HIST363: Global Perspectives on Industrialization

Adam Smith

Adam Smith, FRS (Fellowship of the Royal Society) (baptized June 5, 1723 – July 17, 1790) was a Scottish political economist, lecturer and essayist who is principally known for having authored An Inquiry into the Cause of the Wealth of Nations and The Theory of Moral Sentiments.

Smith is principally known for his contributions to political economy and moral philosophy; however, his writings span a broad spectrum of topics ranging from astronomy to the origin of language. Smith first achieved notoriety because of his Theory of Moral Sentiments where he emphasized the important role of sympathy in making moral decisions. In Moral Sentiments he described a moral compass within humankind that he referred to as the "impartial spectator". The "impartial spectator" led the individual to intuit right from wrong. Study of Smith's life reveals that he was an extremely sensitive man who possessed a strong sense of right and wrong that guided the way in which he conducted his life. Where Smith may have erred in Moral Sentiments was in assuming that all people shared the strong intuitive sense of right and wrong that he possessed. Smith's writing does not elaborate on how one cultivates such a sentiment although Smith did recognize the important role of formal education in shaping one's moral character.

Smith's reputation further skyrocketed with his authoring of An Inquiry in to the Cause of the Wealth of Nations. Wealth of Nations represents a highly critical commentary on mercantilism, the prevailing economic system of Smith's day. Mercantilism emphasized the maximizing of exports and the minimizing of imports. In Wealth of Nations, one senses Smith's passion for what is right and his concern that mercantilism benefits the wealthy and the politically powerful while it deprives the common people of the better quality and less expensive goods that would be available if protectionism ended and free trade prevailed. In Wealth of Nations Smith argues that everyone benefits from the removal of tariffs and other barriers to trade. Because of supply and demand, production will increase as demand increases. This may lead to new employment opportunities for the workforce and to collateral industries emerging in response to new demands. For example, an increase in France's wine production would also lead to an increased demand for bottles, for barrels, for cork, and an increase in shipping, thus leading to a variety of new employment opportunities. Adam Smith was convinced that the market would stimulate development, improve living conditions, reduce social strife, and create an atmosphere that was conducive to peace and human cooperation. In his view, a balance had to exist between self interest and sympathy, with sympathy being the guiding moral imperative. Competition would emerge and serve as a check to profiteering and unfair pricing.

Smith makes compelling arguments for the free market and his economic and moral writings remain relevant today. Wealth of Nations serves as one of the most elegant explanations for the rapid economic growth experienced by the United States and other industrial powers in the nineteenth and twentieth centuries. Because of his own life experience, Smith's frame of reference in his writings tended to be the individual vis-a-vis the State. Smith had little appreciation of the role that the family could play in social and corporate relations and, although he had great respect for China, he did not foresee that the ethics emanating from the Confucian concept of extended family would serve as the guiding moral compass for emerging Asian economies rather than the impartial spectator that he outlined in Moral Sentiments. It should be noted that Smith developed an increasingly critical view of the Christianity of his time, partly because of his personal experiences with Christianity and surely also due to the critical view of Christianity that prevailed in the intellectual circles that shaped the Scottish Enlightenment.

Source: New World Encyclopedia, https://www.newworldencyclopedia.org/entry/Adam_Smith
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