The Real Adam Smith Lecture Notes

Overview

• Discussion of current issues: corruption, fraud, greed, unemployment, wage stagnation, income inequality.
• Questions raised: Is the system rigged? Is the free market inherently corrupt? Relationship between morality and markets.

Adam Smith: Introduction

• Scottish philosopher and economist from the 18th century.
• Known as the father of modern economics.
• His work bridges the gap between moral philosophy and economics.
• Key texts: The Theory of Moral Sentiments and The Wealth of Nations.

Early Life

• Born in 1723 in Kirkcaldy, Scotland.
• Influenced by his father’s profession as a lawyer and customs inspector.
• Educated at Glasgow University, became its top administrator.
• Key figure in the Scottish Enlightenment, a cultural and intellectual revolution.

Key Concepts in Smith's Philosophy

Invisible Hand

• Concept describing self-interest leading to societal benefits.

Impartial Spectator

• A metaphor for moral judgment; the internal voice that guides ethical behavior based on societal norms.

Smith's Education and Influences

• Influenced by Francis Hutchison at Glasgow University, who taught in English, promoting enlightenment values.
• Exposure to David Hume’s philosophies, leading to a radical shift in his thinking.

Moral Philosophy and Economic Theory

• Focus on moral aspects of economics; concern for the poor.
• Empathy (or sympathy) as a foundation of morality, not objective standards.
• Development of morality through social interactions and the desire for approval.

Teaching Career

• Appointed Professor of Logic and Metaphysics at Glasgow University at age 27.
• Lectures on moral philosophy and its relationship to economics.

Major Works and Theories

The Theory of Moral Sentiments (1759)

• Explored human behavior and morality, emphasizing empathy and societal interactions.

The Wealth of Nations (1776)

• Critique of mercantilism and advocacy for free markets.
• Articulated ideas about productivity and the role of labor in wealth creation.
• Concept of division of labor and its impact on productivity.

Political Views

• Critiqued monopolies and the protective measures of the state that benefited the rich over the poor.
• Advocated for minimal government interference, focusing on justice and fair regulation.

Impact of Smith's Ideas

• His ideas influenced economic policies and practices across the globe.
• Contributed to the foundation of modern capitalism and free market principles.
• Encouraged the view that the economy functions best when individuals pursue their self-interest.

Later Life and Legacy

• Wealthy and influential in Edinburgh but continued to revise his major works.
• Died in 1790, leaving a significant legacy in both economics and moral philosophy, advocating for the plight of the working poor.
• Gave the bulk of his wealth to charity, emphasizing his moral values.

Conclusion

• Adam Smith as both a free market advocate and moral philosopher.
• His principles and ideas remain relevant in contemporary discussions on economy and morality.