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Contributions of Adam smith to the study of economics

Contributions of Adam smith to the study of economics
Adam Smith (1723-1790), was a Scottish philosopher and economist. He was born in a
small village called kirkcaldy where his widowed mother raised him. At age fourteen, he joined
the University of Glasgow after getting a scholarship. He later on entered Balliol College at
Oxford, and graduated with a wide knowledge of European literature. He also began to develop
contempt of English schools. He later on returned home and after delivery of well-received
lectures, he was made the chair of logic (1751) and chair of philosophy (1952), at Glasgow
University. He made a tour of the young duke of buccleuch for around two years after leaving
the academia in 1764. He travelled through France and Switzerland where he met people like
Voltaire, Jean Jacques Rousseau, Françoise Quesnay, and Anne Robert Jacques Turgot. Adam
smith is known for his book ‘The wealth of nations’ published in 1776. He died in Edinburgh in
The Wealth of Nations, was published as a five-book series, and intends to show where a
countries wealth lies. Smith saw the chief foundation of wealth as increasing division of labor.
Using the example of pins, Smith illustrated how ten workers could produce 48,000 pins in a day
if each of eighteen specialized functions was dedicated to particular workers. The average
productivity is 4,800 pins per worker per day. With absence of the division of labor, a worker
may not even produce a pin per day. How one can best apply their own labor or other resource is
a main subject of the first book in series. Smith asserts that a person would invest with the
expectation of a higher return. Other resources should also yield at the same rate. If such do not
happen then reallocation of the resource would occur. An idea George Stigler called central
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