Adam Smith - The Inventor of Market Economy I THE INDUSTRIAL REVOLUTION



if you ever been in England then you probably come across those 20 pound notes but the portrait of Queen Elizabeth on it but who is that a guy on the other side well that is Adam Smith in a time in which mercantilism reigned supreme where there were no free agents and I other economics or politics Adam Smith was the champion of the free market economy for Smith it was the demands of the market itself and not the state that should have the final save everything hung on whether someone decided to buy something or not my name is Brett and welcome to its history little is actually known about the founder of classical economics we don't even know exactly when Adam Smith was born only that he was baptised in a small town on the east coast of Scotland Kirkcaldy on the 5th of June 17:23 the kukkala D is a small city that then was becoming an increasingly important trade and shipping port at the time little Adam Smith was probably a very clever and attentive child at school and at the young tender age of 14 he enrolled at the University of Glasgow in 1740 he finished his studies and received a scholarship to Oxford University even then this was one of the most prestigious universities in Europe what grabbed his interest is not well-known to us but he seemed to have felt under challenged by the by weekly lectures offered by the University between 1748 and 1751 Smith held many public lecture positions eventually receiving a professorship at Glasgow unlike Oxford where the old tradition values were held in high regard Glasgow was thought to be more progressive in modern Smith became co-founder of the select society a sort of debate club were scientists philosophers theologians and others could discuss the science politics and cultures of the day this time would later be seen as fundamental for Smith's later ideas and views the idea of a god-given society that could not be changed gave way to an understanding that society could be manipulated and shaped Smith began with man as a political subject and set forth to analyze and question his economic activity how does an economy work and why do people act economically in London 1759 Smith published his work the Theory of Moral Sentiments and this book became so successful that it was read not only in England but throughout Europe even by the famous German philosopher Smith focused in particular on the question of why man beside his natural need for self-preservation is interested in the fortunes of others replacing the feeling of a moral sense with the principle of sympathy the success of his book brought him a lucrative offer to be a private tutor for the young Duke of Buccleuch while he was touring through Europe this journey of his was not only very well-paid but also brought him in contact with the leading French intellectuals of the day like Voltaire in 1764 a Smith's adventure led him first to Paris and into the heart of mercantilism number k'en'dl ISM then being the dominant theory of the age that promoted governmental regulations here is where Smith received his valuable insight from an economic system in which state intervention was a commonplace there were government operated factories as well as heavily regulated trade now the French government allowed for the import of raw material to ensure that Goods would only be produced in their own country now back home even though the English economy was allowed to run with a bit more freedom there were also many import duties and restrictions that Smith became more and more critical of for him it was obvious that economic prosperity for all can be realized through one's own self-interest and competition a baker makes bread and a brewmaster beer but they don't feed and toxic 8 the public out of their own generosity and the division of labor was also important to him because it made one more productive the bigger the market the more room for specialization in certain areas further increasing productivity that would lower the prices as competition went up needless to say mr. Smith considered the expansion of markets absolutely essential and openly criticised tariffs and other restrictions administered from both the guilds and the governments alike for him it was certain that an unregulated form of free market would provide sustainable wealth for the whole nation England around this time began to change rapidly private citizens were redirecting rivers building canals and long distance roads allowing for faster transportation of goods trips from London to Birmingham could be made in less than 20 hours instead of two days in 1770 Europe became home to the first cotton mill and in the basement of the University of Glasgow James Watt built his new and improved steam engine Adam Smith closely observed these and other developments and he wrote about them in great detail and in 1776 he published his famous inquiry into the nature and causes of the wealth of nations which he wrote as an attack upon the economic system of the day he also addressed the division of labour people's propensity to barter and trade and provided a theory for an economic cycle built upon self-interest that would provide for the ever testing wealth of a nation for Smith as quoted from the book it is not from the benevolence of the butcher the brewer or the Baker that we expect our dinner but from the regard to their own interest basically it is because of self-interest that the butcher and the Baker sell their wares for money instead of just giving them away and with that money earned they could spend it at their friend the camel stick maker who in turn spends it at the pub and so on and so forth it is one's own self-interest that indirectly promotes a well-functioning economy the metaphor of the invisible hand that channels the selfish interest of the individual into a socially desirable n is of central importance for the classical lazy affair economics but debate still exists as to how powerful the invisible hand really is despite the strong criticism he leveled against the British economic system mr. Smith was appointed by the British prime minister in 1778 to a post as a customs inspector in Edinburgh will heat the great advocate of free trade working as a customs collector waiting in a state of cat-like readiness ready to pounce on any would-be smuggler how could he take such a job well we should remember that the job of a custom was official back in the day was a completely different ballgame it was then a highly paid post that many saws reward for his intellectual achievements a position he found to be enjoyable and relaxing and which he kept until the day of his death in 1790 on his deathbed mr. Smith was actually disappointed that he had not achieved more and before succumbing to a painful illness he instructed his executives to burn all of his unfinished writings Adam Smith died on July 17th 1790 in Edinburgh by then Great Britain found itself in the middle of the industrial revolution with around 200 factories making it one of the largest industrial nations in the world two years after Smith's death the Prime Minister of England gave a speech before the House of Commons that presented an explicit commitment to the idea of free trade since then Adam Smith's thought has made a profound impact on both economics and politics he's considered to be the founding father of economic liberalism so what do you think about mr. Smith's ideas his theories were discussed a whole lot through the financial crises of the past years but are they still relevant where is this incorporated invisible hand giving the rest of us the finger in the new global age let us know what you think and send us your thoughts in the comments down below and don't forget to subscribe see you next time on its history




