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Management Hall of Fame
Most Respected Management Gurus

Adam Smith Father of Political Economics & Enlightened Self-Interest (1723-1790)

  • "There is no art which one government sooner learns of another than that of draining money from the pockets of the people." (Adam Smith)

Adam Smith was a Scottish philosopher and a political economist. He is a major contributor to the modern perception of free market economics. He is known primarily as the author of two treatises: theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). His work helped to build the foundation of the modern academic discipline of free market economics and provided one of the best-known intellectual rationales for free trade, capitalism, and libertarianism.

Key Work
Adam Smith's book entitled "An Inquiry into the Nature and Causes of the Wealth of Nations" also known as "The Wealth of Nations" is considered by many as the philosophical basis of U.S. economy. Its main key points are as follows

  • Human society is subject to immutable natural moral and physical laws.
  • If natural laws are left to work freely, they would create the best possible society
  • Natural law = "law of labor." All men should have the right to carry out activities to preserve their existence
  • Government should promote the supreme value of individual liberty. The pursuit of self-interest is ultimately beneficial for society as a whole. Enlightened self-interest eventually becomes public interests
  • Government's only role should be to promote the existence of natural law, and to enable its free working. (Free Market)
  • A Free market is a customer-driven, democratic mechanism through which, by exercising their free choices about purchase or sale prices, people would act to regulate resources fairly. 
  • The economic benefits of the Division of Labor (Specialization) of individuals in production
  • International commerce importers and exporters is a source of wealth for both buyers and sellers.

Adam Smith is not a proponent of "the law of the jungle" as an approach to social organization. He recognized the nature's worst tendencies of greed, corruption and abuse of power by some businessmen who "‚Ķlove to reap where they never sowed". He also supports some forms of government intervention in public areas such as defense.

Related Books/References:

  • Adam Smith, Theory of Moral Sentiments(1759)
  • Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
  • Adam Smith, Essays on Philosophical Subjects(published posthumously 1795)
  • Adam Smith, Lectures on Jurisprudence(published posthumously 1976)
  • Adam Smith, Lectures on Rhetoric and Belle Letters
  • James Buchan. The Authentic Adam Smith: His Life and Ideas (2006)
  • Stephen Copley and Kathryn Sutherland, eds. Adam Smith's Wealth of Nations: New Interdisciplinary Essays(1999)
  • F. Glahe, ed. Adam Smith and the Wealth of nations: 1776-1976 bicentennial essays : 1776-1976 (1977)
  • Knud Haakonssen. The Cambridge Companion to Adam Smith (2006)
  • Samuel Hollander. Economics of Adam Smith(University of Toronto Press) (1973)
  • Muller, Jerry Z. Adam Smith in His Time and Ours: Designing the Decent Society . Princeton Univ. Press (1999)
  • Muller, Jerry Z. The Mind and the Market: Capitalism in Western Thought. Anchor Books (2002)
  • Frederick Rosen, Classical Utilitarianism from Hume to Mill(Routledge Studies in Ethics & Moral Theory), 2003. ISBN 0415220947
  • P. J. O'Rourke. On The Wealth of Nations (Books That Changed the World) (2006
  • Richard F. Teichgraeber. Free Trade and Moral Philosophy: Rethinking the Sources of Adam Smith's Wealth of Nations (1986)
  • Cousin, John William (1910). Short Biographical Dictionary of English Literature. London, J.M. Dent & sons; New York, E.P. Dutton.

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