Adam Smith was born in Kirkcaldy, Fife, Scotland. His exact date of his birth is
unknown but he was baptized on June 5, 1723. At the age of fifteen, Smith began
attending Glasgow University where he studied moral philosophy. In 1748 he began giving
lectures in Edinburgh where he discussed rhetoric and later he began to discuss the
economic philosophy of the simple system of natural liberty which he later proclaimed in
his Inquiry into Nature and Causes of the Wealth of Nations.
In 1751, Smith was appointed professor of logic at Glasgow university,
transferring in 1752 to the chair of moral philosophy. His lectures covered the field of
ethics, rhetoric, jurisprudence and political economy. In 1759 he published his Theory of
Moral Sentiments, embodying some of his Glasgow lectures. This work was about those
standards of ethical conduct that hold society together, with emphasis on the general
harmony of human motives.
Smith moved to London in 1776, where he published An Inquiry into the Nature
and Causes of the Wealth of Nations, which examined in detail the consequences of
economic freedom. It covered such concepts as the role of self-interest, the division of
labor, the function of markets, and the international implications of a laissez-faire
economy. The Wealth of Nations established economics as an autonomous subject and,
launched the economic doctrine of free enterprise. In the western world, it is the most
influential book on the subject. When the book, which has become a classic manifesto
against mercantilism, appeared in 1776, there was a strong sentiment for free trade in both
Britain and America. This new feeling had been born out of the economic hardships and
poverty caused by the war but the British public and parliament still clung to mercantilism
for many years to come. Smith laid the intellectual framework that explained the free
market and still holds true today. He is most often recognized for the expression the
invisible hand, which he used to demonstrate how self-interest guides the most efficient
use of resources in a nation’s economy.
In 1778, he was appointed to a post of commissioner of customs in Edinburgh,
Scotland. He died there on July 17, 1790, after a painful illness. After his death it was
discovered that Smith had devoted a considerable part of his income to numerous secret
acts of charity.
In the piece entitled Four Percent Follies from The Accidental Theorist Krugman
discusses how some people think Alan Greenspan should let the economy grow faster.
Four Percenters, those against Greenspan, feel that he is not putting enough currency into
circulation therefore slowing growth. If more money is put into the economy then nit will
grow faster but if too much is put in, inflation will occur. Also, they feel that this will
remedy the low rate of unemployment which will soon cause inflation to spiral upward if it
continues to decrease below the standard 6%.
Adam Smith would surely understand the Four Percenters plea. He would want
the economy to be free from too much government control. Greenspan is abusing his place
and should let the currency flow into the market rather then hold back. Sure, Smith would
say some mediation is necessary to keep too much money from pouring in so inflation
doesnt occur. Smith believes that the economy should be free from the government yet
the government should still silently oversee it to prevent any problems. Greenspan is
preventing problems but is being too cautious and Smith would want him to let more
currency into our market but still keep it from getting out of control.
My view on this matter is quite similar to that of Adam Smiths view on the
matter. I also feel that an economy should be allowed to flourish and grow to its fullest
capacity. As the article illustrates, inserting more money into the economy will certainly
cause the economy to grow and also help fix the unemployment rate. So I feel that
Greenspan should loosen his control over the money and let more currency be distributed
into the economy. But I also feel that it is very important that Greenspan maintains a
watchful eye over this inserting of money into the economy. His job is to keep the
economy prosperous and safe. So while he must let more money flow he still must be sure
to keep too much money from entering our market. He can not let inflation occur because
that would hurt our economy and he will have failed. That is why his job is difficult,
however, as the man placed in that position he must be able to handle this. Either
Greenspan lets more money enter the economy while overseeing it as too prevent inflation
or America simply needs to find a new Chairman of the Federal Reserve.
The second article from The Accidental Theorist is called Technologys Wonders:
Maybe not so wondrous.