Scottish economist and philosopher, born in Kirkcaldy on Scotland's east coast. Often called the "father of economics," though the accolade may overstate his novelty. Behind only Karl Marx, he is the best-known economist in history.
Smith was shy, though he enjoyed drinking claret with friends. He never married. He quit a scholarship at Oxford in 1746 because he thought the teaching was poor. He was fantastically absent-minded: he once wandered out of town in his dressing gown; he brewed a beverage of bread and butter and pronounced it the worst tea he had ever tasted. By his early thirties he was professor of moral philosophy at Glasgow University. He later became an independent scholar to make a bigger impact. On his deathbed in 1790, he ordered his papers to be burned.
His most famous book, "An Inquiry into the Nature and Causes of the Wealth of Nations", turns 250 in 2026. The popular view that Smith celebrated selfishness and laissez-faire is a caricature. He used the phrase "invisible hand" only three times across all his works, never in reference to the price mechanism, and borrowed it from Macbeth. He often favoured the visible hand of government: he urged state-provided education, favoured legal caps on interest rates, and supported the Navigation Acts (similar to what is now America's Jones Act).
His famous "butcher, baker" quotation is widely misread. Smith's argument was not that selfishness creates markets, but that markets encourage people to think both of themselves and others at the same time -- to frame offers in terms the other party can accept. This drew on the contemporary idea of doux commerce, found in Montesquieu.
Smith argued for the "labour theory of value" (that the amount of work going into a product determines its price), a theory that distracted economists for decades and laid the groundwork for Marxism.
Smith's first major work introduced the "impartial spectator", a model of human decision-making. He insisted that humans do not make decisions purely from selfish impulses but consult an inner moral judge.
Margaret Thatcher supposedly carried a copy of the "Wealth of Nations" in her handbag. Javier Milei, Argentina's libertarian president, is a devotee. A cottage industry of academics led by Amartya Sen has encouraged closer reading of Smith, revealing the caricature of him as a pure free-marketeer to be misleading.
Smith did not invent GDP (William Petty, in the 1660s, probably gets that accolade). He was not the first to recommend free trade -- Francois Quesnay got there earlier. Nor was he the first to recognise the benefits of the division of labour -- Plato beat him by 2,000 years. His famous pin-factory example may have been "borrowed" from the French "Encyclopaedia". John Maynard Keynes, discussing the plagiarism charge, shrugged: "It seems unlikely that the question can ever be answered for certain."
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