On training for the past two weeks so I have not had much time to read up and react to stuff these days but normal service will resume soon. This blog post kick-starts a series on famous economists starting with the progenitor of economics – Adam Smith
Evidence exists pointing to a common origin in the mitochondrial DNA of economics. Although prior to this ancestor and as with the evolution of Man according to Charles Darwin, certain species or writings of economic nature in a hitherto vacuous form existed. However, from the very moment the bumbling author who lived with his mother all his life penned the words in the next paragraph, economics had its ‘one step for a man, one giant leap for mankind’ moment.
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest….By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it”.
Though still far from lucid, this ‘Adamic’ individual was alluding to the equilibrium concept that is at the core of modern economics. He was indeed an Adam His name… Adam Smith. I first came across the name way back in secondary school days but it was just a fact you needed to know to pass the exams. It was during the second semester of freshman year economics, that I became fascinated by the name when I was asked to make an impromptu talk on the subject
His exact date of birth is not known but he was born in sometime in 1723, in Kircaldy Scotland but was baptized on the 16th of June to Adam Smith and Margaret Smith (nee Douglas)
Smith sadly didn’t get to see his dad much as he died two months after his christening. He attended some pretty elite schools ending up at the University of Glasgow before going on to Balliol College in Oxford. He didn’t like Oxford however, as he found it a bit conservative, dogmatic …stifling was the word.
In 1773, Smith began writing his Adamic legacy, “An Inquiry into the Nature and Causes of the Wealth of Nations” published in 1776. The central theme in this book was a concept even He was unable to conceptualize or even prove. The existence of equilibrium in every market was mathematically and economically improvable until 1940. Although his words seemed unclear, the meaning and concepts he prodded are wide-ranging; from the existence of perfect markets, to the division of labour and the factors of production and their returns which determined the prices of goods and services. Smith provided a logically coherent framework for analyzing how inherent value was to be computed which was utilized by Karl Marx in arriving at the value of labour. Smith was also ahead of his time in international trade as having seen the devastation wrought by the Mercantilist doctrine in France, he proposed that countries specialize in those areas they had an advantage in as opposed to the accumulation of gold and silver.
Smith however suffered from a shaking disease and was prone to unusual fits bordering on the paranoid. He was well known to sleep walk and mix the components of his tea. He’s also known to have burned some of his books and he lived with his mother not so far away while in Scotland. He never married but was prominent friends with many of the philosophers of the era – David Hume, Francis Hutcheson, Francois Quesnay, etc
Although on his death bed, Smith expressed disappointment that he had not achieved more, history however does not remember the bumbling laggard looking occasionally shaking man. Posterity remembers an individual who not only extended knowledge beyond its cradle frontier but created a powerful perspective for analyzing the behaviour of individuals and societies in a way that transformed nearly every facet of economic literature since 1776. His magnus opus became the platform for nearly every strand of analysis; Classical, Marxist, Keynesian, Libertarian etc Smith died on the 17th of July 1790 at the age of 67 in the northern wing of Panmure House in Edinburgh on 17 July 1790.