David Smith- 'Free Lunch' (Pt. III- On Adam Smith)

The next ‘course’ is the first chapter entirely dedicated to a single economist- Adam Smith, the ‘Father of modern Economics’ (To avoid confusion, here, I shall refer to both David and Adam Smith by their first names). The chapter begins with a brief history of Adam’s life with aspects of his childhood upbringing with regards to his teachers and mentors being mentioned. Aside from this, the focus of this chapter is on Adam’s writing career and gradual rise to fame as ‘The Father of Economics’. Where he lacked in looks, he more than made up for in writing ability- Adam is most famous for his two books an Inquiry into the Nature and Causes of the Wealth of Nations and The Theory of Moral Sentiments. The latter of the two outsold Wealth of Nations by far, despite it not being nearly as important in the eyes of many. In Wealth of Nations, Adam used his experiences of travelling the world, meeting the likes of Voltaire and Quesnay, to present “The first synthesis of economics in its entirety.” It explained many of the phenomenon that have laid the foundations for much of econometrics (macro and micro) in that it began discussions on specialisation, absolute advantage, and free trade. It also gave birth to one of the most famous examples of the division of labour and specialisation that helped shape the construction industry, and put Adam on the £20 note- the pin factory. He cites the example of a pin factory in which workers make the pin in its entirety from start to finish, and could produce a fair number, but if each individual worker were to SPECIALISE in a specific task related to the production process, they could increase their output by somewhere between 240 and 4800 times. This revolutionary idea laid the foundations upon which the likes of Henry T. Ford built when he invented the moving production line for the ‘T-model’ Ford in 1912. After this, David speaks of ‘The Invisible Hand’ which, although only being referred to once in The Wealth of Nations, is one of the most famous pieces of writing Smith ever produced. This was the ‘Invisible Hand’ of the market, which helped keep the markets from failing- Adam also speaks of ‘liberty’ and that without it; the ‘Invisible Hand’ cannot operate properly. This is one of the main arguments for right-winged anarchists or just those who look on at the ‘laissez-faire’ government from the ‘Republican Ascendency’ days with nostalgia.

Once again, if you have any questions about key terms, or references to individuals that I've made, feel free to ask in the comments section below.

K