Comments
  1. I wouldn't call him "the inventor". For instance, in his Nobel Prize reception speech, Friedich Hayek already mentioned:

    "Indeed, the chief point was already seen by those remarkable anticipators of modern economics, the Spanish schoolmen of the sixteenth century, who emphasized that what they called pretium mathematicum, the mathematical price, depended on so many particular circumstances that it could never be known to man but was known only to God."

    Also, From Elgar Companion to Hayekian Economics:
    "The Spanish schoolmen, as Hayek called them, developed a subjective approach to value that they applied to monetary theory. They appear to be the first group of thinkers to devote attention to the idea that markets operate through self-regulation based on the subjective valuation of goods through prices."

  2. could you do a show on the freemasons when the time comes because i could could only find papal and church documents that were actually factual and historical besides old trial documents and anti-masonic newspapers and the first "third party" in the United States Anti-Masonic Party because other sources were incomplete or altered or Missing

    all i can find in modern times its a fraternal organisation the ritual and symbolism of the craft, others will focus their involvement on the social side of the Lodge, while still others will concentrate on the charitable functions

    i like to know more factual information because so many historical figures were freemasons Of the 44 people who have been President of the United States, roughly one-third (14, or by some counts 15*) were Freemasons.

  3. I dont usually post comment, but i do like these topics. But, your face is boring and after awhile, annoying. Replace your face with footage please.

  4. I think the one flaw in Adam Smith's capitalism was not including guilds and unions in the free market. Workers also need to be competitive with their labor, and companies need to compete for both workers and market share

  5. Adam Smith is controversial against economics ruining to the principles of balanced on life itself.

  6. It is what it is! He made a mark! Let it be!
    His ideas did seem to make someone money!

  7. adam smith copied his idead from the documents at the universitt of salamanca where at the 1510s the spaniards founded the science of economy and economical ethics and market freedom. adam smith was at salamanca and copied his ideas from their.

    adam smith DID NOT invent economical freedom in market.
    spaniards did.

    once again british historiography lies gain terrain due to peoples ignorance

  8. The description of mercantilism is so completely off that I unsubscribed from this channel as quickly as I had subscribed to it. I am very disappointed. The definition seems tailored to fit modern arguments against government regulation. The basic and fallacious view of wealth as a static pool of precious metals, and all national wealth as a slice of a finite pie, is absolutely ignored. This robs Smith of credit for his most revolutionary insights.

  9. This is all lies Adam Smith was basically  a supporter of pirates things like the Rothschild's buying the British stock market after they tricked them Britain had lost the Battle of Waterloo. Also the British East India company and the  opium wars in China. Schools and university's teach shit brainwashing kids assholes criminals not smart arses with dunces square caps

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