Adam Smith (1723-1790) was a Scottish economist and moral philosopher known for his influential works 'The Theory of Moral Sentiments' and 'The Wealth of Nations,' which laid the foundation for classical economics and introduced concepts like the division of labor and the 'invisible hand.' He argued that labor is the true source of national wealth and categorized society into three classes: capitalists, landlords, and workers. Smith's ideas on free markets and economic principles significantly shaped modern economics and are celebrated worldwide.

1. Adam Smith (1723-1790)
PROF. MANAS CHAKRABORTHY

2. Born
5 June 1723 OS
KIRKCADY, FIFE, Scotland
Died
17 July 1790 (aged 67)
EDINBURGH, Scotland
Nationality Scottish
Notable work(s) The Wealth of Nations
Region Western philosophy
School Classical economics
Main interests
POLITICAL
PHILOSOPHY, ETHICS,
ECONOMICS
Notable ideas
Classical economics
modern free market,
division of labour,
the "invisible hand"

3. • Smith entered the University of Glasgow when he was
fourteen and studied moral philosophy under Francis
Hutcheson.
• Here, Smith developed his passion for liberty, reason,
and free speech.
• In 1740 Smith was the graduate scholar presented to
undertake postgraduate studies at Balliol
College, Oxford, under the Snell Exhibition.
Formal education
Teaching career
• Smith began delivering public lectures in 1748
in University of Edinburgh, sponsored by the
Philosophical Society of Edinburgh under the
patronage of Lord Kames.
• His lecture topics included rhetoric and belles-
lettres, and later the subject of "the progress of
opulence".
• On this latter topic he first expounded his economic
philosophy of "the obvious and simple system
of natural liberty".

4. • In 1751, Smith earned a professorship at Glasgow University
teaching logic courses, and in 1752 Smith was elected a member of the
Philosophical Society of Edinburgh, having been introduced to the
society by Lord Kames.
Conti….
• Following the publication of The Theory of Moral Sentiments, Smith became
so popular that many wealthy students left their schools in other countries to
enroll at Glasgow to learn under Smith.
• After the publication of The Theory of Moral Sentiments, Smith began to
give more attention to jurisprudence and economics in his lectures and less
to his theories of morals.
• For example, Smith lectured that the cause of increase in national wealth is
labor, rather than the nation's quantity of gold or silver
In 1762, the University of Glasgow conferred on Smith the title of Doctor of Laws (LL.D.).

5. • He was member in the first political economy club
• In 1759 he published his 1st book “The Theory of
Moral Sentiments”
• In 1776 he published his 2nd book “An Inquiry into the Nature
and Causes of the Wealth of Nations”

6. Adam Smith’s major ideas:
Division of Labor rises the productivity because:
• Each worker gains more dexterity by repeating the same
moves again and again
• There is not any lost time in the transition from one move to
another
• The breaking down of labor in basic moves helps in the
invention of time saving tools

7. Adam Smith’s major ideas
There are two kinds of values:
• value of use
• value of exchange

8. Adam Smith’s major ideas
Society is divided into three classes
• Capitalists
• Landlords
• Workers

9. Adam Smith’s Major Ideas
Income is divided into three categories.
• Profits
• Annuity Land Charge
• Wages

10. Divison of labour:
• The division of labour is the specialisation of co-operating
individuals who perform specific tasks and roles.
• Also, having workers perform single or limited tasks
eliminated the long training period required to train craftsmen,
who were replaced with lesser paid but more productive
unskilled workers.
• Historically, an increasingly complex division of labour is
associated with the growth of total output and trade, the rise
of capitalism, and of the complexity
of industrialised processes.

11. The wealth of nations
• The Wealth Of Nations the magnum opus of a Scottish
economist and moral philospher Adam Smith.
• It was published on 9th March, 1776 during Scottish
Enlightenment and Scottish Agricultural Revolution.
• It is the first book which describes what builds the nation’s
wealth and now it is a classical economics.
• It touches the broad topics of economics as productivity,
division of labour and free markets.

12. Introduction of book I
• Causes of Improvement in the productive powers of
labour .
• Gives information regarding division of labour, real
and nominal price of commodities, wages and
commodities of labour and market.
• The division of labour has been arised from human’s
propensity to barter.

13. Introduction of book II, III, IV, V
• The BOOK II introduces the nature, accumulation
and employment of stock.
• The BOOK III introduces different progress of
Opulance in different Nations.
• The BOOK IV introduces the systems of political
economy.
• The BOOK V introduces about the revenue of the
Sovereign or Commonwealth.

14. ADAM SMITH
• As a Symbol of Free Market Economics Smith has been celebrated by
advocates of free market policies as the founder of free market economics,
a view reflected in the naming of bodies such as the Adam smith institute
in London, the adam smith society and the Australian Adam Smith club
and in term such as the Adam smith necktie.
• Alen greenspan agues that, while Smith did not coin the term laissez-faire,
it was left to Adam Smith to identify the more – general set of principles
that bought conceptual clarity to the seeming chaos of market transactions.
• Greenspan continues that the wealth of nations was “one of the great
achievements in human intellectual history “P.J.O’rourke describes smith
as the “founder of free market economics”

15. CONTINUE…
• The wealth of nations could justify the food and drug administration,
the consumer product safety commission mandatory and
“discriminatory taxation to deter improper or luxurious behaviour.
• Economist David Ricardo set straight some of the
misunderstandings about smith’s thoughts on free market.
• Ricardo pointed out that smith was in support of helping infant
industries.
• Smith belived that the government should subsidise newly formed
industry, but he did fear that when the infant industry grew into
Adulhood it would be unwilling to surrender the government help.

16. Legacy: In economics and moral
philosophy
• The Wealth of Nations was a precursor to the modern academic discipline
of economics.
• In this and other works, Smith expounded how rational self –interest and
competition can lead to economic prosperity.
• Smith was controversial in his own day and his general approach and
writing were often satirized by Tory writers in the moralising tradition of
Hogarth and Swift.
• During the industrial revolution in the late 18th century, Britain embraced
free trade and Smith’s economic theory were used to spread a broadly
liberal economic model around the world, characterized by open markets,
and relatively barrier free domestic and international trade.

17. ADAM SMITH AS OF NOW
• ADAM SMITH made two epoch making event i.e he made two
notable works one is THE THEORY OF MORAL
SENTIMENTS in 1759 and THE WEALTH OF NATIONS in
1776.
• Smith did not inaugurate a new chapter in social philosophy
and did not sow on land hitherto left uncultivated. His books
were rather the consummation, summarization, and perfection
of lines of thought developed by eminent authors—mostly
British—over a period of more than a hundred years.

18. THANK YOU