Courses
Courses for Kids
Free study material
Free LIVE classes
More

Father of Economics

VSAT 2022

Who is the Father of Economics?

Adam Smith is considered to be the Father of Economics because of his book "Theory of Moral Sentiments" and "An Inquiry into the Nature and Causes of the Wealth of Nations". He became the father of modern economics.


The academic field of economics as we know it now had its roots in Adam Smith's The Wealth of Nations. He elaborated on the division of labour and discussed how rational self-interest and competition might promote economic growth in this work and other ones. Smith was divisive in his own time, and writers like Horace Walpole frequently parodied his basic philosophy and writing style. Smith established the fundamental principles of traditional free market economics.


Adam Smith: Early Life

Smith entered Glasgow University at the age of fifteen to pursue a degree in moral philosophy under the tutelage of "the never-to-be-forgotten" Francis Hutcheson. He enrolled in Balliol College in Oxford in 1740 but gave up his exhibition in 1746. He started giving public lectures in Edinburgh in 1748, but he soon changed the subject to "the progress of opulence." It was at this point, when he was in his mid-to-late-20s, that he first outlined the economic theory of "the obvious and simple system of natural liberty," which he would later expound in his Inquiry into the Nature and Causes of the Wealth of Nations. He first met David Hume in about 1750, and the two became great friends.


Before enrolling at Glasgow College at age 14 in 1737, Adam Smith completed his basic education at a two-room "burgh" school in Kirkcaldy, Scotland. Smith received a scholarship at Balliol College in Oxford after graduating in 1740, where he spent six years studying. Adam Smith majored in social philosophy while attending the Universities of Glasgow and Oxford's Balliol College. He was one of the first recipients of scholarships established by fellow Scot John Snell. He collaborated with David Hume during the Scottish Enlightenment after delivering a series of well-received public lectures at the University of Edinburgh after receiving his degree.


The Theory of Moral Sentiments was written and published by Smith while he was a professor of moral philosophy at Glasgow. Later in life, he accepted a tutoring career that allowed him to travel around Europe and connect with other intellectual titans of the day.


Father of Economics

Adam Smith FRSA was a Scottish economist and philosopher who is regarded as the father of political economics and a prominent player in the Scottish Enlightenment. His two major works are "An Inquiry into the Nature and Causes of the Wealth of Nations" and "The Theory of Moral Sentiments." Other names for him included The Father of Economics and The Father of Capitalism.


The father of economics is regarded as Adam Smith. He is the pioneer who gave economics as a brand-new discipline a clearly defined form. The book "Wealth of Nations" was written by him. The founding father of macroeconomics as a distinct field is John Maynard Keynes.


Founder of Modern Economics

The founder of modern economics is regarded as Adam Smith. Smith opposed mercantilism and was a strong supporter of laissez-faire economic principles. Smith put out the concept of an invisible hand in his first book, "The Theory of Moral Sentiments," which described how markets tend to self-regulate through competition, supply and demand, and self-interest. Modern capitalism and modern economics were both born with the publication of "The Wealth of Nations."


Theories by Adam Smith

  • The Invisible Hand

In his writings from the 1700s, Adam Smith discussed the idea of an "invisible hand," emphasising that selfish people are responsible for this mechanism's advantages to the economy and society.


The invisible-hand idea is frequently presented as a natural phenomenon that, through supply and demand and competition for limited resources, steers capitalism and free markets toward efficiency rather than as something that promotes the happiness of individuals. This framework is made up of organisations like the legal system that serves to safeguard and advance free and fair competition.


Without interference from the government or other parties, the market is able to find equilibrium without being forced into abnormal patterns. Oversupply and shortages are avoided when supply and demand balance naturally. Self-interest and the freedom of production and consumption are how society can function in its best advantage.


  • Philosophy of Free Markets

The Adam Smith theory of free markets places a strong emphasis on limiting the influence of taxation and government involvement in the market. Smith supported a small government but believed that the government should be in charge of a nation's defence and education systems.


Summary

Adam Smith is known as the Father of Modern Economics. He published The Wealth of Nations in 1776. His idea of an invisible hand directs someone attempting to maximise their individual well-being to provide the best overall result for society as a whole. He is remembered for his best written book named “ An Inquiry into the Nature and Causes of the Wealth of Nations.”

FAQs on Father of Economics

1. What is Adam Smith best known for?

Adam Smith is most remembered for his one book, "An Inquiry into the Nature and Causes of the Wealth of Nations," which introduced the first complete political economics and contained Smith's depiction of a system of market-determined wages and free rather than government-restricted enterprise. Although Adam Smith is best known for his 1776 book "An Inquiry into the Nature and Causes of the Wealth of Nations," which introduced the field of political economy, he is actually more appropriately regarded as a social philosopher whose writings on economics serve as the apex of a broader theory of the development of politics and society.

2. What is Adam Smith's definition of economics?

In his renowned book "The Wealth of Nations," Adam Smith put out the concept of economics as the "science of wealth." "An inquiry into the nature and causes of the wealth of nations," according to Smith, is what economics is. He explained economics from the point of view of the wealth of the nation. According to the Scottish economist, economics is a science of wealth that investigates the creation, consumption, and accumulation of money.

3. What is the invisible hand theory?

The metaphor of the "invisible hand" describes the processes by which positive social and economic consequences may result from a collection of self-interested human activities, none of which are intended to produce such effects. The invisible hand is an unobservable market force that assists in a free market's self-correcting process where supply and demand for commodities naturally find equilibrium. Supply and demand can change, and the invisible hand guides the market toward equilibrium. Given that it prevents both shortages and overstock, this is regarded as the socially ideal point. Supply grows in reaction to a rise in price through the invisible hand.

Comment