ADAM SMITH

Adam Smith (1723-1790) was a British philosopher and economist. His celebrated treatise An Inquiry into the Nature and Causes of the Wealth of Nations was the first serious attempt to study the nature of capital and the historical development of industry and commerce among European nations.

Smith was born in Kirkcaldy, Scotland, and educated at the universities of Glasgow and Oxford. From 1748 to 1751, he gave lectures on rhetoric and belles-lettres in Edinburgh. During this period, a close association developed between Smith and the Scottish philosopher David Hume that lasted until the latter's death in 1776 and contributed much to the development of Smith's ethical and economic theories.

Smith was appointed professor of logic in 1751 and then professor of moral philosophy in 1752 at the University of Glasgow. He later systematized the ethical teachings he had propounded in his lectures and published them in his first major work, Theory of Moral Sentiments (1759). In 1763 he resigned from the university to accept the position of tutor to Henry Scott whom he accompanied on an 18-month tour of France and Switzerland. Smith met and associated with many of the leading Continental philosophers of the physiocratic school, which based its political and economic doctrines on the supremacy of natural law, wealth, and order. From 1766 to 1776, he lived in Kirkcaldy preparing The Wealth of Nations (1776). Smith was appointed commissioner of customs in Edinburgh in 1778, serving in this capacity until his death. In 1787 he was also named lord rector of the University of Glasgow.

Smith's Wealth of Nations represents the first serious attempt in the history of economic thought to divorce the study of political economy from the related fields of political science, ethics, and jurisprudence. It embodies a penetrating analysis of the processes whereby economic wealth is produced and distributed and demonstrates that the fundamental sources of all income, that is, the basic forms in which wealth is distributed, are rent, wages, and profits.

The central thesis of The Wealth of Nations is that capital is best employed for the production and distribution of wealth under conditions of governmental noninterference, or laissez-faire, and free trade. In Smith's view, the production and exchange of goods can be stimulated, and a consequent rise in the general standard of living attained, only through the efficient operations of private industrial and commercial entrepreneurs acting with a minimum of regulation and control by governments. To explain this concept of government maintaining a laissez-faire attitude toward commercial endeavors, Smith proclaimed the principle of the "invisible hand". Every individual in pursuing his or her own good is led, as if by an invisible hand, to achieve the best good for all. Therefore any interference with free competition by government is almost certain to be injurious.

II. Ответьте на следующие вопросы:

1. Who was Adam Smith?

2. Where did he study?

3. Who based his political and economic doctrines on the supremacy of natural law?

4. What does the Wealth of Nations represent?

5. What is the central thesis of The Wealth of Nations?

6. Can the production and exchange of goods be stimulated?

7. Explain the principle of the "invisible hand".

III. Какое из следующих утверждений является неправильным:

1. An Inquiry into the Nature and Causes of the Wealth of Nations was the first serious attempt to study the nature of capital.

2. Smith gave lectures on rhetoric in Glasgow.

3. Smith was preparing The Wealth of Nations from 1766 to 1778.

4. The fundamental sources of all income are rent, wages, and profits.

5. In 1778 Smith was appointed commissioner of customs.