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{{Otherpeople|Adam Smith}}
{{Infobox_Philosopher |
<!-- Scroll down to edit this page -->
<!-- Philosopher Category -->
region = Western Philosophers |
era = [[18th-century philosophy]]<br>(Modern Philosophy) |
color = #B0C4DE |
<!-- Image and Caption -->
image_name = AdamSmith.jpg |

image_caption = Adam Smith, Father of Individualism |

<!-- Information -->
name = Adam Smith|
birth = [[June 5]], [[1723]] (baptized) ([[Kirkcaldy]], [[Fife]], [[Scotland]], [[Kingdom of Great Britain]]) |
death = [[July 17]], [[1790]] ([[Edinburgh]], [[Scotland]], [[Kingdom of Great Britain]]) |
school_tradition = [[Classical economics]] |
main_interests = [[Political philosophy]], [[ethics]], [[economics]] |
influences = [[Aristotle]], [[Thomas Hobbes|Hobbes]], [[John Locke|Locke]], [[Bernard de Mandeville|Mandeville]], [[Francis Hutcheson (philosopher)|Hutcheson]], [[David Hume|Hume]], [[Baron de Montesquieu|Montesquieu]], [[François Quesnay|Quesnay]] |
influenced = [[Thomas Malthus|Malthus]], [[David Ricardo|Ricardo]], [[John Stuart Mill|Mill]], [[John Maynard Keynes|Keynes]], [[Milton Friedman|Friedman]], [[Karl Marx|Marx]], [[Friedrich Engels|Engels]], [[Founding Fathers of the United States|American Founding Fathers]] |
notable_ideas = [[Classical economics]], modern [[free market]], [[division of labour]], [[invisible hand]]|
}}
'''Adam Smith''' (baptized [[June 5]], [[1723]] &ndash; [[July 17]], [[1790]]) was a [[Scotland|Scottish]] [[philosopher]] and a pioneering [[political economy|political economist]]. One of the key figures of the intellectual movement known as the [[Enlightenment]], he is known primarily as the author of two treatises: ''[[The Theory of Moral Sentiments]]'' (1759), and ''[[The Wealth of Nations|An Inquiry into the Nature and Causes of the Wealth of Nations]]'' (1776). The latter was one of the first examples of applying analysis and historical study to economics in [[Europe]], lending support to the idea of expanding individual freedoms and the concept of the [[social contract]] and [[natural rights]]. Smith's work also helped to create the modern academic discipline of [[economics]] as well as provide academic justification to [[capitalism]], [[free trade]] and [[libertarianism]].

==Intellectual Contribution==
Smith contended that economic liberty was the keystone to a sound economy. He claimed that the intention of production was consumption and therefore an increase in production raised the standard of living. Self-interested people, Smith believed, sought to earn wealth by enriching others this way and in turn compete to produce the best product. The appropriate price for a good determined to be somewhere between what a producer is willing to sell it for and what a consumer is willing to pay. Smith described this as the "invisible hand" that guided the market and led it to greater wealth and enrichment.

{{Cquote2|Every man is, no doubt, by nature, first and principally recommended to his own care; and as he is fitter to take care of himself than of any other person, it is fit and right that it should be so. |[[Adam Smith]]|''[[The Theory of Moral Sentiments]]''}}

[[Image:Adam Smith.jpg|right|thumb|Adam Smith]]

===Free Trade===
At the time of the publication of Adam Smith's works the nations of Europe had adopted the philosophy of [[mercantilism]]. Each nation sought to encourage exports and discourage imports in an effort to expand national coffers and protect domestic jobs by enacting regulations, tariffs and restrictions on industry. Smith rebutted this system by contending that greater economic growth could be found in free trade between nations. Each nation should produce the goods in which it had the greatest [[comparative advantage]], and in turn import the goods that would be more expensive to produce itself. Smith said that if such a system of economic freedom was embraced by government the highest quality, lowest cost products would be made available.

