Leading figures in the field of economic development theory, Adam Smith, was born in the town of Kirkcaldy, Scotland, in 1723. When teens he studied at Oxford University, and from 1751 until 1764 he became professor at the University of Glasgow. As long as that's where he published his first book, Theory of Moral Sentiments, which lifted him into the midst of an intellectual community. However, the peak of his fame rests primarily on his great work the book An Inquiry Into the Nature and Causes of The Wealth of Nations, published in 1776. This book is a success and soon captured the market, and the rest of Smith's life enjoyed fame and awards thanks to the work. He died also in Kirkcaldy in 1790. No child he had, after all never married.
Adam Smith was not the first devoted to economic theory, and many well-known ideas is not the original out of his head. However, he was the first to present a systematic economic theory and easy to digest is quite appropriate as the basis for progress in the field opposite it in the future. On the basis of reason, it is worth is considered that The Wealth of Nations is a departure from the research base of modern economic politics.
One of the major results presented this book is because he is straight and dispel various assumptions to be role models of people before. Smith's argument against the old theory of economic and trade that emphasizes the importance of the need for the state had an inventory of gold bullion in large numbers. Similarly, the book rejects the view of the Physiocrats who says the land is the main source of value. Instead Smith emphasized the most important subject is the workforce. Smith vehemently stressed that the increase in production can be achieved through division of labor and he attacked out of all government regulation and intervention following obsolete barriers that hinder the development and expansion of the industry.
The central idea of The Wealth of Nations is a free market that moves according to market mechanisms can be considered automatically memprodusir type and quantities of goods of the most loved and needed consumer society. For example, inventories of goods that actually liked degenerate, by itself the price will rise and this price increase will bring in much profit for those who produce it. Because a lot of profit, other factories were moved to produce as well. As a result of increased production can not be rid of a state shortage of goods. Moreover, the increase in supply due to competition between various companies will tend to lower the price of the commodity at price levels "normal," for example, costs of production. There was no any party that helps eliminate scarcity, but scarcity would be settled by itself. "Everyone," Smith said "tend to seek profit for himself, but he was" guided by the invisible hand to achieve the ultimate goal is not to be part of his desire. With the road pursuing his own interest he frequently advance the society more effectively than when he betulbetul promote these aims "(The Wealth of Nations, Chapter IV, Article II).
"Unseen Hand" is not able to do the job properly if there is a disruption to the free competition. Smith therefore believe in the free enterprise system and strongly opposed to the high prices. Basically he strongly opposes almost all government interference in business and free markets. This intervention, Smith said, almost always will result in deterioration of economic efficiency and ujungujungnya will raise the price. (Smith does not create the slogan "laissez faire," but he more than anyone else to spread the concept).
Some people get the impression that Adam Smith was none other than one who just "dance to the sound of the drum" for the sake of economic interests. This opinion is not correct. He repeatedly and with hard words, blasted out of economic monopoly practices and want to eliminate it. And Smith instead of naive people in the economic relations practice. This can be read from a typical observation in the book The Wealth of Nations: "People in world trade the same goods could seldom meet together, but the talks will end in the formation of a conspiracy against the people, or in other forms of raising prices."
Adam Smith so perfectly organized and forward thinking economic system, so only within a period of some twenty years earlier economic schools excluded. In fact, all points of their great minds have been combined with a system of Smith, while Smith to systematically reveal the shortcomings of their existing. Substitute Smith include renowned economists such as Thomas Malthus and David Ricardo, developed and perfected the system (without substantially changing the lines) into a structure which is now classified into the categories of classical economics. Until at a certain critical level, even Karl Marx's economic theory (though not political theory) can be regarded as a continuation of the classical economic theory.
In the book The Wealth of Nations, Smith was part using Malthus's views on overpopulation. However, if Ricardo and Karl Marx both insist that population pressure will prevent wage rises beyond the purposes of (the so-called "law of wages of steel"), Smith asserts that the conditions of wage increase in production can be increased. It is perfectly clear, the events-proving that Smith was correct in this respect, while Ricardo and Marx missed.
Nothing to do with Smith's view of assessment or impact on the economic theorists who came later, the most important is its influence on legislation and politics taken by the government. The Wealth of Nations was written by a high prominence and clarity of vision that is not bertolok very broad appeal and legible. Arguments Smith facing government interference in business and world trade and for the sake of low prices and free economy, it certainly has influenced government policy towards the line in seseluruh the 19th century. Indeed, its influence in that it is still felt today.
Since the economic theory developed rapidly after the time of Smith, and some ideas displaced by the opinions of others, it is very easy to play down the significance of Adam Smith. It must be so, the facts show, he was the beginner and the founder of the economic figures as a systematic study, and he was actually leading figures in the history of human thought.
ADAM SMITH 1723-1790
Taken from:Hundred Most Influential People in HistoryMichael H. Hart, 1978
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