INTRODUCTORY NOTE
ADAM SMITH, political economist and moral philosopher, was born in Kirkcaldy, Scotland, June 5, 1723. His father, a lawyer and customs official, died before the birth of his son, who was brought up through a delicate childhood by his mother. At fourteen he was sent to the University of Glasgow, where he came under the influence of Francis Hutcheson, and in 1740 he went up to Oxford as Snell exhibitioner at Balliol College, remaining there till 1746. After leaving Oxford, he gave lectures upon English Literature and Economics, and in 1751 became professor of logic, and in 1752 of moral philosophy, at Glasgow. The reputation won by his lectures was increased by the publication, in 1759, of his “Theory of the Moral Sentiments,” one result of which was his appointment as travelling tutor to the third Duke of Buccleuch. In this capacity he spent nearly three years in France, and made the acquaintance of many of the intellectual leaders of that country. Returning to Britain in the end of 1766, he lived chiefly in Kirkcaldy and London, working upon his “Wealth of Nations,” which was finally published in 1776. It met with immediate success, and in a few years had taken an authoritative place with both philosophers and men of affairs. In the following year Smith was appointed a Commissioner of Customs, and took a house in Edinburgh, where he lived quietly and at ease till his death on July 17, 1790.
Political economy had been studied long before Adam Smith, but the “Wealth of Nations” may be said to constitute it for the first time as a separate science. The work was based upon a vast historical knowledge, and its principles were worked out with remarkable sanity as well as ingenuity, and skilfully illuminated by apt illustrations. In spite of more than a century of speculation, criticism, and the amassing of new facts and fresh experience, the work still stands as the best all-round statement and defence of some of the fundamental principles of the science of economics.
The most notable feature of the teaching of the “Wealth of Nations,” from the point of view of its divergence from previous economic thought as well as of its subsequent influence, is the statement of the doctrine of natural liberty. Smith believed that “man's self-interest is God's providence,” and held that if government abstained from interfering with free competition, industrial problems would work themselves out and the practical maximum of efficiency would be reached. This same doctrine was applied to international relations, and Smith's working out of it here is the classical statement of the argument for free trade.
In its original form the book contained a considerable number of digressions and illustrations which the progress of knowledge and of industrial civilization have shown to be inaccurate or useless, and of these the present edition has been unburdened. This process, while greatly increasing the interest and readableness of the book, has left intact Smith's main argument, which is here offered to the reader as admittedly the best foundation for the study of political economy.