===Role of Government===
While rejecting the interference of government in trade between nations and the operation of business' with his theory of "[[laissez-faire]]" (let them do),Smith felt the government still had an important task to manage. His economic structure required a complex system of [[private property]] that the government, acting in everyone's interest, is obliged to protect. The government should also be obliged to provide services that the private sector would be "unlikely" to participate in, such as the construction of roads, the construction of schools and the maintenance of a military.

In 1751 Smith was appointed chair of [[logic]] at the University of Glasgow, transferring in 1752 to the [[Professor of Moral Philosophy, Glasgow|Chair of Moral Philosophy]], once occupied by his famous teacher, Francis Hutcheson. His lectures covered the fields of [[ethics]], [[rhetoric]], [[jurisprudence]], [[political economy]], and "police and revenue". In 1759 he published his ''[[The Theory of Moral Sentiments]]'', embodying some of his [[Glasgow]] lectures. This work, which established Smith's reputation in his day, was concerned with how human communication depends on sympathy between agent and spectator (that is, the individual and other members of society). His analysis of language evolution was somewhat superficial, as shown only 14 years later by a more rigorous examination of primitive language evolution by [[Lord Monboddo]] in his ''Of the Origin and Progress of Language''<ref>Cloyd, E.L.: ''"[[James Burnett, Lord Monboddo]]"'', pp 64-66. Oxford University Press, 1972</ref>. Smith's capacity for fluent, persuasive, if rather rhetorical argument, is much in evidence. He bases his explanation, not as the third Lord Shaftesbury and Hutcheson had done, on a special "moral sense", nor (as Hume did) on [[utilitarianism|utility]], but on sympathy.

Smith now began to give more attention to jurisprudence and economics in his lecture and less to his theories of morals. An impression can be obtained as to the development of his ideas on political economy from the notes of his lectures taken down by a student in about 1763 which were later edited by [[Edwin Cannan]]<ref>''"Lectures on Justice, Police, Revenue and Arms"'', 1896</ref>, and from what Scott, its discoverer and publisher, describes as "An Early Draft of Part of The Wealth of Nations", which he dates about 1763. Cannan's work appeared as ''Lectures on Justice, Police, Revenue and Arms''. A fuller version was published as [[Lectures on Jurisprudence]] in the Glasgow Edition of 1976.

===Susie Derkins Smells!!11===
In 1762 the academic senate of the [[University of Glasgow]] conferred on Smith the title of [[doctor of laws]] (LL.D.). At the end of 1763, he obtained a lucrative offer from [[Charles Townshend]] (who had been introduced to Smith by [[David Hume]]), to tutor his stepson, the young [[Henry Scott, 3rd Duke of Buccleuch|Duke of Buccleuch]]. Smith subsequently resigned from his professorship and from 1764-66 traveled with his pupil, mostly in [[France]], where he came to know intellectual leaders such as [[Anne Robert Jacques Turgot, Baron de Laune|Turgot]], [[Jean le Rond d'Alembert|Jean D'Alembert]], [[André Morellet]], [[Helvétius]] and, in particular, [[Francois Quesnay]], the head of the [[physiocrats|Physiocratic school]] whose work he respected greatly. On returning home to Kirkcaldy Smith was elected fellow of the [[Royal Society]] of [[London]] and he devoted much of the next ten years to his ''magnum opus'', ''[[The Wealth of Nations]],'' which appeared in 1776. The book was very well-received and made its author famous.

===Later years===
In 1778 Smith was appointed to a post as commissioner of customs in Scotland and went to live with his mother in Edinburgh. In 1783 he became one of the founding members of the [[Royal Society of Edinburgh]] and from 1787 to 1789 he occupied the honorary position of Lord [[Rector of the University of Glasgow]]. He died in Edinburgh on July 17, 1790, after a painful illness and was buried in the [[Canongate Kirkyard]].

{{wikisource|Times Obituary of Adam Smith}}
Smith's literary executors were two old friends from the Scottish academic world; the physicist and chemist [[Joseph Black]], and the pioneering geologist [[James Hutton]]. Smith left behind many notes and some unpublished material, but gave instructions to destroy anything that was not fit for publication. He mentioned an early unpublished ''History of Astronomy'' as probably suitable, and it duly appeared in 1795, along with other material, as ''[[Essays on Philosophical Subjects]]''.

