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The enduring legacy of Adam Smith
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The invisible hand that shaped the modern world
Few thinkers have left as profound a mark on economics and moral philosophy as Adam Smith, the Scottish intellectual widely recognised as the FATHER OF MODERN ECONOMICS. Born in Kirkcaldy, Scotland, on June 5, 1723, Smith’s legacy is defined by a unique fusion of ethics, philosophy and economics — anchored by his groundbreaking works: The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).
Though known primarily for The Wealth of Nations, Smith was not merely an economist. He was a moral philosopher deeply concerned with how societies function, how individuals interact and how human self-interest could — paradoxically — lead to collective prosperity. His economic theories were in fact the natural continuation of his philosophical insights on human behaviour.
Raised in a quiet Scottish town, Smith studied at the University of Glasgow and later at Oxford, where the rigid academic atmosphere prompted him to pursue his own rigorous self-education. His intellectual journey brought him under the influence of great minds such as Francis Hutcheson and David Hume and later to the salons of Paris, where he mingled with Enlightenment figures, including Voltaire and the physiocrats.
It was during his years as a professor at the University of Glasgow that Smith delivered daily lectures and developed the ideas that would evolve into his published works. His first major book, The Theory of Moral Sentiments, explored the inner moral compass of individuals — what he termed the “impartial spectator” — and the powerful human ability to empathise, which he saw as the glue of social cohesion.
But it was in The Wealth of Nations, published in 1776, that Smith forever altered how we view economic systems. This was the first comprehensive treatise on political economy, examining how individuals, driven by their self-interest, participate in a market system that, through competition, naturally regulates itself. Here he famously wrote: “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest.”
And more famously, he observed that people, in pursuing their own gain, are often:
“…led by an invisible hand to promote an end which was no part of his intention.”
This “invisible hand” became the metaphor that encapsulated Smith’s belief in the unintended social benefits of individual self-interest — one of the most enduring ideas in economic thought.
Yet, Smith was no blind advocate of greed or unfettered capitalism. He was acutely aware of inequality and the tendency of economic systems to privilege the wealthy. He warned:
“Civil government… is instituted for the defence of the rich against the poor.”
His vision of capitalism was one tempered by moral responsibility, reason and institutional safeguards. To Smith, prosperity was not merely about wealth accumulation, but about the organisation of society in a way that aligned self-interest with the public good.
Adam Smith passed away in 1790, but his ideas continue to resonate — from policy debates on free markets to discussions on the role of empathy in a competitive world. His fusion of economic analysis with moral philosophy remains a cornerstone of Western thought, reminding us that the forces that drive markets are, at their core, profoundly human.
More than two centuries later, Adam Smith still guides us — not just with the hand we cannot see, but with a mind we cannot forget.
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