we look at the influence this makes, we can relate it to the concept of utility in economy. Smith simply did not care about utility in his theories, but what he cared was the efficiency.2 So we can claim that, Smith was more materilaistic than Hume. But arenÐŽ¦t the economicians always so? In 1752 he became a professor of philosophy at the Glasgow University. In 1758, he was elected as the dean of Glasgow University, and in 1763 he went to France to join the enlightement movements. He returned back to England in 1764 and he started to work on his master work ÐŽ§Wealth of NationsЎЁ. He worked on the book in Kirkcaldy for 6 years and in London for 3 years. He died in 1790.3

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1: Ian Simpson Ross,The Life Of Adam Smith.(London:Oxford University Press,1995),12

2: Jack Russel Weintein, On Adam Smith. (Belmont:Thomson Learning inc., 2001)18-19

3:Temel Britannica, Vol. 15 (Istanbul: Ana Yayincilik A.S.1993), 293

PART 2: ÐŽ§THE WEALTH OF NATIONSЎЁ

ÐŽ§An inquiry into the Nature and Causes of the Wealth of Nations was published in 1776 and as I said before it took him 12 years to write. But the book was succesful. Ian Simpson Ross, who is a Adam Smith bibliographer, explains this as ÐŽ§doing the right thing at the right timeЎЁ1 as, at this time both American and British