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In economics, the invisible hand is a metaphor used by Adam Smith to describe unintended social benefits resulting from individual actions. The phrase has come to capture his notion that individuals' efforts to pursue their own interest may frequently benefit society more than if their actions were directly intending to benefit society.

Laissez-faire is an economic system in which transactions between private parties are free from government interference such as regulations, privileges, tariffs, and subsidies.

Adam Smith first used the metaphor of an "invisible hand" in his book The Theory of Moral Sentiments to describe the unintentional effects of economic self-organization from economic self-interest. In political economy, that idea and the doctrine of laissez-faire have always been closely related. Some have characterized the invisible hand metaphor as one for laissez-faire, though Smith never actually used the term himself.

Basic Information

Later Years

Adam Smith (Unknown– 17 July 1790) was a Scottish moral philosopher, pioneer of political economy, and key Scottish Enlightenment figure

He died in the northern wing of Panmure House in Edinburgh on 17 July 1790 after a painful illness and was buried in the Canongate Kirkyard. On his death bed, Smith expressed disappointment that he had not achieved more.

Early Year

Formal Education

Teaching Career

Tutoring and Travels

Later Year

CONTENT

1. Basic information

Insight Into Adam Smith

Formal Education

Early Year

Smith entered the University of Glasgow when he was fourteen and studied moral philosophy under Francis Hutcheson. Here, Smith developed his passion for liberty, reason, and free speech. In 1740 Smith was the graduate scholar presented to undertake postgraduate studies at Balliol College, Oxford, under the Snell Exhibition.

2. His economic theories

Teaching Career

Tutoring and travels

Smith was born in Kirkcaldy, in the County of Fife, in Scotland. His father, also of the same name, was a Scottish Writer to the senior solicitor, advocate, and prosecutor and also served as comptroller of the Customs in Kirkcaldy. In 1720 he married Margaret Douglas, daughter of the landed Robert Douglas of Strathendry, also in Fife. His father died two months after he was born, leaving his mother a widow. The date of Smith's baptism into the Church of Scotland at Kirkcaldy was 5 June 1723, and this has often been treated as if it were also his date of birth.

Smith began delivering public lectures in 1748 in Edinburgh, sponsored by the Philosophical Society of Edinburgh under the patronage of Lord Kames. His lecture topics included rhetoric and belles-lettres, and later the subject of "the progress of opulence". On this latter topic he first expounded his economic philosophy of "the obvious and simple system of natural liberty". While Smith was not adept at public speaking, his lectures met with success

In 1751, Smith earned a professorship at Glasgow University teaching logic courses, and in 1752 he was elected a member of the Philosophical Society of Edinburgh.

Smith's tutoring job entailed touring Europe with Scott, during which time he educated Scott on a variety of subjects – such as proper Polish. He was paid £300 per year (plus expenses) along with a £300 per year pension; roughly twice his former income as a teacher. Smith first travelled as a tutor to Toulouse, France, where he stayed for one and a half years. According to his own account, he found Toulouse to be somewhat boring, having written to Hume that he "had begun to write a book to pass away the time".

Economic Theories

The Wealth of Nations

Laissez-faire

&

Invisible Hand

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