===Personal character and views===
Very little is known about Smith beyond what can be deduced from his published works. All of his personal papers were destroyed after his death. He never married and seems to have maintained a close relationship with his mother, with whom he lived after his return from France and who predeceased him by only six years. Contemporary accounts describe Smith as an eccentric but benevolent intellectual, comically absent minded, with peculiar habits of speech and gait and a smile of "inexpressible benignity."<ref>The comment, by [[Dugald Stewart]], is quoted in Ch. 17 of John Rae's biography [http://www.econlib.org/library/YPDBooks/Rae/raeLS17.html#Chapter%2017]</ref> His patience and tact are said to have been valuable to his work as a university administrator at Glasgow. After his death it was discovered that much of his income had been devoted to secret acts of charity.

There has been considerable scholarly debate about the nature of Adam Smith's religious views. Smith's father had a strong interest in Christianity<ref>Ross, Ian Simpson, ''The Life of Adam Smith'' page 15</ref> and belonged to the moderate wing of the [[Church of Scotland]] (the [[national church]] of Scotland since [[1690]]). Smith may have gone to [[England]] with the intention of a career in the Church of England: this is controversial and depends on the status of the Snell Exhibition. At Oxford, Smith rejected Christianity and it is generally believed that he returned to Scotland as a [[Deism|Deist]].<ref>"When the time of his residence at Oxford expired, the question arose what line he was afterwards to pursue. He was destitute of patrimony and had not any turn for business. The Church seemed an improper profession, because he had early become a disciple of [[Voltaire]] in matters of religion." [[wikisource:Times obituary of Adam Smith|Times obituary of Adam Smith]]</ref>

Economist [[Ronald Coase]], however, has challenged the view that Smith was a Deist, stating that, whilst Smith may have referred to the "[[Great Architect of the Universe]]", other scholars have "very much exaggerated the extent to which Adam Smith was committed to a belief in a personal God". He based this on analysis of a remark in ''The Wealth of Nations'' where Smith writes that the curiosity of mankind about the "great phenomena of nature" such as "the generation, the life, growth and dissolution of plants and animals" has led men to "enquire into their causes". Coase notes Smith's observation that: "Superstition first attempted to satisfy this curiosity, by referring all those wonderful appearances to the immediate agency of the gods. Philosophy afterwards endeavoured to account for them, from more familiar causes, or from such as mankind were better acquainted with than the agency of the gods." Coase argues that this is "hardly a remark which would have been made by a strong, or even a mild, deist."<ref>{{cite paper|url=http://www.chicagogsb.edu/research/selectedpapers/sp50a.pdf|format=PDF|title=Adam Smith's View of Man|author=R. H. Coase|pages=19 &ndash; 20|publisher=University of Chicago Graduate School of Business}}</ref> According to Coase, Smith's attitude towards religion was problably close to that of his friend and mentor, the [[Atheism|atheist]] [[David Hume]].

==Works==
Shortly before his death Smith had nearly all his manuscripts destroyed. In his last years he seemed to have been planning two major treatises, one on the theory and history of law and one on the sciences and arts. The posthumously published ''Essays on Philosophical Subjects'' (1795) probably contain parts of what would have been the latter treatise.

''[[The Wealth of Nations]]'' was influential since it did so much to create the field of economics and develop it into an autonomous systematic discipline. In the Western world, it is arguably the most influential book on the subject ever published. When the book, which has become a classic manifesto against [[mercantilism]] (the theory that large reserves of [[bullion]] are essential for economic success), appeared in 1776, there was a strong sentiment for [[free trade]] in both Britain and America. This new feeling had been born out of the economic hardships and poverty caused by the American War of Independence. However, at the time of publication, not everybody was immediately convinced of the advantages of free trade: the British public and Parliament still clung to mercantilism for many years to come.

