Adam Smith

• Father of economics• Born in Kirkcaldy,

Scotland• Oxford University• Theology, ethics,

philosophy of law

Theory of Moral Sentiments

• First book• Published in 1759• Human behavior – Sympathy , propriety, virtue, and duty

• What makes us care about the welfare of others

Wealth of Nations• France • Tutor to Duke of Buccleauch• Took ten years to finish• Main principles

– supply a product that will create demand

– competitive markets achieve efficient production and economic growth

– the market owes goods and services that made the economy work

Discussion Questions• Discuss Smith’s issues with poverty. Is it a necessary evil that yields

the highest efficiency?• With regard to poverty, how is birth rate and population critical in

society in relation to wages and employment? How can today’s unemployment rate and declining birth rate connect to society and the future of mecroeconomics?

• How can restraints on trade or embargos be useful or be corruptive? Specifically, the issue of flow of cash capital.

• Smith believed the only source of wealth was production resulting from labor and resources. Have we changed that theory any? Is it still much the same? Why?

• Can you identify any of Smith’s ideas at work in our present society?

References

http://www.martinfrost.ws/htmlfiles/wealth_nations.htmlhttps://wiki.uchicago.edu/download/attachments/54231678/adam+smith.jpg?version=1&modificationDate=1286245912000http://lestat.me/wp-content/uploads/1984/03/1776-03-09-Adam-Smith-The-Wealth-of-Nations-1776.jpg