A short life of the author
Adam Smith wrote the most influential book in the history of economic thought — The Wealth of Nations (1776), published in the same year as the American Declaration of Independence and the first volume of Gibbon’s Decline and Fall, a coincidence that has often been noted and that marks 1776 as one of the pivotal years in the history of Western civilisation. The book did not invent economics — the physiocrats in France, the mercantilists in England, and various other thinkers had written about trade, money, and national wealth before Smith — but it synthesised the scattered insights of its predecessors into a coherent system, wrote that system in prose of extraordinary clarity and power, and established the framework within which economic debate has been conducted ever since. Every subsequent school of economic thought — from Ricardo and Mill through Marx and Keynes to Hayek and Friedman — has defined itself in relation to Smith.
Kirkcaldy and Glasgow
Adam Smith was born in 1723 in Kirkcaldy, Fife, a small Scottish port town across the Firth of Forth from Edinburgh. His father, a customs official, died before Adam was born. He was raised by his mother, Margaret Douglas, to whom he was devoted throughout her life. He attended the University of Glasgow, where he studied under Francis Hutcheson, the moral philosopher whose emphasis on benevolence and the “moral sense” influenced Smith profoundly, and then Balliol College, Oxford, where he spent six miserable years and formed a lifelong contempt for the English university system.
He returned to Scotland, lectured on rhetoric and belles-lettres in Edinburgh, and in 1751 was appointed professor of logic and then professor of moral philosophy at the University of Glasgow — the position he later described as “by far the most useful, and therefore by far the happiest and most honourable period of my life.”
The Theory of Moral Sentiments
The Theory of Moral Sentiments (1759) was Smith’s first major work and the book he himself may have valued more highly than The Wealth of Nations. It investigated the foundations of moral judgment: how do we distinguish right from wrong, and why do we care about the well-being of others?
Smith’s answer was “sympathy” — not mere pity or compassion, but the imaginative capacity to enter into the feelings of another person and to judge our own conduct by imagining how an impartial observer would view it. The “impartial spectator” — the internalised judge who represents the standards of the community — was Smith’s most original philosophical concept, and it provided the moral psychology that underpins The Wealth of Nations: Smith’s economics assumes not the selfish, calculating “economic man” of later caricature, but a social being whose self-interest is constrained by sympathy, custom, and the desire for the approval of others.
The Wealth of Nations
An Inquiry into the Nature and Causes of the Wealth of Nations (1776) was the product of over a decade of research and writing, partly stimulated by Smith’s experience as tutor to the young Duke of Buccleuch on a tour of France, where he met the physiocrats Quesnay and Turgot.
The book’s central argument was that the wealth of a nation consists not in its stock of gold and silver (as the mercantilists believed) but in the productive labour of its people, and that the most effective way to increase that labour’s productivity is through the division of labour, free competition, and the removal of the artificial restrictions (monopolies, tariffs, guild regulations) that governments impose on trade. Smith’s metaphor of the “invisible hand” — the idea that individuals pursuing their own self-interest are led, as if by an invisible hand, to promote the public good — became the most famous image in economics.
But The Wealth of Nations is a far more complex and more nuanced book than the slogans derived from it would suggest. Smith was deeply suspicious of businessmen (“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public”), advocated progressive taxation, supported public education, and recognised that the division of labour, for all its economic benefits, could make workers “as stupid and ignorant as it is possible for a human creature to become.”
Collecting Smith
An Inquiry into the Nature and Causes of the Wealth of Nations (W. Strahan and T. Cadell, London, 1776, 2 volumes, quarto) in first edition is one of the most valuable and most important books in the history of ideas. The Theory of Moral Sentiments (A. Millar, Edinburgh, 1759) in first edition is the philosophical masterwork. Essays on Philosophical Subjects (Cadell and Davies, 1795) was published posthumously. All first editions are rare and command substantial prices.