''The Wealth of Nations'' also rejects the [[Physiocrat]]ic school's emphasis on the importance of land; instead, Smith believed labour was paramount, and that a [[division of labour]] would effect a great increase in production. One example he used was the making of pins. One worker could probably make only one pin per day. But if ten people divided up the eighteen steps required to make a pin, they could make a combined amount of 48,000 pins in one day. ''Nations'' was so successful, in fact, that it led to the abandonment of earlier economic schools, and later economists, such as [[Thomas Malthus]] and [[David Ricardo]], focused on refining Smith's theory into what is now known as [[classical economics]]. Both [[Modern economics]] and, separately, [[Marxian economics]] owe significantly to classical economics. Malthus expanded Smith's ruminations on [[overpopulation]], while Ricardo believed in the "[[iron law of wages]]" — that overpopulation would prevent wages from topping the subsistence level. Smith postulated an increase of wages with an increase in production, a view considered more accurate today.

One of the main points of ''The Wealth of Nations'' is that the free market, while appearing chaotic and unrestrained, is actually guided to produce the right amount and variety of goods by a so-called "[[Invisible Hand|invisible hand]]" (an image that Smith had previously employed in ''Theory of Moral Sentiments,'' but which has its original use in his essay, "The History of Astronomy"). If a product shortage occurs, for instance, its price rises, creating a profit margin that creates an incentive for others to enter production, eventually curing the shortage. If too many producers enter the market, the increased [[competition]] among manufacturers and increased supply would lower the price of the product to its production cost, the "[[natural price]]". Even as profits are zeroed out at the "natural price," there would be incentives to produce goods and services, as all costs of production, including compensation for the owner's labour, are also built into the price of the goods. If prices dip below a zero profit, producers would drop out of the market; if they were above a zero profit, producers would enter the market. Smith believed that while human motives are often [[selfishness|selfish]] and [[Greed (emotion)|greedy]], the competition in the free market would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and argued against the formation of [[monopoly|monopolies]].

Smith vigorously attacked the antiquated government restrictions which he thought were hindering industrial expansion. In fact, he attacked most forms of government interference in the economic process, including [[tariff]]s, arguing that this creates inefficiency and high prices in the long run. This theory, now referred to as "[[laissez-faire]]", which means "let them do", influenced government legislation in later years, especially during the 19th century. (However this was not opposition to government. Smith advocated a Government that was active in sectors other than the economy: he advocated public education of poor adults; institutional systems that were not profitable for private industries; a judiciary; and a standing army.)

Two of the most famous and often-quoted passages in ''The Wealth of Nations'' are:

:''It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.''

:''As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual value of society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

==Do Not Cite Wikipedia!==
{{liberalism}}
In the ''Wealth of Nations'' Smith claims that self-interest alone (in a proper institutional setting) can lead to socially beneficial results. But in his ''Theory of Moral Sentiments'' Smith argues that sympathy is required to achieve socially beneficial results. On the surface it appears that a contradiction exists. Economist August Oncken referred to this in German as ''[[:de:Adam-Smith-Problem|das 'Adam Smith-Problem']]''.<ref>August Oncken, "The Consistency of Adam Smith," The Economic Journal 7, no. 27 (1897): 444.</ref> [[Austria]]n economist [[Joseph Schumpeter]] also emphasized this apparent contradiction in his commentary on Smith's work.

Adam Smith himself cannot have seen any contradiction, since he produced a revised edition of ''Moral Sentiments'' after the publication of ''Wealth of Nations''. Both sets of ideas are to be found in his ''Lectures on Jurisprudence''. In recent years most students of Adam Smith's work have argued that no contradiction exists. In the ''Theory of Moral Sentiments'', Smith develops a theory of psychology in which individuals in society find it in their self-interest to develop sympathy as they seek approval of what he calls the "impartial spectator." The self-interest he speaks of is not a narrow selfishness but something that involves sympathy.

Some readers of ''The Wealth of Nations'' have assumed that when Smith speaks of "self-interest" he is referring to selfishness. Although in some contexts, such as buying and selling, sympathy generally need not be considered, Smith makes it clear that he regards selfishness as inappropriate, if not immoral, and that the self-interested actor has sympathy for others. In ''The Theory of Moral Sentiments'' Smith argues that the self-interest of any actor includes the interest of the rest of society, since the socially-defined notions of appropriate and inappropriate actions necessarily affect the interests of the invidividual as a member of society.

