CHRIST ACADEMY

INSTITUTE OF LAW

ADAM SMITH
(16th June 1723 - 17th July 1790)

PRESENTED BY –
PRATEEK AUSTIN, 1ST B.A. LL.B.
CONTENT
 About
 The Wealth Of Nations
 Concept Of GDP
 Comments
 Conclusion
 Bibliography
ABOUT
 Born in Kirkcaldy, Scotland in 1723.
 Attended the Burgh School of Kirkcaldy, and from 1729
to 1737, he learned Latin, mathematics, history, and
writing.
 He entered the University of Glasgow when he was 14
and studied moral philosophy. There, Smith developed
his passion for liberty, reason, and free speech. In 1740,
Smith was the graduate scholar presented to undertake
postgraduate studies at Balliol College, Oxford, under
the Snell Exhibition.
 Smith began delivering public lectures in 1748 in
Edinburgh, sponsored by the Philosophical Society of
Edinburgh.
 In 1750, Smith met the philosopher David Hume. In their
writings covering history, politics, philosophy, economics,
and religion, Smith and Hume shared closer intellectual
and personal bonds.
CONTINUED…
 In 1751, Smith earned a professorship at Glasgow University
teaching logic courses, and in 1752, he was elected a
member of the Philosophical Society of Edinburgh. And in
1753, he took over as the head of Moral Philosophy.
 After the publication of ‘The Theory of Moral Sentiments’ in
1759, Smith began to give more attention to jurisprudence
and economics in his lectures and less to his theories of
morals.
 Smith lectured that the cause of increase in national wealth
is labour, rather than the nation's quantity of gold or silver,
which is the basis for mercantilism, the economic theory
that dominated Western European economic policies at Mercantilism is a
the time. national economic
 In May 1773, Smith was elected fellow of the Royal Society policy that is designed
of London, and was elected a member of the Literary Club to maximize the exports
in 1775. The Wealth of Nations was published in 1776 and of a nation.
was an instant success, selling out its first edition in only six
months.
THE WEALTH OF NATIONS
 Published on 9th March, 1776 it influenced several authors
and economists, such as Karl Marx, as well as
governments and organisations, setting the terms for
economic debate and discussion for the coming years.
 The book was the product of seventeen years of notes
and earlier works, as well as an observation of
conversation among economists of the time concerning
economic and societal conditions during the beginning
of the Industrial Revolution, and it took Smith some ten
years to produce.
 There exists disagreement between classical and
neoclassical economists about the central message of
the book. Neoclassical economists emphasise Smith's
invisible hand, a concept mentioned in the middle of his
work – Book IV, Chapter II – and classical economists
believe that Smith stated his programme for promoting
the "wealth of nations" in the first sentences, which
attributes the growth of wealth and prosperity to the
division of labour.
CONTINUED…
 Smith explained that wealth comes mainly from the division
of labor, which is to say: people cooperating with each
other, in their own personal interest, in a way that
coordinates their specialized talents. In order to enable that
condition, we need security of ownership, a means of
saving, the presence of capital that allows the building of
complex production structures, and the freedom to
innovate.
 Laissez-faire philosophies, such as minimizing the role of
government intervention and taxation in the free markets, The invisible hand is a
and the idea that an "invisible hand" guides supply and term used by Adam
demand are among the key ideas Smith's writing is Smith to describe the
responsible for promoting. These ideas reflect the concept unintended social
that each person, by looking out for him or herself, benefits of an
inadvertently helps to create the best outcome for all.
individual's self-
 "The Wealth of Nations" is a massive work consisting of two interested actions.
volumes divided into five books. The ideas it promoted
generated international attention and helped drive the
move from land-based wealth to wealth created by
assembly-line production methods driven by the division of
labor.
CONCEPT OF GDP
 Ultimately through the ideas presented in "The Wealth of
Nations," Smith changed the import/export business,
created the concept of what is now known as gross
domestic product (GDP) and argued for free exchange.
 Before Smith’s book, countries were hesitant to trade
with other countries, unless it benefited them. However,
Smith argued that a free exchange should be created,
as both sides trading become better off. This led to the
increase in imports and exports and countries judging
their value accordingly.
 He argued that countries should be evaluated based on
their levels of production and commerce. This sentiment
created the basis for measuring nation’s prosperity
based on a metric called GDP.
COMMENTS
 David Graeber argues that the traditional explanation
for the origins of monetary economies from primitive
bartering systems, as laid out by Adam Smith, does not
find empirical support. He says that credit systems
developed as means of account long before the advent
of coinage and can still be seen operating in non-
monetary economies.
 Mark Blaug argued that it was Smith's achievement to
shift the burden of proof against those maintaining that
the pursuit of self-interest does not achieve social good.
But he notes Smith's relevant attention to definite
institutional arrangements and process as disciplining
self-interest to widen the scope of the market,
accumulate capital, and grow income.
CONCLUSION
The ideas that became associated with Smith became the
foundation of the classical school of economics and gave him
a place in history as the father of economics. Concepts Smith
pioneered, such as the invisible hand and the division of labor
serve are now quintessential economic theories.
BIBLIOGRAPHY
 www.hailhydra.com  www.cannabislife.com
 www.investopedia.com  www.hailhitler.com
 www.randomwebsite.com  www.jewsdeservedit.com
 www.theepochtimes.com  www.theindependent.com
 www.Wikipedia.org  www.youllneverknow.org
THANK YOU