Adam Smith

Adam Smith was a Scottish political economist and philosopher. He entered the University of Glasgow on scholarship and started to study moral philosophy there, when he was fourteen. Then he proceeded to Balliol College, Oxford from where he graduated with a high level of European literature knowledge. After he left the Oxford University in 1746, he started to give lectures at Edinburg in 1748. When he met with David Hume in 1950, they shared intellectual opinions by covering mostly the subjects of economics, philosophy and politics. He, then, started to work as a professor of moral philosophy for thirteen years to which he referred as the most honorable period of his life. Smith published his first book The Theory of Moral Sentiments in 1759, in which he wrote about his lectures in Glasgow and focused on the problems of how people express their self-interest and their morality. Later, he traveled throughout France and to Switzerland where he met Voltaire, Rousseau and Quesnay. Finally, the most important contribution of Adam Smith to the history of economic thought, that has to be mentioned is his famous book called Inquiry into the Nature and Causes of the Wealth of Nations which reflects two mainstreams of economic thought. Adam Smith buried the thoughts of the intellectual foundations of old mercantilism and he advocated and consolidated the economic liberalisation.

Adam Smith's concept of consolidated economic liberalisations was based on four fundamental pillars which are (i) private property meaning that each individual should be the owner of the production factors, (ii) free entrepreneurship meaning that every individual can build his or her own factory or shop, (iii) price mechanism meaning free market economy and invisible hand determining the prices and the most significant one; (iv) profit maximization meaning that firms should be allowed to maximize profits. According to Smith, profit maximization is the driving force behind the capitalism.