Economics and Its Great Man

1. Economics is a social science concerned with how mankind organizes

itself to accommodate scarce resources to their wants through the process of
production, substitution and exchange.
2. Bythe beginning of the eighteenth century economics had taken shape
as an academic discipline, largely as a branch of political economy. It should be
noted that the old name for economics was “political economy”. Adam Smith
was the founding father of modern economics as an academic discipline.
3. Adam Smith was born in 1723. For most of his life he was a professor of
philosophy in Glasgow, Scotland. His first and only economics book, The
Wealth of Nations, was not published until 1776, when he was 53.
4. Smith’s
purpose was to explain why some nations become wealthier
than others. He was fascinated by the rise of industrialism in the England and
Scotland of his times.
5. Over his lifetime Adam Smith’s economic investigations ranged from
the theory of trade to economic growth and an attempt to model the working
of the economy. He believed that a free market would maximise the welfare of
the population. It followed from his works that the role of government in the
economy should be minimal. The government should provide defence, justice
and public works. The only market intervention should be to prevent monopoly
and to promote competition.
6. Smith argued that competitive business was not just a possible way but
the best way to increase the wealth of a nation. He thought government re -
straints
on competition did more harm than good.
7. Divisionof labor was seen by him as the source of society’s capacity to
increase its productivity. According to Adam Smith technical progress and
free trade between nations were central to economic growth. If a country
wished
to improve its standard of living it had to export more than it imported.