Management Hall of Fame: Leading Management Gurus
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 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: The
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.
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
- 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
- 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 "…love to
reap where they never sowed". He also supports some forms of
public areas such as defense.
- Adam Smith, The Theory of Moral Sentiments (1759)
- Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
- 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
Haakonssen, Knud, ed. The Theory of Moral Sentiments. New York: Cambridge
University Press, 2002.
- Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations (abridged). Indianapolis, IN: Hackett Publishing Company, 1993
- 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 (1995)
- 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
- Muller, Jerry Z. Adam Smith in His Time and Ours: Designing the Decent Society . Princeton Univ. Press (1995)
- 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
- 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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