Adam Smith

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  • Topic: Capitalism, Adam Smith, Economics
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  • Published : October 30, 2005
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„ÏHis life and influences

„ÏA brief summary of the book
„ÏIdeas presented in the book


Selim Eren Yener





Obviously, the term capitalism comes from the word capital. Capital is the money someone has. So capitalism has to do something with money. Simply we can define capitalism as making more money from the starting capital. The economicians claim that there are three distinctive features of this making more money process, which divides capitalism from other economic models. They are: ¡§Private ownership of property, pursuit of personal profit, and free market idea¡¨1 All of these three ideas were developed for the first time by the Scotch Economican, Adam Smith, so he is considered as the founder of the capitalist economy although he has never mentioned the word capitalism in his books.2

In this essay, I will discuss Adam Smith in two parts; in the first part I will talk about Smith¡¦s life and the purpose of this is that, some particular events played very important roles on Smith to write his famous works. In the second part I will focus on Smith¡¦s famous book, ¡§Wealth of Nations¡¨ and discuss the important terms that are given in this book.

1: John j. Macionis, Sociology, 9th edition. (New Jersey: Pearson Education Inc. 2003), 415. 2:Micheal Fray, Adam Smith¡¦s Legacy. (London:Biddles Publications, 1993), 5


Adam Smith was born in 1723 in Kirkcaldy, a seaport near Edinburgh, where his father had been a customs officer. I am saying ¡§had been¡¨ because Smith¡¦s father died before he was born. He had no father but they had plenty of money. His mother was Margeret Douglas who was a strict woman with firm religious values, and it is considered that she has a great effect on Adam Smith to encourage him to be a scholar. As I said, Smith¡¦s mother wanted Smith to be a scholar, she was ready to spend all of her money for Smith to get a good education. So Smith had a good fortune in his early education, first he went to Kirkcaldy burgh school where he was thought English composition and Roman history. He then went to Glasgow University where he met the leading figures of that days¡¦ famous movement: enlightement. Being a student at Glasgow, also had a instructive effect on him. The place he was born, Kirkcaldy was a small town with a small economy where Glasgow was a big port city. What interested Smith was the growing pattern of city¡¦s economy. Probably, he was inspired from this when he introduced his trade based economic growth model.1

Smith continued his education at Oxford University. Although most of us think that Oxford is the best university in the world, Adam Smith did not think so. This reminds me of Albert Einstein who also rejected the regular education. In Smith¡¦s case, we see that the teachers of Oxford University were not so willing to share their knowledge with others. This provoked Smith to educate himself, spending most of his time on reading.2 since I am talking 1:Ian Simpson Ross,The Life Of Adam Smith.(London:Oxford University Press,1995)1-25 2:Jack Russel Weintein, On Adam Smith. (Belmont:Thomson Learning inc., 2001) 43

about the influences in Smith¡¦s life, his years in Oxford also helped him in developing his ideas about economy. There is no wonder that Oxford was inefficient and Smith gave the reason for this as lack of competition.1 This competition figure, again probably inspired Smith to focus on the importance of free trade.

Beginning his career as a teacher, he spent three years in the Scottish capital, Edinburgh. There he met David Hume who will later be a famous philosopher. They became life long friends. Hume¡¦s influence on Smith was complex, because they disagreed more than they agreed. Hume was stressing...
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