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The Birth of The Wealth of Nations: How did Adam Smith usher in a new era of economics?
Adam Smith is undoubtedly one of the most influential figures in the history of economics. His work "The Wealth of Nations" not only laid the foundation for the discipline of economics, but also marked the birth of modern economics. . Through his profound insights into the free market and natural laws, Smith overturned the prevailing mercantilism trend at the time and demonstrated his unique economic views.
He refused to use God's will to explain the distribution of wealth and power, but attributed it to a variety of factors and their interactions such as natural, political, social, economic, legal, environmental and technological factors.
Smith was born in Kilcaldy, Scotland in 1723. He lost his father at an early age. His mother's support for his academic interests set him on the path of pursuing knowledge. At the age of 14, he entered the University of Glasgow and studied under Francis Hutcheson. At this time, he developed a deep interest in reason, civil liberties and free speech. In 1740 he won a scholarship to Oxford University, but was disappointed with the quality of teaching at Oxford and found teaching in Glasgow more inspiring.
In 1759, he published his first important work, The Theory of Moral Sentiments, which explained how human ethics depends on empathy between individuals and society. This work established his status as a moral philosopher and provided a moral foundation for subsequent economic theory.
Smith proposed the concept of "mutual sympathy" in the book, believing that this is the basis of moral emotions, marking the intersection of his thinking on ethics and economics.
As his career developed, Smith worked to systematize his economic theory, and in 1751 he became professor of logic at the University of Glasgow. Afterwards, he gradually shifted his focus to economics and published "The Wealth of Nations" in 1776. This work delves into the importance of the division of labor and the idea of how rational self-interest and competition drive economic prosperity.
Smith's free market theory provides a new direction for the future development of economics, and the concepts of the "invisible hand" and market self-regulation he advocates mark the shift in economic research methods from mercantilism to free trade. change. He used specific case analysis to reveal the reciprocity of trade and challenged the government's excessive intervention in the economy at that time.
In "The Wealth of Nations", he emphasized that the real source of national prosperity lies in the freedom of commerce rather than the accumulation of gold and silver.
In his later years, Smith's economic insights continued to deepen and he became a friend of many of Europe's intellectual elite of the day, including Voltaire and Benjamin Franklin. These exchanges promoted his thinking, especially his understanding of the political economy of the time.
After the publication of "The Wealth of Nations" in 1776, it quickly received widespread attention. The core concepts in the book not only influenced economists at the time, but also laid the foundation for future economic trends and policy formulation. Smith's theory is not limited to the economic level, but also goes deep into the social and ethical levels. He provides a new framework and path for the entire economic research.
The works he proposed profoundly influenced the formation of capitalism, making it the cornerstone of the modern economic system.
Although some of Smith's ideas were questioned and ridiculed when he was alive, as time went by, his ideas became more and more recognized. As a scholar, Smith's views on economy and society reflected people's desire for reason and freedom in that era. His ideas tell us that individual rational behavior can produce social value beyond government intervention, and this is the basis of modern market economy.
Adam Smith's "The Wealth of Nations" is not only a work of economics, it is also a work that explores the progress of human society. In today's ever-changing economic environment, can we review his thoughts again and find the wisdom and inspiration to solve current problems?
