Adam Smith Biography and Contributions

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Adam smith
Adam Smith /1723 – 1790/

Adam Smith gave the first scientific explanation of the working of the capitalistic market economy in the conditions of a free competition. For the first time in the history of economic thought Adam Smith worked out a complete economic theory that corresponds exactly to the interests of the developing industrial capital. The interesting is that he made it in the time when a men organizational form of the large scale industry (едрото производство) was the manufacture and the manual labor was predominant. Adam Smith was born in a small village in Kirkcaldy, Scotland. There his widowed mother raised him until he entered the university of Glasgow at age 14 as was the usual practice on scholarship. He later attended Balliol college of Oxford, graduating with an extensive knowledge of European literature and an enduring contempt for English schools. He returned home and after delivering a series of well-received lectures was made first chair of logic (1751), then chair of moral philosophy (1752) at Glasgow University. He left Academia in 1764 to tutor the young duke of Buccleuch. For over 2 years they lived and traveled throughout France and into Switzerland – an experience that brought Smith in contact with contemporaries Voltaire, Jean-Jacques Rousseau, François Quesnay and Anne Robert Jacques Turgot. With the life pension he had earned in the service of the duke Smith retired to his birthplace of Kirkcaldy to write “The Wealth of Nations”. It was published in 1776. In 1778 he was appointed commissioner of customs. This job put him in the uncomfortable position of having to curb smuggling which in “The Wealth of Nations” he had upheld as a legitimate activity in the face of unnatural legislation.

Adam Smith never married. He died in Edinburg on June, 19th 1790.

1. Methodology

The most distinctive feature of the methodology of Smith was the dualism. The reason for it was that Smith did not manage to combine the induction and the deduction as two parts of the uniform (единен) scientific method. As a result of that he frequently presented the surface of the things as their internal (вътрешна) essential nature. The separate application of two methods without necessary connection between them is the reason for the Smith`s dualism but he failed to notice such contradictions. The major method that he used was the logical abstraction. It gave him opportunity to get to the heart of the matter. The aim of the political economy is to investigate the creation of the wealth and it has 2 sides. One – positive side to analyze the objective economic reality and to reveal the objective laws of its development. Two – normative side to elaborate recommendations for the firms and state economic policy. Smith managed to investigate two sides of the man - moral and economic – in two works. The first is “The Theory of moral sentiments” (1759). According to Smith in the moral world a man is driven by the feeling of a sympathy (striving for participation in that is happening to the others) and is guided by altruistic motives. Very important element of the book is the idea of equality of men. The second work is “An Inquiry into the Nature and Causes of The Wealth of Nations” (1776). Smith asserts there that in economic world a man operates leaded by egoism (personal mercenary interest pursuit in economic activity) and is guided by the “Invisible Hand”. Smith, however, fails to notice any connection between two worlds, i.e. a man acts in one way in his social relationship with the others and in other way in business relations. Under “Invisible Hand” Smith understands the spontaneous action of economic objective laws that people obey nevertheless their wishes. According to Smith in society exist natural order and natural laws. He considers them as eternal and constant being not subject of any change in the future and namely the spontaneous unforeseen, unintentional action of these...
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