Adam Smith 1723-1790 – Theory of Moral

Adam Smith

Posted by Isra Anwar

August 13, 2014

Leading figures in the field of economic development theory, Adam Smith, was born in the town of Kirkcaldy, Scotland, in 1723. Time teenager he studied at Oxford University, and from 1751 until 1764 he was a professor at the University of Glasgow. As long as that's where he published his first book, Theory of Moral Sentiments, which lifted him into the midst of the intellectual community. However, the peak of his fame rests primarily on his masterpiece book An Inquiry Into the Nature and Causes of The Wealth of Nations, published in 1776 this book is an immediate success and seize the market, and the rest of his life Smith enjoys notoriety thanks and appreciation of the work. He died also in Kirkcaldy 1790. Not a single child she had, after all never married.

Adam Smith was not the first to devote itself to economic theory, and many well-known ideas that are not original out of his head. However, he was the first to present a systematic economic theory and easy to digest which is quite appropriate as the basis for progress in the field opposite it in the future. On the basis of this reason, it is worth considered that The Wealth of Nations is the starting base of the modern study of political economy.

One of the major results of this book is presented as he straightened and dispel the notion that various people before so fad. Smith and an argument against the old theory that emphasizes the economic importance of trade need for state had gold bullion supplies in bulk. Similarly, the book rejects the view of the Physiocrats who say that the land is the main source of value. Instead Smith emphasized the most important subject is labor. Smith emphasizes that the persistent increase in production can be achieved through the division of labor, and he attacked exhausted all government regulations and interference following obsolete barriers that hinder the development and expansion of industry.

The central idea of The Wealth of Nations is that the free market is moving according to market mechanism that can automatically produce considered the type and quantities of goods are the most favored and necessary consumer society. For example, the inventory actually liked degenerate, by itself the price will go up and this price increase will bring much benefit for anyone who produce it. Because a lot of profit, other factories were moved to produce as well. As a result of the increase in production can not be rid of the state of shortage of goods. Moreover, the increase in supply in terms of competition between the various companies will be inclined to lower the price of the commodity at a price level that is "normal," such as the cost of production. There is no party that helps eliminate scarcity, but scarcity it will resolve itself. "Each person," Smith said "tend to seek profit for himself, but he was" guided by the invisible hand to achieve the ultimate goal which is not a part of his wish. With the pursuit of his own interest he frequently advance society more effectively than when he was actually suffering intends to fast-forward "(The Wealth of Nations, Chapter IV, Article II).

"Unseen Hand" was not able to do the job properly if there is an interruption to the free competition. Smith because it believes in the free enterprise system and strongly opposed to the high price. Basically he strongly opposes almost all government interference in business and the free market. This intervention, says Smith, is almost always going to result in deterioration of economic efficiency and lead to raise prices. (Smith does not create the slogan "laissez faire," but he more than anyone else to spread the concept).

Some people get the impression that Adam Smith was none other than one who is merely a "dance to the sound of the drum" for the sake of economic interests. This opinion is not true. She repeatedly and with hard words, criticized exhausted economic monopoly practices and wants to eliminate it. And Smith instead of naive people in economic relations practice. It can be read from a typical observation in the book The Wealth of Nations: "The world trade in the same goods could seldom meet together, but the talks would end in the formation of a plot against the people, or in other forms of raising prices."
Adam Smith's so perfect organizing and promoting economic system of thought, so that only a period of just a few decades earlier economic schools of marginalized. In fact, all of the thoughts they have a good system combined with Smith, while Smith to systematically reveal their shortcomings that exist. Substitute Smith including prominent economists such as Thomas Malthus and David Ricardo, develop and enhance the system (without changing the lines anyway) into a structure that has been classified into the category of classical economics. Up to a certain critical level, even Karl Marx's economic theory (though not political theory) can be regarded as a continuation of classical economic theory.

In the book The Wealth of Nations, Smith mostly use Malthus's views on overpopulation. However, if Ricardo and Karl Marx both insist that population pressure would prevent the rise beyond the limit wage purposes (so-called "law of wages steel"), Smith asserts that the conditions of wage increase in production can be increased. It is increasingly clear, the events which prove that Smith's true that in this respect, while Ricardo and Marx misses.

There was nothing to do with the view of Smith's determination or influence on the economic theorists who came later, which is the most important influence on legislation and politics taken by the government. The Wealth of Nations was written by a high prominence and clarity of the views of Adam Smith. Arguments Smith faced government interference in business and world trade and for the low price and the free economy, it certainly has affected the lines of government policy throughout the 19th century. Indeed, the influence it still felt to this day.

Since economic theory developed rapidly after the time of Smith, and a few ideas displaced by the opinions of others, it is easy to downplay the significance of Adam Smith. It must be so, the fact remains, he was the founder beginners and economic figures as a systematic study, and he is indeed a prominent figure in the history of human thought.

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