1723-1790

Adam Smith was a Scottish economist and thinker.

He was born in Kirkcaldy on 5 June 1723 in Scotland.

When he was fourteen year he entered the University of

Glasgow where he studied the moral philosophy and

develop the passion for liberty and free speech. In 1748 he

started teaching. Smith lectures topic based on the

economic and natural liberty. His lectures gave his success

and popularity.

Famous

Adam Smith was famous for his two books namely

1 ) The Theory of Moral Sentiments published in

1759 based on the social relationship and explain the

sources of mankind and ability of moral Judgments.

2) The Wealth of Nations published in 1776 regarded

as Smith most famous work.

The Wealth of NationsIn his book he emphasis on

1) Free Trade : it is the Principle of liberalism. Its

mean straightforward flow of products and minimum help of

Government.

2) limited Government influence between business and

individuals.

3) Invisible Hand(Self-interest)

One of the greatest contributions of Adam Smith was the

invisible hand theory which he used to demonstrate how

self-interest guides the most efficient use of resources in a

nation’s economy, with public welfare coming as a by-

product . According to Adam Smith, self-interest should not be denied. In the ‘Wealth of Nations’, he asserts that self-interest in the market is to encourage the growth of society through the division of labor and the maximization of wealth. For him, self-interest is enough to motivate the exchange of goods.

4) Division of Labor

The division of labor mean the division of work refers

to the division of a large task. It mean the

specialization of cooperation Individuals who perform

specific tasks and roles.

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