A five-minute guide to Adam Smith

An Edinburgh monument to Adam SmithThe "father of modern economics", Scottish philosopher and economist Adam Smith wrote the hugely influential "An Inquiry into the Nature and Causes of the Wealth of Nations", usually abbreviated to "The Wealth of Nations".

Born in 1723, Smith remains one of the most important thinkers in the field of economics today.

Who he was
Smith studied social philosophy at the University of Glasgow and at Balliol College, Oxford.

He made his reputation with a series of public lectures at the University of Edinburgh, before obtaining a professorship at Glasgow teaching moral philosophy.

Later in life, he travelled extensively in Europe as a tutor to Henry, the future Duke of Buccleuch, meeting famous intellectuals such as Voltaire and Rousseau.

He then spent the 10 years writing The Wealth of Nations, which was published in 1776, before being appointed commissioner of customs in Edinburgh and becoming a founding member of the Royal Society of Edinburgh. He died in 1790.

What he believed
In the 1700s, national wealth was measured in terms of a country's stock of gold and silver.

Importing goods from abroad was seen as damaging because it meant that this wealth must be given up to pay for them, while exporting goods was seen as positive because it added to the stores.

However, Smith argued that in a free exchange, both sides became better off. Or that, in other words, imports are just as valuable to us as our exports are to others and that that if people were set free to better themselves, it would produce economic prosperity for all.

He was the first economist to look at a nation's wealth as the total of its production and commerce – what today we would call gross domestic product or GDP.

How he changed the world
The Wealth of Nations" deeply influenced the politicians of the time and provided the intellectual foundation of the great 19th century era of free trade and economic expansion.

Today the common sense of Smith's vision of free trade is globally accepted, despite the practical difficulties of achieving it.