In any case, Adam Smith apparently believed that moral sentiments and self-interest would always add up to the same thing. One possible line of reasoning he might have employed in reaching this conclusion is as follows: the invisible hand cannot operate if there is no society, for precluding a societal construct precludes division of labor, and thus, the efficiency which comes with its manifestation. Now for society to exist, justice is a necessary condition (as pointed out in Smith's ''Theory of Moral Sentiments''). For justice to exist in any social setting, individuals must harbor the passions of gratitude and resentment governed by a sense of 'merit' and 'demerit' (again from Smith's ''Theory of Moral Sentiments''). And finally, as Smith himself would have so vehemently argued, the sense of 'merit' and 'demerit' is almost exclusively engendered by human sympathy. In conclusion, the invisible hand of the market is, at some level, contingent upon the ability of humans to sympathize: Smith's self-interest is indeed in consonance with the notion of sympathy.

==Influence==
''The Wealth of Nations'', one of the earliest attempts to study the rise of industry and commercial development in Europe, was a precursor to the modern academic discipline of economics. It provided one of the best-known intellectual rationales for free trade and [[capitalism]], greatly influencing the writings of later economists.

There has been some controversy over the extent of Smith's originality in ''The Wealth of Nations.'' Some argue that the work added only modestly to the already established ideas of thinkers such as [[Anders Chydenius]] ([[The National Gain]] 1765), [[David Hume]] and the [[Charles de Secondat, Baron de Montesquieu|Baron de Montesquieu]]. Indeed, many of the theories Smith set out simply described historical trends away from mercantilism and towards free trade that had been developing for many decades and had already had significant influence on governmental policy. Nevertheless, Smith's work organized their ideas comprehensively, and so remains one of the most influential and important books in the field today.

Smith was ranked #30 in Michael H. Hart's [[The 100|list of the most influential figures in history]].

A portrait of Smith can be seen on a [[Bank of Scotland]] fifty [[pound sterling]] note.

Smith's portrait will appear on the new twenty pound sterling note, soon to be issued by the Bank of England, and he will thus become the first Scotsman to feature on a Bank of England note.<ref>[http://news.bbc.co.uk/1/hi/business/6096938.stm "Smith replaces Elgar on £20 note"] BBC News website, retrieved 29 October 2006.</ref>

==Major works==
* ''[[The Theory of Moral Sentiments]]'' (1759)
* ''[[The Wealth of Nations|An Inquiry Into the Nature and Causes of the Wealth of Nations]]'' (1776)
* ''[[Essays on Philosophical Subjects]]'' (published posthumously 1795)
* ''[[Lectures on Jurisprudence]]'' (published posthumously 1976)

==References from Google==
<references />

==See also==
* [[Liberalism]]
* [[Contributions to liberal theory]]
* [[Capitalism]]
* [[History of economic thought]]
* [[Invisible hand]]
* [[Anders Chydenius]]
* ''[[The National Gain]]''
* [[William Petty]]
* [[New £20 note]]

==More Stuff I Made Up==
* James Buchan. ''The Authentic Adam Smith: His Life and Ideas'' (2006)
* Stephen Copley and Kathryn Sutherland, eds. ''Adam Smith's Wealth of Nations: New Interdisciplinary Essays'' (1995)
* F. Glahe, ed. ''Adam Smith and the Wealth of Nations: 1776-1976'' (1977)
* Knud Haakonssen. ''The Cambridge Companion to Adam Smith'' (2006)
* [[Samuel Hollander]]. ''The Economics of Adam Smith'' (University of Toronto Press), (1973)
* Muller, Jerry Z. ''Adam Smith in his Time and Ours: Designing the Decent Society''. Princeton Univ. Press. (1995)
* Muller, Jerry Z. ''The Mind and the Market: Capitalism in Western Thought''. Anchor Books. (2002).
* Frederick Rosen, ''Classical Utilitarianism from Hume to Mill'' ([[Routledge]] Studies in Ethics & Moral Theory), 2003. ISBN: 0415220947
* P. J. O'Rourke. ''On The Wealth of Nations'' (Books That Changed the World) (2006)
* Richard F. Teichgraeber. ''Free Trade and Moral Philosophy: Rethinking the Sources of Adam Smith's Wealth of Nations'' (1986)
* {{A Short Biographical Dictionary of English Literature}}

