Wednesday, February 6, 2013

The Original Gangster

Adam Smith, the metaphorical jesus of the church of modern economics. From his book An inquiry into the nature and causes of the wealth of nations, the academic study of economics began. In his book, he lays out concepts that would become pillars of the study of economics such as the law of comparative advantage, human capital, and market equilibrium. From his teachings more than 200 years ago, modern economists still derive truths and educate students.

The question this week was:

“In what ways has Smith shaped the study of economics? Is his reputation deserved?”

My response would be that just like jesus, Adam Smith started a movement which has not only shaped the study of economics in general, but has changed the way most if not all major governments in the world operate. To put it in perspective, when Smith published WN ( Wealth of Nations ) the United States had just declared independence, a nations economical power was measured by how much gold you had standing in the bank at that moment, and industrialization was in its most infant stages. The enlightenment was in full swing, and he was an intellectual professing in Glasgow. This man, who was not at all a celebrity or even substantially wealthy at the time, would put on paper ideas that structure decision making on a global level. He has shaped the study of economics by giving it a point to start from, creating a work of literature that for the most part has stood the test of time and provided a basis for economic discussion, and in this book laid down principles and ideas which would become a global standard for economic thinking. Many latter and more accomplished economists regularly cite Smith in their works, and even expand and refine his ideas. He has shaped the study of economics by being the first giant who's shoulders you could stand on. (Yes that was a Newton Quote.)

Is his reputation deserved? Hell yes.

Many complain he was not the most original, that he could have been more genius and more concrete and expanded more on his theories, some even say he was not the first to come up with these ideas and that he was merely writing down the possible work of others, but all of this scrutiny come from people who did not live in his time and can only use hindsight to criticize a dead man. He was the first to make it big, he is the biggie and tupac of economics. He was the first to get it all down on paper in a way people could understand and interpret and released it during a time when there were open ears eager for new knowledge. Whether or not he was not the sole creator of these ideas, or that he could have done better, or offered more evidence for his theorems is irrelevant because he did it his way and it still had a profound effect on the world. Most criticisms of Smith that I have heard are simply stating that he was wrong in some aspect or another. This is understandable because he lived in 18th century

scotland where there was no internet, no global intellectual system, a very unrefined scientific process, and was writing general philosophy about an unexplored subject.

His reputation as a world changing thinker is definitely deserved, he wrote a book that changed the world. He is basically as cool as J.K Rowling

Anyone who thinks he does not deserve to be known as the father of economics would be more than hard pressed to find a better example.

Adam Smith
The Original Gangster

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