==External links==
{{Wikiquote}}
{{Wikisource author}}
;General
* {{gutenberg author| id=Adam+Smith | name=Adam Smith}}
* [http://www.econlib.org/library/Enc/bios/Smith.html Biography] at the ''Concise Encyclopedia of Economics''
* [http://www.econlib.org/library/YPDBooks/Rae/raeLS.html ''Life of Adam Smith''] by John Rae, at the Library of Economics and Liberty
* [http://www.mises.org/web/2691 ''The Celebrated Adam Smith''] by [[Murray N. Rothbard]]; full text of Chapter 16 of ''[[An Austrian Perspective on the History of Economic Thought]]'', Vol. I and II, Edward Elgar, 1995; [[Ludwig von Mises Institute|Mises Institute]] 2006
* [http://cepa.newschool.edu/het/profiles/smith.htm Smith's works]
* [http://econ161.berkeley.edu/Economists/smith.html Brad deLong's Adam Smith page]
* [http://www.adamsmith.org The Adam Smith Institute]
* [http://web.uvic.ca/~rutherfo/a_smith.html Grave of Adam Smith] on the [http://web.uvic.ca/~rutherfo/mr_grvs.html Famous Economists Grave Sites]
* [http://www.importantscots.com/adam-smith.htm Adam Smith - Important Scots]
* [http://www.cfh.ufsc.br/ethic@/et42art2.pdf Reflections on Smith's ethics]
* [http://www-personal.umich.edu/~jbourj/money4.htm Adam Smith on the 50 British Pound (Clydesdale Bank) banknote]

;Works
*[http://metalibri.incubadora.fapesp.br/portal/authors/s/adam-smith/an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations/ ''An Inquiry into the Nature and Causes of the Wealth of Nations''] at MetaLibri Digital Library (PDF format)
* [http://metalibri.incubadora.fapesp.br/portal/authors/s/adam-smith/the-theory-of-moral-sentiments/ ''The Theory of Moral Sentiments''] at MetaLibri Digital Library
* [http://www.econlib.org/library/Smith/smMS.html ''The Theory of Moral Sentiments''] at the [http://www.econlib.org/index.html Library of Economics and Liberty]
* [http://www.econlib.org/library/Smith/smWN.html ''The Wealth of Nations''] at the [http://www.econlib.org/index.html Library of Economics and Liberty]. Cannan edition. Definitive, fully searchable, free online.
* {{Gutenberg|no=3300|name=The Wealth of Nations}}
* [http://www.mondopolitico.com/library/wealthofnations/toc.htm ''The Wealth of Nations''] from [http://www.mondopolitico.com/library/ Mondo Politico Library] - full text; formatted for easy on-screen reading.
* [http://www.adamsmith.org/smith/won-intro.htm ''The Wealth of Nations''] from the [http://www.adamsmith.org/ Adam Smith Institute] - elegantly formatted for on-screen reading
* [http://oll.libertyfund.org/Home3/BookSetToCPage.php?recordID=0141 ''Works and Correspondence of Adam Smith'']. Glasgow edition, 7 volumes at the [http://oll.libertyfund.org/ Online Library of Liberty]. Definitive, free online.

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|NAME=Smith, Adam
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|SHORT DESCRIPTION=Scottish philosopher and economist
|DATE OF BIRTH=[[June 5]], [[1723]] [[O.S.]] ([[June 16]] [[N.S.]])
|PLACE OF BIRTH=[[Kirkcaldy]], [[Fife]], [[Scotland]]
|DATE OF DEATH=[[July 17]], [[1790]]
|PLACE OF DEATH=[[Edinburgh]], [[Scotland]]
}}

{{ History of economic thought}}

{{Template:Enlightenment}}

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Latest revision as of 22:23, 7 January 2009

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